They aren't making any more...

But they are finding more farmland.  In a striking example of a nation with a clear national policy and plenty of hard-pressed citizens to put it into practice, China is slowly working to secure food by acting like the BTO for the world.

China's Ministry of Commerce triumphantly announced this month that its bilateral trade with the continent is set to hit $100bn (£67.8bn) by the end of 2008, two years ahead of schedule. Africa's plentiful oilfields and rich mineral deposits are top of China's imports, and in return the world's most populous nation is exporting tens of thousands of its countrymen.
By some estimates, 750,000 Chinese people have spent time on the continent or have moved to Africa permanently to do business and take advantage of the natural resources. And Hebei, the province from where the middle-aged Mr Liu hails, is no exception. He reckons 10,000 farmers from Hebei alone have gone to 18 African countries in the past few years.
They work in "Baoding villages", named after the dusty township where Mr Liu lives; he likes to point out that Baoding means "Protection and peace". The villages, ranging in size from 400 to 2,000 Chinese, have been set up across the continent, from Nigeria to Kenya, from Sudan to Zambia.
Mr Liu started the Baoding villages when he was head of Hebei province's foreign trade bureau in 1998 and was seeking ways to boost the local economy, which had been dampened by the Asian financial crisis. He discovered Africa.
"We found Africa was not affected by the crisis, and we went there, and found that local people were short of food, even though there was lots of land not in use for farming and plenty of animals," he says. "So I decided to switch from exporting goods to exporting agricultural expertise."

It is a winning formula for China, which has more than 20 per cent of the world's population but only 7 per cent of its arable land. "China has too many people and too little land," Mr Liu ponts out. "In Africa, they have plenty of land and too few farmers. Places such as Ivory Coast are short of 400,000 tonnes of food a year, and the local people cannot farm enough to feed the population. Local farming skills are not developed." [More]

While this certainly looks like a mashup of colonialism and outright invasion, as long as Africans welcome the immigrants, who is to say they are imperialists?  It certainly offers a stark comparison with our military-based nation building.  And China is hardly alone in this strategic effort.

From a long term perspective, our ignorance of Africa prevents much understanding of the possibilities for farming there, given the right people in charge.

For instance we have little appreciation for how enormous the continent is.

I remember joking about Brazil would never realize its agricultural potential only to have to eat those words a few years later. We may be ignoring the same or even larger competitive emergence when the energy of Chinese farmers is coupled with underutilized resources.

The Italian garment industry certainly found this out when they began importing cheap Chinese labor. To their consternation, the workers rapidly became managers and then owners.

But most brands aren't so straightforward. To please customers looking for the "Made in Italy" label, several luxury companies now have their goods made in Italy by illegal Chinese laborers. The Tuscan town of Prato, just outside Florence and long the center for leather-goods production for brands like Gucci and Prada, today has the second-largest population of Chinese in Europe, after Paris. More than half of the 4,200 factories in Prato are owned by Chinese entrepreneurs, some of whom pay their Chinese workers as little as two euros an hour. [More]

Undoubtedly this global recession will change attitudes about immigration. Already our inflows of Hispanis workers have slowed dramatically, and perhaps even reversed.  We may yet look back on the good old days of immigration problems becuase they were clear evidence of a growing economy.

The power of China is people, something generally not recognized in the west, where we see population as a problem. One reason I tend toward occasional optimism about the global economy is we now have several  hundred million more minds engaged in finding answers, instead of the few in the developed world.

Problem solved...

Pat Buchanan can pause for breath. The wave of Hispanic immigrants is slowing.

Unfortunately, the cost may be a vibrant, expanding economy.

Such figures miss those who cross successfully and recount those detained several times, but they show a clear trend. So does evidence from remittances. Mexico’s central bank reports that, after years of eye-popping growth, the amount of cash sent home by migrants inside America is falling. Last year such flows were worth $24 billion—more valuable than tourism. But in the first quarter of this year the year-on-year figure was down 2.9%, according to a new report by Goldman Sachs.

Better scrutiny of flows across borders after 2001 probably exaggerated the real rate of growth, so it was bound to taper eventually. But even with that in mind, it is clear that migrants really are sending less money home. A poll of migrants across America published by the Inter-American Development Bank in April confirmed that fewer are sending money back regularly: in 2006 three-quarters of migrants did, this year only half report doing so. Nor is it only Mexico; Brazil, the second-largest recipient of remittances in the region, saw them slide by 4% last year, to $7.1 billion.

