Tag: economics

Winning: corporate tax edition

Say what you will about the God-Emperor, but his policies actually work as designed:

Apple just announced on Wednesday it will bring back hundreds of billions of dollars from overseas to fund investment in the U.S. and likely increase its capital returns.

“Apple, already the largest US taxpayer, anticipates repatriation tax payments of approximately $38 billion as required by recent changes to the tax law. A payment of that size would likely be the largest of its kind ever made,” the company said in the release.

Using the new 15.5 percent repatriation tax rate, the $38 billion tax payment disclosed by Apple means they are planning a $245 billion repatriation.

The tax overhaul, which President Donald Trump signed into law last month, also lowered the corporate tax rate to 21 percent from 35 percent.

After the repatriation tax payment, the company will have $207 billion left over from the move it can use for investments, acquisitions, stock buybacks or larger dividends. Apple said it plans more than $30 billion in capital expenditures in the U.S. during the next five years.

Apple had $252.3 billion in overseas cash as of the end of September quarter, according to SEC filings, so that means the company is paying tax on nearly all of that foreign cash.

$38 billion is a lot of money. And I note that it’s considerably more than the $21.6 billion the Department of Homeland Security said it would cost to build a big beautiful wall on the southern border.

Also, there are going to be some very sad European bankers and investment managers this morning. All those glorious fees gone in the blink of an eye. No wonder they hate the God-Emperor so much. It was very smart to make the repatriation fee even lower than the reduced corporate tax fee.

Why socialism doesn’t work

The Hoover Institution publishes an unusually good casual explication of the real reason socialism not only does not work, but cannot work: the Impossibility of Socialist Calculation:

After gaining power a century ago and then holding onto it through a civil war, the Soviet communists were intent on building a socialist state that would overwhelm capitalism. State ownership and scientific planning would replace the anarchy of the market. Material benefits would accrue to the working class. An equitable economy would supplant capitalist exploitation and a new socialist man would rise, prioritizing social above private interests. A dictatorship of the proletariat would guarantee the interests of the working class. Instead of extracting surpluses from workers, the socialist state would take tribute from capitalists to finance the building of socialism.

The basics of the Soviet “horse” were in place by the early 1930s. Under this system, Stalin and his Politburo set general priorities for industrial ministries and a state planning commission. The ministers and planners worked in tandem to draw up economic plans. Managers of the hundreds of thousands of plants, factories, food stores, and even farms were obligated by law to fulfill the plans handed down by their superiors.

The Soviets launched their planned socialist economy as the capitalist world sank into depression, trade wars, and hyperinflation. Soviet authorities bragged of unprecedented rates of growth. New industrial complexes grew from scratch. Magazines featured contented workers lounging in comfortable resorts. The message: The West was failing, and the Soviet economic system was the way to the future.

As the competition between capitalism and Soviet socialism became more pronounced during the Cold War, serious scholarly study of the Soviet economy began. The overarching research agenda of Western scholars was “scientific planning”—the socialist belief that expert technocrats could manage an economy better than spontaneous market forces. After all, would not experts know better than buyers and sellers what, how, and for whom to produce?

It was the Austrian economists F. A. Hayek and Ludwig von Mises who resisted this idea most forcefully. In their landmark critique laid out in a series of papers written from the 1920s through the 1940s, they concluded that socialism must fail. In modern economies, hundreds of thousands of enterprises produce millions of products. Even with the most sophisticated computer technology, managing such large numbers would be far too complex for an administrative body trying to allocate resources. Modern economies, therefore, are too complex to plan. Without markets and prices, decision-makers will not know what is scarce and what is abundant. If property belongs to all, what rules should those who manage assets for society follow?

The Soviets’ solution to the complexity and information problems was a national plan that spelled out production goals only for broad sectors, not for specific transactions. In other words, rather than mandate the delivery of 10 tons of steel cable by factory A to factory B, the planners set a target for the total number of tons of cable to be produced nationwide. Only a few specific goods—such as crude oil, aluminum ore, brown coal, electricity, and freight-car dispatches—could be planned as actual transactions. Everything else had to be planned in crude quantities, such as several million square meters of textile products. Product specifications, delivery plans, and payments were worked out at lower levels and often with disastrous results.

