Ramblings on Illegal Immigrants, Globalization, and Inflationary Pictures
Posted by Frugal on May 20th, 2006
Despite a more than 40% increase in the US money supply since 2000, US (and Greenspan) has been benefiting tremendously from various global trends. First of all, the globalization of the economy keeps the manufacturing labor cost down. Secondly, all the flooding immigrants, either legal or illegal, are keeping the domestic service labor costs down. Furthermore, many well-to-do legal immigrants bring in needed expertises and investment capital to expand and energize US economy. Obviously, if these legal immigrants are not rich in the first place, they cannot possibly afford an international move, facing possible hiatus in their income, job, or career. Because both the service and manufacturing sectors have labor costs held down, the price of manufactured products and service labor were held in check. But looking at the recent US policies, things seemed to have made a turn.
Due to the globalization of the economy, first world countries like US are losing important manufacturing jobs and industries to second or third world countries. Coupling with many illegal immigrants taking up low wage jobs, or below minimum wage jobs, the biggest casualties are the existing lower working class. Since lower working class has less skills that have a high training barrier, they are the most replaceable labor. The lower working class people cannot have their wages increased at par with inflation rate. If the money credit such as credit cards is not so widely available, the lower working class probably would have revolted long time ago. The extent of this seems to have gone beyond what the lower class can tolerate after years of sub-par growth in wage. Despite the fact that they cause their own credit card debt, one of the reasons for them not being able to make ends meet is that they have become the sacrifices under outsourcing and illegal immigrant labor. Unfortunatley in a pro-capitalism system, the government is often more pro-business. Letting businesses to get a lower cost of labor takes priority over improving the life quality of the people at the bottom.
These days, wherever WTO (World Trade Organization) goes, there are big protests. Globalization of economy is under attack by the low skilled labor. The tide is also turning against illegal immigrants in the US. The infrastructure cost of supporting illegal immigrants in over-crowded schools, unpaid healthcare bills, uninsured driving on the road, free childcare, milks, foodstamps for their children born in America are simply causing debts at various levels to pile up. Increased funding usually comes in the form of more debt as a future hidden tax. The present effect of these debts won’t be felt until years later. Despite all the associated costs, illegal immigrants have not doubts held back the wages of domestic labor. Without them, the so-called core rate of the CPI would have gone much higher. Under such beneficial circumstances for capitalism at a low inflation rate, the stock market had boomed until 2000, and obviously the rich who holds the most stocks just got richer, almost at the expense of the lower-skilled labor.
Going forward, the trend is less favorable for business, investment, and inflation in general. Greenspan was lucky to preside over a period where he can print lots of money, but still have the Asians to mop up the excess, and return the capital back to US in the form of US treasury bonds investment. But the political climate has changed for worse for illegal immigrants. Decreasing the flow of illegal immigrants will definitely increase the future domestic wage and speed up the outsourcing process since $US is still a dominant and over-valued reserve currency. Obviously, judging from the recent market reactions, Bernanke has both of his hands tied. The simultaneous fall of $US dollar and US bonds is a clear sign of beginning of the end of $US. Fall of $US will increase the import prices. The fall of US bonds will cause the increase in the mortgage interest rate. Both factors indicate that more inflation will be coming.
The new tax cuts without corresponding cutting back of other programs will ensure US to have more debts for the future generation. One day all the debts will manifest as inflation through monetization. Paper money is destined to be depreciated through politicians taking care of the constituents always for the short term.
Just on a last note, I am personally fed up with illegal immigration. Many unscrupulous small businesses that employ illegal immigrants simply destroy the honest people in the same businesses. These unscrupulous small businesses undercut both big companies and small honest companies, feed cash to illegal immigrants always at below the market rate of salary, destroy a decent job prospects for legal residents, and pass just enough price benefits to obtain business from consumers. If all these illegal immigrants will stop getting foodstamps, low-income aids despite all of their cash income, and pay their own healthcare, then I will not have any problems. But for all the ones that I encountered, they never hesitate or flush, but rather rush to any places that will offer services or aids without (closely) checking their status (or the person who checks status is simply giving his or her country men a free-ride). I’m sure that all of these are just part of what these illegal immigrants think America is such a great, generous (and stupid) country.
