Human and Drug Smuggling Trends under the Trump Administration

Border control issues with Mexico boil down to smuggling in marijuana, 'hard drugs', and illegal immigrants.

Attempts to enforce bans on illegal immigrants and hard drugs have materially failed under President Trump.  By contrast, the legalization and taxation of marijuana has succeeded in dramatically reducing smuggling of that drug.

Let's take these black markets in turn.

Drugs Marijuana Illegal immigrant.png

Hard Drugs

Hard drugs consist of principally of heroin, cocaine, methamphetamine and fentanyl.  Policies associated with interdicting these drugs can only be described as an abject failure, with seizures up by half since President Trump took office, compared to the prior two fiscal years.

The vast majority of hard drugs come through Customs at official crossing points.  Such contraband is almost impossible to detect, with our estimate of interdiction rates by weight around 3%.  Seizures have been rising due to both supply and demand considerations.  A strong economy brings with it demand for flashy drugs, most notably cocaine, which is rebounding in both the US and UK.  In addition, drug traffickers have been trying to compensate for the collapse of the marijuana smuggling business.  The rise of fentanyl may well be the result, as traffickers both look for new product and a way to increase the potency of their offerings at a lower cost.  The hard drug scene is likely to get worse, and possibly much worse, for the rest of this business cycle. 

Marijuana

Seizures of marijuana have dropped by nearly 60% since President Trump took office.  By any reasonable measure, this should be considered a fantastic success and trumpeted as a key accomplishment of the Administration.  Of course, declining volumes are due to marijuana legalization, most recently in Nevada, California and Canada.  Marijuana smuggling across the border is rapidly coming to an end and should cease entirely if Texas decides to legalize cannabis.  Whereas drug enforcement efforts have failed, legalize-and-tax has worked, and worked spectacularly well.

Illegal Immigration

Illegal immigrants come to the US primarily in search of higher wages.  The administration has attempted to curtail such immigration with enhanced enforcement.  Numbers were down last year, but due principally to the 'Trump effect', which intimidated migrants from attempting to cross into the US.  However, the impact has faded, and crossings have returned to more typical levels. Although enhanced enforcement has kept illegal immigration 10-15% below our expectations given the strength of the economy, such efforts have failed to move the needle in any more material way.  An enforcement-based strategy is not bringing results.

Instead we should apply our successful strategy with marijuana to illegal immigration: legalize-and-tax.  By implementing such an approach, we would effectively terminate illegal immigration and close the border by the early 2020s, without a wall or aggressive enforcement.  

No wall can stop opioid smuggling

In a Washington Times op-ed, Representative Paul Gosar of Arizona recently called for “a real defensible border to stop the flow of illegal drugs,” to prevent thousands of Americans from dying of opioid overdoses. “If we want to save lives,” he wrote, “we need a defensible border and we need it yesterday.”

Were it so simple.

Historically, marijuana has constituted more than 99% by weight of drugs smuggled into the US in the field away from official crossing points, according to US Customs and Border Patrol data.  The pictures we see of the smugglers carrying backpacks full of drugs – it’s almost entirely pot.

Notwithstanding, marijuana smuggling across the southwest border is collapsing, with seizures down 86% since 2009.  US and Canadian marijuana legalization is killing the Mexican business.  By the early to mid-2020s, marijuana smuggling across the desert will largely be consigned to the history books, whether we enforce the border or not.

What remains are ‘hard drugs’, notably cocaine, heroin, methamphetamines, and fentanyl.  Seven-eighths of all hard drugs, however, are smuggled through official crossing points, not across the open border.  Thus, a wall would do nothing to prevent the vast majority of hard drugs entering the country.  Indeed, such smuggling is booming, with interdictions up 40% since President Trump took office.

But the story is even worse than this.  The key cause of the overdose epidemic is fentanyl, a synthetic opioid 50-100 times more potent than heroin.  Drug dealers use fentanyl to spike other drugs like heroin, cocaine, and even methamphetamines.  As little as two milligrams – the equivalent of a few grains of salt – can kill the average person.   A user might believe they are receiving a normal dose of, say, heroin but inject a fentanyl-laced dose many times more powerful.  A user of cocaine or methamphetamines may not even realize the drugs have been adulterated and die without any expectation of having taken a serious risk.

The economic incentive to use fentanyl is enormous.  A soda can equivalent of fentanyl, costing one thousand dollars, could translate into counterfeit opioid pills with a street value in excess of $1 million.  That much fentanyl could easily be hidden in the bowels of a drug carrier, or readily concealed anywhere in the seven million trucks crossing from Mexico into the US this year.  Even if every person entering the southern US were given a cavity search and every crossing vehicle disassembled to its component parts, a cheap drone could still fly $20 million of fentanyl over the wall into the US every day.  There is no way to stop fentanyl at the border.  It is too compact, too potent and too valuable.  

As a result, the calls for enhanced border enforcement are in reality pleas for the status quo.  Such exhortations may make us feel better, but merely underwrite the terrible toll that opioid overdoses are taking on the country.  If we take the crack cocaine or HIV epidemics as a template, the opioid crisis could claim as many as 500,000 victims by the time it ultimately burns out a decade from now. 

The country does, however, have two other policy options: legalize hard drugs or suppress demand.

Many drug policy experts and liberal politicians are advocating for legalizing hard drugs, at least for medicinal use.  For example, New York mayor Bill de Blasio is championing supervised injection sites to allow users to check drugs for adulteration and provide a safe space to shoot up.  Based on the experience of the Netherlands, such a policy would sustain perhaps one million addicts nationally, but could reduce the death toll by more than 90%. 

Alternatively, the US could attempt to copy the approaches of Japan and Singapore.  These put addicts into forced recovery, including ‘cold turkey’ withdrawal and months in work programs.  Both of these initiatives succeeded in materially eliminating heroin and opium addiction in their respective countries, but they are not for the faint-hearted.  Nor would the program come cheap, although the cost could be largely offset by savings elsewhere in drug interdiction, incarceration and treatment.  If one wants to take a hardline conservative approach, aggressive demand suppression is the way to go.

There are no easy options in combating opioid deaths.  The public is poorly served, however, by an unthinking repetition of the build-the-wall mantra.  The fixation on the wall to stop drugs translates, as a practical matter, into an acquiescence in the death of hundreds of thousands of additional overdose victims.  It is unequivocally the wrong policy.

What conservatives want -- but won't get -- from immigration reform

Conservatives don't have the votes to maintain deportation, as we discussed here.  Nor have we ever beaten a black market, as discussed here.

Instead, here's the most likely political outcome:

The Democrats will either take the House or come close in November, and some version of the DACA and Dreamer eligible will be granted permanent or indefinite residency, in return for a promise of enhanced border protection and more aggressive ICE efforts.