Two factors, each as ugly as the other, probably explain the double downturn in flows of people and money: hostility to migrants, especially illegal ones, and America’s deepening economic gloom. The impact of the former is plain: state-level laws that make it illegal to employ migrants without documents, ever more aggressive raids on businesses that hire such workers, and better technology to share information that will lead to catching them. [More]

Of course it is not so simple as to suggest we scuttle our economy to keep outsiders from wanting to come in. But oddly enough, that thinking could be completely wrong. It was the influx of cheap labor that fired the engines of our economy according to some.

Letting in a low-skilled immigrant to mow my lawn will indeed lower average productivity in this country. But I will be better off.

To the extent that low-skilled immigrants are significant, standard productivity indicators can be misleading. For example, suppose that France lets in a bunch of low-skilled immigrants and puts them on welfare, while we let in a bunch of low-skilled immigrants and put them to work. Then our GDP per capita will be higher, but France's GDP per worker will be higher and their GDP per hour of work will be higher. If you use the latter as a measure of productivity, you would say that France is following a brilliant strategy, and we should copy it.

To get closer to a relevant measure of national economic performance, you might invent something like endowment-adjusted consumption per working-age adult. By adjusting for endowment, you correct for the lower skills of immigrants. By using consumption, you get a measure that is closer to the quality of life. And by using working-age adults, you don't treat high unemployment of low-skilled workers as a good thing.

But it's important to remember that you personally don't get to consume GDP per capita. You get to consume based on the purchasing power of what you produce. If immigrants lower the cost of goods and services for us, then bully for immigrants. [More]

The "rise of the rest" could very well solve our illegal immigration problem. And we may miss it.

Bad news travels fast. Word from communities south of the border is that a life-gambling trip to the United States in search of work is not worth the effort.

America's weak economy and its strong communication system have done more to stem the flow of immigration than Lou Dobbs and could have ever imagined. The question becomes, do we really need a wall? There will be fewer immigrants coming our way, and with fewer workers, who'll build it? It turns out that bad news through word-of-mouth is stronger than the Patriot Act.

And here's the greatest irony: if the wall is scrapped because of a lack of need, we could thank the immigrant grapevine for saving the Constitution from decimation. Granted, our Constitution won't be safe until the Patriot Act and those who hide behind it to propagate their fear, are gone. But until that happens, our weak economy seems to be doing yeoman's work along the border. [More]

Let's hear it for recession.

Fallout from the housing slump...

Our neighbors adjusting to the repercussions from the American economic headache, just as they tagged along on the ride upward. The loonie is at $0.99 - a thirty year high. If you live along the friendliest of borders, the impact is considerable.

Only hours before the U.S. rate cut announcement, the Canadian forest industry, burned by the double whammy of the surging loonie plus the housing recession in its largest export market, also appealed to the Bank of Canada to act to moderate the loonie's surge.

Further, it asked the federal government for, among other things, more tax relief, including the extension of a two-year tax break on new investments in machinery and equipment to help it compete.

The federal government and Bank of Canada must act now to mitigate the damage that the rapid appreciation of the dollar is doing to Canada's manufacturing sector, the Forest Products Association of Canada appealed in a news release.

"The dollar ... is up over 10 per cent from the 88-cent level it was at the start of 2007 and more than 53 per cent from the 63-cent range it was at five years ago this month," said association president Avrim Lazar.

"This has placed enormous pressure on Canada's forest-products industry and Canada's manufacturing sector more broadly." he said, noting that since 2002, 110,000 jobs having been lost in Canada's manufacturing sector, including 32,000 jobs in the forest sector. [More]

Perversely, the rising price of lumber won't be much help to our struggling housing sector, raising home construction costs just when they need to trim prices to reach now-unqualified buyers. The slump in housing could continue for a significant period, I think as the dame factors that made the boom unwind.

No more. With U.S. home building in the dumps, Romero is working sporadically and sending little money. Diaz and her three young boys are eating rice and beans. She is watching every centavo.

So are economists who track this crucial southward flow of currency. They are worried by what they see.

Remittances are the financial lifeblood for millions of Mexican families and a crucial source of foreign exchange for their government. The $23 billion that maids, cooks, gardeners and others sent home last year — almost all from the U.S. — topped the amount that multinationals invested in Mexico. But fallout from the U.S. construction industry, which employs 1 in 5 Latino immigrants, is now rippling south of the border. Growth in remittances to Mexico has slowed to a trickle.

After increasing an average of just over 23% a year since 2000, remittances for the first two months of 2007 were just 5.5% ahead of the same period last year, according to Mexico's central bank. The figure peaked in May at $2.3 billion and has drifted downward ever since.

