Chapter
7
Conclusion
As we have seen the one thing
that above all else characterizes the new economic order is an outright war
waged against the great American middle; the middle class and the productive
working class. The new ideologies underlying the transformation
of America arose in the turbulent period of the 1960s and early 1970s. Ironically
it was the very great affluence of postwar America that supported the social
programs and also provided sinecures for the social critics who pressed for the
ever expanding list of entitlements and diversity-promoting regulations. The
new elite, now turned into a permanent governing class, share a common
globalist vision; that being one of equality,
diversity, multiculturalism and globalism. Commitment to this
vision unites all factions of the elite: ex-radicals, old-fashioned liberals
and “compassionate conservatives”. Enforcers of the new orthodoxy, the
mainstream media, are quick to attack any who dare question the prevailing ideology.
Despite, or indeed because, of the ideology of diversity and equality the gap
between those at the top and those at the bottom has increased greatly and the U.S. economy has been progressively
hollowed out. The financial collapse and great recession has been one result.
Lessons Not Learned
Nothing deters the new ruling
elite from their disastrous economic course; not even the largest terrorist
attack to occur on American soil. The 911 terrorist attacks did not keep
business, and banking, as usual from quickly resuming. FBI Assistant Director Steve McCraw testified
before the House Subcommittee on Immigration, Border Security and Claims on
June 26, 2003 that the matricula cards issued by the government of Mexico were
not a reliable proof of identity. But that had not kept Bank of America from accepting
those cards as valid ID for mortgages and various other loans. As Assistant
Director McCraw testified:
These criminal threats are significant, but it is
the terrorist threat presented by the Matricula Consular that is most
worrisome. Federal officials have discovered individuals from many different
countries in possession of the Matricula Consular card. Most of these
individuals are citizens of other Central or South American countries. However,
at least one individual of Middle Eastern descent has also been arrested in
possession of the Matricula Consular card. The ability of foreign nationals to
use the Matricula Consular to create a well-documented, but fictitious,
identity in the U.S. provides an opportunity for terrorists to move freely within
the U.S. without triggering name-based watch lists that are disseminated to
local police officers. It also allows them to board planes without revealing
their true identity. All of these threats are in addition to the transfer of
terrorist funds, mentioned earlier.[1]
Michael Cutler, onetime INS
Senior Special Agent, observes that:
It
is unthinkable that, after the clear and convincing warning issued by the head
of FBI intelligence at a Congressional hearing conducted approximately 20
months after the worst terrorist attack ever committed on American soil, and
arguably the worst terrorist attack of modern history, bankers summarily
ignored that advice! Clearly these bankers do not say a pledge of allegiance to
the red, white, and blue flag of the U.S. but to a banner, likely green in
color, festooned with dollar signs![2]
Of course, bankers,
regulators and government policymakers have also been ignoring warnings about an
impending financial disaster for many years before and since 2001.
Such cluelessness is evident
even at the present day. The Republican leadership provides a case study in
obtuseness and wishful thinking. The demographic changes resulting from
immigration that have ushered them from power have apparently left no impression
on the minds of the top echelon of the Party. Republican
leaders plead for the party to accommodate itself to the concerns of all groups
but one; that one being the white working class. The latter have seen their
jobs exported and they and their children are forced to compete with low wage
immigrant labor for the ones that remain. They are also the ones that must bear
the burden for the social policies pushed by the insulated elite.
A study by political quant
Sean Trende shows that “the 2012 elections actually weren’t
about a demographic explosion with non-white voters. Instead, they were about a
large group of white voters not showing up.” He observes that while there were
increases in the Black and Hispanic vote, these were “dwarfed by the decline in the number of
whites.” Looking at the critical swing state of Ohio Trende notes the
following:
We can see that the counties clustered around
Columbus in the center of the state turned out in full force, as did the
suburban counties near Cincinnati in the southwest. These heavily Republican
counties are the growing areas of the state, filled with white-collar workers.
