Sunday, April 1, 2018

Inflation Benefits the Borrower

"Embracing higher inflation, however, could cause political problems for the Fed."

from https://www.nytimes.com/2018/02/23/us/politics/federal-reserve-interest-rate-increase.html

As Economy Grows, Federal Reserve Frets Next Downturn

Photo
Jerome H. Powell, the chairman of the Federal Reserve, which is confronting the question of how quickly to raise interest rates. CreditJoshua Roberts/Reuters
The Federal Reserve on Friday described recent volatility in financial markets as a brief blip and affirmed its plans to raise its benchmark interest rate in the coming months.
The Fed painted economic conditions in bright and happy colors in its biannual report to Congress on the conduct of monetary policy. It said the labor market was “near or a little beyond full employment,” an important milestone in the recovery from the 2008 crisis.
“The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has been in since the crisis and, by many metrics, since well before the crisis,” Randal K. Quarles, the Fed’s vice chairman for supervision, said Thursday in Tokyo.
The immediate problem confronting the Fed is how quickly to raise interest rates. The Fed forecast in December that it would raise rates three times in 2018, just as it did in 2017. Fed officials say stronger growth is fortifying those intentions, and the next rate increase is expected in March. A growing number of Wall Street analysts predict the improving economic forecast will persuade the Fed to raise rates four times this year.
The hot topic on Friday, however, at a conference attended by several Fed officials in New York, was whether the Fed would be ready for the next economic downturn.
The Fed’s benchmark rate is in a range of 1.25 percent to 1.5 percent, and the Fed does not expect it to rise much higher than 3 percent in the current economic expansion. That’s a problem given that, in the last four downturns, the Fed has cut rates by an average of 5.5 percentage points to stimulate renewed growth.
During the last downturn, the Fed reduced the benchmark rate to nearly zero in 2008, and then supplemented its efforts by pledging to keep interest rates at a low level and by purchasing large quantities of Treasuries and mortgage-backed bonds.
Fed officials have said that those policies benefited the economy, and could be used again during a future downturn. Other central banks have relied on similar policies in recent years, and have reached similar conclusions. Benoît Cœuré, a board member of the European Central Bank, said economic research was “fairly clear” that such asset purchases helped to hold down interest rates.
But the main paper presented at the conference on Friday, which is hosted by the University of Chicago’s Booth School of Business, asserted that bond-buying had little economic benefit.
“Our conclusion is that the most important and reliable instrument of monetary policy is the short term interest rate,” wrote the authors, a team of two academics and two bank economists-
The danger of a rapid return to near-zero interest rates seemed particularly acute in the immediate aftermath of the 2008 financial crisis, as the Fed repeatedly delayed any increase in rates. Now, the economy has gained strength and the Fed has raised rates five times. Jan Hatzius, chief economist at Goldman Sachs, said the progress showed the Fed’s policies had helped, and that the Fed might be able to raise interest rates above current expectations.
“My own view about what is possible at the zero lower bound is quite a bit more optimistic than it was back then,” Mr. Hatzius said.
An account of the Fed’s most recent policymaking meeting, in January, reported that some officials had shared that optimism, expressing the view that the Fed might be able to increase its benchmark rate somewhat closer to its precrisis level.
Nonetheless, there is growing support among Fed officials for a review of the Fed’s approach to policy, and of alternatives that might allow it to respond more forcefully to future downturns.
Loretta Mester, the relatively conservative president of the Federal Reserve Bank of Cleveland, told the conference she favored starting such a study “later this year.”
The Fed aims to keep inflation at an annual pace of 2 percent a year, by raising and lower interest rates and by training the public to expect a certain level of inflation, disciplining the pricing decisions of businesses and the wage demands of workers.
Alternative approaches fall into two broad categories: Permanently replace the Fed’s 2 percent target, or set it aside in the aftermath of downturns.
Raising the target is a simple way of creating more room to respond to crises. Interest rates include expected inflation, so higher inflation would raise rates.
Embracing higher inflation, however, could cause political problems for the Fed.
Alternatively, the Fed could tolerate higher inflation on a temporary basis. For example, the Fed could aim to maintain average inflation at 2 percent over some specified period, meaning that it would compensate for periods of lower inflation, as during the last six years, by allowing periods of higher inflation, thus maintaining a 2 percent average.
Last year, the Fed began to include a comparison between its actual management of interest rates, and the results produced by alternative approaches to monetary policy.

