Wednesday, February 11, 2009

Attack Financial Crisis With Green Cards, Not Just Greenbacks, and With Start-ups Not Just Bailouts

Leave it to a brainy Indian to come up with the cheapest and surest way to stimulate our economy: immigration.

“All you need to do is grant visas to two million Indians, Chinese and Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper. “We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate — no Indian bank today has more than 2% nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans.”

While his tongue was slightly in cheek, Gupta and many other Indian business people I spoke to this week were trying to make a point that sometimes non-Americans can make best:

“Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.”

When the best brains in the world are on sale, you don’t shut them out. You open your doors wider. We need to attack this financial crisis with green cards not just greenbacks, and with start-ups not just bailouts. One Detroit is enough.


~Thomas Friedman in yesterday's NY Times

23 Comments:

At 2/11/2009 7:04 PM, Anonymous poor boomer said...

Won't this make American unskilled workers even worse off than they are now?

What do you say to the millions of working poor who will seek government help?

 
At 2/11/2009 7:44 PM, Blogger Les Cargill said...

Immigrate in to do *what*, exactly?

The tech sector is dead - or wil be soon as the iPhone saturates... about... now. VC culture is "Berlin bunker, 1945". The financial sector is on life support. Bill Gates et al wanted massive Subcontinental employment only to provide a market beachhead in what was alleged to be a booming Subcontinental economy

Anything that can be put in a box is already made offshore. The Web? Laugh now.

There won't be a whole lot of startups, fellers. Unless we need another Facebook clone...

 
At 2/11/2009 7:49 PM, Blogger lineup32 said...

Lets start with Doctors.nurses followed by college professors. We have a acute shortage in the healthcare field combined with over the top cost in our hospital's, seems like a slam dumk!
Our entire public college and university system is riddled with overpaid help so lets brings in some fresh brains dump all this lifetime contract and pensions the public is on the hook for.

 
At 2/11/2009 9:09 PM, Blogger @sethstorm said...

Nice, add to the troubles that citizens are having.

Citizens first, the rest later. Now is not the time to harm citizens.

 
At 2/11/2009 9:26 PM, Anonymous Anonymous said...

What a great idea! Import third world peasants and send all of our factories to China. Aren't 50 million Mexicans enough? California wouldn't be bankrupt if this theory worked.

 
At 2/11/2009 9:26 PM, Blogger QT said...

Figured this one would push the buttoms.

 
At 2/11/2009 9:45 PM, Blogger save_the_rustbelt said...

Many of my best professors were from overseas.

So eliminate tenure and import as many foreign college professors as we can.

The free market in talent would be wonderful (and it will never happen!).

The high skill immigration idea may have some merit, as soon as we deport 15 million low skill illegals, so that affluent white people might have to pay real market rates for lawn mowing and child care.

 
At 2/11/2009 10:00 PM, Blogger Ken Braun said...

"Immigrate in to do *what*, exactly?"

The most valuable resource on earth is the fatty mush between your ears. Vastly more precious than gold, and you certainly wouldn't deny the mass importation of that, would you?

Unrestrained brains build wealth. More of those brains -- particularly smarter brains -- build more wealth. It's a virtuouos cycle that built fabulously wealthy and crowded places like Hong Kong.

What will they do, you ask? I dunno... If I knew things like that, then I wouldn't need anyone else to think of stuff like how to build the laptop I'm typing this message on.

That's why we need them here. We don't know what wonderful things smart people will come up with -- only that they WILL come up with them.

 
At 2/11/2009 11:14 PM, Blogger Les Cargill said...

True enough, Ken Braun - in the long
run. But our attention span seems to have atrophied. Maybe it's just me.

 
At 2/12/2009 12:40 AM, Blogger randian said...

Mere immigration didn't make the US great, its culture did. In today's politically correct multicultural environment, smart English-speaking immigrants have no incentive to, and usually do not, abandon their home culture in favor of ours. Bringing in immigrants without demanding they respect primacy of our culture means that the future we are creating won't be an American one.

 
At 2/12/2009 2:28 AM, Blogger OBloodyHell said...

> "Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade."

I liked the way Carnegie said it, better:

"Take back your protection; We are now men, and we can beat the world at the manufacture of steel."
- Andrew Carnegie -

If manufacturing steel was a way to make money any more, in the kind of quantities America deals in (yeah: *Trillions*), we'd be doing it, and doing it better than anyone else.

