New School Politics

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This from today’s NYT:

For years, William Zammer Jr. has relied on 100 seasonal foreign employees to turn down beds, boil lobsters and serve cocktails at the restaurants, golf course and inn he owns on Cape Cod and in nearby Plymouth.

This summer, however, the foreign workers will not be returning, and Mr. Zammer, like other seasonal employers across the nation, is scrambling to find replacements.

“It’s a major crisis,” he said. “We’re very short on work force. We’ll be looking at opening a little later, closing a little earlier, looking at how we do our menus.”

Mr. Zammer is caught up in a Congressional standoff over immigration overhaul that is punishing employers who play by the rules and that, advocates of change say, could cost small companies billions in lost business.

In an effort to win support for a comprehensive immigration overhaul, the Congressional Hispanic Caucus and its allies have blocked voting on legislation that would allow employers to rehire foreign seasonal nonagricultural workers independent of a 1991 quota.

As a result, the government is limited to issuing the 66,000 seasonal work visas set when the visa program, known as H-2B, became law — 33,000 for winter workers and 33,000 for summer workers. Last year, more than 120,000 foreign workers entered the country on H-2B visas.

The consequences of stricter quotas on immigration are pretty clear but not often talked about in political debate regarding the issue. Less immigration, be it legal or illegal (in this case its legal), will mean a smaller, less diversified labor force and rising costs for businesses. Economist (and food critic) Tyler Cowen attributes the growth in quality and value in the restaurante industry in recent years to the immigration boom.

In the more macro sense, more immigration makes our economy more productive by making more labor available and enhancing our ability to divide labor in this country. Simple enough, no?

But now rising anti-immigration sentiment is beginning to take its toll at a troublesome time for the economy, and it will take its toll directly on the pocketbooks of American consumers in the form of higher prices of goods and services.

Weighing the value of illegal immigration is a matter of costs and benefits: how the productive labor reaped by the economy compares to the losses attributed to wealfare benefits, etc. The thing is that the complaint about illegal immigration from Republicans generally amount to “it’s illegal.” But then, if it were legal would it be okay? The Democrats don’t even take much of a stand on the issue, which is why businesses such as the one in the article are in trouble now.

As far as I see it, as long as immigrants don’t consume a large amount of welfare benefits they unequivocally add to our economy and legislative stalemates should not stop that from happening. The result is that we feel the worst of consequences–the ones that no one is even talking about.

Popularity: 19% [?]

As January comes to a close, the Obama campaign has easily surpassed a fundraising goal set earlier today. In a mass e-mail from the Obama campaign earlier today, the campaign stated that they were looking for more donors to boost their current 242,000 individual donor count above 250,000. Tonight, their website shows that they surpassed that milestone and had approximately 253,198 supporters [as of this writing] during the month of January. Obama’s e-mail touts the wide variety of donors, and mentions the fact that Obama has received donations from more than 500,000 individual donators [a figure he surpassed in the hours before the Iowa caucuses]. Obama, ever the politician, attributes this “unprecedented base of individual donors” to his rejection of special interest money.

We rejected donations from Washington lobbyists and special interest PACs and relied on ordinary people to take ownership of this campaign — and the result was more donors than any presidential primary campaign has had in history.

During the last three months of 2007, Obama raised approximately $23.5 million. In January alone, however, the candidate has raised in excess of $32 million. This is a record for candidates still faced with a primary challenge. For all those who thought Hillary was sure to win the nomination following her victory in New Hampshire, Obama’s fundraising successes should give them second thoughts. Obama may not have the richest supporters, but he has among the widest networks of individual donors, and it’s the number of people, not the size of their donations, that counts when the Democrats will be picking a presidential candidate. MSNBC is reporting that the Republican candidates didn’t even come close to the massive figure released by the Obama campaign, and the Clinton camp has yet to release their figures for January.

Scores of Obama Supporters Have Rallied Around Their Candidate

Obama’s “Yes We Can” slogan seems to be convincing America that he’s electable as well, as he’s been victorious in several early primaries. With Edwards out of the race, it will be interesting to see where his supporters end up. Both candidates are vying for his endorsement, and many unions and organizations that once backed Edwards have now switched their affiliation to Obama. Whether or not Edwards will endorse either Democrat before Super Tuesday remains to be seen.Tonight’s Democratic debate, called a “love movie” by the Agence France-Presse, saw the start of cordial relationships between the two candidates. This is a marked difference between the finger pointing and negative comments circulating between John McCain and Mitt Romney, who still have other candidates to worry about. Both Democrats made it clear that they’d like to see the Republicans out of the White House in 2009. While their platforms differ only slightly, the CNN-sponsored debate focused on three main areas, healthcare, Iraq, and illegal immigration. CNN’s catalog of quotes from the debate provides a window into the platforms of each candidate, while their Election Center provides further information for undecided voters.

Cordial Relations Marked Tonight’s Democratic Debate

Most pundits, including CNN’s Bruce Schneider, are calling the debate a draw. Schneider said that Democrats are “happy with their choice this year, but they don’t want to have to make it.” Fortunately for the undecided, the coming weeks will shed more light on the records and positions of both candidates. Unfortunately, however, many will have to make their decisions in short order for the primaries on February 5th. Join us for live, broadcasted video coverage of Super Tuesday next week on February 5th for more about the candidates and the status of the race.

Popularity: 66% [?]

Unfortunately, most politicians don’t have much of an economic pedigree, but some at least think more like economists than others. My inclination is that Obama fits the bill among Democrats, although all the talk of “taking on the drug companies,” “predatory lending,” the illusions to protectionism, etc. is enough to conclude that the Democrats are not really to be trusted on big economic issues in general.