Analysts say tougher border enforcement and workplace crackdowns by U.S. immigration authorities may be playing a role. Still, the remittance slowdown has moved virtually in lock step with the stumble in U.S. home building. Housing starts hit their 2006 peak in May before tumbling 50% by year-end. [More]

While this may relieve many who are concerned about illegal immigration, it could be relatively good news for agriculture, which has been struggling to compete for jobs. Harvesting crops is widely perceived as the least desirable of the difficult jobs immigrants typically do ( although having hung drywall, I would debate that).

Still as the economy sputters due to the housing slowdown the transition for workers will only make life for the working poor more uncertain. Obviously the Fed is concerned, and their action yesterday to try to prevent further damage to credit markets and economic growth indicates to me they anticipate a deeper effect than many.

The tendrils of interaction in our economy can often be hidden until they unravel. Over the next months I think we will be surprised by other daisy-chained consequences of what was essentially bad mortgage lending practices.

Connect these dots...

Item #1: John Deere announces handsome profits.

Net income climbed to $537.2 million, or $2.37 a share, from $436 million, or $1.85, a year earlier, topping analysts' estimates. Sales grew 5.9 percent to $6.63 billion, the Moline, Illinois-based company said today in a statement.

Overseas machinery revenue increased by 30 percent, and the company said U.S. and Canadian retail sales of agricultural equipment gained momentum. That growth countered lagging demand in the construction and forestry division, which has been hurt by the slump in the U.S. housing industry.

``Higher North and South American agricultural equipment demand expectations, driven by a resurgence in farmer cash flow'' boosted sales, Andrew Casey, an analyst with Wachovia Capital Markets LLC in Boston, wrote in an Aug. 7 note. He rates the stock ``outperform'' and raised his third-quarter profit estimate to $2.05 a share. [More]

Item#2: Ag employers warn of labor shortages crippling entire sectors:

The agricultural sector, which depends heavily on migrant labor, may be the hardest hit. "It's going to be crazy," says Eli Kantor, a Beverly Hills-based immigration attorney: "There will be major disruptions to the economy of Southern California, [which is] heavily dependent on immigrant labor. There will be crops rotting in the fields." Kantor says he expects some of his clients to lay staff off, while he expects others will "take their chances." [More]

What do these developments suggest to me? American agriculture may be gravitating to growing crops that lend themselves to machine harvesting, while many fruits and vegetables will be increasingly imported.

Just in time for country-of-origin-labeling.

This oughta be train-wreck fascinating.

Let's see how tough works...

The failure of the immigration reform effort has snowballed into a truly vigorous enforcement alternative. Employers especially will be struggling with much stricter record-keeping and compliance issues.

Critics of the proposal -- ranging from farmers to restaurant owners to immigrant advocates -- predict the tougher approach will lead to massive layoffs of both legal and illegal workers, potentially crippling some industries that rely heavily on that low-paid workforce.

Supporters say it will cut into rampant illegal hiring that has been highlighted in recent workplace raids across the country, another step in a federal strategy to show a tougher face to the nation's estimated 12 million undocumented immigrants.

"The rule will be very specific and very hard on employers who choose not to comply," said Laura Keehner, a spokeswoman for the Department of Homeland Security who declined to say when the new regulations would go into effect. "If they choose not to follow the law, there will be consequences." [More]

The press is just starting to cover these developments, and quite frankly I have no idea how successful these efforts will be. I do know readers and viewers get really worked up about immigration and like the presidential candidates, seem to feel arguing for stern policing as the easiest answer.

Senator John McCain, trying to keep his presidential hopes aloft by jettisoning his courage and good sense, has leapt to the enforcement barricades, joining Senators Jon Kyl and Lindsey Graham in sponsoring a bill that is essentially a Minuteman’s to-do list of fence-building and punishments. He has shamefully repudiated his commitment to giving illegal immigrants a way to get right with the country. Senator Arlen Specter, meanwhile, wrote an op-ed article in The Washington Post titled “A Less Ambitious Approach to Immigration,” in which he endorsed the creation of a permanent noncitizen immigrant underclass, saying it is the best we can hope for until “a more hospitable America” emerges. [More]

But as I argued about RW corn refuges in the latest issue of Top Producer, America doesn't work because we're really good at apprehending bad guys. America works because the overwhelming majority of citizens choose to obey the law because they find the rules reasonable and no big sacrifice to comply with.

But more than the effectiveness is the likelihood we shall find out something similar to what we have discovered to our despair in Iraq: we can't muscle the world or even our own country to meet arbitrary standards of conduct just because a handful of people in Washington or some state capital say so. This delusion of enforcement ability flies in the face of power flowing downward via better information and technology.

Even the vituperative defense of English as our national language shows a lack of cultural confidence. Enforcement will not ensure its supremacy in the US - it is the unique communication superiority of English, especially in science, that makes it the language of choice around the world. Also the fact that English speakers control so much of the world's wealth. You don't need language cops to make that point.