The report on Friday included an inflation-averaging approach among those alternatives for the first time.

Wednesday, March 21, 2018

Steady-State Economy

I just added the first new link to my list of "Learn Econ from Wikipedia" links in .... over 5 years, at least.

TLDR: is "In all my years studying and following Economics as an academic discipline, I never, ever heard the term Steady-State Economy.  In every discussion of Macroeconomics, Growth was as assumed as the sky is blue."

And I am at long last relieved I'm not the only one thinking this is absurd. 

This article also has a great section on the history of the idea, which has given me a clearer explanation for the flow of ideas from Smith to Ricardo than anything I've encountered, including Heilbronner's "Worldly Philosophers".

"

Adam Smith's concept[edit]

Smith examined the economic states of various nations in the world
Adam Smith's magnum opus on The Wealth of Nations, published in 1776, laid the foundation of classical economics in Britain. Smith thereby disseminated and established a concept that has since been a cornerstone in economics throughout most of the world: In a liberal capitalist society, provided with a stable institutional and legal framework, an 'invisible hand' will ensure that the enlightened self-interest of all members of society will contribute to the growth and prosperity of society as a whole, thereby leading to an 'obvious and simple system of natural liberty'.[36]:349f, 533f
Smith was convinced of the beneficial effect of the enlightened self-interest on the wealth of nations; but he was less certain this wealth would grow forever. Smith observed that any country in the world found itself in either a 'progressive', a 'stationary', or a 'declining' state: Although England was wealthier than its North American colonies, wages were higher in the latter place as wealth in North America was growing faster than in England; hence, North America was in the 'cheerful and hearty' progressive state. In China, on the other hand, wages were low, the condition of poor people was scantier than in any nation in Europe, and more marriages were contracted here because the 'horrid' killing of newborn babies was permitted and even widely practised; hence, China was in the 'dull' stationary state, although it did not yet seem to be declining. In nations situated in the 'melancholic' declining state, the higher ranks of society would fall down and settle for occupation amid the lower ranks, while the lowest ranks would either subsist on a miserable and insufficient wage, resort to begging or crime, or slide into starvation and early death. Bengal and some other English settlements in the East Indies possibly found themselves in this state, Smith reckoned.[36]:59–68
Smith pointed out that as wealth was growing in any nation, the rate of profit would tend to fall and investment opportunities would diminish. In a nation that had thereby reached this 'full complement of riches', society would finally settle in a stationary state with a constant stock of people and capital. In an 18th-century anticipation of The Limits to Growth (see below), Smith described the state as follows:
According to Smith, Holland seemed to be approaching this stationary state, although at a much higher level than in China. Smith believed the laws and institutions of China prevented this country from achieving the potential wealth its soil, climate and situation might have admitted of.[36]:78f Smith was unable to provide any contemporary examples of a nation in the world that had in fact reached the full complement of riches and thus had settled in stationarity, because, as he conjectured, "... perhaps no country has ever yet arrived at this degree of opulence."[36]:78

David Ricardo's concept[edit]