Soviet scientific planning, in fact, directed only a minuscule portion of products. In the early 1950s, central agencies drew up less than 10,000 planned indexes, while industrial products numbered more than 20 million. Central agencies drew up generalized plans for industrial ministries, which issued more detailed plans to “main administrations,” which prepared plans for enterprises. There never was a pretense that the top officials would plan the production of specific products.

To make matters even more complicated, virtually all plans were “drafts” that could be changed at any time by higher state and party officials. This constant intervention, called “petty tutelage,” was an irritant from the first to the last day of the Soviet system, but it was a key pillar of resource allocation.

If you want to read some truly artistic masterpieces of illogic, read a few socialist papers attempt to prove that socialist price-calculation is possible. The two primary papers, written first by Mises, then further articulated by Hayek, are two of the most conclusively devastating critiques of anything ever published. And the empirical evidence subsequently gathered over decades resoundingly supported their logical conclusion.

It’s not an accident that the Impossibility of Social Justice Convergence sounds a lot like the Mises-Hayek law.

No worries, they’ve got immigrants

Surely they will be more than up to the burden of shouldering the tax load:

According to the Daily Caller, three states, in particular, saw a massive departure of Americans to the tune of 450,000, taking their wallets with them as they fled. This is leading to the problem of having no one around to pay the bills in these tax-heavy states.

The Daily Caller reported that taking the lead is New York:

The exodus of residents was most pronounced in New York, which saw about 190,000 people leave the state between July 1, 2016 and July 1, 2017, according to U.S. Census Bureau data released last week.

New York’s domestic out-migration during that time period was about the same as it was in the same time 2015 and 2016. Since 2010, the state’s outflow of just over 1 million residents has exceeded that of every other state, both in absolute terms and as a share of population, according to the free-market think tank Empire Center.

Despite the number of people leaving New York, the population did grow due to high immigration from other parts of the world, and a higher birth rate.

California is yet another deep blue state that found itself watching Americans take their money with them as they left:

California was the third deep blue state to experience significant domestic out-migration between July 2016 and July 2017, and it couldn’t blame the outflow on retirees searching for a more agreeable climate. About 138,000 residents left the state during that time period, second only to New York.

But like New York, California’s population only grew due to a heavy flow of international migration to the state:

However, because California was the top receiving state for international migrants, its net migration was actually 27,000. Add to that number a “natural increase” of 214,000 people, and California’s population grew by about just over 240,000, according to the Census Bureau.

Both New York and California’s population growth may or may not help them. The tax status of the immigrants replacing the taxpayers that flee the states may range from completely legitimate, to non-tax paying status depending on the immigrants’ level of income or legality. According to CNN, most new immigrants into the country work lower paying jobs, and with those workers paying little to no taxes, the burden on the high-tax deep blue states could get even worse.

It’s amusing how people suddenly start talking very differently about the tax-paying abilities of immigrants when they realize that the state’s tax revenue is actually going to depend on them.

The problem is that these so-called “blue state” idiots are going to vote for exactly the same thing they’re fleeing now. No state should have ever allowed its new residents to vote on state and local matters for at least two generations, and preferably three.

They knew all along

Ronald Reagan and the Queen of England discussed economics and the prospects for the future in 1991.

The footage begins with the former president asking if the coffee being served is decaffeinated. The Queen calls replies ‘No, it’s ordinary’ before calling over a waiter to request some, then telling Mr Reagan ‘We try our best. It’s coming.’

Their conversation then turns to economics.  Mr Reagan, who finished his second term as president in 1989, told the British monarch: ‘Now if you’ve got two thirds… paying for the bureaucrats and give only one third to the needy people, something’s wrong there.’

The Queen responded by saying that ‘democracies are bankrupt’ because of such policies.