My point of view lost. I freely admit this and will do everything required of me to comply without carping (much). But I am also preparing for consequences as any prudent observer should. Some of the fallout may kneecap high-value agriculture and further cripple construction. But the larger effect will be to create, I believe, an even more subterranean underclass of workers for an economy that is barely able to supply labor now.

We will also likely create some serious headaches for people who think they will not be touched by this issue.

The consequences will be severe. Industries dependent on immigrant workers, like restaurants, construction and farms, may face labor shortages. Fired workers will be driven into the underground economy. Companies worried about being potentially liable for firings based on bad information may shy away from hiring even legal immigrants.

And it's not just undocumented workers who will be dragged into the maw. Social Security estimates that there are inconsistencies with the records of 13 million American citizens, due to clerical errors, name changes and spelling mistakes. They too may face dismissal if they can't straighten out their records. [More]

Or maybe we'll choose to enjoy a recession instead. Or simply cede entire industries to off-shore.

The pace of recent U.S. economic growth would have been impossible without immigration. Since 1990, immigrants have contributed to job growth in three main ways: They fill an increasing share of jobs overall, they take jobs in labor-scarce regions, and they fill the types of jobs native workers often shun. The foreign-born make up only 11.3 percent of the U.S. population and 14 percent of the labor force. But amazingly, the flow of foreign-born is so large that immigrants currently account for a larger share of labor force growth than natives [More]

One outcome seems very probable to me. Our country takes one more step toward an admittedly distant target of a police state. (Congress just hastened this process) This effort will require more police-types, jails, attorneys, etc. It will clog our criminal justice system and foster an enormous and hideously expensive and permanently entrenched bureaucracy. It will corrode trust and further contempt for the rule of law by placing too many people in the wretched position of keeping their business afloat and helping wretchedly poor employees they have befriended.

And in the end, I believe we will gain little or nothing. Our economy is far too wealthy and amoral not to invest heavily in enforcement avoidance efforts, and those despised illegal immigrants are far more tenacious than many suspect. Many of us have simply forgotten how incredibly resourceful truly desperate humans can be. In the worst case, we could set back economic growth and fuel serious inflation for years. (And don't even ponder about how much oil we get from Mexico and how that future problem will complicate this issue.)

Nor will we un-diversify our population and preserve our Anglo-European majority. That battle has not only been lost, it is slipping away faster than ever thanks to simple demographics.

It strikes me as breathtakingly inefficient. But then, I lost the debate.

The summer of our discontent...

I have taken the time to re-read most of my posts about the farm bill progress (?) through Congress [Note: you can do like wise by clicking on "farm bill" in the labels below.] The most upbeat spin I can put on them is they are not totally cynical.

But they are not far from it. Despite my efforts to write honestly, this likely is an unfair characterization of events, influenced no doubt by my strong belief farm policy could be so much better. (And at times my concerns about rain - foolish, but a typical farmer trait)

So it struck me hard to read these words from an observer whose work and opinion I admire immensely - Jim Weisemeyer.

Comments: Will Peterson confront the "magic beans" and "monopoly money" charges by detailing where the $17.5 billion to $18 billion from the so-called reserve funds will come from? He has failed to detail the offsets so far and most expect him to be silent again. If all this sounds bewildering, it is. It's no wonder the vast majority of voters are losing faith in their government. The House farm bill process is another sad example of how not to write a major bill.

The question Rep. Peterson should answer: How much funding has Speaker Nancy Pelosi (D-Calif.) agreed to, and where are the offsets coming from? Without answers to those questions, the farm bill process (or whatever you want to call it) is not transparent. Leadership on so many things in Washington is needed -- from both political parties.

Bottom line: If the split-personality farm bills go to the House floor, those seeking multibillion-dollar boosts in funding (food and nutrition, conservation, specialty crops) will likely cause a donnybrook. That is when we may finally get a true, open debate. We haven't had that in the House Ag Committee to date. And the Senate Ag Committee remains a work in non progress. [More - via a reasonable subscription]

I may get into hot water for borrowing rather liberally from subscription-firewalled material, but these thoughts are, I believe profoundly important. Jim rarely expresses even mild judgments of the politicians he chronicles meticulously in his professional writing, let alone lapse into frustration.

I do not suggest he is corroborating my low opinion of recent farm bill (in)action. His information is far purer than mine, but his thoughts do seem to address the growing concern about Americans' alienation from our own government.

How do people think the Democratic Congress is doing after six months? Lousy. But better than the alternative.