That's not a place to make Real Money, any more. Manufacturing flat out isn't.

We don't need, and should not want, protectionism. And it's a bad move anyway. There's not a single competent economist out there who doesn't ack that the depth of the Great Depression was strongly worstened by protectionism. There's nothing in this current problem which makes it different.

 
At 2/12/2009 2:35 AM, Blogger OBloodyHell said...

> Immigrate in to do *what*, exactly?

Genius, figure it out.

"Making objects" isn't how you make money any more. That portion of the economy is as dead as agriculture. It will, in the very near future, represent less than 5% of all jobs in the USA -- not from being "shipped offshore" (what kind of shipping containers do those use, by the way?) -- but from roboticization doing the same thing for manufacturing that mechanization did for agriculture.

Yes, Agriculture, which now employs... GASP!!! between 2% and 5% of the workforce!!

The future economy is in IP AND SERVICES.

And, yes, the VC market is dried -- up for the moment.

You might actually be able to guess that, short of some idiotic complete and total F-UP by Obama, it will fix itself within a couple years, and there will again be funds for small companies (which grow to be BIG companies) to hire an array of available talent to perform whatever IP & S the company is targeting.

Your name seems appropriate, somehow.

 
At 2/12/2009 2:37 AM, Blogger OBloodyHell said...

> California wouldn't be bankrupt if this theory worked.

Of course it would. Socialism can bankrupt any wellspring, no matter how effulgent.

 
At 2/12/2009 2:43 AM, Blogger OBloodyHell said...

Hockey moms and capital markets

 
At 2/12/2009 2:53 AM, Blogger OBloodyHell said...

> What a great idea! Import third world peasants and send all of our factories to China.

Indian and chinese "peasants" would bust their asses a hell of a lot more than you (or I, for that matter) would.

If you don't think that makes a difference in any economy, you're even stupider than **I** think you are.

And that's not easy.

 
At 2/12/2009 2:57 AM, Blogger OBloodyHell said...

> Of course it would. Socialism can bankrupt any wellspring, no matter how effulgent.

And in the opposite vein from that, notice what was happening in India, as it finally tossed out piece after piece of the remnant British socialism it inherited as a parting "gift" of British independence.

The Indian economy was exploding. Because the Indians and the Chinese, despite their other flaws, are damned sure an industrious lot.

 
At 2/12/2009 11:58 AM, Anonymous Anonymous said...

OBloodyHell said

“Of course it would. Socialism can bankrupt any wellspring, no matter how effulgent.”

and

“Indian and chinese "peasants" would bust their asses a hell of a lot more than you (or I, for that matter) would.

If you don't think that makes a difference in any economy, you're even stupider than **I** think you are.

And that's not easy.”

California is part of America. It isn’t North Korea. How can it be bankrupt with all of those hardworking foreigners that now live there? Why don’t they all start businesses and innovate. I guess I am too “stupid” by your standards to figure it out. You are so brave, calling people names over the internet; my hero. I would love to meet you face-to-face. I am sure you would be more polite then.

I worked full time and went to school at night to get a chemical engineering degree. The job market has been difficult ever since I received my degree fifteen years ago. There is no shortage of engineers. I know many engineers who can’t find work in their fields and have moved on to other, lower level jobs. The big companies just want to pay everyone less money. Wake up, genius.

 
At 2/12/2009 4:09 PM, Blogger @sethstorm said...


We don't need, and should not want, protectionism. And it's a bad move anyway. There's not a single competent economist out there who doesn't ack that the depth of the Great Depression was strongly worstened by protectionism. There's nothing in this current problem which makes it different.

This article's suggestion is to make it worse for citizens.

There is a point where you help citizens first. We have passed that point.

How about a huge tax cut on business(down to perhaps a fraction of a percent), a complete removal of the immigrant worker program, and a retention of the "Buy America" laws? Citizens get an assurance of no "jobless" recovery, businesses get very low taxes.

 
At 2/12/2009 4:23 PM, Blogger misterjosh said...

Unfortunately Seth, your suggestion will harm every American who produces anything for export.

That's not cool.

 
At 2/12/2009 6:07 PM, Blogger OBloodyHell said...

> California is part of America. It isn’t North Korea. How can it be bankrupt with all of those hardworking foreigners that now live there?