‘But you see all of the democracies are bankrupt now, because of the way the services have been planned for people to grab,’ she told him.

‘I know, we tried to get some of these things changed and reduce them,’ said Reagan.

‘For example, we have a rule to this day, that a supervisor’s salary is based on the number of people he supervises,’ he continued.

‘Well now, you have a group of people that have no interest in reducing the payroll, even if they can, because it will reduce their salary.’

The Queen, who had hosted the event for Florida’s grandest society including another former US president – Jimmy Carter – agreed.

‘Obviously, yes. It’s extraordinary, isn’t it? I think the next generation is going to have a very difficult time.’

The answer, obviously, was to flood the West with credit and third world immigrants, because monetary and population inflation are good for the economy. It’s interesting, though, that both public figures already knew that which eluded the public and most opinion-leaders for another 17 years.

A strong step forward

This 14-point corporate tax cut really is a big deal and a massive win for the God-Emperor:

Telecom giant AT&T was quick to respond to news of U.S. tax reform, announcing it would give some employees bonuses once the legislation is signed into law.

AT&T said in a press release Wednesday that it would give more than 200,000 of its U.S. workers who are union members a special bonus of $1,000. The company also increased its capital expenditures budget by $1 billion in the U.S.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” CEO Randall Stephenson said in a statement. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

AT&T had previously said that it would invest $1 billion in the U.S. if “competitive” tax reform legislation was passed, and has said that the tax reform framework could increase demand for AT&T’s services.

The House of Representatives on Wednesday sent tax reform legislation to President Donald Trump, who is expected to sign it soon. Trump lauded the bill, calling it “an extraordinary victory for American families, workers, and businesses.”

The new tax law will drop the corporate tax rate to 21 percent from the current 35 percent and includes other measures that Republicans say will spur businesses to invest domestically. AT&T’s effective tax rate was 32.7 percent in 2016, according to its annual report.

High corporate taxes are brutal because they cost so many people beyond the intended targets; it’s like eating the seed corn. It would be nice to see the God-Emperor follow this up by offering a carrot-and-stick solution to corporations holding Eurodollars overseas, then getting rid of the ludicrous and unconstitutional FATCA.

A masterpiece in progress

Professor Steve Keen, aka The Greatest Living Economist, has graciously permitted me to quote some of the very first words from his Principles of Political Economy, which Castalia House will be publishing sometime in the next five years:

The True Father of Economics

Labor without Energy is a Corpse;
Capital without Energy is a Statue

Economics went astray from the very first sentence of Adam Smith’s Wealth of Nations in 1776:

“The annual labour of every nation”, Smith asserted, “is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes, and which consist always, either in the immediate produce of that labour, or in what is purchased with that produce from other nations.”

This paragraph mimicked the structure, and even the cadence (though not the brevity), of the opening sentence of Richard Cantillon’s 1730 treatise Essai sur la Nature du Commerce en Général (which Smith read). However, Smith made one crucial substitution: he asserted that “Labor … is the fund” from which our wealth springs, whereas Cantillon asserted that it was Land:

“Land”, Cantillon began, “is the source or matter from which all wealth is drawn; man’s labor provides the form for its production, and wealth in itself is nothing but the food, conveniences, and pleasures of life.”

Both these assertions are strictly false. The true source of the wealth that humanity has generated from production is neither Labor nor Land, but the Energy that humanity’s production systems harness and turn into useful work (now known as “Exergy”). However, Smith’s assertion is irredeemably false, whereas Cantillon’s merely needs generalization to make it consistent with the fundamental laws of the universe known as the Laws of Thermodynamics.