Many of the Republicans leave a lot to be desired also, but some do make sense from time to time. The South Carolina debate on Thursday night demonstrates this.

I think among Republicans, Ron Paul and John McCain tend to distinguish themselves. Ron Paul, I believe, has consistently established himself as the most economically-minded of candidates although he is out of the mainstream. Perhaps I am partial to him because he is reads von Mises, Rothbard, and Hayek, however any politician who actually takes the time to read treatises on economics by such thinkers deserves credit.

He also deserves credit for putting the immigration issue into an economic context which none of the other candidates seem think of–ever. Here was his response to an immigration question:

I think this whole thing should be thought of more in economic terms. Maybe I think about economics too much. But there is something said in economics that, if you subsidize something, you get more of it.

And this is what we do. We encourage it by giving free medical care, and free education, and the promise of amnesty. And no wonder more will come.

We have a weakening economy and now immigrants, especially the illegals, are seen as a threat because they come and they undermine our tax system. And some of our hospitals are being closed and some of our people won’t work because of the welfare state.

You can’t solve this problem if you don’t deal with the terms of welfarism. And, besides, you know, some of our border guards are over in Iraq. I think they would be better off on our borders, you know, protecting our borders, not in Iraq.

Immigration is one of the issues on which I disagree to a certain extent with Rep. Paul–I think that immigration laws should be very lax–but he is right with regard to the welfare aspect of it, which must be curtailed. Most of all, he deserves pops for observing that immigration is fundamentally an economic phenomenon, and to analyze any economic phenomenon you must look at incentives.

Zach may be right that Ron Paul sounds about as confusing to the average voter as Sean Paul sounds to–well–me, but at least he speaks in a more rational and candid manner–something which I would rarely accuse the other candidates of doing.

John McCain also made some sense in the debate with regard for the potential recession (especially with regard to the loss of manufacturing jobs in Michigan, which has the next primary):

Well, the first thing we need to do is stop the out-of- control spending. Out-of-control spending is what caused the interest rates to rise. It causes people to be less able to afford to own their own homes.

We need to stop the spending. And that way we can get our budget under control and we can have a — basically a strong, fundamental fiscal underpinnings.

The second thing that we need to do, of course, is stop spending $400 billion a year overseas to oil-producing countries that come right out of our economy immediately. Some of that money goes, unfortunately, to fund terrorist organizations.

We’ve got to — and we can use Detroit for this, where there’s tremendous technology in the state of Michigan, and tremendous abilities to develop technologies to reduce this dependency on foreign oil, and eventually eliminate it, and stop this outflow of some $400 billion a year. Education and training is obviously important, but stop the spending. As president, I know how to do it. I’ll wield that veto pen, and I won’t let another pork-barrel earmark spending bill cross my desk without vetoing it. And I’ll make the authors of it famous.

It was generally a good statement because its theme was that spending more than you have is bad for the economy. Hence, hes giving an economic–not a political (i.e. “deficit” sounds bad, so lets stop it)–reason to tighten fiscal policy, and eliminate the deficit. He also deserves high marks for alluding to the price system and how more spending means less savings and higher interest rates.

His comment on foreign oil was not so good, however. His claim about the $400 billion spent on foreign oil does not compute. Even if we stopped spending that money on foreign oil altogether, we would still have an unfulfilled $400 billion dollar demand for energy. Where would we get it? Its not like “alternative” energies can provide us with nearly the same energy for the same cost.

Additionally, if we stop spending on Middle Eastern oil it wont really hurt those producer–at least, not nearly as much as it will hurt us economically. The oil market is a global market, and if we remove our demand from the marketplace, the price will immediately go down, but that will cause demand from elsewhere to rise and the price to rise, although not quite as high as original levels. The US on the other hand will be spending its energy dollars elsewhere, which will make non-MidEastern energy more expensive and, again, shift spending from the rest of the world back to Middle Eastern oil to off-set the imbalance.

Among the other candidates, there wasn’t much to write home about. Thompson and Giuliani, who have both proposed similar tax cuts, which they insisted would also raise revenue. This is not necessarily true as it is difficult to tell where we are on the Laffer Curve and how much it applies. Additionally, their saying that spending need not be cut reminds me of the Bush deficits.

Mitt Romney kind of surprises me. I see him posturing for public opinion on economic issues more than I hear him making sense–for instance, he was making an obvious appeal to MI voters on the recession question when he talked about how he “created jobs” as Governor. I expect more from such a successful executive and investor.

I have little evidence that Mike Huckabee speaks economics.

Lastly, the Wall Street Journal recently conducted a survey of economists regarding everything from the future of the economy to the presidential race.

when asked their personal preference, the economists favored Republicans. Sen. McCain led the field with 39% of the forecasters’ votes, compared with 11% for Mr. Giuliani and 7% for former Massachusetts Gov. Mitt Romney. Among Democrats, Sen. Obama edged Sen. Clinton, 14% to 11%, while former North Carolina Sen. John Edwards took 4%.

“People are looking for change,” said Susan Sterne of Economic Analysis.

Some 56% of the economists disapproved of President Bush’s stewardship of the economy, while 44% approved. That is especially startling considering 59% of the economists said the stock market performs better under Republican presidents, compared with 28% who said it favored Democrats. Most economists who disapproved of Mr. Bush cited an increase in government spending. Many praised the president’s tax cuts.

The economists polled, as I understand, were generally mainstream ones which is probably one reason why they tended towards mainstream candidates, especially moderate conservatives. McCain led the field by a lot, which suggests that he does sound good on economic issues as I suggested. Ron Paul apparently doesn’t register, which isn’t a surprise because he is so radical, but is disappointing nevertheless.

Popularity: 39% [?]