P.S. I have closed the ability to leave further comments. If anyone thinks that I was too biased in my writing, I apologize that respectfully but stand by what I have written since I have the right to express my own opinion (although that doesn’t mean that my opinions are correct). I respect what everyone has to say on these issues. But because these issues are too heated and polarized, I will stop further comments. You can still email me if you feel so strongly to leave your opinion on this issue. In that case, most likely I will grant your request in leaving your opinions here for everyone to see. But I only ask for mutual respects for whichever side you take on. After all, if this issue is that easy to resolve, it would have been taken care long time ago.
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May 21st, 2006 at 3:53 pm
The Carnival of the Capitalists…
Welcome to the May 22nd Edition of the The Carnival of the Capitalists!. For those visitors to the site who aren’t familiar, the the CoTC is a weekly roving roundup of the best business, investing and career management posts in the blogosphere, a…
June 5th, 2006 at 11:43 am
Maybe I’m slow, or maybe our elected representatives are completely out of touch with the majority of Americans. If you’re sitting there, like me, scratching your head and boiling mad about the immigration and illegal alien issues, and wondering how anyone can vote for a guest worker program or against closing the borders or against deportation, then it’s not the lawmakers we should be mad at. It’s the American public. Have you emailed, called, faxed, visited, or otherwise let your Senators, Representatives, President Bush, and our Vice-President how you feel on the issue? Have you told everyone you can to do the same? I guarantee you that if everyone that voted for an American Idol contestant this week got in touch with their elected officials, the bill that comes out of Washington would be very, very different that what they’re working on now. How many of the average people on the street are fed up with the problem but have done nothing about it? The answer is most of them.
I watched President Bush on TV Monday night [see this post for my reaction], a President I was intensely proud of after 9/11, and I was very disappointed. What has happened? We, the American public assume, not act. We must act. Otherwise how can our leaders know what we want?
Sure President Bush’s speech sounded good at first, but a guest worker program is amnesty no matter how you try to spin it – look up amnesty in the dictionary.
Any illegal alien or immigrant that commits a crime (more serious than speeding) should be deported – there’s no need to let them have three misdemeanors before deporting them.
Slapping illegal aliens with a fine and letting them live here while working on citizenship IS NOT ACCEPTABLE.
Worrying about what anyone in Mexico thinks about us putting up a fence and guarding our own border is absolutely ludicrous (as for Ted Kennedy, sir, I think that a big fence sends the exact message that the majority of Americans want sent).
And, while I’m thinking about it, how can Mexico or any of its citizens sue us or anyone in the United States for building a fence or apprehending illegal aliens on American soil?
This is what I want, and I think this is what most Americans want:
- We must put an end to Federal and State support of illegal aliens and illegal immigrants (financial support like Social Security).
- We must close up and secure our borders.
- We must give warning that we will not tolerate gangs, drugs, and criminals coming across the border and that will arm our military with lethal force and allow them to use it.
- We must stop granting citizenship automatically to infants born on American soil of parents that are illegal aliens or illegal immigrants.
- We do not want a guest worker program.
- We want illegal aliens and illegal immigrants rounded up and deported.
- We do not want a path to citizenship for illegal aliens and illegal immigrants.
- We want laws that protect American citizens from being sued for protecting their property and possessions.
We must keep passing the word about this and asking people to get involved. Take my short list of above items and send it to your elected officials. Get your friends, neighbors to do the same.
Be sure to give your name and address so that you will be taken seriously when contacting your elected officials.
Click Here to Contact Your Elected Officials.
Until Next Time,
Recoil
June 5th, 2006 at 4:17 pm
Thanks for your inputs, Recoil. I think illegal immigration is a very tough problem, and any solutions need to be practical, reasonable, and enforceable. However, for sure, United States must STOP all incentives for illegal immigrants to come in. It is simply human nature to seek better lives. But one should seek it without taking advantages of others.
June 6th, 2006 at 5:57 pm
I totally disagree. For one, illegal immigrant isn’t going to stop based on some law. The difference between living standards will drive people here. No law is going to stop someone that has nothing to lose. People risk life and limb getting over here. And not all are from Mexico either. There are illegal immigrants that get into Mexico simply because Mexico has a higher living standard than their homeland. Those that can wait in line to get here legally wouldn’t risk life and limb because they can sustain themselve. And no, you can’t simply filling an app and wait in line. Guest worker program or Amnesty would be a solution. It’s only calling it what it is. There was a 5% unemployment rate a few years ago. when there was the same illegal immigrants working here. Suddenly, they are taking jobs away from low imcome Americans? Seriously. Are we at 11%?A lot of your arguements and examples are very cliche. I’ve only been sick enough to see a doctor for 3 times the past 6 years. And they were strep and bacteria. If I was illegal, how much would that have cost? This reminds me of “incentives” from various work. Let say you work at a theater, you get to watch movies for free. Wow that’s like $12×7daysx52weeks=$4000 a year. I must be really screwing the boss. Except I’m paid $7/hr instead of more somewhere else. And I couldn’t possibly watch that much movies.