These Laws are still poorly known by economists, which in part explains why economic theory has managed to be in conflict with them for so long. Illustrating why this is so, and why it is crucial, will take time and effort on your part to understand them (if you do not already). But the fact that no theory that contradicts them can be taken seriously was stated eloquently by the physicist Arthur Eddington in his 1928 book for lay readers The Nature of the Physical World:

The law that entropy always increases—the second law of thermodynamics—holds, I think, the supreme position among the laws of Nature. If someone points out to you that your pet theory of the universe is in disagreement with Maxwell’s equations—then so much the worse for Maxwell’s equations. If it is found to be contradicted by observations—well, these experimentalists do bungle things sometimes. But if your theory is found to be against the second law of thermodynamics I can give you no hope; there is nothing for it but to collapse in deepest humiliation.

On this undeniable basis, the only pre-2016 economic theory of production which does not have to “collapse in deepest humiliation” is that of Richard Cantillon and the School to which he belonged, the Physiocrats.

That’s right. Steve Keen is taking economics all the way back to Cantillon and building upon that as a much stronger foundation! Now do you understand why I am so enthusiastic about a book that isn’t even written yet? This is exactly the sort of book that Castalia House was founded to publish.

Deal with it, commies

Lefties are deeply upset to discover that their labor is of so little value that they can be literally replaced for nothing:

#LAWeekly fired their staff in favor of unpaid “contributors.” If you are an aspiring writer, and you submit to them, you are insuring it becomes impossible to make a living in this field.
– Jennifer Wright‏

As with music, just because you love something so much that you’d do it for free, doesn’t mean that you don’t deserve to be paid for your hard work that makes other people money.
– Zack Stentz

See, the problem is supply and demand. The labor theory of value is false. There is no intrinsic value in one’s labor that merits automatic compensation. In cases such as this, the value of the channel greatly exceeds the value of the indistinguishable content flowing through it.

We have firsthand experience of this. We have a perfectly functioning store that sells – or as is increasingly the case, sold – ebooks that are superior to the ebooks that Amazon sells. Unlike Amazon, we don’t DRM the epubs sold there, whereas Amazon converts exactly the same epub into a proprietary format that can only be read on a Kindle device or application. The price is exactly the same.

And yet, we sell literally 100 times more books through Amazon because that is how people almost uniformly prefer to buy them. In fact, we have learned that we even do better giving Amazon exclusive distribution rights and permitting them to give books away to its KU subscribers and then compensate us for those who actually read them at about one-half the page rate that would be equivalent to a book sale than we do selling our books on our own store. More than three times better.

Of course, this preference for the dominant channel will sooner or later lead to the usual monopoly-related problems, which is why we will continue to maintain our digital storefront. But as long as the channel is more valuable than the content, content providers will be at risk by those willing to provide cheaper, or even free, substitutes. And the more that content is readily available, the less one is going to be compensated for it.

Steve Keen may have disproved the inescapability of the Law of Supply & Demand, but that doesn’t mean it is never relevant, only that it may not always be applicable to a given situation. But in this particular case, there is clearly more demand for free labor than there is for expensive labor. The writers and musicians affected would be wise to contemplate why their work is so easily replaced by free substitutes; the irony is that the free music available today is often superior in quality to that for which one must pay up front.

Case in point: Erock’s instrumental version of Let It Go is a joyful thing of beauty that surpasses Leo Moracchioli’s very good metal cover, and both of them are far more interesting than the Disney-published version available in the stores. I don’t know that I’ve ever seen a better combination of technical pyrotechnics with staying completely within the melodic framework of a song. Note to aspiring young guitarists: if you want to make an unforgettable impression on the girls in your town, learn to play this.

Mailvox: back for more

It never ceases to amaze me how these idiots read a single paragraph I have written on a subject and then assume that it comprises the totality of my thoughts on the matter. Yesterday’s emailer, Donny, decides to come back for more

I see that you have published my email to you and John.  Well, that’s fine.  I wish I had clarified that my public service at a community college was in addition to my regular job (commodities trader) and those eleven years ended twenty years ago.  You and some of your commenters had fun with that.

To the matter at hand, John’s speech at Mencken asked:  “I’d like to see a good logical proof of the proposition that free trade requires free movement of peoples.”

