Friday, July 16, 2010

WTF, Frum?

I see that David Frum is putting out a solution to our employment problems:

Immigrants now make up some 15% of the US labor force. They are concentrated in the less skilled portion of the labor force and in industries hardest hit, especially construction.

If immigration levels were curtailed, the job gap would be a lot smaller. And if illegal immigrants returned home, rather than being put on a "path to citizenship," the problem of putting the unemployed back to work would be smaller and easier.

Needless to say, I'm not impressed. The knock against Frum is that he's a perfectly conventional Republican who acts like a moderate, and is willing to speak civilly and engage with others, but has no gripes with any aspect of the Republican agenda aside from on some social issues. I had a somewhat favorable opinion of the guy in spite of (or perhaps because of) never having read his blog regularly. But his point here is just idiotic, and it's fairly typical of GOP arguments on immigration: ignorant and nonsensical. It's identitical to the arguments made by trade protectionists, which I assume Frum formally isn't, only he is as immigration restrictionism basically is protectionism.

Protectionism fails because it ignores the problem of inflation. Sure, stopping imports means that the same stuff made inside the country becomes more expensive, and the people making it get paid more. But the first half of that equation is what causes inflation, and it's usually inflation that vastly outstrips any increase in wages earned. Admittedly, people are too worried about inflation at the moment, the government should be engaging in more inflationary policy in a time of deflation and not less, and visions of Germany in the early 1920s still scare people far more than they should, but it should be noted that protectionism has, in fact, been tried by various countries undergoing a lack of demand and deflation to try to boost earnings and improve economic performance. Countries like, well, The United States of America after the stock market collapse of 1929, as explained in a surprisingly cogent (though intentionally and hilariously dull) manner by Professor Ben Stein.

It's also worth noting that the Confederacy effectively had a protectionist trade policy during the Civil War (though certainly not by their own choice), and they experienced Weimaresque inflation as well. Not a lot of people know that. If protectionism actually delivered higher standards of living, every country would be doing it. Its track record speaks otherwise. Political pressure along that path inevitably crops up during a recession, and it's up to political leaders to head that off, be it on textiles, agriculture, or labor. Frum's position serendipitously coincides with his party's xenophobia but cuts against his party's trade policy. Incidentally, a lot of the more cosmopolitan and elite Republicans realize that immigration is good for the economy because it keeps prices down, and further realize that granting illegal immigrants legal status would be great for the government as those newly minted citizens would be paying taxes, which would provide a bump in federal revenues and help close the deficit without having to spend any money. Hell, immigration was the one area of policy where George W. Bush was actually good, and it's very regrettable that his attempt at immigration reform wasn't successful. As was sometimes the case during W's reign, the Democrats' desire to keep Bush from winning a victory prevented them from allying fully with Bush on the issue and showing solidarity in favor of his policy, which would not have precluded making the Republican Party look xenophobic and at least partly made up of racists. Such are the perils of overpersonalizing politics. Deep down, Frum probably agrees with Bush on this issue as he does on practically every other issue, but he's forever on shaky ground with the angries because of stuff like this. So we have to suffer through his pandering here. At least, that's what I think is happening with this post.

While we're on the subject, Frum has more thoughts to share on the economy:
Extending the Bush tax cuts would be helpful to long-term economic growth – but hardly constitutes an effective anti-recession measure. The Bush tax cuts have been in force since 2001 and 2003. The crash of October 2008 and the ensuing recession happened anyway. The medicine that did not prevent the disease is hardly likely to cure it.

Yet there are policy improvements that Republicans could deliver – and which would help lift the country out of the worst recession since 1945. The first is a payroll tax holiday. Mr Obama added $787bn to the national debt with a poorly designed “fiscal stimulus” that did little to create jobs. Now is the time for a Republican alternative. The US collects about $40bn a month from the payroll tax that funds Social Security and Medicare. A one-year holiday from such payments would put money in workers’ pockets and encourage employers to hire, at only a little more than half the cost of the Obama stimulus. The holiday would have been a great idea in January 2009. It still is now.

This is even worse than the last one. Frum admits that tax cuts didn't prevent the economic crisis, then suggests a tax cut anyway. Here's some bold new leadership for the GOP! He says that the stimulus created few jobs, which is just nuts. Admittedly, the White House is not an impartial observer when it says that the stimulus created 2+ million jobs, but Frum is seemingly endorsing the GOP line that the stimulus did absolutely nothing to improve the economy. Shit, even your fellow sensible-ish right-wingers Reihan Salams and Megan McArdles won't say that much! It might be fair to say that the stimulus didn't create enough jobs, but to take Frum seriously I guess those people paving I-80 here in Northern California don't count? The teachers who get to keep their jobs because of Race To The Top are a mirage or something? Aargh! And while a payroll tax holiday would be a lot more egalitarian than the Bush tax cuts were, Frum evidently doesn't see fit to mention that about 1/3 of the stimulus consisted of similar tax cuts. So the thing he's saying didn't work already did what he suggests we should do now, only we should do less of it now then we did then. And he even puts a thing in there about the deficit without mentioning that his cuts would add to the deficit. It's like a fucking pretzel, this argument.

What kind of economic mind do I have? Practically zero. I took some econ courses in college. I don't have anything close to a head for the complex stuff that Paul Krugman posts to elaborate on his columns. But even I can see that David Frum has no clue here. He should mend fences with the activist right on his own time, instead of polluting the Dish with this nonsense.

The Man, The Myth, The Bio

East Bay, California, United States
Problem: I have lots of opinions on politics and culture that I need to vent. If I do not do this I will wind up muttering to myself, and that's only like one or two steps away from being a hobo. Solution: I write two blogs. A political blog that has some evident sympathies (pro-Obama, mostly liberal though I dissent on some issues, like guns and trade) and a culture blog that does, well, cultural essays in a more long-form manner. My particular thing is taking overrated things (movies, mostly, but other things too) down a peg and putting underrated things up a peg. I'm sort of the court of last resort, and I tend to focus on more obscure cultural phenomena.