Where things drop off are in the rural portions
of Ohio, especially in the southeast. These represent areas still hard-hit by
the recession. Unemployment is high there, and the area has seen almost no
growth in recent years.
My sense is these voters were unhappy with
Obama. But his negative ad campaign relentlessly emphasizing Romney’s wealth
and tenure at Bain Capital may have turned them off to the Republican nominee
as well. The Romney campaign exacerbated this through the challenger’s failure
to articulate a clear, positive agenda to address these voters’ fears, and
self-inflicted wounds like the “47 percent” gaffe. Given a choice between two
unpalatable options, these voters simply stayed home.[3]
We may reasonably conclude
that the white voters who did not show up to vote Republican are those who have
suffered the most from the policies pushed by the ruling elite over the last
four decades.
Economics and Reality
Many economists, particularly
those of a free market conservative or libertarian persuasion, continue to
cling to outmoded economic theory regarding trade and immigration. They
discount the importance of meta-economics – the underlying
structure supporting the economic system, culture, law, the social contract and
human capital. Liberals including some liberal economists believe that the
American people cling to their murderous guns and outmoded religion and should
be punished. Similarly, many of their conservative counterparts believe that
the American people cling to their belief in fair labor practices, a social
safety net and social security. Thus, according to the likes of the Wall Street
Journal and Cato Institute libertarians, they must be punished by having their
jobs deported while being replaced by a new and, presumably, more pliant
population. These along with many in the Republican establishment are advocates
for free trade and open borders.
Besides the deterioration in
the U.S. standard of living, the hollowing out of manufacturing promoted borrowing
and financial speculation. The recycling of U.S. dollars at low interest rates
back into the economy by America’s foreign competitors financed U.S. importing
and consumption and fed America’s massive increase in debt.[4]
Following the examples of NAFTA and CAFTA the free traders are now pushing for
a Free Trade Area of the Americas which would impose tariff reductions and
trade controls encompassing almost the entire Western Hemisphere. As we have
seen such ill-considered trade agreements have often turned out to be
one-sided. High technology CEO Richard Elkus points out how America has been
shut out of future industries:
Just as the loss of the VCR wiped out America’s
ability to participate in the design and manufacture of broadcast
video-recording equipment, the loss of the design and manufacturing of consumer
electronic cameras in the United States virtually guaranteed the demise of its
professional camera market....Thus, as the United States lost its position in
consumer electronics, it began to lose its competitive base in commercial
electronics as well. The losses in these related infrastructures would begin to
negatively affect other downstream industries, not the least of which was the
automobile.[5]
Mr. Elkus then
says something of supreme importance emphasizing the organic nature of an
economy; an inconvenient fact too often not acknowledged by economists of all
political persuasions. “Like an ecosystem, a competitive economy is a holistic
entity, far greater than the sum of its parts.”[6]
Open Borders Conservatives
It is hard to
understand the obsession free-market conservative and libertarian economists
have with open borders and mass immigration; particularly when one considers
how the rapid demographic consequences are effectively shutting them out of
political influence. Typical representatives of this species of thought are the
Cato Institute’s Daniel Griswold and Jason Riley of the Wall Street Journal. The
ruins of the World Trade Center were still smoldering when Griswold rose to the
defense of the very immigration status quo that had eased the way for the
terrorists. Griswold attacked several writers at National Review as
"anti-immigrant crusaders" who seized the opportunity to “whip up
hostility to immigration." He then turned on a new Border Patrol
anti-crime initiative viewing it as “just another example of government trying
to stop people from doing something that is natural, to better their conditions."