As the US has never beaten a black market, it will again fail this time around as border enforcement will prove ineffective.  On the other hand, potential migrants will be encouraged by DACA / Dreamer amnesty to believe that, if they can just hang on, they or their children will in time also gain amnesty.  It sets up a replay of 1986 (with the caveat that Latin American demographics are different today than they were in, say, 1990).  The quote below, from The Atlantic in 1994, will come back to haunt conservatives once again: 

The mass legalization of then-illegal immigrants was traded for the promise that a new program of employer sanctions would destroy the incentive for further mass immigration. That hope proved vain; but if it had never been entertained, IRCA would never have passed.

In other words, conservatives were played for suckers, by a Republican White House and Senate and a Democratic House.  The graph below shows the appalling result:

Population.png

Conservative anger and xenophobia may be understandable, but in policy terms, it's the equivalent of leading with your chin.  Anger is not enough.  Conservatives also have to be smart.

Obrador's Chance to Reduce Mexico's Corruption and Violence

Only July 1st, Andrés Manuel López Obrador won the Mexican presidential election promising to eradicate corruption and quell endemic violence.

Prohibitions and resulting black markets in drugs and illegal migration are responsible for approximately 60% of the violence and corruption in Mexico.  These black markets result principally from US immigration and drug policy and Mexico's war on drugs.

Black markets are not crimes of convenience.  They are businesses, sometimes legal and sometimes not, as we have seen in the US for alcohol, marijuana and gambling, for example.  When illegal, they generate outsize profits available for bribery and recruitment of foot soldiers to intimidate and assassinate politicians, policemen, judges and journalists.  

For example, US Prohibition era gangster Al Capone once claimed that half the Chicago police force was on his payroll and reportedly spent half his $60 million in annual earnings in the 1920s on bribes for police and politicians.  The head of the DEA in Colombia during the Pablo Escobar era described the country as a 'narco-democracy' after drug traffickers contributed $6 million to the successful presidential election campaign of Ernesto Samper in 1994.  The Escobar organization turned about $20 bn in revenues in a good year, twice Colombian government tax receipts, providing ample funding to take on the national government there.  More than 500 Colombian policemen were shot pursuant to Escobar's bounty on their lives.  

With the death of Escobar in 1993 and the ratification of NAFTA in 1994, the drug business moved north to Mexico.  But the dynamics are the same.  In the just concluded election cycle, 138 politicians and campaign workers were assassinated.  Just last week in Mexico, 28 police officers in the state of Michoacan were detained over their alleged involvement in the murder of mayoral candidate Fernando Angeles Juarez. 

In the US, the homicide rate nearly doubled during Prohibition, and fell by half when Prohibition was repealed.  In Mexico, the situation is even worse, with homicides rising by 150% with the inception of the war on drugs; 2018 is on track to post a record 32,000 homicides for the year.

Mexico US homocide.png

When President Obrador calls to reduce violence and corruption, these are essentially two manifestations of a single problem: black markets.  Our purpose is not to advocate for legalizing hard drugs (although we do think Mexico should legalize marijuana along the lines of Canada and a number of US states).  Rather, our purpose is to call for legalizing and taxing migrant labor -- a proven approach to address this black market.  This would not cure all ills, but it should reduce corruption and violence by 20% or so, even in the absence of drug legalization.

Jan Brewer was right. Most illegal immigrants were carrying drugs

In 2010, then Arizona Governor Jan Brewer took some heat for saying that a majority of illegals were drug mules.  

In fact, the numbers bear her out.  We can impute the number of drug carriers through the volumes of drugs seized by Border Patrol and estimated seizure rates; as well as the number of illegal border crossers arrested and assumed apprehension rates.  In 2010, for example, Border Patrol arrested 450,000 crossers representing 1.1 million crossing attempts for the year.  

In addition, Border Patrol seized 3.4 million lbs of drugs, virtually all marijuana.  We estimate interdiction rates at 14% (12-15% range), implying smugglers tried to bring in an astounding 23 - 29 million pounds of drugs over the border away from official points of entry in 2010.

Smuggler Percent.png

The standard backpack for drug smugglers is estimated at 40 lbs, thus 23 - 29 million pounds translates into roughly 1,700 - 2,200 smuggling trips per day.  Projected onto 1.1 m crossers implies that 51-64% of all crossers carried drugs in 2010. Thus, our mean estimates suggests that more than half of illegal border crossers smuggled drugs in 2010, just as Jan Brewer claimed.

As I have noted earlier, drug volumes seized by Border Patrol have been collapsing due to marijuana legalization in the US and, just recently, Canada.  Expected 2018 seizures of marijuana are forecast down 86% from 2009 levels, which would translate into 200-250 smuggling trips per day in 2018.  I'd note that these numbers do not entirely line up with anecdotal data from rancher Jim Chilton, with whom I had the pleasure of speaking last week.  Jim runs a 55,000 acre ranch of which 15 miles constitutes the border with Mexico.  Most of the crossers coming over his property appear to be carrying backpacks presumed to be filled with drugs.  If so, seizure rates may be substantially lower than believed in our analysis (and smuggling rates correspondingly higher).   

I would also add that drug mules are a combination of professionals -- who will make return trips -- and economic migrants, who carry drugs opportunistically one-time to pay their coyote fees.  By definition, the share of economic migrants carrying drugs will be lower than the total percentage of smugglers in all crossers. Notwithstanding, our current estimates still suggest that more than half of economic migrants carried drugs in 2010, falling to about 10% in 2018.

In any event, the marijuana smuggling business across the border is likely doomed and should fall to very low levels by the early to mid-2020s.

Can illegal immigrants really afford a 25% tax rate?

Yes, they can, because they already are.

In an earlier note, we talked about the Relocation Wage, the hourly wage Mexicans would have to earn to make it worth their while to come to the US, and we calculated this around $6.50 / hour.  If border enforcement is effective, then the realized wage should be higher than this level.  If it is not, then we would expect observed wages to come in around the Relocation Wage.  Our analysis suggests that the border is largely ineffective and wages have been around the Relocation Wage, due to wage theft, poor utilization, and hassle costs (risk of deportation, inability to operate normally, etc.)

Thus, Mexicans appear to be realizing $6.50 / hour on typical US unskilled wages of $10 / hour, representing an effective tax rate of 35%.  

In a market-based system, we look to monetize theses costs in a fee to the government, which is worth about $30 bn net to the Federal budget -- but is achieved at essentially no cost to illegal immigrants as a whole.  We are simply replacing predation and dead-weight costs in a black market system with a formal fee in a legalized system.

The range of outcomes, however, is dramatically altered.  Today, the Mexicans who lose the border crossing lottery die in the desert, or are raped, kidnapped, trafficked or incarcerated.  That would end entirely, as there is no point in entering illegally if a legal channel is always available at a market rate for a volume of visas which materially cover the entire market.  

Similarly, those undocumented migrants already in the US would see much reduced wage theft and higher utilization rates (or lower costs, if they leave the US seasonally), and obviously much greater ease of living and working in the US.  

The top 10% would see some decline in net income.  On the other hand, the more successful have the most to lose from deportation and the greatest opportunity for advancement in a legal system.