The US has a high living standard. Earning a little here is a lot in some countries. Globalization will smooth this out. Countries that are prepared for this benefits. There are now people in China that once thought about immigrating to the US legally, yet after 10!! years of waiting decided not to because they would rather retire comfortably in China than work like a horse in the US. How can this happen? Rise in living standard. You don’t need a fence or law to make that happen.
We are all human. We don’t need a degree to weight cost benefit.
June 6th, 2006 at 7:05 pm
baron,
I thought long & hard before I posted this. This is a very difficult issue. And I don’t pretend to be wise. I think everyone is entitled to their opinion. That’s what’s great about democracy. I agree partially with you. And I’m all for the simpler solutions to this problem. Feel free to express your opinions, but at the same time, know that everyone probably has a different view. I welcome your counter-arguments so every visitor here can see a different side of the story.
On the healthcare issue, the problem is that illegal immigrants usually don’t go see any doctors, until the health problem is quite serious. At such time, the healthcare cost is much higher if you had treated them much earlier. Again, this is just my view.
July 8th, 2006 at 2:40 pm
To Recoil,
You have offered some clear-cut, strong and well-written solution to the immigration challenge. Unfortunately, they are practically worthless because they are impossible to implement. Let’s start from the top, shall we?
1. “We must put an end to Federal and State support of illegal aliens and illegal immigrants (financial support like Social Security).” How much support REALLY goes to illegal immigrants? Do you know how many immigrants actually pay taxes? The IRS seems to think that there are quite a few. Not to mention sales taxes paid every time an immigrant buys something. Many are paying into the system and getting nothing, NOTHING, in return. For more on this see New York Times Article on this.
2. “We must close up and secure our borders.” How exactly, Recoil, do you propose our government do this? The Big Fence? I can assure you that you could build the Berlin Wall along the border and immigrants would get through it. Many are desperate and desperation, my friend, breeds ingenuity.
3. “We must give warning that we will not tolerate gangs, drugs, and criminals coming across the border and that will arm our military with lethal force and allow them to use it.” Giving a stern warning hasn’t done much to American gangs, drugs and criminals. THEY still continue to thrive despite the much-touted “War on Drugs.” Do you think it will work better with Hispanics? What this type of policy has done is overcrowd jails and prisons in our great country leading to costs that far outweigh those incurred by immigrants seeking healthcare.
4. “We must stop granting citizenship automatically to infants born on American soil of parents that are illegal aliens or illegal immigrants.” That’s it, punish the children for the misdeeds of the parents. If past Americans had this train of thought, would America be as strong as it is today? Somehow, I think not.
5. “We do not want a guest worker program.” Why not? Give me one good reason. Is it because the immigrants are taking that 14 hour per day fruit picking job you may be coveting? I believe you are probably better off than that. During the American Revolution, George Washington issued an edict granting freedom to any slave who fought for the Colonial Army. Could that be viewed as a guest-worker program? It was most certainly amnesty, if not from the law, then from the American Shame known as slavery.
6. “We want illegal aliens and illegal immigrants rounded up and deported.” And how do you expect to pay for this delightful little program? Any surplusses our states and country have seen are being whittled away by policies of war and tax-cuts. But, hey, this is an idea that sounds good to the multitudes, I’m sure.
7. “We do not want a path to citizenship for illegal aliens and illegal immigrants.” Again, I ask why not? How did your ancestors arrive on our teeming shores? Were all of them legal? Perhaps. Perhaps not.
8. “We want laws that protect American citizens from being sued for protecting their property and possessions.” Recoil, you’ve saved the best for last. This is one with which I completely agree. This makes sense, doesn’t cost the government and may indeed even save money.
In conclusion, sometimes what the majority of people want is not necessarily the best thing. Not too long ago, a majority of the people were against integration. This does not mean that segregation is a good thing. And how dare we stop slavery? My friend, nothing clouds the mind and destroys reason like emotions. I ask that you turn off your emotions and reason through the Immigrant Challenge. If however you still think that illegal immigration should be stopped at all costs, I know a LOT of Native Americans here in Oklahoma who would like to see YOUR green card.
Thank you for you time.
Shawn Garza