John Fonte of the Hudson Institute observes that Griswold’s position is not
representative of classical libertarianism as exemplified by the Nobel
Prize-winning economist Frederich A. Hayek “who stood first and foremost for
the rule of law and “would surely have repudiated an extreme laissez-faire
dogmatism that argues that a free society should not establish and enforce
rules to regulate the admission of non-citizens.” In addition “Griswold's
position expresses utter contempt for American democracy and the principles of
republican self-government.”[7]
Griswold and his colleagues at the Cato Institute assert that the problem is
not one of immigration but rather that of the welfare state. As we have seen
above, immigrants, even those here illegally, are able to avail themselves of
many welfare benefits. Robert Rector of the Heritage Foundation eviscerates
this libertarian viewpoint:
While most open-border libertarians proclaim a
desire to dismantle both borders and the welfare state, in practice what they
offer is open borders today and a vague (and almost certainly illusory) promise
to end the welfare state in the indefinite future. As Milton Friedman
understood, open-border enthusiasts have the sequence wrong: Opening borders
with the redistributionist state still intact will result in a larger and more
confiscatory government. In response to libertarians who propose to open
borders and dismantle the welfare state, practical conservatives should answer:
“Go ahead. Dismantle the welfare state. As soon as you’ve got that finished,
let us know, and then we’ll talk about open borders.”[8]
Jason Riley, a member of the Wall Street Journal
editorial board also argues the case for unrestricted immigration. A review of Riley’s book, Let
Them In, appeared in the Wall Street Journal which summarized his major themes.[9]
Looking at what he calls the work-force effect Riley asserts that immigrants
fall into two groups, the low-skilled and the highly educated with American
workers falling between these extremes. Thus immigrants “tend not to elbow
aside natives for jobs and depress wages.” As many studies have shown (see
Chapter 3) this contention is simply wrong; in fact there are many U.S. workers
both at the lower and higher end who have lost out to immigrant labor. Moreover
given the dumbing down of the U.S. education system the suspicion arises that
many high school graduates and even those with some college are really in the
low-skilled labor category. It is an irony that this was written at the
beginning of 2008 when unemployment began its rise to 8% and above with the
real rate being in double digits. One may suspect that Riley still holds to the
same opinion today since the Wall Street Journal view is echoed by a GOP
establishment pushing their own amnesty and skilled worker immigration proposals.
Riley’s next concern is with the “talent imperative”. He
casts blame on the teachers' unions for the dreadful condition of American
public education. It is easy and convenient to blame teachers while ignoring
the quality of the student body and particularly the significant burden placed
on the system by the flood of non-English speaking immigrant underclass
children. He worries that without talented employees from India and China Bill
Gates will not be able to keep Microsoft competitive. To keep the American lead
in science and technology it is “better to let Apple and Google and eBay make
their own personnel decisions without interference”. Of course he does not
consider the alteration of immigration laws so that Gates can employ low-cost
software engineers “interference”. Riley is another free-market advocate who
evinces a woeful lack of confidence in the ability of the market to adjust. He
does not acknowledge the price signal given by the labor market; a rise in
wages will induce additional entry. In the past many workers in high tech have
had backgrounds in engineering or science not directly related to computer
technology; a rise in wages will induce many of these to enter the market. A
rise in wages will also encourage talented students to shift their studies from
law or finance to high technology.
He also contends that the true costs of illegal
immigration are negligible; that in fact illegal workers produce a net surplus.
He asserts that they do not have access to federal welfare benefits and are
also reluctant to access emergency health care owing to a fear of apprehension
and deportation. In reality, however, his alleged fear factor is simply false;
illegal aliens no longer live in the shadows; indeed as shown during
demonstrations and even public appearances some are quite openly and loudly
visible. Emergency rooms are under great pressure due to immigrant and illegal
immigrant usage. And as we have seen in Chapter 3, even if not directly
eligible the children of illegal immigrants must be given access to education
by law and at the same time require more expensive bilingual programs. These
children also have access to numerous welfare programs. He also alleges a
social security surplus since illegals pay payroll and Social Security taxes
without the attendant benefits. He ignores the fact that many work off the
books while others are in such low wage brackets that their contributions are
minimal. As we have seen in Chapter 3 the benefits of illegal aliens accrue to
their employers; the greater costs are borne by the general tax-paying public.
