Charles Laffiteau's Bigger Picture
2017-01-09 11:16:26 -
Immigration
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Donald Trump won the US presidential election because he succeeded in feeding the same unrealistic expectations of mature white voters with lower levels of education that Michael Gove, Boris Johnson and Nigel Farage stoked in order to persuade their British counterparts to vote for Brexit. Both Trump and the Brexit champions blamed the declining economic fortunes of their countries’ blue-collar workers on immigration and companies shifting manufacturing jobs abroad.

But these populist demagogues’ claims that arresting this change will lead to greater economic growth and prosperity are just myths. Still, like most myths, they are also built on a kernel of truth. The truth is that because immigrant workers don’t have a social safety net, they will often work longer hours for lower wages than native citizens. Some corporations have also shifted industrial jobs to other countries in order to remain economically competitive in global markets.

Unfortunately for those most seriously affected by the loss of well-paid manufacturing jobs, populist politicians ignore the complex underlying causes and focus instead on single issues like immigration and globalisation, so they can sell their simplistic solutions to a gullible electorate. But because a substantial number of elderly and ill-informed white voters in America, the UK and the rest of Europe believe these false and misleading myths, it is also extremely difficult to forge the bipartisan compromises that will be needed to implement more realistic and achievable solutions.

Since the predominately white native populations of the US, the UK, Ireland and Europe are declining due to decades of low fertility rates, there are fewer young whites available to work and pay the taxes for the older generation’s pensions and medical care. The real truth about immigration is that without it, we would have to reduce Social Security and Medicare for older white Americans.

Another big myth is the idea that we can turn back the clock and boost the economic fortunes of older and less educated blue collar workers by penalising companies that want to move manufacturing jobs out to developing countries such as Mexico, China and India. A recent study by Ball State University’s Center for Business and Economic Research showed that only 13 per cent of US factory jobs were lost to low-wage countries. The truth is that 87 per cent of our industrial jobs were actually lost to US technology, automation and robots.

No matter what the populists tell you, the unprecedented four to five per cent annual economic growth the US, Japan and Europe experienced between 1948 and 1979 will not ever happen again. This was a once-in-a-millennium economic boost driven by a post-war baby boom, pent-up demand and technology advances in communications, transportation, factory productivity, education and infrastructure investment, as well as reductions in tariffs. The US and Europe’s current growth rates of 1.5 to two per cent are actually the historical norm. Get used to it.

As for what we should expect from the incoming Trump administration, given what we already know about the political positions of many of his nominees for the cabinet, we can anticipate a sharp turn to the right in the areas of education, healthcare, housing and immigration.

Education Secretary Betty DeVos is a political outsider and charter school activist who supports redirecting tax dollars from public to private schools, while Housing Secretary Dr Ben Carson is also an outsider opposed to US housing programmes that are designed to reduce segregation.

Much like President George W Bush’s selection of his presidential campaign strategist Karl Rove to be his White House Senior Advisor, president-elect Trump likewise chose Stephen Bannon, his chief campaign strategist, to be his White House senior advisor. However, unlike Rove, Bannon is a Republican Party outsider and firebrand who ran an alt-right news website that publishes anti-immigrant, anti-Muslim and racist diatribes. Trump chose Bannon because he wants him to run his re-election campaign, not for his right-wing political views.

While Trump’s choice for treasury secretary, Steven Mnuchin, also has no government experience, given his skills as a hedge fund manager and Hollywood financier, he does know how to deal with Wall Street. Likewise, Wilbur Ross, Trump’s pick as commerce secretary, has no prior government experience, but as a billionaire investor he knows how to walk the walk with the money men. So while I believe Trump will loosen restrictions on US banks, I also think he plans to issue 50-year treasury bonds to pay for his infrastructure investments instead of reducing our budget deficit.

Trump’s choice of insider Republican lawmakers Tom Price as health and human services Secretary and Jeff Sessions as attorney general also point to a rightward tilt. Dr Price has always been a vocal critic of Obamacare and Sessions has been an equally vocal proponent of stricter immigration law enforcement. I will discuss the rest of Trump’s appointees next time.

Charles Laffiteau is a US Republican from Dallas, Texas pursuing a career in public service. He previously lectured on Contemporary US Business & Society at DCU from 2009-2011 and pursued a PhD in Public Policy and Political Economy.
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