It's midyear, and the Democratic Congress is taking a break. Well-deserved? No, say Republicans.

"We are now halfway through the first year of the 110th Congress," Rep. Eric Cantor, R-Virginia, said. "And there is no question that the failure on the part of the Democrats in terms of their midterm exam is really a letdown to the expectations of the American people.''

Democratic leaders are inclined to agree. "I'm not happy with Congress, either," Speaker of the House Nancy Pelosi said.

And the American people? Look at the grades. President Bush is doing terribly -- an average of 30 percent job approval in six recent polls. Congress is doing worse -- 25 percent on the average in five polls. (Poll: Support for Democrats wavering)

Why the low marks? Democrats point to one issue where not much seems to be getting done. "The war in Iraq is dragging down people's confidence in what's going on in this country," Senate Majority Leader Harry Reid said. [More]

As many have pointed out, this discontent - which strikes me as truly more deeply felt than our usual contempt for politics - is occurring as our economy chugs along briskly. The American Way is to rank financial progress 90% of the score, right? Steve Chapman puts his finger on the reason, I believe.

A major cause of the misperception, though, is President Bush's sagging popularity. It's clear that many people let their discontent with the president color their view of everything. If he is failing to win the war in Iraq or curb illegal immigration, we assume he must also be coming up short on the economy.

The polls suggest that some people won't acknowledge anything good here lest it suggest competence on the part of a president they can't stand. According to a survey by the Pew Research Center for People and the Press, 43 percent of Republicans say the economy is fair or poor, but 79 percent of Democrats take that view. "People are giving partisan responses," says public opinion expert Karlyn Bowman of the American Enterprise Institute in Washington. [More - great read]

This rings true for me. It also forces me to reconsider if presidential popularity matters. I have always considered it to be simply news fodder - I mean, it's not like we could oust our leader at any moment by a show of hands. But perhaps there is something to political capital, and we are running a deficit.

Let me hazard a prediction. If farm bill reform of some kind is not enacted (a replay of immigration), it will simply add to the widening chasm between people and government, making any political progress even harder, and fueling a spirit of futility and even despair. The farm bill debate has achieved that level of national prominence and involvement.

This disillusionment, if eventually reflected in economic terms such as consumer spending, will make any recovery all the harder. The connection between business and politics is real, but subject to delays between actions and consequences.

The inability to effect collective change would seem to be good for conservatives, but that presumes we are in a happy place right now. And fewer and fewer citizens seem to feel that way. This creates a real political conundrum. If Americans lose faith in government, no legislation will receive acceptance, because it is the creation of distrusted authors. How then will we address those issues? This is what happened perhaps to immigration reform.

I think that if people did not already have the sense that their country was in some sense slipping away from them -- if they felt secure enough about our country and its direction -- then they would be a lot less inclined to think that illegal immigrants were taking it away from them. But the reason they think their country is slipping away from them need have nothing to do with illegal immigration itself, as opposed to a more general sense that the rules are stacked against them, and no one obeys the laws, and decent people who work hard get screwed. [More]

I have no ready answer. But he urgency to accomplish something has increased. Our national character depends on a hopeful future.

A better direction...

While the Immigration Plan lives - despite Pres. Bush's well-meaning blunder - to see another day, its fate is very much in doubt.

The senators voted, 64 to 35, to invoke cloture, or move to consideration of the bill itself. Since 60 votes are required for cloture, and only 45 voted for cloture two weeks ago, the measure’s supporters were heartened by today’s vote. Had the cloture vote failed today, the bill would have been dead for the foreseeable future.

The Senate’s next step is to consider a batch of amendments, some designed to be easier on illegal immigrants, some meant to be tougher. The amendments’ differing intentions underline the fragility of the coalition behind the bill.

Another make-or-break cloture vote could come before this weekend, and it is by no means certain that those who voted for cloture today will vote for the bill itself. [More]

This could be some of the best work this Congress will do, because you can be sure few of them want to wrestle with this issue. Nonetheless, problems like this are their job and regardless of the outcome, it is encouraging to this observer to see Congress vote for something rather against everything.

Still, along with others, I think I have found an immigration plan that addresses our real problems better.

Another problem, though, was that the Senate bill was worse than it needed to be. On the legal side of the immigration equation, there are easy trade-ups to be had. In fact, even a National Journal columnist with no apparent qualifications could write a better bill.

And what might that look like? Glad you asked.

* First, raise the number of legal immigrants by about 50 percent, to about 1.8 million a year. That meets the economy's demonstrated demand for workers.

* Second, provide pathways to permanence. Bring in these 1.8 million people on temporary visas, say for three to five years, with the promise of permanent legal residency (a green card) if they stay out of trouble, pose no security risk, and work or get a college degree.