Riley warns of the political danger immigration
restrictionism presents to his fellow conservatives. Given the large and
increasing Hispanic population and a more generally tolerant electorate
Republicans and conservatives are certain to lose out. This of course ignores
the fact that the current demographic trends are not a law of nature but were
deliberately engineered, and the engineers included conservatives just like
Riley. Thus the arguments used by Riley and other open borders advocates are analogous
to those of the man who murders his parents and seeks leniency because he is an
orphan. Such conservatives neither acknowledge their responsibility nor
apologize for their mistakes; they simply berate others for various forms of
bigotry. Moreover McCain, one of the most pro-immigration politicians of either
party, did very poorly with the Hispanic vote. California was once a middle of
the road swing state, now it is permanently lost due to immigration; apparently
Riley wants the same for the rest of the country. Bush and Rove appeased
Hispanics in every possible way and yet the GOP is lucky when it gets even a
third of their vote. For such conservatives mass immigration is similar to the
business which loses money on every unit sold but seeks to make it up on
volume.
Riley’s response to the “policy challenge” of illegal
immigration is to provide “more legal ways for immigrants to enter the
country.” Of course an easy way to reduce illegal immigration is to simply make
everyone who enters legal; problem solved. Latino immigrants are “economic
migrants” and should not be painted as “violent criminals or Islamofascists”.
His incoherence here is striking; his statement implies that he only wants
Latino immigrants and would discriminate against Middle Easterners. He would
allow mass immigration from Latin America while banning it from even those few
Muslim countries that are still friendly to the U.S. One might suspect that he
is not really in favor of such blatant discrimination and his defense of
Hispanic immigrants is simply a cover for the real agenda which is to “let them
all in”. Disingenuously he states that “post 9/11, knowing who's in the country
has rightly taken on an urgency.” But if we let all in who want to come here
(except presumably Muslims?) what will be the costs of monitoring them to make
sure they are not terrorists’ or criminals? Do we have the administrative
apparatus in place for that? What increase in the size of government will be
necessary to make sure that the millions Riley would allow in meet the
standards? Of course one might suspect that he doesn’t want any real monitoring
at all and if so what does that say about his alleged concern of knowing who is
in the country?
Mac Johnson at Human Events concisely summarizes the
flaws in the Wall Street Journal position on open borders:
More
than anything else, in my opinion, it shows that the central failing of the
right-wing of the open borders lobby is viewing human beings as interchangeable
parts — to be self-traded like commodities across any frontier according to the
simple dictate of supply and demand. But
men and women are not some sort of sentient pork belly. Men and women are what nations are made
of. They carry in their hearts and minds
the culture and beliefs and common experiences that make one nation rich and
free and another poor and corrupt.
When
you discuss the idea of unrestricted human migration across national borders,
you have to recall this. Immigration has
economic consequences, but it is not exclusively an economic issue. It is not even primarily an economic
issue. It is primarily a social or
political issue. And when the
immigration in question is illegal, then it becomes an issue of the rule of law
as well.
Men
are not widgets, and immigration affects more than just numbers in an abstract
spreadsheet. America is not merely an
economic opportunity zone for all comers to profit from. America is a homeland. America is a home to a distinct culture and
the people that created it or have been assimilated into it. It is possible that the philosophical
bookends of rightist globalism and leftist multiculturalism have squashed the
instinct of that people to protect their culture and to claim the right to
restrict entry into their home. But I
doubt it.[10]
A
Liberal Economist’s View of the Financial Meltdown
Nobel Prize-winning economist
Joseph Stiglitz has a different view of the great financial meltdown. Stiglitz
is, without a doubt, one of the leading economic thinkers of the present day.
