Archive

May 29th, 2016

Immigration isn't that bad for native workers

    Does immigration cost native workers their jobs or drive down their wages? This is one of the most contentious issues in economic policy right now. Fortunately, a lot of academic economists are doing some very smart, careful and thorough empirical work to figure out the effects of immigration on local labor markets.

    Various surveys and meta-analyses all reach one overwhelming conclusion: Immigration has at most only a small harmful effect on the native-born. If this were biology or astrophysics, that would be that -- the media would accept the scientific consensus, until new research came along and overturned it. But this is economics, and so politics and ideology inevitably get in the way. There will always be people who are in favor of immigration restriction, and they will always have reason to question what would otherwise be a well-accepted consensus.

    To some, this means that true consensus is impossible. Russ Roberts, host of the popular podcast EconTalk, sounds a pessimistic note in a recent interview:

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Presidential campaign pivots to personal conduct

    While the contest for the presidency should focus on the candidates' qualifications to run the world's most powerful nation, the current one instead is getting bogged down on personal behavior and trustworthiness.

    Donald Trump's business record finally has come under sharper scrutiny from the news media. Simultaneously, Hillary Clinton's handling of classified material while heading the State Department is under ever deeper investigation by the government.

    Not surprisingly, Trump, Clinton and their strategists have largely joined the pivot away from substantive policy discussions, effectively shunting the public's attention to the question of which of them is least qualified and least trustworthy.

    Sleuths at The New York Times, Washington Post, Wall Street Journal, Politico and other newsrooms are reporting at considerable length on Trump's involvement in Trump University, his real-estate trade school facing litigation from disgruntled former students. Reporters are checking into other Trump business enterprises, as well as into his alleged charitable donations to veterans groups and the like.

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Trump can't get past the door in Rust Belt homes

    Donald Trump has a personal problem with voters that transcends policy differences, partisan affiliations and political concerns: They don't want him in their homes and aren't eager to have their kids exposed to him.

    These are among the findings of an online poll of working-class voters in the Rust Belt. When asked which likely general election candidate would be a good role model for their children, these voters said they preferred Hillary Clinton, 39 percent to 14 percent. By a margin of more than three to two they said they would rather have her in their homes over Trump, according to the Purple Slice survey conducted by Purple Strategies for Bloomberg Politics.

    The poll surveyed 803 voters in households with earnings between $30,000 and $75,000 in Pennsylvania, Ohio, Michigan and Wisconsin. The Trump camp has predicted that he would do better than other Republican candidates with this demographic -- sometimes referred to as Reagan Democrats, though that's probably outdated.

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The proof behind Sanders's policies

    Mainstream U.S. economists have criticized Democratic presidential candidate Bernie Sanders's proposals as unworkable, but these economists betray the status quo bias of their economic models and professional experience. It's been decades since the United States had a progressive economic strategy, and mainstream economists have forgotten what one can deliver. In fact, Sanders's recipes are supported by overwhelming evidence - notably from countries that already follow the policies he advocates. On health care, growth and income inequality, Sanders wins the policy debate hands down.

    On health care, Sanders's proposal for a single-payer system has been roundly attacked as too expensive. His campaign (for which I briefly served as a foreign policy adviser) is told that his plan will raise taxes and burst the budget. But this attack misses the whole point of his health proposals. While health spending by the government would go up in the Sanders health plan, private insurance payments would disappear, generating huge net savings for the American people.

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The great nonexistent Hillary email scandal

    This is the last thing Hillary Clinton needed. Two weeks before the final contests of the 2016 Democratic primary, and just 78 delegates shy of wrapping up the nomination, she wakes up to find herself once again bogged down by the email scandal that just won't go away.

    But this time it's not Donald Trump piling on, it's the State Department's own inspector general, who issued a highly critical report of Clinton's by now well-known exclusive use of a private server for her emails while secretary of state. In so doing, concludes the report, contradicting what Clinton has asserted many times, she did, indeed, violate long-standing State Department rules. Not only that, she never sought permission to use her own private server, and would not have received permission if she had. And, in another violation of department rules, she failed to turn over copies of her emails upon leaving office. The report also chides her for refusing to meet with State Department lawyers conducting the internal investigation.

