Ep. 103 Krugman Fair With Sessions? Keep DREAMing

9 September 2017     |     Tom Woods     |     28

Bob flies solo in this episode, as Tom & Family evacuate for the hurricane. Krugman makes some good observations about the economics of immigration, but (as usual) he misrepresents his opponents (while accusing them of being liars). Bob offers his own views on how libertarians might better approach this controversial subject.

Krugman Blog Post

Dreamers, Liars and Bad Economics” (September 9, 2017)

Related Articles

Republican Immigration Proposal Is All Pain and No Gain,” by By Ben Powell
Privatize the Borders!,” by Bob Murphy

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  • RobertRoddis

    I really like the “let the states decide” short run solution. PLUS, the new folks don’t get to vote and they only get the public goods awarded by the state that allows them in so they get paid in real time by the citizens of that state. No benefits paid via debt to be paid off by the grandkids.

  • Robert

    Hi Robert/Bob Murphy,

    I think you did a splendid job with the show today. Immigration is a confusing issue and I tend to agree with whatever the last person I listened to said, because people on opposite sides of the issue seem to all make reasonable points.

    p.s. Too many Roberts commenting, we’re going to have to draw straws or something.

  • http://2vnews.com 2VNews

    3 best actions to help immigration issue:
    1 Decriminalize drugs
    2 Enact the Fair Tax plan
    3 Reduce red tape in the legal immigration process

  • Texan Peron

    I’m a proud believer in open borders. As long as someone isn’t a criminal or terrorist they should be allowed to enter the United States. Maybe I’m in the minority with all the fear-mongering going around with respect to refugees, brown people, and foreigners in general.

    • mary

      If the current situation were genuine “organic” migration, I would agree with you. But borders, open or otherwise, are a GOVT PROGRAM. There is a definite, identifiable agenda in “opening” the borders to third world migration. In addition, this migration is funded by our taxes and dozens of welfare programs are open to these people.

      • Intersnooze

        Europe is the obvious example.

  • http://www.economicmanblog.com Roger Barris

    Bob, there are a lot of proposals to kick the issue down to the states. Basically, Canada has had for a long time something called the Provincial Nominee Program where provinces can look at their own particular employment, population, skills, etc., situation and propose immigrants to fulfill their needs. Many people have suggested a similar system for America. One of the issues, of course, is province-to-province ( or state-to-state) movement once they have entered.

    Canada also has a system of voluntary support, often by religious groups, of refugees. The groups sponsor refugees and then help them upon their arrival, with education, acculturation, employment, etc. This also appears to work pretty well.

    Canada also has a points system for immigrants which tries to “cherry pick” the immigrants most likely to be productive and assimilate rapidly.

    In general, Canada has dealt with immigration and refugees much more intelligently than we have. There is a lot to learn here.

  • mary

    Well, Bob, I just can’t get your statement that immigrants don’t take jobs from the host population. Maybe it a short run v. long run thing, but if you are aware of what’s going on with the h1b visa situation in tech, you might question what you’re saying. Companies are bringing Indians in who are paid far less and replacing their experienced software programmers. At the same time, these jerks claim that they can’t find qualified workers. REALLY? How about the people who were just laid off and were forced to train the “immigrants” as a condition of their severance?? In parts of SF and Chicago, yours would be the only white face on the streets.

    The DACA is not what tptb admit. Obummer immigration policy was a speeding up of the Dems plan to import Dem voters. The “children” are shipped in–btw, who’s paying for these people to travel? I thought they were indigent?–without id, claim they are under 18 (are they?) and get to temporarily stay, which means permanently since the system will be protected at all costs. They’re being bribed with OUR MONEY to act as pawns in a larger political game that also has cultural and racial aspects. Some believe it’s war by other means. There have been books written about the history of colonization as an act of war.

    All these aspects need to be included in the discussion.

    • mary

      Also, in the past, people have identified young workers as taking jobs. That’s why unions wanted teens to be forced to stay in school at increasingly older ages.

      And there is just no way that importing low skill workers doesn’t at least depress wages. See this:

      • Tyler Folger

        You often wouldn’t get the statement by looking at a single industry. One of the textbook explanations of why immigrants don’t take jobs is that the cheaper labor translates through the forces of competition to cheaper products. The money the consumers save is spent elsewhere and prompts the expansion of other businesses, who then increase their hiring. Also significantly, many of the cheaper products will be factors of production for other businesses which means lower costs of production for those businesses, enabling them to expand their production and increase hiring.

        I’m surprised Bob didn’t touch upon this. He probably expected the listener to check out Ben Powell’s work and get the arguments there. If only Tom Woods was there to interrupt and clarify to make sure people weren’t getting lost.