I cannot over-emphasize how much this would change the image of Mexicans in the US.  There are a number of conservative radio hosts and columnists on this email list, and some of them really want the Mexicans out.  I can assure you, though, if a Mexican day laborer is paying $5,000 in visa fees for nothing more than the right to work and basic healthcare coverage, that migrant will earn the respect of even the most hardened immigration foes.  Legalization brings normalization.  Today, no one much challenges alcohol consumption, although it causes far more damage to the US than immigrants do.  We are used to it, and now to gambling and increasingly, to marijuana.  The very act of legalization changes public perceptions dramatically. 

PR releases new data. Deaths 1400, not 4600

On Friday afternoon, as a result of the controversy surrounding the publication of Mortality in Puerto Rico after Hurricane Maria (the ‘MPR Study’) by a Harvard-led team, the government of Puerto Rico released island death statistics as of May 31, 2018.

These statistics, which can now be taken as materially final through year end, indicate 1,397 excess deaths following Hurricane Maria for the Sept. 20 - Dec. 31, 2017 period covered by the MPR Study.  By contrast, the MPR Study indicated 4,654 excess deaths as its central estimate for the period.  As we discuss below, the official numbers are unlikely to change materially at this point, implying that the MPR central estimate was approximately 3,250 above the observed number representing an error of 232% over the actual figure. 

For Official Deaths, Puerto Rico Institute of Statistics via  Latino USA  as of January 2, 2018;  via  David Begnaud  for May 31, 2018 release; for MPR excess deaths,  Mortality in Puerto Rico after Hurricane Maria , with Princeton Policy monthly interpolations to MPR year-end total.

For Official Deaths, Puerto Rico Institute of Statistics via Latino USA as of January 2, 2018;  via David Begnaud for May 31, 2018 release; for MPR excess deaths, Mortality in Puerto Rico after Hurricane Maria, with Princeton Policy monthly interpolations to MPR year-end total.

Conceptually, government agencies and other organizations release their data on three separate bases: 'as of', 'preliminary' and 'final'.

When data is released as of a given date, this represents the data available in the database as of that date.  It does not necessarily reflect the total number expected for the month or an official final count.  The difference between an 'as of' figure and a final official tally could be 30-40%.

Data presented as 'preliminary' usually represents an early estimate of the final count, but could be revised by, say, +/- 8% to the final value. 

'Final' numbers may still be revised, but generally fall within 1-2% of their ultimate value.

Some agencies release only 'preliminary' and 'final' numbers, but it comes down the the specific practices of the agency involved.  In the field of oil production, for example, Texas crude output as officially recorded by the Railroad Commission is materially unreliable until the sixth month revision following the initial publication.  By contrast, North Dakota output as published by the state's Department of Mineral Resources can be considered materially accurate when initially released.  It comes down to the practices of the institutions involved.

Puerto Rican authorities appear to release death statistics on an 'as of' basis.  Thus, data released on January 2nd and published by Latino USA and on May 31 published by David Begnaud of CBS should be considered 'as of' versions which may be subject to material revision.  For example, the December death count was revised up from 2168 in the January report to 2820 in the May report, a revision of 30%.  

On the other hand, the November numbers were revised up only 5%, and the September and October numbers less than 1%, from the January to May release of death statistics.  Consequently, the vintages of data available to us suggest that data from the third month prior and earlier may be considered 'final' and unlikely to vary more than 1% in future releases.  That is, data through March 2018 may be treated as 'final'.  Thus, the year-end excess death toll of 1,400 may be treated as a firm number in practice.  It is nowhere near the 4,600 central estimate of the MPR study and relayed by virtually the entire mass market media in the US.  The Harvard study was wrong, and by a wide margin.  Therefore, as we wrote earlier, unless the Study authors can point to where 3,000 bodies undiscovered through March 2018 may literally be buried, we are left to conclude that they simply do not exist, and the Study must be judged as wildly inaccurate and a gross exaggeration of the true impact of Hurricane Maria in Puerto Rico. 

Source: Puerto Rico Institute of Statistics via  Latino USA  as of January 2, 2018 release;  via  David Begnaud  for May 31, 2018 release; Princeton Policy designation of data as 'as of', 'Preliminary' and 'Final'

Source: Puerto Rico Institute of Statistics via Latino USA as of January 2, 2018 release;  via David Begnaud for May 31, 2018 release; Princeton Policy designation of data as 'as of', 'Preliminary' and 'Final'

The data subsequent to year-end 2017 suggest that excess deaths continued to rise through Q1 2018, reaching approximately 1600 in March 2018.  Preliminary data from April suggest this number may decline, but it is too early to make such a judgement with any confidence.  On the other hand, Q1 data strongly suggests that there was no reservoir of 3,000+ undiscovered bodies at year-end 2017.

We had earlier stated that we believed excess deaths would settle around 200-400 at the one year event horizon, that is, as of Oct. 1, 2018.  This was based on a misinterpretation of the December tally issued on January 2nd as 'preliminary' rather than 'as of' -- a classic analyst mistake for which the responsibility is entirely ours.  As a result, the December figure was revised higher than we expected.   It is not yet impossible that deaths settle in our expected range, but given that a firm peak is not yet visible, excess deaths are likely to be higher than our expectation, and possibly materially so.

Reports of Death in Puerto Rico are Wildly Exaggerated

A study by a Harvard-led team, published in The New England Journal of Medicine, claims that mortality in Puerto Rico following Hurricane Maria has been far higher than previously thought.  Their study, Mortality in Puerto Rico after Hurricane Maria (the ‘MPR Study’) claims 4,645 excess deaths occurred in on the island from September 20 through December 31, 2017.

How plausible is this?  Not even remotely.

Deaths on the island are reported by the Demographic Registry of Puerto Rico.  Recorded deaths from January to August 2017, the month prior to the hurricane, were essentially flat year on year.  Without additional information, we would expect the count to be flat for the remainder of the 2017 as well.  Notwithstanding, counts were elevated from the September hurricane through November. Based on the latest registry numbers available to us, in September, these excess deaths numbered 540 more than the previous year; October was up 650.  November deaths, however, were up only 113 on the previous year.  In December, the difference was actually negative, a decrease of 649 compared to 2016.   All in, deaths reported by the registry were up 654 for the period covered by the MPR Study.

What caused these excess deaths?  Those persons who were included in the elevated count did not die, for the most part, as a direct result of the hurricane.  That is, they did not drown, were hit by debris or crushed in a building collapse.  That count was reported as 64, and although it could be light, is probably directionally correct.  Rather, excess deaths came from a vulnerable, and principally elderly, population stressed chiefly by a lack of electricity, leading to an inability to access dialysis, respirators and air conditioners.  In addition, some people were unable to reach medical facilities, which may have also been closed for a lack of power.  Finally, some probably succumbed to issues associated with compromised food or water supplies, again related to a loss of power.  In other words, those who were already ill and close to death were pushed over the edge, mostly due to a sustained power outage. 