And although he is quite liberal Stiglitz has at least some
understanding that an economy is embedded in a larger social structure and is
an organic entity, as shown in his 2002 book Globalization and its Discontents.[11] Liberal economists tend to be a bit more
skeptical when it comes to free trade but blindly follow the diversity dogma
when it comes to immigration and have a stubbornly incomplete view of the most
important factors underlying the mortgage meltdown and recession. Stiglitz, in
the analysis of the Great Recession he presents in his recent book Freefall, demonstrates
this incomplete view.
Stiglitz is highly critical of the bankers; some of this
criticism is quite justified but much of what he writes expresses the inner
contradictions inherent in the liberal globalist worldview. Referring to the
cost of funds to bankers, Stiglitz asserts that had “the low-cost funds been
used well, for example, if the funds had gone to support investment in new
technology or expansion of enterprises, we would have had a more competitive
and dynamic economy.”[12]
He thereby ignores the fact that new technology expansion was limited by cheap
labor via ‘free trade’ abroad and immigration at home. In an amazing example of
liberal inconsistency he states that “it was easier just to hand out credit
cards to anyone who breathed than to do the hard work of credit assessment and
judge who was creditworthy and who was not.”[13]
He is evidently out to damn the banks no matter what they did. If the banks
followed his recommendation he and his liberal colleagues would have, and did
indeed, condemn such ‘discrimination’. When some bankers worried about the
higher interest rates that would result from repealing the 2005 bankruptcy act,
Stiglitz observed: “If so, so be it: Americans have overborrowed, at great cost
to society and the whole world. An incentive for saving would be all for the
better.”[14] But
if despite the higher rates Americans continued to borrow one might suspect
that there would be complaints about greedy bankers exploiting the public. And
if there were stricter regulations as to who can apply for credit in the first
place liberals like Stiglitz would once again denounce unfair discrimination in
the credit markets. Stiglitz notes the virtues of the traditional banking model
but ignores the government mandate that was most instrumental in impelling the
banks to suddenly change their business practices. This lack of curiosity regarding
government housing mortgage mandates on the part of progressive economists like
Stiglitz is astounding. They are the counterparts of the free market
conservatives who are inclined to excuse the actions of big business and the major
financial companies.
He advocates that government
provide low interest credit to owners in distress as it has done for the large
banks; there is no way one can justify denying the same benefit to all. He also
notes that this fairness justified both government student loan programs and
government mortgages.[15]
However, while the banks may have been bad in many respects, the idea that
having bureaucrats unconstrained by any bottom line considerations allocating
capital is an invitation to massive corruption and favoritism; the cure is
worse than the disease. For example the Federal agencies were designed to
promote home ownership but were pressed into making bad decisions which ignited
the housing mess. And a new financial crisis involving student loans has recently
surfaced.
Stiglitz correctly notes that the too big to fail
institutions are also too big to be managed properly. Their competitive
advantage arises from their ability to engage in risky investments while obtaining
political favors with consequent government subsidies.[16]
What he and other liberal analysts don’t consider, when they rail against those
banks too big to fail and call for breaking them up, is that only large
institutions with their ability to devise new ways of passing on the resulting
risk could have supported government affirmative action in the credit markets.
A system consisting of a large number of small banks could not have diversified
their risk and would have collapsed much earlier. These would have been
replaced by a government banking system with characteristics similar to the one
he decries in order to carry out such policies.
He also writes about the ethically challenged Angelo Mozilo
of Countrywide.[17] However,
he ignores the sequence of events that enabled Mozilo to embark on his schemes.
It was government with its CRA enforcement effort that put the wheels into
motion. Smart operators like Mozilo saw how to take advantage of this Federal
initiative. His success then motivated imitators and sparked many new
innovations in mortgage finance. These innovations were then extended throughout
the entire mortgage market and beyond. Finally the Wall Street greed machine
latched on to a potential source of new profits and the subprime takeoff began.