Your November 9th post (which I discovered from a link in John’s December 1st posting) responded in two paragraphs.  In the first you write “free trade requires the free movement of peoples.”  No, it doesn’t, except in a pedantic “by definition” sense.  As commenter Austin Ballast said, “You still have blinders on VD. Free trade in goods does not require free trade in people, assuming people are not the goods.”

Without regard to minutia such as one commenter’s (SAK) concern for a foreign nation making the chips in our missiles, the big picture on trade is that it is beneficial to both parties trading.  That big picture remains even if we tighten against visa over-stayers, chain-migration and Rio Grande swimmers.

In your second paragraph you speak of “maximum efficiencies theoretically provided” and “maximum growth potential” but less than maximum is still mutually beneficial in the big picture sense.  I made these points in my email to John which I copied to you as a matter of courtesy, since the two of you are so deferential to each other.

In response to my email, you ask, “what two points is the clueless professor failing to take into account here?” as if simply asking makes your points.  Again, Austin Ballast, “VD, you treat this idea more as an axiom than something you have really proven. That is a basic flaw. It may seem obvious to you, but that does not make it true.”

Then you ask, “where is the evidence that free trade in goods without free trade in labor is even materially possible” which is facile.  I agree that visa over-stayers, chain-migration and Rio Grande swimmers are a challenge, but why does that prevent the trade of a container of computers for Africa in exchange for a sum of gold?

Your bullying manner may appeal to the members of your audience with a sadistic bent but I am not distracted from the fact that you have been twice unresponsive to the challenge John posed:  “I’d like to see a good logical proof of the proposition that free trade requires free movement of peoples.”

It’s not so much that I am sadistic as these stubborn ignoramuses tend to be masochistic. Donny isn’t distracted from the fact that I’m repeatedly unresponsive to demands to provide a good logical proof of the proposition that water is wet. Just as being wet is an attribute of water, the free movement of labor is an intrinsic attribute of free trade. What Donny complains is a “pedantic ‘by definition’ sense” is literally what free trade is. Every argument, every economic law, that supports the free trade in x also supports free trade in y. All of them. No exceptions.

Austin Ballast’s comment is particularly stupid. He is projecting the blinders he mentions, because his statement is simply irrelevant. He might as well have said “free trade in cars does not require free trade in computers.” But it does, for the obvious reason that if you are engaged in trading cars without restriction but restricting trade in computers, you are not engaged in free trade. You are simply doing what nearly all states have done for all of human history in restricting the trade in some goods while permitting it in others.

What Donny and some other advocates of “free trade in goods, but not capital, services, or labor” want is to be able to draw the line in a different place than other trade protectionists, but dishonestly avail themselves of the rhetoric of free trade and the ability to appeal emotionally to the language of freedom and liberty.

But as he has asked for an actual proof, I will provide him with a logically unassailable one, one with which he will quibble, but in vain. After all, what can be easier than to prove that water is wet?

  1. The sole justification for distinguishing in economic theory between domestic and foreign trade is to be found in the fact that in the case of the former there is free mobility of capital and labor, whereas this is not true with regards to the commerce between nations.
  2. The basis for restricting the free trade in goods between nations is an invisible judicial line that separates one nation from the other.
  3. The same logic and ethics apply to people who want to trade on both sides of the invisible judicial line known as a national border, which renders this basis for restricting the free trade in goods between nations both false and illegitimate.
  4. Because the basis for restricting the free trade in goods between nations is false and illegitimate, it cannot logically or ethically restrict that free trade in goods.
  5. This invisible judicial line that cannot logically or ethically restrict the free trade in goods between nations does not magically materialize when labor and capital cross it.
  6. Therefore, there is no legitimate justification for distinguishing between domestic and foreign trade in economic theory.
  7. Therefore, any logical, ethical, or theoretical argument for the free trade in goods encompasses the free trade in capital and labor as well.

Those who are sufficiently well-educated in economics will recognize the sources of at least three of those points as well as their impeccably free trade credentials. Unlike Donny and Austin, I do not attack strawmen of my own imagination, but rather, the actual arguments made by the strongest proponents.