During any given year, deaths tend to be elevated in December and January.  December 2017 was the exception, almost certainly because many of those who would have died then had died a few months earlier due to the effects of Hurricane Maria.  This explains the surge in deaths in the autumn and the reduction in deaths in December.  Hurricane Maria did not so much kill people outright as accelerate their deaths. 

How can we reconcile 654 excess registry deaths with MPR Study estimates of 4,645 through year-end?

Source:  For Official Deaths, Puerto Rico Institute of Statistics via  Latino USA ; for MPR excess deaths,  Mortality in Puerto Rico after Hurricane Maria , with Princeton Policy monthly interpolations to MPR year-end total.

Source:

For Official Deaths, Puerto Rico Institute of Statistics via Latino USA; for MPR excess deaths, Mortality in Puerto Rico after Hurricane Maria, with Princeton Policy monthly interpolations to MPR year-end total.

Perhaps the registry failed administratively to record deaths.  They may have been overwhelmed by work after the hurricane.  Alas, this seems unlikely, because we can see that registry ex-post adjustments are typically 30 or fewer deaths, that is, only about 1% from the original value.  Therefore, recording and reporting are unlikely to be the principal cause of the discrepancy.

Alternatively, perhaps some of the elderly left and died in the US.  The Study’s own numbers suggest this is not the case.  Many young people left the island.  The elderly stayed at home.

We are left with the possibility that the Puerto Rican authorities may have simply overlooked 4,000 bodies.  This is quite a large number to miss.

Imagine, for example, an earthquake hit Los Angeles, a metro area four times the population of Puerto Rico.  Now imagine that many died in the event, with 4,000 people unaccounted for.  What would we expect to see?  First, we would expect most of them to be reported as missing.  As of mid-December, though, only 45 people were still reported as missing in Puerto Rico in the wake of Hurricane Maria.

We would expect to see massive efforts, by both the public and private sector, to locate and identify the bodies.  And we would expect to see on-going news stories about the missing and recovered bodies.  But we see none of that in Puerto Rico.

Thus, we are left with almost 4,000 unaccounted-for persons not recorded as missing, prompting virtually no efforts at recovery of remains, and with no coverage in the media.  This must be considered as highly unusual -- and improbable.

Therefore, unless the Study authors can point to where these bodies may literally be buried, we are left to conclude that they simply do not exist, and the Study must be judged as wildly inaccurate and a gross exaggeration of the true impact of Hurricane Maria in Puerto Rico. 

Instead, total excess deaths may well continue to decline when January numbers come in.  At the year horizon, excess deaths seem likely to settle in the 200-400 range.  This is still a substantial number and a tragedy in its own right.  Most of the fatalities can be attributed to the sustained loss of power experienced by the island. 

This loss was largely of Puerto Rico’s own doing.  The island’s power system is state-owned, and state-owned utilities face political pressures to keep electricity prices low, so low in fact, that they fail to cover needed capital maintenance.  Puerto Rico held its base rate — the part of the electric bill meant to cover operating costs and capital maintenance — unchanged from 1989 to January 2017—nearly thirty years!  Over time, neglected infrastructure becomes vulnerable to unplanned outages.  When incidents occur – as during Hurricane Maria – power generation revenues are inadequate to pay for capital repairs.  That’s why the utility signed a suspect and ultimately stillborn contract with the tiny firm of Whitefish to repair the island’s infrastructure.  That is all the money and credit the utility could muster. 

No matter who owned Puerto Rico’s power utility, given the island’s geography and the massive hit it sustained from Hurricane Maria, power would have been lost for a while.  That the damage was so extensive and repair so delayed is directly attributable to the state ownership of Puerto Rico’s power system and the unrealistically low electricity rates which under-pinned local political popularity not for years, but for decades.

To blame the Trump administration for 4,645 excess deaths is flat out wrong.  Unless the MPR Study authors can actually locate the bodies, 4,000 of those deaths never occurred.  Those that did were largely attributable to the protracted loss of power on the island, unavoidable in part, but made all the worse by the politicized state ownership of Puerto Rico’s power company.

 

A Conservative Hierarchy of Needs

Maslow's Hierarchy of Needs

Maslow's Hierarchy of Needs

In his 1943 paper, "A Theory of Human Motivation", the psychologist Abraham Maslow posited a hierarchy of human needs starting with base survival and moving towards higher levels of self-realization.  At the most fundamental, the individual requires food, shelter and safety; progressing to family and an intimate relationship; and on to social standing and achievements defined in the individual’s own terms.  Much of Maslow’s model is common sense, but it does help understand how people at different stages of development might react differently to objective circumstances.  The hierarchy is a handy framework for considering human motivation.

Maslow’s framework considers the hierarchy from the liberal – the individual’s – perspective.  We can also use a conservative framework, which considers the individual from the group’s perspective. 

Before we do so, some terminology.  Today, ‘liberal’ in the political sense means egalitarian, progressive or left-leaning.  Historically, however, liberal has meant ‘pertaining to the individual and individual rights'.  'Liberal' was traditionally associated with the liberty or freedom of the individual.  

Under such a system, a person has the right to do what they want, interact and buy and sell their goods and labor with whomever they like.  In economics, the term ‘liberal policies’ retains this meaning.  When we speak of liberalizing a market, we mean that individuals can now freely transact with each other, whereas before this was prevented by government policy.  Thus, when we speak of 'liberal', we are not directly speaking of the political right or left, but as pertaining to the individual and viewing a situation from the individual’s perspective. As a practical matter, though, 'liberal' as we use it largely corresponds to 'fiscally conservative', 'free market' or the much- loathed term 'libertarian'.

In the press, ‘conservative’ is generally taken to mean, in the US, white, Christian, and in some cases, male.  It is also associated with political right and religious fundamentalists like evangelicals.  On the other hand, the government of, say, Saudi Arabia is also described as conservative, although it is neither white nor Christian.  Generally, ‘conservative’ is associated with being resistant to change, backward-looking, illiberal, and hierarchical. 

We are using ‘conservative’ more generally to mean, ‘pertaining to the group and the rights and obligations of the group with respect to the individual.’  In economics terms, conservative means using the group as the unit of analysis.  To use a football analogy, ‘liberal’ means from the perspective of the player, and ‘conservative’ means the perspective of the team.  If we are considering the contract and performance of, say, Tom Brady, the quarterback of the New England Patriots, then the framework of analysis is liberal.  If we are considering Patriots as a team, then we are using a conservative framework.

Groups arise due to increasing economies of scale, that is, because two people working together can produce more than either alone.   That’s true in the military, a nation, a family or a company. 

Groups imply hierarchy.  In a group, someone has to decide what the group is to do, how it is to be organized, and how the risks and rewards of the group’s efforts will be allocated.  A group needs a decision-making body and is therefore hierarchical by nature.

Furthermore, groups will engender specialization.  On a football team, some players are strong, some are fast, some can throw a ball, and some can catch it.  And leadership, the coach and the owner, can do none of these, but specialize in selecting personnel and teaching them how to play and work together.  This is similar to a company, an army, or indeed, a family.