LOL.

What part of
“Of course it would. Socialism can bankrupt any wellspring, no matter how effulgent.”
do you not get?

Cali isn't NoKo. Yet. But it's certainly well along the way to Soviet Russia, and, unlike the USSR, citizens of Cali aren't trapped there. They vote with their feet. And the main reason for the building boom in NV and AZ is mildly clued-in people voting with their feet on the whole thing, and leaving Cali in droves. And since they're often the most productive ones, sick of getting ripped off by the mobs voting themselves bread and circuses, revenue goes... down...

What a surprise?

There's a reason that the running joke over the last 40-odd years has been some variant of:
"There are three communist states in the Americas: Cuba, Nicaragua, and California".

More and more, the only people left in Cali are idiots too stupid to get the F*** out.

> The big companies just want to pay everyone less money. Wake up, genius.

So start your own business with some other "ill-paid co-workers" and eat their lunch, and quit whining.

Geez how incompetent do you have to be to have a degree in chemical friggin' engineering and not be able to find a high-paying job easily in most of the last decade and a half? It's one of the more in-demand professions around.
Typical salaries for a chemical engineer with 6-8 years experience run from 78k to 91k. Sorry if that seems like a "sucky salary" to you. Shall I whip out my "world's smallest violin" and play a heartrending tune JUST for you?

Hint: If you can't find a job in Cali, you might do something lots of others have done. MOVE.

Find out where there's a demand for chemical engineers (without even trying: Alaska and Texas) and start tossing out your resume.

There's this neat, really cool NEW thing called the INTERNET, and it can make finding a suitable, high-paying job in another state a lot easier than it ever was in the past. You can actually have a job lined up before you ever go to the place you've selected as a nice destination.

 
At 2/12/2009 6:16 PM, Blogger OBloodyHell said...

> How about a huge tax cut on business(down to perhaps a fraction of a percent), a complete removal of the immigrant worker program, and a retention of the "Buy America" laws? Citizens get an assurance of no "jobless" recovery, businesses get very low taxes.

You got it half right. Trust me, as someone who has worked at a place that hired someone from Romainia, mainly because he was known by people from the local university while a student there, "hiring foreigners" is rarely easy, especially if they don't have a green card. The kind of ridiculous hoops that you have to jump through to do it isn't going to encourage any organization to do it unless they literally can't get an American who is competent at the job. The hoops they had to jump through to get the guy on board were something that no small business(i.e., less than 250-odd employees) is going to be able to waste a clerical employees's time on.

So the tax cuts by themselves are more than adequate for doing what is needed, you don't need any type of protectionism -- trade or employment -- which is KNOWN to have been a major cause of the length and depth of the Great Depression. All it does is trigger a retaliatory cycle that kills world trade, which is one of the most significant elements of the modern marketplace.


How the f*** can anyone actually even suggest that idea? It's categorically stupid, on every friggin' level. And that's been known for literally decades.

Simply put: If someone advocates "protectionism", STEP ON THEIR HEAD. They're too stupid and ignorant to have an opinion worthy of voicing, and they need to learn that immediately and inarguably, so they'll STFU.

 
At 2/12/2009 10:46 PM, Blogger @sethstorm said...

misterjosh:
Having trade being used against you isn't good either. That is, being in the Manufacturing Belt and having layoffs be a relative non-news item(save for Wilmington).

OBH:
It's not as if the Manufacturing Belt has tried it, but there are plenty on the wrong side. Is there something that you could suggest that convinces people to not stock up on grinding wheels, torches and pitchforks? Mind that the people you are working with have seen multiple tries at trade with about the same result.

For those whom have rarely seen growth in their region from trade, it is getting closer to being the only option left.

 
At 3/10/2009 1:56 PM, Blogger Realist Theorist said...

Here's a suggestion that is less ambitious that the one in the original post. However, it also does not raise any protectionist hackles:

Today, there are many families who live and work in the U.S. as "legal aliens" and who have applied for Green Cards. They are already here, already working. Many of them will wait for years for their Green cards: particularly if they're from India, China, Philippines or Mexico.

If these people have otherwise been approved for Green Card, but are simply in the "queue" because of annual quotas, they should be allowed to get past the quota limit if they buy a house.

That's a bare minimum suggestion. Other creative options are possible if people will only take off their xenophobic hats.

 

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