What both of them failed to grasp is that simply mentioning the fact that there are beneficial aspects to free trade, limited or not, does not mean that free trade is net beneficial, even if it is limited only to goods or a given set of goods. I do not deny that free trade benefits certain parties, the point is that it also harms other parties whose costs are never factored into the equation. The point that I was making  when I referred to the maximum efficiencies provided is that the argument for economic efficiency to which free traders so often appeal – free trade is good for the economy – necessarily and intrinsically includes the free movement of labor and capital. If one is going to appeal to the good of the economy as a whole without considering the costs to various elements of the economy, then it is every bit as reasonable to argue for the free movement of labor combined with restricting the movement of goods as it is to argue the reverse.

Indeed, if we are to use GDP as our primary metric as so many free trade advocates do, one can make a considerably stronger case for free trade in labor combined with a restricted trade in goods than one can for the reverse.

Fair enough

Derb highlights a line of demarcation:

Since I have no clue what the Alt Right perspective is, I went for inspiration to someone who believes he does know. This is the blogger Vox Day, who last year published a 16-point Alt Right Manifesto. In my address to the Mencken Club I read off Vox Day’s points and passed comment on each one.

As a format for a talk, this has somewhat of cheating about it; but spirits were so high, nobody minded, and my talk went over well with the audience.

Not so much with Vox Day, who picked nits with my comments on his website a few days later. That’s okay, and all in good argumentative combat. I respect Vox Day as an ally in the Cultural Counterrevolution, as well as a writer of wit and courage. We disagree about many things, but our disagreements are cordial.

Our deepest disagreement is anyway just temperamental. In the language of We Are Doomed, Chapter 7: he’s a religionist, I’m a biologian. He thinks the universe cares about the human race, and even about individual persons; I see no evidence of either thing. He thinks we are a unique creation, kissed with magic; I think we’re smart chimps.

There’s no use arguing about this. The difference is, as I said, temperamental, most likely genetic. It shouldn’t stop us liking and respecting each other, and acknowledging that both personality types have a part to play in the Cultural Counterrevolution.

I could not agree more with the general sentiment. I like and respect Derb, who remains one of my favorite Dissident Right writers as well as the author of the only math book I have ever really enjoyed reading. I am no more troubled by the fact that we disagree on this, that, and the other thing than I am by the fact that my sexual preferences happen to differ considerably from my friend Milo’s.

That being said, contra Derb, I do think it can be useful to argue about these things, even when our opposing positions are intractable. I do see real value in intellectual opponents who can disagree vehemently and yet still get along on a personal level. My economic arguments have been honed by opponents like Nate and Dr. James Miller, as well as the guy who challenged me to review Henry Hazlitt’s arguments.

Not so much, however, by this next fellow. As is so often the case when someone thinks he has caught me out in a mistake, he has only demonstrated his inability to understand what I have written or the conclusions that naturally follow. For some reason, this gentlemen elected to CC me in his email to John Derbyshire, in which he claimed that I had inadvertently made the opposite of the case I was making without anyone even noticing. Except himself, of course.

One would think that would have been his first clue…Note that this is written by a community college professor, demonstrating once more that the self-professed intellectual elite is actually composed of midwits who overestimate their own capabilities and don’t understand their own subjects very well:

John,

Having embarrassed myself in our emails and at our single meeting (AmRen15) I had been resolved to communicate with you less, but you suffer fools gladly so I venture again with this.

I am not an “economic ignoramus” having taught micro- and macro- for eleven years (community college, adjunct faculty – more public service than income source) but I have long had the exact same question as the one you posed:  Why does free trade require free movement of peoples? I note from the Vox Day response that it does not, though he would be surprised by that reading.

He wrote two paragraphs.  In the first he wrote “by definition” and so creates a tautology:  Free trade requires that trade be free.  More specifically, an engineer who travels to install a piece of equipment and the returns home is not a migrant.  There is nothing about the importation of automobiles (or any other merchandise) that requires the importation of people.  Call it the difference between free trade and absolutely free trade.