Ricardo was opposed to the interests of the landowning class
In the early 19th century, David Ricardo was the leading economist of the day and the champion of British laissez-faire liberalism. Ricardo replaced Adam Smith's empirical reasoning with abstract principles and deductive argument. This new methodology would later become the norm in economics as a science.[2]:135f
In Ricardo's times, Britain's trade with the European continent was somewhat disrupted during the Napoleonic Wars that had raged since 1803. The Continental System brought into effect a large-scale embargo against British trade, whereby the nation's food supply came to rely heavily on domestic agriculture to the benefit of the landowning classes. When the wars ended with Napoleon's final defeat in 1815, the landowning classes dominating the British parliament had managed to tighten the existing Corn Laws in order to retain their monopoly status on the home market during peacetime. The controversial Corn Laws were a protectionist two-sided measure of subsidies on corn exports and tariffs on corn imports. The tightening was opposed by both the capitalist and the labouring classes, as the high price of bread effectively reduced real profits and real wages in the economy. So was the political setting when Ricardo published his treatise On the Principles of Political Economy and Taxation in 1817.[37]:6–10
According to Ricardo, the limits to growth were ever present due to scarcity of arable agricultural land in the country. In the wake of the wartime period, the British economy seemed to be approaching the stationary state as population was growing, plots of land with lower fertility were put into agricultural use, and the rising rents of the rural landowning class were crowding out the profits of the urban capitalists. This was the broad outline of Ricardo's controversial land rent theory. Ricardo believed that the only way for Britain to avoid the stationary state was to increase her volume of international trade: The country should export more industrial products and start importing cheap agricultural products from abroad in turn. However, this course of development was impeded by the Corn Laws that seemed to be hampering both the industrialisation and the internationalization of the British economy. In the 1820s, Ricardo and his followers – Ricardo himself died in 1823 – directed much of their fire at the Corn Laws in order to have them repealed, and various other free trade campaigners borrowed indiscriminately from Ricardo's doctrines to suit their agenda.[37]:202f
The Corn Laws were not repealed before 1846. In the meantime, the British economy kept growing, a fact that effectively undermined the credibility and thrust of Ricardian economics in Britain;[37]:223 but Ricardo had by now established himself as the first stationary state theorist in the history of economic thought.[2]:88f
Ricardo's preoccupation with class conflict anticipated the work of Karl Marx (see below)."

Repairing the rungs on the ladder

from The Economist, https://www.economist.com/news/leaders/21571417-how-prevent-virtuous-meritocracy-entrenching-itself-top-repairing-rungs



Feb 9th 2013

Social mobility in AmericaRepairing the rungs on the ladder

How to prevent a virtuous meritocracy entrenching itself at the top

MERITOCRACY” tends to be spoken of approvingly these days. Its ascendancy is seen as a measure of progress. In the dark ages, the dumb scions of the aristocracy inherited their seats on cabinets and on the boards of great companies. These days, people succeed through brains and hard work.
Yet the man who invented the word meant it as a pejorative term. In “The Rise of the Meritocracy”, published in 1958, Michael Young, a British sociologist and Labour Party activist, painted a futuristic picture of a dystopian Britain, where the class-based elite had been replaced with a hierarchy of talent. Democracy was dispensed with. Clever children were siphoned into special schools and showered with resources. The demoralised talentless masses eventually revolted.

The world is starting to look a bit like Young’s nightmare vision. The top 1% have seen their incomes soar because of the premium that a globalised high-tech economy places on brainy people. An aristocracy that gambled its money away on “wine, women and song” has been replaced by a business-school-educated elite whose members marry one another and spend their money wisely on Mandarin lessons and Economistsubscriptions for their children.
It is, of course, good that money flows to talent rather than connections, and that people invest in their children’s education. But the clever rich are turning themselves into an entrenched elite. This phenomenon—call it the paradox of virtuous meritocracy—undermines equality of opportunity.
A very American paradox
This is happening throughout the rich world, where elites have proved remarkably adept at passing on privilege down the generations (see article). But it is most acute in America. Back in its Horatio Alger days, America was more fluid than Europe. Now it is not. Using one-generation measures of social mobility—how much a father’s relative income influences that of his adult son—America does half as well as Nordic countries, and about the same as Britain and Italy, Europe’s least-mobile places. America is particularly exposed to the virtuous-meritocracy paradox because its poor are getting married in ever smaller numbers, leaving more children with single mothers short of time and money. One study suggests that the gap in test scores between the children of America’s richest 10% and its poorest has risen by 30-40% over the past 25 years.
American conservatives say the answer lies in boosting marriage; the left focuses on redistribution. This newspaper would sweep away tax breaks such as mortgage-interest deduction that help richer people, and target more state spending on the poor. But the main focus should be education policy.
Whereas most OECD countries spend more on the education of poor children than rich ones, in America the opposite is true. It is especially bad at early-childhood education, which can have a big influence on results later (see article): only one four-year-old in six in America is in a public pre-school programme. Barack Obama has increased pre-school funding, but deeper change is needed. Because the school system is organised at the local level, and funded mainly through property taxes, affluent areas spend more. And thanks to the teachers’ unions, America has been far less willing than, say, Sweden to open its schools to choice through vouchers.
In higher education stiff fees in America mean that many poor children never get to university, and too many of those who do drop out. Outdated affirmative-action programmes should give way to schemes to help students based on the poverty of the applicant rather than the colour of his skin.
As for the rich strivers, there is nothing that you can, or should, do to stop people investing in their children, but you can prevent them from unfairly adding to their already privileged position. For instance, standardised tests were supposed to favour the brainy, but the $4.5 billion test-prep industry, which disproportionately caters to the rich, indicates that this is being gamed. Intelligence tests should be more widely used. The other great unfairness has to do with the preferences that elite American universities give to well-connected children, either because their parents went to the university themselves or because they have given money. An educational institution should focus on attracting the best people, and then work out how to finance the poorer people in that category.
None of these things will stop rich couples who invest in the children having an advantage. But they may stop that advantage being as insurmountable as it is today, and thus prevent Michael Young’s ugly fantasy from becoming real."