* Third, don't micromanage who gets in. Allocate visas using a simple three-way formula that gives about equal weight to family, work, and education: 600,000 family visas for close relatives of citizens and green-card holders; 600,000 work visas for people who are sponsored by an employer and have less than a bachelor's degree; 600,000 education visas for people who hold a bachelor's degree or higher, with first call going to those who also have employer sponsorships or family ties. [More]

It may strike many of you as wrong-headed to argue for the economic merits of immigration when our culture itself seems to be at risk. I think we underestimate our ability to absorb and synthesize a new America with both Hispanic and European flavors. Besides, as I have argued ad nauseaum, the future belongs to those who will populate it. The Chinese will certainly be there, and the Indians, and with immigrants' help, America could be too.

The U.S. Census Bureau this week reported that Hispanics, the largest minority at 42.7 million, are the nation's fastest-growing group. They are 14.3 percent of the overall population, but between July 2004 and July 2005, they accounted for 49 percent of US population growth. Of the increase of 1.3 million Hispanics, the Census Bureau reported, 800,000 was because of natural increase (births minus deaths), and 500,000 was due to immigration. [More]

Many feel that national destiny is a function of wealth. I argue that our wealth is a function of population - that a growing economy needs a growing population, and furthermore, we can support far more people in the US that we have now.

After all farmers haven been arguing that for decades, and now if we have enough productivity to add fuel to our output, we can surely feed a few more fellow citizens.

At the center of our fears is, I think, the loss of our language and Northern European heritage. People speaking another language in OUR country stirs strong emotions. We have been here before. But I have great faith in the power of English ans a language and the American culture to absorb competing ways of life, simply because it is an amalgam itself. Our ability to find a new hybrid extends to more than just corn.

Another side of the debate...

As the increasingly divisive debate over immigration continues, efforts are stepping up to manage the labor problem if immigrants are not available. Like robot fruit pickers.



The more interesting aspect of the post for me was the tone of the comments. The immigration quarrel seems to bring out the worst in Americans.

It could also the THE issue for 2008.

[Thanks, Patrick]

The guest worker problem...

Much of the anxiety of the current immigration debate is centered on the proposed guest worker program, which has been largely advanced by agriculture (although only 4% of immigrants work in ag) and other employers. Much of what we suspect - not know - about guest workers is ill-informed or influenced by other fears.

For example, many think outsiders depress the wages of native workers. But not to the degree you might suspect.

But immigrants tend to work in different industries than native workers, and have different skills, and so they often end up complementing native workers, rather than competing with them. That can make native workers more productive and therefore better off. (In construction, for instance, the work of carpenters and masons, who are often immigrants, can create a need for crane operators and foremen, who tend to be native-born.) According to a recent study by the economists Gianmarco Ottaviano and Giovanni Peri, between 1990 and 2004 immigration actually boosted the wages of most American workers; its only negative effect was a small one, on the wages of workers without a high-school diploma. And if by increasing the number of legal guest workers we reduced the number of undocumented workers, the economy would benefit even more. [More]

There are many aspects to the immigration debate, and the most likely outcome right now is to continue the status quo - hardly a good working solution. Hardliners who want to wall-and-deport cannot muster the political power to spend the enormous sums needed for that kind of enforcement - even if it is possible.

The current answer for most problems in the US is more police of some kind - more coercion. One the the amazing features of American success has been voluntary compliance. Or as in the case of income taxes - a pretty good try. It seems to me America works best when we simply show people our way of doing things and they choose to copy us. We are less successful using strong-arm tactics. See "policy, foreign"

I am concerned this debate will produce only a larger enforcement sector in the US economy ( a really unproductive activity), a less than charming no-man's land on our border, a crippled economy, and significant alienation for many of our citizens.

And about the same number of illegal immigrants.

Predictable compromises...

The supplemental emergency funding for Iraq was seen as a major victory for the administration. Like many of the President's wins, it was largely bought on credit.

Democratic leaders still insisted on about $20 billion in non-war domestic spending as part of the deal. That includes money for military and veterans' health care, Hurricane Katrina relief, military base closure costs, drought aid for farmers and medical coverage for poor children. Also part of the deal is the first federal minimum wage hike in more than a decade. [More]

Another example: the immigration deal between legislative leaders and the White House deleted the requirement that illegal immigrants pay back taxes to earn citizenship.

Forget that part about the taxes. The Bush administration actually asked that the provision requiring payment of back taxes be dropped from the bill, and it was taken out. Kennedy had it in! ...

P.S.: White House spokesman Scott Stanzel said:

Determining the past tax liability would have been very difficult and costly and extremely time consuming.