To wit:  If Americans drink Mexican beer, it is because we import the beer.  The beer has cost components that are relevant to the manufacturer in Mexico but irrelevant to the gringo imbiber, such as direct materials, direct labor and overhead.  (I am a CPA too.)  The Budweiser employee in Saint Louis may see his hours cut back due to the good efforts of the Dos Equis employee south of the border, but no economist without an agenda would call that “importing labor.”

In the case of “absolutely free trade” where factors of production can cross borders as freely as merchandise, theoretical economics predicts “factor price equalization” and we would expect brewer employees both north and south of the border to be paid the same wage in equilibrium.  In his second paragraph, he writes of “maximum efficiencies” and “maximum growth potential” – very theoretical stuff.

But he gives the game away where he writes “any failure to restrict this travel will necessarily create inefficiencies” (though he of course meant “any travel restriction will necessarily create inefficiencies”) which concedes a key point:  Free trade in merchandise without free trade in all factors of production (e.g. labor) is still beneficial to both parties, even if not maximally.

Imagine a world where ethnocontinents are stable but comparative advantages differ.  Africa could send gold to North America in exchange for computers and both would benefit.  If there are no North American gold miners, we can live with that small inefficiency reflected in a slightly higher price of gold.  We could have all the gold be want simply by importing it.  And if the Africans use Dell computers to enslave and murder each other, that has no weight in calculating gains from trade.

Trump is wrong on trade; it is not a zero-sum game.  As I had preached for eleven years, “trade fosters peace” because both parties develop an interest in a friendly on-going relationship.  However, trade (excepting “absolutely free trade” comprehending factor mobility) does not demand emigration/immigration.  Indeed, a person relocating internationally is not an act of “trade.”  Build the wall, yes, but run railroads through it.

There is no game to be given away. I conceded absolutely nothing. Let’s look closely at this “key point”.

But he gives the game away where he writes “any failure to restrict this travel will necessarily create inefficiencies” (though he of course meant “any travel restriction will necessarily create inefficiencies”) which concedes a key point:  Free trade in merchandise without free trade in all factors of production (e.g. labor) is still beneficial to both parties, even if not maximally. 

Now, what two points is the clueless professor failing to take into account here? And beyond that, speaking of “very theoretical stuff”, where is the evidence that free trade in goods without free trade in labor is even materially possible in a world where inexpensive global travel is available to the average laborer? I observe that the free traders have it entirely backwards now, as their theory does not even begin to account for the fact that labor can now move more easily, more inexpensively, and more freely than goods can.

Lower IQ, declining productivity

More of the unseen benefits of mass immigration altering US demographics:

Evidence from the American Time Use Survey 2003-12 suggests the existence of small but statistically significant racial/ethnic differences in time spent not working at the workplace. Minorities, especially men, spend a greater fraction of their workdays not working than do white non-Hispanics. These differences are robust to the inclusion of large numbers of demographic, industry, occupation, time and geographic controls. They do not vary by union status, public-private sector attachment, pay method or age; nor do they arise from the effects of equal-employment enforcement or geographic differences in racial/ethnic representation. The findings imply that measures of the adjusted wage disadvantages of minority employees are overstated by about 10 percent.

White men are more productive on average. This isn’t news to anyone who actually works in the labor force or is familiar with national productivity statistics. The good news is that at least it isn’t racist. White women are less productive too.

But it is one more piece of evidence showing that immigration is NOT good for the economy. It is, however, good for white contractors.

Subway-repair contracts had to be issued and work performed as emergency repairs to every leg of the DC Metro train system this summer. Populated 92{75555d9e07a24e4b9ce698107dbbd309d5544f8e8057bab8f219509a7e001883} Black, every maintenance job up to the most specialized engineering positions are held by Blacks, who cannot perform said work. Like women in the Navy, they hold the job, knock down the pay and benefits, but someone else has to do the work under contract.