Thursday, January 25, 2018

Democrats against immigration

Democrats against immigration

By Ashley Taylor
Friday Nov 09, 2007 · 5:40 AM MST
247 Comments (221 New)


I’m a Democrat, and I’m opposed to immigration.

Because too many people are unable to understand subtle differences between words, let me explain that I’m not opposed to immigrants—people who moved here legally and who don’t violate our laws—I’m opposed to illegal immigrants (who by very definition are violating our laws), and I’m opposed to future immigration (at least for the next ten years until our immigrant imbalance has time to work itself out). This makes me a Democrat in the mold of Franklin Delano Roosevelt. Roosevelt was a very pro-immigrant president who stood up for the rights of immigrants. But during his administration, the United States saw the lowest levels of new immigration in our nation’s history. "Total immigration in the decade of 1931 to 1940 was 528,000 averaging less than 53,000 a year." (source)

Illegal immigrants

It’s sad that I have to explain why I’m opposed to illegal immigrants, who by very definition are violating our laws by being here, but nevertheless I find myself in the strange situation of having to defend the obvious. Congress correctly decided that there are limits to how many new immigrants the country can absorb. In my opinion Congress set the limit way too high (as will be explained below), but I hope that all sane Americans who care about our country understand that America is unable to allow all the billions of people of the world into our borders. Therefore, it’s necessary to have laws limiting the number of new immigrants. But illegal immigrants decided to violate the laws created by Congress for the protection of Americans. Illegal immigrants should not be rewarded for violating the laws, which is what people who want to grant them amnesty want to do.

I’m not advocating punishment of illegal immigrants.  Just a free trip back to their home country, with reasonable time to wrap up their affairs in America. I would even be in favor giving destitute illegal immigrants a few hundred dollars to help them get their lives in order when the return to their home countries. But nevertheless, we need a plan to return the estimated 12 million illegal immigrants to their home countries.

The oversupply of labor relative to capital

It’s a basic principle of microeconomics that economic output requires two inputs: labor and capital. It’s also a basic principal of economics that if you increase the supply of something while the demand remains constant, the result is lower prices.

If we increase the supply of labor without increasing the supply of capital, the natural result is that the wages paid to laborers decrease and the returns to capital increase.

We can observe this effect in the economy today. Paul Krugman writes:

[T]he America I grew up in -- the America of the 1950's and 1960's -- was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass -- but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren't rich the way the robber barons who built the mansions had been rich, and there weren't that many of them. The days when plutocrats were a force to be reckoned with in American society, economically or politically, seemed long past.

Daily experience confirmed the sense of a fairly equal society. The economic disparities you were conscious of were quite muted. Highly educated professionals -- middle managers, college teachers, even lawyers -- often claimed that they earned less than unionized blue-collar workers. Those considered very well off lived in split-levels, had a housecleaner come in once a week and took summer vacations in Europe. But they sent their kids to public schools and drove themselves to work, just like everyone else.

But that was long ago. The middle-class America of my youth was another country.