Try that "difficult and time consuming" excuse out on the IRS if you're a U.S. citizen and see how far it gets you. ... [More]

This pattern is pretty firmly fixed for both branches of the current government. Lacking any compelling crisis such as interest rates, the solution to every problem from gay marriage to energy prices will likely be found in adding to the deficit.

Well, every problem except the deficit, of course.

The problem with courage...

Is that, like history, it often isn't obvious at the time. The courageous immigration deal announced today had a honeymoon of maybe 30-35 minutes before being roundly criticized by both sides.

The Senate will wade into an emotional and wide-ranging debate on the issue next week that promises to test the unlikely coalition that produced the deal. Almost instantly, the plan brought vehement criticism from both sides of the immigration issue, including liberals who called it unfair and unworkable and conservatives who branded it an overly permissive "amnesty." [More] [More]

The immense effort required by both Congress and the administration nonetheless should be applauded. This is one of the few examples of national leadership we have seen from Washington in years.

I think much of the outcry will originate from politicians who are afraid of losing their one reliable election year issue. If there is an immigration plan in effect, somebody might ask why we can't have a fiscal policy too.

As someone who does more than my share of pointing out flaws in our leadership, my hat's off to those who worked to get us even this far on this issue.

Juan hasn't gone phishing...

Somebody else finds the "identity theft" cover for illegal immigration raids a little hard to swallow:

Of course, if this were presented as an immigration crackdown, people might ask: Why were no charges filed against the employer -- Swift & Co? The world's second-largest meat processing company has "never condoned the employment of unauthorized workers, nor ... knowingly hired such individuals," Swift & Co. President and CEO Sam Rovit said in a statement.

Note the word: knowingly. Rovit didn't just fall off the meat wagon. He's read the statute. The 1986 Immigration Reform and Control Act made it a crime to "knowingly" hire illegal immigrants.

That's a monster loophole. Suddenly, whenever there is a raid, no one knows anything. Illegal workers? Who? What? Where?

It's cynical, and it's the sort of thing that makes it hard to believe that Americans are serious about combating illegal immigration. How can we be if we don't address the problem at its source? [More]

Stay tuned, folks, this is just the beginning.

Immigration and technology...

The recent raids by immigration authorities of meatpacking plants across the US signals another ratchet up in immigration enforcement. (We discussed this on USFR this week) This is a hot political topic and surprisingly fractures normal political boundaries.

Most curious about the raid was the cover story of concern about not illegal immigration but identity theft. This is a red herring in my view designed to make it seem desperate Hispanics are phishing your credit card, doubtless to engage relatively unconcerned Americans in the outrage. Reason's Kerry Howley agrees:

Something very backward is going on when anti-immigration officials are trading in dated identity scares. A litmus test for "seriousness" in the immigration debate is support for an employer verification system, a massive federal database that employers will be required to consult before making hires. And one of the chief arguments against creating that database is that it will surely spur a massive increase in actual identity theft, encouraging middlemen to sell, and undocumented workers to buy, more sophisticated false documentation. [More]

It also impacts specific sectors of agriculture, such as livestock (especially processing), dairy, and horticulture. Proponents who favor strong measures to limit illegal entry often envision forcing these industries to raise wages to attract needed workers. Certainly that would be one outcome. But more typically in the US we solve labor cost squeezes with technology.

This seems to be the direction for Europe where labor is even more expensive. Meanwhile, Australian researchers have developed robotic milkers that attach and detach autonomously. This free range dairy concept would drastically reduce the human factor for milk production.

The automatic milking machines are based on ones already used in Europe with special adaptations for Australia's free-ranging cattle. "It is basically a robot with an arm that attaches the milking cups to each teat so it milks each cow," Fulkerson said. He notes that most modern dairies use milking cups that release—but don't attach—automatically. "At the moment the farmers put them on themselves," Fulkerson said. "But the automatic machines use lasers to find the udders, and a computer memorizes the configuration of the udder for the next milking." The machines spare farmers the twice-a-day chore of rounding up their herds and attaching 200 to 300 sets of cups. Cows can visit milking sheds when they want to relieve themselves of their milk and the discomfort of full udders. "It is a better lifestyle for the cows and the farmers," Fulkerson said. [More]

The real puzzler is whether this will disadvantage or aid smaller farms - always the darlings of the media. My understanding right now is Hispanic labor has been a godsend to small dairies and it strikes me as unlikely a massive investment in robotic technology would be attractive to these operators if the source of cheap labor (and c'mon, we know much of it is illegal) dried up. This debate is continuing among dairy producers.