        It is true that a greater supply of labor will other things equal depress wages, but because of the forces previously mentioned, you can also expect the demand for labor to increase, which will tend to increase wages.

        Silicon valley is a good example where we’ve seen the prices on technology products fall dramatically over the past few decades, which brings down costs for every business that uses those products. Part of this beneficial outcome (although certainly not all) may be due to the use of cheaper labor.

        • mary

          But the SillyCon Valley prices are not lower due to third world immigration. They’re lower due to the off-shoring of middle class jobs, reducing the ranks of the middle class, blocking upward mobility and making it harder for the population as a whole to afford the rising cost of living. Yes, spy phones are cheaper, and due to third world immigrants so are food and hotels. But education, insurance, medical care, housing, most things not off shored are much much more expensive.

          I was at a seminar last year where we were pointing out all the middle class jobs/profession that have disappeared in the past few decades that have not been replaced–mid-level executive in manufacturing, local banker (s&ls belly up), travel agent, local newspapers, local retail chain owners, I’m forgetting others. Now the targets are financial planners, transportation, engineers, accountants and lawyers.

          This is an important and dangerous trend not just economically, but socially. Not only is there less upward mobility, communities no longer have prominent people who “everyone” knows and looks up to, who can provide leadership, entry level jobs for teens, local charity, etc. Catherine Austin Fitts says that she has spent many years driving all around the US, and she found that most rural towns have no economy outside of drug dealing. The only other source for the “economy” is typically govt. For example, where I live, the largest employers are 1. local state university, 2. local school district, 3. prison. And the compensation for all these govt workers is astronomical. The town just hired an army of new cops and inspectors who fill the role of roving tax collectors. Ugh.

          Fitts also talks about a woman in her town who’s on welfare. This woman had some problem with her welfare check, called a “customer service” line, and was connected to a rep in India. JP Morgan has the contract for customer service and off shores it, pocketing a huge percentage. Fitts points out that if her neighbor had the job as the customer service rep, she wouldn’t need the welfare and JPMorgan wouldn’t be making its rapacious profits.

          Contracting out all kinds of govt “services” btw is another scam to line the pockets of the multinationals and get around public corruption laws, but I digress.

          My husband works for a fortune 500 company that just off-shored their processing of expense reports. We have been waiting to be reimburse thousands of dollars for biz expenses for four months. When this was done in house, he could go to accounting or have his boss put pressure on them and his check would show up in a few days. Now, he has no one to complain to. HR shrugs their shoulders and nobody cares, while we are fronting the company without compensation for the use of our money.

          I am fully aware of all the arguments for “free trade” and “open borders” so don’t bother. There is no free trade in the world today. It is “managed trade” and we are NOT better for it. Borders are a government program with political, social, and absolutely no humanitarian goals. What I’m trying to say is that the system is rigged and the theoretical is NOT what’s happening in practice. We’ve got an over weening banking sector protected by govt and the fed that is financializing our lives, raping the economy of profits and leaving little more than crumbs for the rest of us. This is a political, economic and social attack on the US. There are definite and well-defined reasons for it–IT’S A PLAN–and here’s a clue: look up Norman Dodd on youtube and you’ll know why.

          • Tyler Folger

            The same arguments apply to outsourcing as well.

            It should be obvious why tuition prices, home prices, insurance prices, and healthcare costs have all increased. Government has intervened heavily and very publicly in all of these areas.

            Economic theory is necessary to understand anything about the economy, precisely because there are so many forces at work at any given time. Trying to develop an explanation, merely by pouring over nominal prices and historic trends and statistics would leave you in a permanent state of confusion without some causal understanding.

            That said, the nice thing about economic laws is that they are true, other things equal, which means even when there are many intervening factors, we can confidently say things like “minimum wages set above the market clearing price will cause unemployment.” Because even if there are other factors at work that are leading to increased employment, the fact is that employment is lower than it would have been if not for the minimum wage laws. Similarly, when we talk about the economic impacts of immigration, we can say things like prices are lower than they would have been with more expensive native labor, even if other factors have pushed those prices nominally higher than before.

            Also, the government cannot suspend economic laws or change how they function, All of the outcomes we observe on the market, regardless of the extent of intervention, can be explained by correct traditional economics, provided we have a sufficient understanding of the empirical conditions, including effective government policies. This is what allows us to look at even a socialist economy like the Soviet Union, and understand what caused all of their absurd economic outcomes.

          • mary


            It’s not just the areas of the economy that govt has screwed up that are showing inflation. Try plumbing, hvac, electricians, car repair, dentists (until recently, few had dental insurance). Can’t outsource those services.

    • mary

      Found a recent book on the topic: Weapons of Mass Migration, Kelly Greenhill, Associate Prof at Tufts.