Thus, we use ‘conservative’ not as ‘the political right’, but as relating to the group.  Note, however, that this does indeed correspond to many of the qualities associated with the political right.  The group is hierarchical, because it needs leadership to operate.  It is illiberal, in the sense that the desires and rights of the individual are subordinate to the rights of the group as a whole.  You can only play quarterback if the coaches let you. 

Conservatism, as we define it, is resistant to change, because the leadership’s perspective is systemic.  Any concession granted to one employee may compel management to grant it to all similar employees to maintain consistency in policy and treatment.  Therefore, management will tend to be resistant to change, all other things equal.  The implications of setting a precedent makes organizations slow to change and reluctant to accommodate individual needs.

Thus, ‘conservative’, as we define it, is in fact conservative as the word is generally appreciated.  The difference is that we are speaking of conservative in a generic sense which can be used assess governance in the US, Saudi Arabia, Hungary, IBM, Facebook or your church or family.  It is conservative as a universal term.

In summary, we use ‘liberal’ to mean pertaining to the individual.  We use ‘conservative’ to mean pertaining to the group.

A Conservative Hierarchy of Needs

A Conservative Hierarchy of Needs

Conservatism versus Fascism

What does the group – the nation, the club, or the team – want from a prospective member?  As with Maslow, we can use a hierarchy of needs, in this case, a conservative hierarchy of needs.

The conservative hierarchy can be segmented into ordinary conservative and fascist values.  Ordinary conservative (hereafter, just ‘conservative’) values and standards apply universally to the entire group (but not necessarily outside the group).  Thus, in the US, a group member is generally expected to speak English, for example.  Americans greet each other by shaking the right hand.  These sorts of expectations apply in principle to all group members. Thus, anyone who speaks English meets this requirement, regardless of any other demographic characteristic.  Conservatism is therefore primarily about standards.  Conservative expectations are about ‘us’, in the sense that new entrants to the group are expected to conform to the group’s prevailing norms and standards.  It is largely a one-way street, but anyone can use it. 

Fascist values encompass all conservative values, but also include demographic characteristics which are essentially immutable, typically race, tribe, religion, or ethnic origin. Thus, a fascist might exclude Mexicans purely on the basis of their race, and there is nothing a Mexican can do about it.  Therefore, fascism is primarily about demographics and is confrontational by its nature.  It is about ‘us’ and ‘them’. 

As social animals, all people have both conservative and fascist impulses. 

All groups have standards – that is implicit in the very concept.  Whether one is sitting in a movie theater or a bus, the group has firm expectations about appropriate behavior.  For example, in a movie theater, one is not allowed to talk, text, use a light, or stand up during the showing of the film.  These rules, as they apply equally to all, are conservative rather than fascist.

At the same time, people tend to feel more comfortable with those who are most like them, which often comes down to race, religion, nationality or ethnic origin.   According to a PRRI poll, for example, three-quarters of US whites have no non-white friends.  The tendency to favor or associate with those of similar demographic characteristic may be considered fascist in nature.

Indeed, self-determination is itself largely a fascist notion.  Self-determination implies that people can choose to live with and be governed by people like themselves.  When these choices are presented to an empowered population, they will often choose based on tribe, religion, or ethnic origin.  Thus, after World War I, the monarchy of the Hapsburg Empire devolved into democratic states—but virtually all based on nationality.  When the British ceded power to a democratic India, Muslims and Hindus in large numbers chose to live in segregated states.  With the fall of communism, democracy allowed the Czechs split from the Slovaks.  At the same time, Yugoslavia dissolved into its ethnic components, accompanied by a good bit of ethnic cleansing – all in ostensibly democratic states.  When the Muslim Brotherhood won democratic elections in Egypt, assaults escalated on Coptic Christians, who had lived in the country for two thousand years.  And of course, self-determination in Iraq brought the de facto secession of Kurdish regions and tensions between Shiites and Sunnis which culminated in the rise of ISIS, perhaps best described as a fascist Sunni organization.  Like it or not, people like to associate with those similar to themselves. 

This is not to endorse ethnic cleansing—far from it.  Nor does it mean that people from different backgrounds cannot live together.  We certainly do in the United States.  Nevertheless, we must acknowledge both the fundamental need for order in society and the tendency for people to favor those like themselves.  Only in doing so can we hope to properly manage social tensions in an age when so many are beset by anger and intolerance.

With that, we can turn to the conservative hierarchy of needs, and their conservative and fascist components.

Conservative Needs

Safety

Safety comprises the very foundation of the pyramid of needs.  Does a prospective entrant represent a risk to group members or to the group as a whole?  If an entrant is deemed unsafe, all other considerations are rendered moot.

This question may be decided either on an individual’s track record or, absent individual-specific information, on group characteristics.    Americans have perceived in recent years a tendency for terrorist activities, both in the United States and other countries, to be linked to Muslim extremism.  While the numbers killed – excluding the World Trade Center attack on September 11, 2001 – have been small, from the conservative perspective, the question arises as to why to take the risk at all.  Thus, the issue of safety may be perceived to be linked to a wider prejudice against a given ethnic or religious group.  This consideration, however, is more likely to be driven by perceived risk than specific ethnic animosity.  For example, in the US, only Muslims have been singled out as a terrorist risk.  Mexicans, Indians and Chinese, all of whom are in the US in great numbers – and far greater numbers in terms of undocumented residents — are not treated as a terrorist risk. 

For the conservative, it’s safety first.

Permission

The notion of permission seems so self-evident as to be banal, but it matters.  Group members will want to know if a stranger in their presence is authorized to be there.  This has nothing to do with the entrant’s individual merits.  Rather, it concerns whether an appropriate member of the group has authorized the entrant’s presence.  In a prosaic example, a stranger may be sitting in an office reception area, only to be approached by a suspicious employee who asks, “Can I help you?”  If the answer is, “Your manager, Mr. Smith, told me to wait for him here,” then the entrant will probably be left unmolested without further inquiry.  Importantly therefore, the mere act of providing permission to be present in a given area – a country, a club or an office – will ease the tension of a stranger’s presence, regardless of that person’s individual merits.

In the case of illegal immigration, for example, just the act of legalizing an immigrant will lift his standing in the community and ease the associated stresses from the group’s perspective.

Identity

At some point, the group will want to know the entrant’s particulars, his name and background.  Just knowing a stranger’s name already provides him limited standing in a group.  “This is Mr. Jones.  He is a lawyer with Baker McKenzie.”  The mere documentation of identity and associated particulars will also facilitate the integration of the stranger into the group.  Again, this may seem self-evident, but the most important aspect in group acceptance is knowing a newcomer’s name.  Having a name transforms an individual from an object into a person and almost constitutes the threshold for acceptance into a group by itself.

Again, this is trivial, but when unidentified Mexicans are roaming the countryside, the locals will be uneasy.  If the citizens of a given area have confidence that a Mexican is, in fact, a known quantity with a proper identity card, that alone will make them more comfortable with the stranger's presence.

