Ding-Dong, Shamnesty is Dead! 46-53! Eat That Presidente Jorge Bush!

George Borjas is one of my favorite authors, and I am happy to report he now has a blog. So let's leave it to him today to announce that the Jorge Bush/RINO/Kennedy/McCain Shamnesty went down to well-deserved defeat. I'm happy to say that both TN senators voted correctly on this piece of crap legislation. As George Borjas rightly points out, it's very rare when the political establishment wants something and doesn't get it. Maybe now George Bush can stop acting like he is the president of Mexico and quit tripping over his own feet long enough to slink quietly out of office next year. Perhaps there is hope for America after all...if enough people are interested enough in the right things at the right time, even the politicians will listen. :)

"...The President bet all his remaining political capital on a proposal he knew would tear his party apart. And the Senate came close to enacting very bad policy. It really makes me wonder: what the heck were they thinking?

There's something else worth pointing out. Here's a policy shift--amnesty and guest workers--that the entire political establishment as well as much of the mainstream media and academic elite wanted badly. It is seldom the case that something that the powers-that-be want so much fails to make it through. I am pretty sure there's a lesson in there somewhere. And the tactics used by the bill's opponents to fight the establishment's power and to weaken their control over key junctures in the information flow will provide lots of case studies that will be studied far into the future. No "Mission Accomplished" banners this time around.

Does this end the debate over immigration? No.

Why? Because our immigration system is truly broken.

Regardless of what happened at the Senate today, there are still 12 million illegal immigrants living in the country, and that number is increasing at the rate of about half-a-million a year. And there's no longer any need for the Bush administration to keep playing the charade of "more enforcement" that received wide media attention in the past few months. The economic and social dislocations caused by illegal immigration are not going to disappear simply because the issue is no longer in the political headlights.

Combine this with a legal immigration system that admits about 1 million immigrants a year--most of which tend to be low-skill workers. The economic pressures that both legal and illegal immigrants put on the low-skill labor market are severe, and have been ignored for years. I suspect that the immigration "problem" would have been long resolved had the labor markets for high-skill workers--say, for example, journalists and attorneys--faced the same pressures as those faced by low-educated workers.

Now that the debate is over, perhaps we can return some sanity and honesty into the intellectual discussion of what immigration does to the United States. A few simple rules to live by:

1. As Greg Mankiw nicely puts it in a post earlier this week regarding the economic effects of unions:

I have no doubt that making it easier for workers to form cartels would raise wages--at least for those workers in the cartels. But demand curves slope downward. When unions push wages above the equilibrium of supply and demand the side effects are not entirely benign.

Well, let's finally all join in and admit the obvious. There is no doubt that making it easier for more and more workers to enter the labor market will lower wages. "Demand curves slope downward" should be the new rallying cry. Perhaps now the economists at the CEA and elsewhere can recover from their amnesia regarding this fundamental law of economics.

(It is no coincidence that my 2003 paper that first reported the widely cited estimates of the labor market impact of immigration was entitled: "The Labor Demand Curve Is Downward Sloping").

2. There's also been a lot of fake fog thrown into the the question of whether immigrants pay their way in the welfare state. It's time for some sanity in this matter as well. The welfare state is specifically designed to transfer resources from higher-income to lower-income persons. Immigrants fall disproportionately into the bottom part of the income distribution. It is downright ridiculous to claim that low-skill immigrants somehow end up being net contributors into the public treasury.

3. And, finally, it's time to start worrying about the future. Even if immigration were to stop completely on its tracks right now, the consequences of what's happened in the past 30 years will continue for decades. What will happen to the children and grandchildren of today's immigrants? For instance, will the descendants of today's poor immigrant groups join the middle class or form a new underclass? How much ethnic inequality will there be 20 years from now, and how much social, cultural, and political conflict will arise as a result of this?

The debate is not yet settled. The Bush administration made a fundamental error of judgment by pushing this proposal so forcefully despite the fact that its detractors had valid doubts and were not bigots. For those of us who supported Bush in the past, such a misjudgment raises many doubts about the rest of the Bush legacy. Maybe those who faulted the Bush manner of governing--its arrogance, its lack of intellectual curiosity, and its obsession with having its way regardless of inconvenient facts--were right after all."