      “At first glance, the U.S. decision to escalate the war in Vietnam in the mid-1960s, China’s position on North Korea’s nuclear program in the late 1990s and early 2000s, and the EU resolution to lift what remained of the arms embargo against Libya in the mid-2000s would appear to share little in common. Yet each of these seemingly unconnected and far-reaching foreign policy decisions resulted at least in part from the exercise of a unique kind of coercion, one predicated on the intentional creation, manipulation, and exploitation of real or threatened mass population movements. In Weapons of Mass Migration, Kelly M. Greenhill offers the first systematic examination of this widely deployed but largely unrecognized instrument of state influence. She shows both how often this unorthodox brand of coercion has been attempted (more than fifty times in the last half century) and how successful it has been (well over half the time). She also tackles the questions of who employs this policy tool, to what ends, and how and why it ever works.Coercers aim to affect target states’ behavior by exploiting the existence of competing political interests and groups, Greenhill argues, and by manipulating the costs or risks imposed on target state populations. This “coercion by punishment” strategy can be effected in two ways: the first relies on straightforward threats to overwhelm a target’s capacity to accommodate a refugee or migrant influx; the second, on a kind of norms-enhanced political blackmail that exploits the existence of legal and normative commitments to those fleeing violence, persecution, or privation. The theory is further illustrated and tested in a variety of case studies from Europe, East Asia, and North America. To help potential targets better respond to-and protect themselves against-this kind of unconventional predation, Weapons of Mass Migration also offers practicable policy recommendations for scholars, government officials, and anyone concerned about the true victims of this kind of coercion—the displaced themselves.”

      “An innovative and beautifully written analysis of how, and to what extent, refugee flows are exploited by states in order to affect policy options and decisions taken by their counterparts.” –Emanuela Paoletti, Oxford University in Journal of Refugee Studies

      “The most theoretically developed and well-researched study of the strategic uses of emigration to date. Migration scholars and those interested in coercive bargaining will find this to be welcome addition to their bookshelves.” –Idean Salehyan, International Studies Review

      “IR theorists, foreign policy analysts, migration, security studies and human rights scholars will all find this book a valuable addition to their scholarship.”–Kristy Belton, University of Connecticut in Political Studies Review

      “A new, authoritative look at forced displacement, skillfully linking politics to migrations. This combination moves beyond migration as a single focused topic and connects it to choices within foreign policy. Any student of demography, conflict, and politics will be well served by this exploration of the interaction between government control, migration, and the willingness of populations to move.” –Tadeusz Kugler, Roger Williams University in Political Science Quarterly

      “Innovative, well-written, rigorously researched, and timely. It is both theoretically innovative and policy relevant, and will likely spur several new paths for IR research and migration studies.” –Christopher Rudolph, American University in Perspectives on Politics

  • davegrille

    Krugman’s description of Dreamers as potential tax cattle,tells us all about his sentiments and his feelings for human beings.

  • Stephen

    Nice Three Amigos reference!
    “Can I have your watch when you are dead?”

  • Jesse Fortner

    When a libertarian says that people have the right to free speech, nobody thinks that means you can commandeer a radio station in order to spread your speech; it means that if you and the radio station owner have an agreement, no third party (such as the state) has the right to interfere.

    Likewise, “open borders” doesn’t mean that people can disregard private property at will; it means that if I have a room to rent and you want to rent my room, the state can’t interfere with that.

    Anyone who claims open borders implies a violation of property rights or that the state should import people from other countries is obfuscating the issue, and I have to assume that many of them are doing it deliberately.

    • Bob_Robert

      Unfortunately, say “open borders” and people will immediately assume whatever it is _they_ think “open borders” means, and ignore anything you say.

    • Intersnooze

      The individualist libertopia doesn’t have a problem with open borders, and when we get there, we can talk about implementing that.

      The context of the current crisis is conservatives and liberty-loving people waging a historic battle against a coercive state and meta-state groups.

      Failing to resist their decades-old, racist plan of out-migrating and out-breeding the more liberty-loving demographic, while preaching statist dogma in schools and media, is strategic capitulation.

    • CristobaI

      That’s all bull.
      We have a welfare state and increasingly direct democracy.

      Your “tenant” starts taking my stuff the second he crosses the federal border.

      The border is a federal issue as long as there’s a welfare state and direct democracy.

      • Jesse Fortner

        Cristobal, that same logic can be applied to people having children.

        • CristobaI

          Children are not coming in fully grown with families; exploiting the welfare system; cheating at labor laws and traffic laws and tax laws; sending their money out of the country; turning neighborhoods into ghettos that are hostile to their peers; stealing identities for dole; burdening the hospitals and schools as free-riders that need to be catered to because they “don’t really exist and have no history OR ADDRESS;” and children are not loyal to a failed foreign government and oppositional (to the point of having a chip on the shoulder) to their community.