We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ''eminence of excess,'' an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts. Still, even J.P. Morgan didn't have a Gulfstream.
The reason for the phenomenon of the shrinking middle-class should be obvious. America is oversupplied with labor relative to capital. According to the 1960 census, there were only 10.3 million foreign born residents. Today there are approximately 35 million legal foreign born residents (source), and an estimated 12 million additional illegal immigrants. All these people competing for American jobs (at a time when outsourcing is already reducing the demand for domestic labor) means lower wages for everyone who has to work for a living. Lower wages for everyone except those in elite professions such as law; lawyers are protected from immigrant competition by the fact that you need three years of U.S. law school education in order to be allowed to work as a lawyer. As usual, the laws protect the interests of the elites.

Who is behind this massive and unprecedented increase in immigration? The rich people who own the capital. As has always been the case with the rich, the quest for profits comes before what’s right for America. The upper-class elites want cheap labor to work for American businesses so rich shareholders can maximize their profits. Rich corporate interests spend hundreds of millions of dollars on political donations and lobbying so they can buy the votes of our politicians. Thus we see that both political parties are fully behind the massive wave of immigration. Some will have you believe that the Republican party is the anti-immigration party. That’s very funny. There has never been a more pro-immigration president than George W. Bush. The only difference between the parties is that they try to sell the idea of immigration to the voters using different rhetoric. The Republicans say "immigrants help the economy." Yes, they help the economy for the wealthy elite, but not for regular Americans. The Democrats say "you must support immigration or you’re racist." But it’s all the same thing, about spinning things so the average American is fooled into voting against his or her interests.

"scary brown people"

"Scary brown people" are the words of kos himself. Which he repeated. This is supposed to mock the sentiments of people who care about what’s happening to America, and to shame people into kowtowing to the elite upper-class corporate wing of the Democratic party. This is just like Republican talk, except instead of saying "vote this way to prove you love Jesus," kos says "vote this way to prove you're not racist."

It’s not racist to care about Americans, of all skin colors, who have to work for a living. It’s very unracist. The pro-immigration people are the racists. They apparently dream of an America where rich white people live in McMansions, attended to by a staff of "brown people" who do the gardening and the cooking and the cleaning, and who work in their factories. They’re trying to bring back the racist South, and using the same arguments of plantation owners who enslaved other humans do their labor. "We need more African slaves to pick our cotton and do other jobs that white Americans won’t do." The only difference is that back then the "brown" immigrants really were slaves. Today they just get paid slave-labor-like wages.

America is rich and can afford to help the less fortunate of the world

I agree that America is rich and that we should do more to help those in the world who are less fortunate. But there are billions of people in the world living in poverty. We are not helping the bulk of the less fortunate of the world by letting a few million into America. If we let too many immigrants into out country without increasing our capital base, we’ll wind up being another poor country. The world is better off if America remains wealthy so we can help other nations become wealthy. When we help another nation become wealthy, we help all people of that nation. When we allow immigration from another nation, we just help the lucky few who win the green card lottery, while harming those who remain behind by draining away their most ambitious citizens.

America is too crowded

This is an aspect of immigration that few people talk about. But look around, there’s traffic all over the place, forests are being bulldozed to make way for new developments, no one can afford to buy a house near where they work, the country is too crowded.

Why are houses so expensive today? It’s because of supply and demand. The population increases because of unchecked immigration, but houses aren’t built fast enough (because of zoning regulations), so today regular working Americans can’t afford to buy their own their own home or even afford to rent a tiny apartment.

Throughout America, communities are passing anti-growth initiatives. This is proof that there are too many people around. It’s the ultimate in hypocrisy and NIMBYism when upper-middle-class elite pro-immigrant people clamor for anti-growth legislation. "Let the ‘brown people’ into the country, but don’t let them live near me!"

My call for action

Today neither party is the anti-immigration party. The Democratic Party, the party that has traditionally stood up against the big-money corporate interests in favor of regular working Americans, should take up this cause.

Remember, "anti-immigration" doesn’t mean "anti-immigrant." People who are opposed to immigration are not calling for any policies that would harm those immigrants who came here legally. In fact, we want to help those immigrants by eliminating competition for their jobs, thus increasing their salaries and allowing them to partake of the American Dream. But we need a plan for returning illegal immigrants to their home countries, and we need a moratorium on new immigration until our current imbalance of labor and capital is fixed.