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Sen. Warren is good at her job

    Elizabeth Warren has a rare talent for distilling political messages. In 2011, as she was running for the Senate seat that she won the next year, the former Harvard law professor delivered the kind of concise, pointed rationale for public investment -- and the taxation to support it -- that the White House had been striving to master for the previous three years.

    Speaking inside a supporter's home, her remarks captured on a crude video that has since been viewed more than a million times, Warren addressed a prosperous, albeit entirely make-believe, business owner who was presumably questioning his tax burden:

    "You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for.

    "Now, look, you built a factory and it turned into something terrific, or a great idea. God bless -- keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along."

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Right-wing populists are running out of time

    Politics are so different in Europe and in the U.S. that analogies usually look contrived. Yet the demographics of those who support right-wing populists are strikingly similar on both sides of the Atlantic. And these demographics are likely to be the reason why the populist right, which appears to be on the rise, is actually peaking. If it doesn't win any major electoral victories in the next few years, it will have to slink off to the fringe.

    Last Sunday, Norbert Hofer of the anti-immigrant Freedom Party lost the Austrian presidential election despite winning the first round and leading in the polls up to election day. He ran again a generic progressive candidate, Alexander van der Bellen, who was technically and independent but was backed by the Green Party. By election day, he was also running against everyone else who didn't want the far right, Hofer rejects, to win. The demographics of his voters in the run-off with van der Bellen are similar to those of Donald Trump's in the race against Hillary Clinton.

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Got cheese? And how!

    As if we didn't have enough to worry about already, here comes a new issue: The Great Cheese Glut of 2016. The Wall Street Journal reports that as of March 31, 1.19 billion pounds had accumulated in commercial cold-storage freezers across the United States, the largest stockpile ever.

    This affects an entire global industry, from Wisconsin Dells to Whole Foods shelves. Yet each American would have to eat an extra 3 pounds of cheese this year, on top of the 36 pounds we already consume per capita, to eliminate the big yellow mountain. Even for a society that piles the stuff on sandwiches and rolls it into pizza crusts, that's a tall order.

    Thanks, Obama!

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Google will become prey, not the predator

    Although monopolies get a bad rap, they're not always a bad thing. In the short term, modern monopolies are often a boon to consumers. They bring valuable new inventions to market, and, in the case of platforms, they build new communities and markets that would not exist otherwise.

    The downside comes much later, as the monopolist ages and starts to crowd out potential new competitors without delivering new value. As legal expert and author Tim Wu said, monopolies "tend to be good-to-great in the short term and bad-to-terrible in the long term."

    Unlike the monopolies of old, however, platforms today are highly competitive. This difference results from the different mechanics of platform markets compared with traditional ones. Platforms compete based on not their assets but rather their networks of users. Users today can migrate much quicker than productive capacity could in the 19th and 20th centuries, as they are locked in by the value the platform delivers, not the assets it owns.

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Why Trump might win

    A Washington Post/ABC News poll released Sunday finds Donald Trump and Hillary Clinton in a virtual tie, with Trump leading Clinton 46 percent to 44 percent among registered voters. That's an 11 percent swing against Clinton since March.

    A new NBC News/Wall Street Journal poll, also released Sunday, shows Clinton at 46 percent to Trump's 43 percent. In April, Clinton had led 50 percent to 39 percent.

    Polls taken this far ahead of an election don't tell us much. But in this case, they do raise a serious question.

    Since he cinched the Republican nomination earlier this month, Trump has been the object of even more unfavorable press than he was before -- about his treatment of women, his propensity to lie, his bizarre policy proposals.

    Before this came months of news coverage of his bigotry, megalomania, narcissism, xenophobia, refusals to condemn violence at his rallies, refusals to distance himself from white supremacists and more lies.

    So how can Trump be pulling even with Clinton?

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