          Children can be said to have some of the traits but they are all matriculated into the society slowly.
          Unlike a person working off of theory and statistics, I’ve lived it. I grew up in So Cal. As much as I love Latinos that I worked with and lived with – the fact is that they took over the state in under 20 years…quite literally. That are all abusing the welfare system and destroying the State apparatus that the citizen has no power to escape – no matter how liberty minded you might be. The increased population is driving up costs of housing, driving down wages for labor, and over-replacing the citizen population that is increasingly less fertile (and aborting babies by the millions) – all while turning California into a super-majority leftist bloc.

          Sorry. But until the State Leviathan has been at least partially destroyed, mass illegal immigration is only making matters that much worse – and making Mexico less responsible for its own terrible policies.

          Would you let other people’s children into your house and let them eat you out of house and home while running riot???

          • Jesse Fortner

            Many children that re born do burden the welfare state, and all of them are entitled to hospital and school use. If immigrants cheat the labor and tax laws, that’s fine by me because those laws are unjust. So what if they send money out of the country? Money is not wealth.

            When you talk about “real experience” vs. “theory and statistics” do you realize that’s the same logic used by feminists when confronted with the lack of support for the wage gap? Experiences aren’t useful without a correct theoretical framework for interpreting them.

            And comparing immigration to allowing someone onto your own private property means you’ve gone back to the tired line of telling other people how they should use their own property. Nations are not the property of the government, so national borders are not in any way comparable to property borders.

          • CristobaI

            Funny, you’re telling me how I should use my property but you’re playing ignorant when it comes to the truth of property rights being a part of maintaining a border – what else is a border than a line of demarcation for one’s property.

            Feminist wage gap??? Get real. I’m not complaining about a wage gap between a home builder and a realtor – which CAN be attributed to fiat currency and an inflationary system. I’m talking about flooding a labor market like construction with illegal immigrants that are not playing by the same rules you are forcing citizens to play by.
            That is the proplem with theories and theoretical arguments, they are interpretations – whereas, people live in the real world. Just like you may consider laws unjust so you don’t care about them…but, real people go to real jails and real people have their money (wealth!) and property taken from them for violating those silly laws you don’t agreee with. Meanwhile, the illegal alien is using 7 different identiities and voting for many of those laws you don’t agree with.

          • Jesse Fortner

            Private property borders are based on individual rights while national borders are based on government fiat. The difference is simple but crucial. Alfons wants to have a job, and Bob wants to hire someone. I say that Bob should be allowed to hire Alfons if he wants; you say he should not; which one of use is telling Bob what to do with his own property?

            Yes, people go unjustly to jail and have their property stolen, and I absolutely care about that; when I talk about unjust laws, I mean that everyone should be exempt from them, not just immigrants. But if Group A is subject to oppression and Group B is not, the only acceptable libertarian position is to reduce the oppression of A, not to increase the oppression of B because of ‘fairness.’

          • CristobaI

            Private property borders based on individual rights???? Ha! Yeah, maybe in your fictional utopia.
            By your own logic a libertarian community has no right to exist – since it cannot exclude anyone it doesn’t want as a member.

            Just as I said…no unlimited illegal-immigration without first getting rid of the welfare state. You cannot force one group to abide by specific rules and flagrantly allow another group to run rampant.
            any analogies to children are knowingly misleading. Children don’t mature overnight, they generally speak the language, and they generally have static parents with addresses and credit histories – illegals disappear and steal identities to get by. There’s no analogy there.

            Instead of working to free real citizens from their chains you’d like to enable non-citizens to come, steal their property, and vote to increase the bondage – a truly sickening and hypocritical stance.

  • Tyler Folger

    While I agree that the immigration decision should be decentralized, it doesn’t really answer the question. The Libertarians in their respective states would still have to decide one way or the other.

    It also would not satisfy the complaints of the closed borders types, because many of the costs of immigration are born by the federal government. The tax-payers of Texas would still have to pay for California’s immigrants, regardless of its own immigration policy. And once the immigrants are accepted into the union via one state’s immigration policies, the borders of the other states are rendered effectively porous to those immigrants as I don’t think it would be legal under the commerce clause for a state to subject the citizens of other states in the union to their own localized customs check points along the interstates. I suppose the cultural and political impact of immigration could be effectively localized, if we’re careful to distinguish between borders policy and naturalization, which must remain a federal issue.

  • maninthewilderness

    Did Bryan Caplan ever respond to what Bob Murphy wrote in “Privatize the Borders”? (I googled by didn’t find anything.) I would really like to hear Murphy and Caplan discussing this.