Resolving just these three factors – safety, permission and identity – would reduce tensions with undocumented migrants by perhaps half.  That is, the mere act of documentation alone would go a long way to mollify conservative concerns.  In the case of illegal Mexican labor, conservatives may well be reacting to the black market in immigrant labor, not to the immigrants per se.  Ending the black market, without any other change, would already represent a huge step forward in the acceptability of Mexican migrants.

More could be achieved with attaining the next steps in the hierarchy of needs.

Standards

Standards refer to an individual’s behavior in following rules and customs.  Language is a primary standard, for it enables communication.  Of course, the history of the US is filled with examples of immigrants without proper English-speaking skills who were still accepted into the community.  At some point, though, the group will want the immigrant, or at least their children, to be fluent in the language of the country. 

Other standards could, in principle, be laid down in law or written rules, but are often observed as a matter of social norms.  For example, one could not let a cow wander loose in a US suburb, as might occur in India; walk around with an AK-47 slung over the shoulder, as in Pakistan; or prevent one’s wife from driving, as in Saudi Arabia.  Most community charters will not, however, have a specific injunction against cows or AK-47s, but neither will be tolerated by the neighbors.

Some mores are flexible.  For example, in the US, Muslim women would typically be allowed to wear a hijab, which covers the head.  On the other hand, a burka, which covers the entire head, face and body, would probably be resisted as incompatible with US traditions.  These social norms are not necessarily promulgated officially, but can still be quite firm in terms of expected behavior.  Again, this has nothing to do with the entrant’s particulars – nationality, religion or income – but rather reflects universal norms applicable to all members of the group.  All group members are expected to conform to certain standards.

Legalization of undocumented migrants would help comportment, because migrants would be able to lead more above-board lives.  For example, migrants are sometimes caught transiting hidden in tractor trailers, one hundred to the container.   Of course, this is part of the migrant’s illicit journey, but it also has a low-life quality which is distasteful to most Americans.  Merely the act of legalizing migrant labor would reduce these sorts of incidents, and raise the status of Mexicans and similar migrants in the US.

Self-Sufficiency

For short-term visitors to a group, self-sufficiency is not of primary interest.  If a day visitor to a country club is not covering his pro rata share of dues, no one will much care.  However, the group will want any permanent or long-term member of the group to carry his own weight. 

Indeed, the principal objection to illegal immigration from think tanks like FAIR and CIS revolves around the fiscal cost of undocumented immigrants.  They are a burden on taxpayers, and this is seen as a primary reason for exclusion from the group.  Migrants will be more acceptable if they are perceived to support themselves.

These five categories – safety, permission, identity, standards and self-sufficiency – exhaust conservative requirements.  It is important to note that, in many ways, this is not a particularly high bar, and comes down to ‘follow the rules’, ‘be respectful’ and ‘support yourself and your family’.  Doing so will not solve every problem, but those meetings these requirements will be tolerated, if not loved, by their neighbors. 

Fascist Needs

Fascist needs come on top of conservative needs.  Conservative needs are universal in character.  Anyone can comply with conservative requirements.  Not so for fascist ones.  The next two categories in the conservative hierarchy may be considered fascist, that is, they pertain to characteristics an individual cannot change, or at least not easily.

Culture

Culture refers to income, education, ethnic or religious practice, political ideology and class identification.  Thus, culture would include the observance of certain holidays, beliefs about desirability of certain political views, and modes of speech, among others.  For example, in the musical, My Fair Lady, Professor Henry Higgins attributes the lower class Eliza Doolittle’s plight to her accent and vocabulary:

Look at her, a prisoner of the gutter, 
Condemned by every syllable she ever uttered. 

Garn! I ask you, sir, what sort of word is that? 
It's "Aoooow" and "Garn" that keep her in her place. 
Not her wretched clothes and dirty face.

While Higgins ultimately manages to transform Eliza using the power of phonetics, from the perspective of the lower class, mastering the niceties of polite society could appear entirely impossible.  In this regard, culture may be viewed as conservative from one perspective, and fascist from another.   Culture is included in the fascist category for purposes of this framework, in the sense that most people prefer their own holidays, spoken accents and food preferences to those of other countries or ethnic groups.  It is not, however, a hard and fast divide, as Eliza Doolittle’s mastering of upper class diction demonstrates.

Income and education are included in culture for purposes of this analysis.  Income creates a different ordering of preferences by class.  For example, a high income individual may prefer to subsidize renewable energy through charges on consumers’ electricity bills, as is the case in states like California and New Jersey.  As these charges may amount to a few hundred dollars per year, they are of little consequence to the wealthy who believe they are enhancing long-term sustainability.  On the other hand, for those who live month-to-month on tight budgets, such charges are a material burden. 

Similarly, strict zoning laws, as exist in California, drive up real estate prices.  This increase is absorbed without excessive stress by the wealthy, but is absolutely crippling to the middle class.

Such restrictions and taxes may be viewed from the top as conservative, in the sense that any wealthy person can afford to live in California.  On the other hand, they may be viewed as fascist for those in lower social strata without hopes of ever earning large incomes.  Such policies may be fascist by effect, rather than intent. 

Thus, culture straddles a divide between the conservative and fascist worlds.  To which camp it belongs depends on the circumstances.

Demographics

The true divide between conservatives and fascists comes over demographics, the inherent characteristics of a given person or group.   These refer to race, ethnicity, tribe and religion.  An individual is generally incapable of changing any of these characteristics (with religion the occasional exception), and thus can be excluded from the group permanently.  ‘Us’ and ‘them’ are clearly defined with no hope of reconciliation.  Such a mindset is unquestionably fascist.

Age, sex and other inherent in-group characteristics can be used as hard dividers as well.  Feminists from time to time decry the male-dominated corporate world as ‘fascist’ in the sense of excluding women based purely on prejudice rather than their underlying capabilities.  History has shown this claim to have merit in many cases, and thus some portion of charges of fascist paternalism may be considered materially true. 

On the other hand, many activities are segregated by gender without social resistance.   For example, no one considers keeping men off the women’s soccer team as fascist.  Nor are, say, single sex schools considered anything more than conservative, because of widely accepted, enduring differences between the sexes.  Therefore, in-group characteristics like sex and age are not typically understood as fascist, if for no other reason than that even the most hardened fascist is unlikely to kick his mother out of the country.

For the true fascist, those from different countries or religious traditions are unacceptable in the group by definition, regardless of their comportment, compliance with the law, or acceptability in cultural terms. 

*****

Understanding both conservative and fascist concepts are helpful in considering public policy.  For example, this framework would have suggested to the administration of George W. Bush that invading Iraq with the intent to democratize would lead to the ethnic cleansing and fragmentation of the country into religious and ethnic enclaves.  This could have been countered by creating incentives in Baghdad to treat all members of the country uniformly and impartially, or by playing midwife to the birth of a Sunni country, just as the US had de facto with the Kurds – albeit with the understanding that this would be accompanied by ethnic cleansing.  Or the US might have chosen not to become involved at all.  Thus, a framework of analysis for conservatism and fascism can help understand and shape policy options.