Democrats against immigration

https://www.dailykos.com/stories/2007/11/9/408275/-

Back in 2007, Ashely Taylor covered pretty much the whole story.  Probably the only fact she left out worthy of mentioning is that our natural population increase was down to 0 since about 1970.

I have reprinted here for posterity her well-reasoned argument.

I’m a Democrat, and I’m opposed to immigration.
Because too many people are unable to understand subtle differences between words, let me explain that I’m not opposed to immigrants—people who moved here legally and who don’t violate our laws—I’m opposed to illegal immigrants (who by very definition are violating our laws), and I’m opposed to future immigration (at least for the next ten years until our immigrant imbalance has time to work itself out). This makes me a Democrat in the mold of Franklin Delano Roosevelt. Roosevelt was a very pro-immigrant president who stood up for the rights of immigrants. But during his administration, the United States saw the lowest levels of new immigration in our nation’s history. "Total immigration in the decade of 1931 to 1940 was 528,000 averaging less than 53,000 a year." (source)
Illegal immigrants
It’s sad that I have to explain why I’m opposed to illegal immigrants, who by very definition are violating our laws by being here, but nevertheless I find myself in the strange situation of having to defend the obvious. Congress correctly decided that there are limits to how many new immigrants the country can absorb. In my opinion Congress set the limit way too high (as will be explained below), but I hope that all sane Americans who care about our country understand that America is unable to allow all the billions of people of the world into our borders. Therefore, it’s necessary to have laws limiting the number of new immigrants. But illegal immigrants decided to violate the laws created by Congress for the protection of Americans. Illegal immigrants should not be rewarded for violating the laws, which is what people who want to grant them amnesty want to do.
I’m not advocating punishment of illegal immigrants.  Just a free trip back to their home country, with reasonable time to wrap up their affairs in America. I would even be in favor giving destitute illegal immigrants a few hundred dollars to help them get their lives in order when the return to their home countries. But nevertheless, we need a plan to return the estimated 12 million illegal immigrants to their home countries.
The oversupply of labor relative to capital
It’s a basic principle of microeconomics that economic output requires two inputs: labor and capital. It’s also a basic principal of economics that if you increase the supply of something while the demand remains constant, the result is lower prices.
If we increase the supply of labor without increasing the supply of capital, the natural result is that the wages paid to laborers decrease and the returns to capital increase.
We can observe this effect in the economy today. Paul Krugman writes:
[T]he America I grew up in -- the America of the 1950's and 1960's -- was a middle-class society, both in reality and in feel. The vast income and wealth inequalities of the Gilded Age had disappeared. Yes, of course, there was the poverty of the underclass -- but the conventional wisdom of the time viewed that as a social rather than an economic problem. Yes, of course, some wealthy businessmen and heirs to large fortunes lived far better than the average American. But they weren't rich the way the robber barons who built the mansions had been rich, and there weren't that many of them. The days when plutocrats were a force to be reckoned with in American society, economically or politically, seemed long past.
Daily experience confirmed the sense of a fairly equal society. The economic disparities you were conscious of were quite muted. Highly educated professionals -- middle managers, college teachers, even lawyers -- often claimed that they earned less than unionized blue-collar workers. Those considered very well off lived in split-levels, had a housecleaner come in once a week and took summer vacations in Europe. But they sent their kids to public schools and drove themselves to work, just like everyone else.
But that was long ago. The middle-class America of my youth was another country.
We are now living in a new Gilded Age, as extravagant as the original. Mansions have made a comeback. Back in 1999 this magazine profiled Thierry Despont, the ''eminence of excess,'' an architect who specializes in designing houses for the superrich. His creations typically range from 20,000 to 60,000 square feet; houses at the upper end of his range are not much smaller than the White House. Needless to say, the armies of servants are back, too. So are the yachts. Still, even J.P. Morgan didn't have a Gulfstream.
The reason for the phenomenon of the shrinking middle-class should be obvious. America is oversupplied with labor relative to capital. According to the 1960 census, there were only 10.3 million foreign born residents. Today there are approximately 35 million legal foreign born residents (source), and an estimated 12 million additional illegal immigrants. All these people competing for American jobs (at a time when outsourcing is already reducing the demand for domestic labor) means lower wages for everyone who has to work for a living. Lower wages for everyone except those in elite professions such as law; lawyers are protected from immigrant competition by the fact that you need three years of U.S. law school education in order to be allowed to work as a lawyer. As usual, the laws protect the interests of the elites.