Stiglitz presents a number of proposals for the reform of
the financial markets. He advocates joint and several liability of all
participants on the exchanges requiring that all exchange participants put up
all of their assets before accessing any taxpayer money. He then states that he
suspects “that such a provision might lead to the end of the market”. He also
contends that: “What is needed is a Financial Products Safety Commission. One
of the tasks of such a commission would be to identify which financial products
are safe enough to be held by ordinary individuals and in what
circumstances.” He advocates adding
financial experts from the unions, NGOs and universities to the regulatory
ranks. He favors the idea of a multiplicity of regulators even if it results in
some duplication of effort. Finally he cautions against adding still more power
to the failed Fed.[18]
His lack of concern regarding the end of the financial exchanges seems very
reactionary; does he recommend going back before the invention of the exchanges
in the 16th and 17th centuries? The Financial Products
Safety Commission is not a bad idea. Of course, a truly honest commission would
have put an end to affirmative housing credit. In general his proposed reforms
are too complex; what would suffice are transparency and the cultivation of
zealous and objective professional regulators free from the foolish liberal
imperatives such as those that existed at the Boston Fed.
Positions held by liberal
economists are frequently naïve, inconsistent, contradictory and incoherent; a
result of blind adherence to the liberal worldview. Stiglitz, for example,
praises the life insurance model as contrasted with the insurance written on
securities by AIG. He observes that “companies can get data on life expectancy
by occupation, sex, income and so forth, and make an even better prediction of
the person seeking insurance.”[19]
This is an amazing example of the inner contradictions of the modern liberal
ideology as exemplified by one of its leading economic thinkers. In the housing
market the insurance failed initially at the source since the lending institutions
were not permitted to take income, credit history etc. into account. One must
wonder whether he thought about this when he writes so knowingly and correctly
about life insurance. Typical of liberals, Stiglitz does not credit government
affirmative action as a possible cause of the economic crisis. This is a point
that can be argued either way, but he does not mention it at all, not even as a
hypothesis to be refuted.
The same applies to other truths inconvenient to liberal
thinkers; Stiglitz cites a number of “challenges’ facing America.”[20]
He mentions global warming without a word regarding the exponential growth in
population. Liberals refuse to mention the undeniable contribution of
population growth to the environmental problems that so concern them. To do so
would be to acknowledge that the population increase is not occurring in the
white west and would inevitably raise the subject of mass immigration. He
decries America’s inefficient education system without making any mention of
the quality of the students or the effect of large scale immigration. He is
greatly concerned about the state of higher education; he favors devoting
increased resources to this as a source of needed technical skills and
expertise. However, he fails to mention that American students are motivated to
take ‘victims studies’ programs while leaving the useful STEM studies to foreign
students. Of course he approves the fact that foreign students become permanent
residents without considering that they now consume and generate pollutants like
Americans; and this despite his professed concern for global warming. He
praises Cuba’s reduction of its infant mortality rate. However one might expect
that an economist would raise the possibility that an inordinate share of
scarce medical resources devoted to a showcase area which is favored by the
rulers will produce such a result.
Stiglitz frequently mentions
the socialist nations of Western Europe; one of his favorites being that of
Sweden.[21]
He notes America’s lack of generosity both domestically and with foreign aid as
compared to that of Europe. His disdain for his own country, typical of the 60s
liberal elite, is obvious. But it is interesting that he chooses the
Scandinavian countries and Western Europe as paragons, countries that have been
displacing their own populations at an even greater rate than has the U.S. He
also ignores the fact that Europe’s generous welfare states were made possible
by the U.S. defense shield. While criticizing America’s lack of generosity to
developing nations he ignores much worse cases. For example he avoids mentioning the Gulf States
and Saudi Arabia whose stingy elites, with their hidden stashes of forbidden
spirits, are far worse than the U.S., even when it comes to helping their own
co-religionists in distress. His admiration for Sweden is particularly ironic
as it has now become the rape capital of the western world due to mass
immigration. Sweden now has a rape rate of 53/100,000 compared to 29 for the
U.S.[22]
In another example of the
blinkered worldview of liberals Stiglitz bemoans the supposed fact that IMF
pressure on recipient countries to cut back on spending had forced Pakistanis
to send their children to “the madrassas, where they would become indoctrinated
in Islamic fundamentalism”.[23]
It requires Incredible naiveté to believe that most Pakistanis are wannabe
Kemalists who were extremely reluctant to have their children indoctrinated
into Islam and did so only when forced to as a last resort.