To sum it up: Conservatism implies universal, group standards to which any person might reasonably be expected and able to conform.  “No shoes, no shirt, no service.”  That’s conservative.

Fascism establishes requirements which specifically exclude certain persons based on their race or religion.  “No Mexicans.”  That’s fascist.

Securing America's Future Act vs Market-based Visas

Market-based visas (MBVs) are a better solution in almost every respect than the the Republicans' Securing America’s Future Act (SAFA)--even for conservatives.  And unlike SAFA, MBVs will garner Democratic support when it’s time to vote.

To recap: Market-based visas would allow background-checked Mexicans and Central Americans to work in the US on demand in return for a market-based fee. 

Below is a link to a feature-by-feature comparison of SAFA v MBVs.  This easy-to-use analysis is recommended for those with deeper interest in immigration policy options.  Academics and policy staff will want to take a look.

Securing America's Future Act vs Market-based Visas

Illegal crossings up 223%, but a relative modest win for Border Patrol and ICE

As forecast, Border Patrol apprehensions and inadmissibles were up sharply for April year on year.  On the other hand, we forecast about 15% higher crossings, given the strength of the US economy.  The lower observed number suggests that increased efforts at the border and vigorous ICE enforcement activities in the US interior are having a modest deterrent effect.

April is likely to mark the worst relative performance year on year, as the month was the absolute low point for crossings last year and therefore established a low base for comparison.

May should see the highest number of crossings for the year in absolute terms, coming in around 58,000 based on recent trends.  The year on year increase in May is likely to come in a bit less than 200%.

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The economics of being illegal, and how the wall increased the illegal population

Mexicans come to the US for the money.  

In Mexico, an unskilled laborer can earn $2.50 / hour; in the US, four times as much. 

Of course, the cost of living is higher in the US, and migrants have to be compensated for moving to a foreign country.  All in, Mexicans need about $6.50 / hour -- call it the Relocation Wage – to come work in the US.  If the border were completely open, unskilled wages for the relevant industry sectors would fall to this level as Mexicans moved north to take the jobs.

So how much do Mexicans actually earn in the US, the prevailing unskilled wage of $10 / hour or the Relocation Wage around $6.50 / hour?  Our research suggests it's closer to the latter, principally due to wage theft and poor off-season utilization for seasonal workers trapped in the US.  Add another $1 / hour for hassle factor, including the risk of deportation and the daily inconveniences of living illegally, and the net compensation for Mexicans (including non-cash costs) actually appears to be pretty close to the Relocation Wage of $6.50 / hour on average.

This suggests that the Wall has not actually been a binding constraint on Mexican migrant levels.  Compensation is not much different than if the border were unenforced.

And indeed, that’s what Pew Research’s population estimates also suggest.  After peaking at 6.9 million in 2007, the undocumented Mexican population fell to 5.6 million in 2016.   Ironically, this suggests that, during the 2008-2016 period, the Wall succeeded in keeping more undocumented Mexicans in the US than it kept out.  Because re-entering the US can be difficult, risky and expensive, a Mexican would only leave if Mexican wages compensated for the possibility of crossing the border back into the US.   However, if the re-entry cost were zero, the cost of leaving would also be lower, and more Mexicans would have left.  Border enforcement sustained the undocumented Mexican population above its natural level after 2008.

This implies that Mexicans’ compensation was in fact below the Relocation Wage after 2007.  Undocumented migrants suffered as did Americans with the Great Recession, but more so.  Border enforcement exaggerated the effects of the Great Recession and artificially depressed wages and employment levels in the US, at least for undocumented Mexicans.  

I would note that this analysis does not pertain to Central Americans, nor does it suggest that the border should have been unenforced after 2007.  Nor does it claim that the same economic conditions hold today.  We do claim, however, that an approach which fails to treat illegal immigration as a black market problem will yield perverse results, at least some of the time.

Andrassy ut 60 and 100,000 Rapes in the Desert

Andrássy út is one of the grand boulevards of Budapest, lined with stately townhouses and mansions, many of which serve as embassies today.  But one building in this row is not like the rest: Andrássy út 60.  This address sends a shudder through all Hungarians, for it housed the headquarters of the Hungarian Nazi party during WWII and the Russian secret police until 1956.   Today, it serves as Budapest’s Terror Museum, well worth a visit if you’re finding the city a little too charming.

When last I was at the Museum, the exhibit included the personnel photographs of the staff who tortured and killed people in the cellar of the building.  I have looked closely at these images for a clue to the depravity and cruelty of those torturers, but they look no different than bureaucrats anywhere.   They could be postal clerks in Switzerland.

But here’s the interesting thing.  Many of them worked first for the Nazis and then for the Communists.  In the same capacity.  For these people, torture was not a matter of protecting society or ideological conviction. They tortured people because they were good at it, or because they liked it.  It was a perk of the job.

*****

If you check the literature, you will find that most sources estimate the rate of rape of migrant women entering the US illegally at 30-80%, with 60% the most commonly cited number.   About one quarter of the crossers apprehended by Border Patrol are women, on a total attempted crossings we forecast at about 1.1 million in 2018.   Do the math, and that comes out at 164,000 girl and women migrants who will be raped this year trying to enter the US illegally from Mexico.  

I shared this number with the head of a respected think tank, a thoughtful and entirely decent man, who all but called me a liar.   How could there possibly be one hundred thousand rapes annually on the border?  It seems incredible.

According to Princeton University’s Mexican Migration Project, about 80% of illegal crossers use coyote guides, men who are increasingly associated with the Mexican crime cartels.  Crossers are extraordinarily dependent on coyotes during the journey through the desert which can last eight or nine days.  Abandonment by a coyote can mean death or apprehension by US Border Patrol.  Therefore, migrants are vulnerable to demands which coyotes may make en route

And what sort of demands might these guides make?

As at Andrássy út 60, sooner or later, the guides will be those who are good at their jobs or value the total compensation package the most – including the perks.  Eight days means eight nights.  That is a long time in the desert.  Sexual predation is not some random criminal event during a crossing.  In many cases, it is literally part of the price of passage.  Indeed, coyotes often advise their female clients to go on birth control prior to the journey.  From PBS:

That was the case for Maria Salinas, a petite 43-year-old who recently tried crossing with her 18-year-old daughter.  Salinas said at first she was confused when a guide at the start of the trip offered her and other women pills he said would prevent pregnancy. Later, it made more sense.

Once Salinas started walking with the group, she couldn’t keep up. One coyote said he’d help – on one condition.

“If I gave him my daughter, then he’d wait for me,” Salinas said. Meaning, if she let him have sex with her daughter. She refused, and he abandoned them. They only survived because they found Border Patrol.