University of Minnesota professor Marcia Endres says often the choice is decided by the personality of the individual running the operation. "You need to fit the system with the manager, I think," says Endres. Endres says robotic milkers work best in computer savvy operations. Score one here for the Goblirsch's. Matt says he and his brother love technology. Good people managers may choose another route. They may go heavy on labor, expanding the herd and then hiring workers to run the place. Endres says each system has its trouble spots.

Other sectors are working to reduce as much manual labor as possible as well. But they have less of a problem with consolidation and larger economic production units. For agriculture, our obsession with small farms necessarily means an obsession with labor intensive farms - it's always written into the script of the agrarian life. Only Americans don't do hard work so much any more. And if we do, we position ourselves directly in competition with people who have no other economic tool to raise their lives.

The motivation factor is obvious in the comparative results. I think it likely that the uproar over illegal immigration will grow, enforcement will intensify (along with massive budgets), and small businesses will collapse under economic pressures.

Meanwhile, illegal immigrants will continue to find ways to find work.

Chickens don't get no respect...

While we corn growers are all gurgling with joy over the ethanol market, some of our best and most loyal customers are under considerable duress.

A 77 percent jump in the past year has made corn the most expensive since 1996, squeezing profit at Coca-Cola Enterprises Inc. and Tyson Foods Inc. Speculators including Pacific Investment Management Co. are basking in returns that go beyond forecasts made as recently as July.

Part of the reason is the furor over immigration. It will be interesting to see if the new Congress and Pres. Bush reach an understanding on how to handle the illegal immigrants already fueling much our resilient economy.

A similar story ran in the LA Times back in July, about Arkadelphia, Arkansas. It was another tale of chicken processing plants, sudden immigration raids, over a hundred workers dragged away, and subsequent damage to the emotional and economic life of a city. The federal raiders got no cooperation, as the story tells it, from local prosecutors or sheriffs, who understand the local circumstances that make such raids a stupid waste of time that doesn't serve their communities, but disrupts them. Arkansas' Republican Gov. Huckabee even donated a grand to a relief fund set up for families hurt by the raid. [More]

Between these two forces, I think much of our domestic livestock industry is up for grabs as we grain producers forsake them to become the ethanol sheiks. When Brazil is the place the world goes for chicken and pork instead of the US, we may wonder how we could have allowed this to happen.

Brazil’s world share of exports is expected to drop by one point to 38 percent. Brazil, which has shown annual increases in broiler meat exports over the last six years, is forecast to show a decrease in 2006 exports due mostly to weakening demand in a few of its major export markets. This is a result of economic factors within the country and AI concerns in importing countries. These AI concerns have led consumers to substitute other protein sources for poultry meat. These circumstances have led to an over supply issue in Brazil. With AI concerns expected to decline and as Brazil focuses on using more aggressive marketing strategies on its larger poultry importers, broiler meat exports are expected to rise 2 percent in 2007 to a total of nearly 2.6 million tons. [More]

If avian influenza (AI) or bird flu remains a dormant threat, Brazil is poised to be formidable competition to US poultry giants. This will eventually impact our corn market.

And our food prices.

Makes sense to me...

Ronald Bailey at Reason magazine had a great post about why immigrants risk so much to come to the US:

Every immigrant who makes it across the border automatically gains access to over $500,000 of capital. What? That's right. The clever economists at the World Bank have figured out how to measure natural, produced and intangible capital. It turns out that natural capital (forests, minerals, oil) and produced capital (buildings, roads, and factories) while important pale in comparison to intangible capital for producing income and wealth. In fact, 80 percent of the capital of rich countries is intangible. Intangible capital encompasses raw labor; human capital, which includes the sum of the knowledge, skills, and know-how possessed by population; as well as the level of trust in a society and the quality of its formal and informal social institutions including an honest bureaucracy, a free press, the rule of law and so forth.

The real solution, IMHO, is to narrow the economic gap between the US and other countries - not build more walls or starve our economy of workers. Unfortunately, we often determine success relatively, by comparing our abundance to other's poverty. What we do not realize is this growing gap provides the economic voltage to attract people whose goal is simply live more like us.

Many in the US, and especially in Washington have developed a sad little delusion that a law will solve problems. While ranting that current immigration laws are not being vigorously enforced, the right is screaming for more laws.

Yeah - that'll help. These people are already illegal - making them "illegaler" won't accomplish much.

We sashayed into Iraq confident we could restructure their society and economy and learned some hard truths about what even immense firepower and squandered wealth can accomplish without support of the people. I see the immigration solution starting with realistic lists of what kind of enforcement we are actually capable of.

Our best homeland security investment may be in the Mexican economy. Making our neighbor more prosperous would keep more citizens at home.