Finally, Stiglitz’ position regarding immigration is
typical of many liberal economists and is quite revealing. He bemoans the fact that
labor does not flow as freely as capital “except in the case of the most
talented individuals”.[24]
This contradicts his professed concern for the environment, for the neediest
and for middle-class Americans who “have fared far worse in recent years”. He
points out that between December 2007 and October 2009 the economy lost 8
million jobs. With new entrants to the labor force more than 12 million jobs
would need to be created for full employment. But he says not a word about the
millions of immigrants, legal and illegal, who have been added to the work
force over the preceding decade; nor does he consider any possible immigration moratorium
during these times of high unemployment. In an analysis of the effectiveness of
stimulus programs he refers to spending on foreign contractors in Iraq as
having a low multiplier but conveniently ignores the multiplier effects of
remittances sent home by immigrant, including illegal, workers.[25]
He expresses numerous times his opinion that government should concentrate on
helping the neediest, while apparently favoring importing even more. Thus ironically
he joins with his ideological adversaries, conservative free market economists,
in their desire for more low-wage labor.
Epilogue: Time Hath Found Us
The Case for Economic Nationalism
The
theme of these chapters has been one of economic nationalism.
Such economic nationalism should of course be flexible and pragmatic as has
been the case through most of U.S. history. The defenders of the status quo
should be confronted with the following question. We have had a virtual free
trade regime with China, East Asia, and NAFTA. We have also had the largest
immigration flow in history since the 1965 reform; a flow that has accelerated
over the last quarter century. If these have been so beneficial, then why are we
in these dire circumstances today?
We have also seen that both conservative
and liberal economic thinkers are slaves to obsolete ideologies. Society and
the economy are complex systems, organic in nature. Conservatives who worry
about the unintended consequences of government programs and liberals concerned
about the ecological balance should both understand that evident fact. But apparently very many of them don’t. There
are trade protectionists and immigration restrictionists in both conservative
and liberal ranks; these have been relatively powerless. The inner contradictions
in the worldview of both ends of the elite political spectrum abound. Liberals,
for example, show more of a tendency toward protectionism. However they are in
favor of bringing in large numbers of immigrants, a policy that reversed the
population stabilization previously attained by American citizens. And, of course, they advocate providing the ‘American
Dream’ for these immigrants. However,
their fervently professed concern for the environment leads them to promote
policies hampering U.S. manufacturing in general and energy production in
particular, thereby undermining both the protection of American industry and
the attainment of high living standards for their immigrant clients.
Given the
betrayal of workers by their supposed defenders in the Democrat Party and the
betrayal of principle and law as well as domestic industry by the Republicans,
the time may have come to consider a third party championing economic
nationalism. Such a party might be able to build up a sufficient base,
possibly even a plurality to advance its agenda. Economist Alan Tonelson hints
at such when he advocates a coalition of immigration and trade realists; a
coalition that would span the political spectrum:
The president’s latest end run shows that the
immigration realists’ plate will remain dauntingly full. But they should
strongly consider offering a helping hand to a trade realist community clearly
needing assistance. The immigration control movement itself would benefit. And
strengthening the trade policy critics would help reinvigorate a U.S. economy
whose weakness plainly threatens all Americans’ well-being.
The immigration realists’ success has shaped the
national political landscape for so long that it is all too easy to take for
granted. It shouldn’t be. Nor should the powerful interests they have
frustrated be overlooked. Save for desperate gambits like Obama’s new
deportation policy end-run, the realists have not only blocked the Open Borders
agenda for years. They have prevailed over an even stronger coalition than that
faced by the trade realists.