Who is behind this massive and unprecedented increase in immigration? The rich people who own the capital. As has always been the case with the rich, the quest for profits comes before what’s right for America. The upper-class elites want cheap labor to work for American businesses so rich shareholders can maximize their profits. Rich corporate interests spend hundreds of millions of dollars on political donations and lobbying so they can buy the votes of our politicians. Thus we see that both political parties are fully behind the massive wave of immigration. Some will have you believe that the Republican party is the anti-immigration party. That’s very funny. There has never been a more pro-immigration president than George W. Bush. The only difference between the parties is that they try to sell the idea of immigration to the voters using different rhetoric. The Republicans say "immigrants help the economy." Yes, they help the economy for the wealthy elite, but not for regular Americans. The Democrats say "you must support immigration or you’re racist." But it’s all the same thing, about spinning things so the average American is fooled into voting against his or her interests.
"scary brown people"
"Scary brown people" are the words of kos himself. Which he repeated. This is supposed to mock the sentiments of people who care about what’s happening to America, and to shame people into kowtowing to the elite upper-class corporate wing of the Democratic party. This is just like Republican talk, except instead of saying "vote this way to prove you love Jesus," kos says "vote this way to prove you're not racist."
It’s not racist to care about Americans, of all skin colors, who have to work for a living. It’s very unracist. The pro-immigration people are the racists. They apparently dream of an America where rich white people live in McMansions, attended to by a staff of "brown people" who do the gardening and the cooking and the cleaning, and who work in their factories. They’re trying to bring back the racist South, and using the same arguments of plantation owners who enslaved other humans do their labor. "We need more African slaves to pick our cotton and do other jobs that white Americans won’t do." The only difference is that back then the "brown" immigrants really were slaves. Today they just get paid slave-labor-like wages.
America is rich and can afford to help the less fortunate of the world
I agree that America is rich and that we should do more to help those in the world who are less fortunate. But there are billions of people in the world living in poverty. We are not helping the bulk of the less fortunate of the world by letting a few million into America. If we let too many immigrants into out country without increasing our capital base, we’ll wind up being another poor country. The world is better off if America remains wealthy so we can help other nations become wealthy. When we help another nation become wealthy, we help all people of that nation. When we allow immigration from another nation, we just help the lucky few who win the green card lottery, while harming those who remain behind by draining away their most ambitious citizens.
America is too crowded
This is an aspect of immigration that few people talk about. But look around, there’s traffic all over the place, forests are being bulldozed to make way for new developments, no one can afford to buy a house near where they work, the country is too crowded.
Why are houses so expensive today? It’s because of supply and demand. The population increases because of unchecked immigration, but houses aren’t built fast enough (because of zoning regulations), so today regular working Americans can’t afford to buy their own their own home or even afford to rent a tiny apartment.
Throughout America, communities are passing anti-growth initiatives. This is proof that there are too many people around. It’s the ultimate in hypocrisy and NIMBYism when upper-middle-class elite pro-immigrant people clamor for anti-growth legislation. "Let the ‘brown people’ into the country, but don’t let them live near me!"
My call for action
Today neither party is the anti-immigration party. The Democratic Party, the party that has traditionally stood up against the big-money corporate interests in favor of regular working Americans, should take up this cause.
Remember, "anti-immigration" doesn’t mean "anti-immigrant." People who are opposed to immigration are not calling for any policies that would harm those immigrants who came here legally. In fact, we want to help those immigrants by eliminating competition for their jobs, thus increasing their salaries and allowing them to partake of the American Dream. But we need a plan for returning illegal immigrants to their home countries, and we need a moratorium on new immigration until our current imbalance of labor and capital is fixed.