Both groups of economic realists have been
battling Big Business, Big Agriculture, Wall Street, and the mainstream media.
But the immigration policy critics are also opposed by a union movement that
stands with the trade realists, and by the leadership of the Democratic party.
It’s true that immigration realism is now endorsed — to varying degrees — by
most Republican party kingpins. But this development is fairly recent.
Previously, these Big Business-friendly politicians — including, of course,
former President George W. Bush and 2008 Republican presidential nominee Sen.
John McCain of Arizona — were active Open Borders advocates.[26]
Summary of the
Meltdown and Great Recession
To conclude, the causes underlying the great mortgage
crisis and recession can be summarized as follows. First of all the American
economy was increasingly hollowed out as a result of these factors: the cult of diversity and affirmative action
arising from the ideology of the 60s generation; mass low wage and low skilled
chain immigration resulting from legislation beginning in the 1960s; the free
trade and globalization imperatives of the last few decades. These were
accompanied by an explosion of financial innovation due to massive debt,
globalization and subprime mortgage securitization. This was aggravated by Wall
Street greed, ineffective regulators and a housing bubble due to easy money. Affirmative
action and immigration impelled subprime mortgages while the Wall Street
machine’s financial innovation made them possible. The mortgage meltdown was the inevitable result. The subsequent recession was
made more intractable due to the hollowed out economy and the ineffectiveness
of economic stimulus owing to leakages as a result of both the trade deficit
and immigrant remittances.
[1] Michael
Cutler, “Immigration — The Modern Day ‘Gold Rush’”, Social Contract Journal, Spring 2012
, p. 43.
[2]
Ibid
[3] Sean
Trende, “The Case of the Missing White Voters”, November 8, 2012, http://www.realclearpolitics.com/articles/2012/11/08/the_case_of_the_missing_white_voters_116106-2.html
[4] Alan
Tonelson, “Immigration Realists Need to Focus on Trade Policy”, Social Contract
Journal, Summer 2012, p.10.
[5] Ian
Fletcher, “The Case against Free Trade”, Social Contract Journal, Summer 2012,
p.5.
[6]
Ibid
[7] John Fonte, “Dogmatic Libertarians Over the edge” May
9, 2002, http://old.nationalreview.com/comment/comment-fonte050902.asp
[8] Robert
Rector, “Look to Milton: Open borders and the welfare state”, June 20, 2007, http://www.nationalreview.com/articles/221330/look-milton/robert-rector
[9] Jason
Riley, “Let Them In” Wall Street Journal, May 16, 2008.
[10] Mac
Johnson, A Nation of Widgets: The Wall Street Journal and Open Borders,
December 12, 2005, http://www.humanevents.com/2005/12/12/a-nation-of-widgets-the-wall-street-journal-and-open-borders/
[11]
See his critique of those economists who pushed for a much too rapid transition
to free markets in chapter 5, “Who Lost Russia” in Joseph Stiglitz,
Globalization and its Discontents, New York, Norton, 2002.
[12] Stiglitz,
Freefall, p. 9.
[13]
Ibid, p. 177.
[14]
Ibid, p. 181.
[15]
Ibid, pp. 103-104.
[16]
Ibid, p. 165.
[17]
Ibid, p. 280.
[18]
Ibid, pp. 174-179.
[19]
Ibid, p. 170.
[20]
Ibid, pp. 192-194.
[21]
Ibid, pp. 196-97.
[22] Ingrid
Carlqvist, “Toto, I Have A Feeling We’re Not In Sweden Anymore”, Gates of
Vienna, July 15, 2012.
[23]
Stiglitz, p. 222.
[24]
Ibid, p. 221.
[25]
Ibid, pp. 60-63.
[26] Tonelson,
“Immigration Realists Need to Focus on Trade Policy”, p.7.