This is not rape in the sense that my think tank friend assumed.  It is not a random criminal event.  This is rape – or coerced sex – as a business proposition, as an industry.  It exists entirely due to the lawlessness of a black market in migrant labor.  If they lacked the opportunity, most of the coyotes would not be rapists, just as most of the interrogators at Andrassy út 60 would not have tortured people as a hobby.  I often sense that my Mexican friends are embarrassed about stories of such malfeasance, because they fear it shows a moral turpitude, that Mexican women are loose and Mexican men are inherently criminal.  Given the opportunity, many men would take advantage of women, as did Harvey Weinstein or Bill Cosby.  There is no moral failing unique to Mexicans or migrants.    

Rather, poor government policy can create a ‘safe space’ for sadistic impulses and sexual aggression, eventually drawing to the activity those who most value such license.  A lawless climate will engender lawless behavior. 

The moral culpability lies with those who know better, with US political, academic and journalistic leadership who have failed to create and maintain order in migrant policy.

This problem cannot be solved by more border enforcement.  That will only further shift the power to the coyotes.  But if you had given Ms. Salinas, the woman mentioned in the story above, the option of paying $4,000 each for herself and her daughter -- the equivalent of the current coyote fee -- for entry into the US, she would have paid it without hesitation.  For then she would not have had to cross the desert, for eight days and nights, at the mercy of the coyote.

Soros' Illegal Immigrant App

George Soros' Open Society Foundation is being taken to task for funding an app which allows immigrants -- both documented and illegal -- to notify family members if they are in the process of being arrested for immigration-related transgressions, among others.

Given that ICE is capable of holding migrants for an indefinite period of time pending proof of status, swift notification of family members appears a reasonable response to perceived uncertainties on the ground.  This is the sort of app an American might want to have, for example, when visiting a foreign country like Russia or Nigeria.  

But again, the story is suggestive of the difficulty of countering a black market -- market participants respond to enforcement efforts with a kind of arms race, almost inevitably escalating violence over time.  This was the experience of Prohibition, for example, and is again visible in rising violence rates in Mexico.

Apps in a Market-based System

Apps can also be used to advance the interests of a well-ordered and transparent market which meets conservative goals.  In the case of market-based visas, below are a few apps we might expect (for the sake of illustration, priced at $16.99 per year and generating $100 million in annual revenues from the six million undocumented working Hispanics in the US).

age theft appears endemic in the migrant community.  A Wage Protection app would summon legal help for those migrants not paid agreed sums.  Employers would soon come to appreciate that migrants are capable of holding their own in these matters, and wage theft should decline significantly.

The value of the app is not in its enforcement, but in its deterrence.  If a sweatshop manager believes that wage infractions will prompt a visit from two Harvard-trained lawyers the next day, he will be less likely to commit them.   

Note also that in the clothing fabrication industry, undocumented immigrants are only about 1/3 of the workforce, with the remainder comprising legal immigrants and unskilled Americans.  The app would also be available to these groups, thereby insuring proper payments for unskilled industry workers more widely.  It would help sustain wage levels more broadly, and not just for migrants.

Such an approach pairs well with bank accounts.  Wage protection works best when payments are electronic and easy to document.  Thus, those seeking wage protection will also have an incentive to be paid electronically above the table--thereby fostering system transparency and curtailing black market activities. 

Other apps could include sexual harassment protection and visa insurance.  Sexual harassment and assault appears to be endemic among undocumented migrant women, which they appear reluctant to report both for societal and immigration enforcement reasons.  Again, the visit of two Harvard-trained lawyers to a California grower would quickly put an end to this kind of abuse of power, typically by field supervisors.  

Wage and sexual harassment protection apps could materially reduce the rates of crime associated with migrant labor.  And note that the migrants themselves -- not the US government -- will take the lead in reducing victimization rates.

Visa insurance could be an extension of the Soros app above, and would summon legal help in the case of detention by ICE.  

A market-based system achieves compliance by offering a suite of services that employers, migrants and other stakeholders like hospitals, schools and police find useful.  The key to compliance is speed, certainty, affordability, and convenience.  Employers in this world would use E-Verify not because of fear of enforcement, but because the system as a whole brings benefits; companies can access qualified, legal labor in unlimited quantities at a known price whenever they want.  That is a valuable service and a reason to comply with system requirements.  Both migrants and employers would want to belong to the system, because it makes their lives easier.  This in turn would create the most transparent and legal labor market in the Americas.  

Right now, the Soros app is serving a need in the black market.  If we legalize and tax this market, then we can create apps which drive compliance and create order, safety, efficiency, fairness and prosperity for all those involved.

How the Wall will turn Phoenix into Chicago

Our proposed approach to illegal immigration has been criticized as being too 'Ayn Rand', 'libertarian' and 'Cato'.   It is not.  Our approach is conservative.  But then again, so are the enforcement-based proposals of, say, the Federation for American Immigration Reform (FAIR) or The Center for Immigration Studies (CIS).

So what's the difference?

FAIR and CIS believe that black markets can be beaten, that with enough effort, the Wall can close off Mexico.  We believe black markets cannot be defeated, certainly not for an extended period of time.

The data back us up.  The traditional black markets of alcohol, drugs, prostitution, gambling and migrant labor have never been beaten in the US.  Prohibition brought all sorts of crime without reducing alcohol consumption much, and was repealed.  The closure of backpage.com suggests US prostitution was alive and well just last week.  Gambling has been widely legalized, with the government itself a big player.  Marijuana is moving rapidly towards wide-spread legalization, even as the opioid epidemic tells us we are being crushed in the war on hard drugs.  And despite 17,000 agents on the southern border, March saw a spike (albeit a forecast spike) in illegal border crossings, such that the Trump administration felt it necessary to add National Guard troops there.  We are not winning in migrant labor, either.

If only we try a little harder, argue our friends at FAIR and CIS, we can surely close the border.  That's not what history tells us.  History tells us that a Wall will bring the crime north into the suburbs of Arizona and Texas, as the cartels move on the Border Patrol and state police itself.  If you can't beat the Wall, you can always buy or intimidate those who man it.  That is a lesson of Prohibition.  Al Capone, the Prohibition era gangster, once claimed that half the Chicago police force was on his payroll.   A favorite Prohibition tactic was 'free nights', when bootleggers paid customs agents to be absent for a specific period of time on a specific night. That would work on the Mexican border, too.  Building a Wall, far from keeping Mexicans out, will bring the Mexican border right into the suburbs of Arizona and Texas as the cartels move to flank the barrier.

So, unless FAIR and CIS can convince us that the US can beat a black market, their proposals ring hollow.  Even if the Wall were built, the key achievement will likely be the transformation of Phoenix into 1927 Chicago, just as the Mexican war on drugs has turned the north of that country into a killing zone.  And there is nothing conservative about organized crime, police and political corruption, and the public's fear for its safety.  

By contrast, market-based visas will reduce crime associated with illegal immigration by 90%, close the border, and bring order, safety, and transparency, as well as compensation for labor market access -- all conservative goals.  True, we achieve that using a market mechanism -- because that's the textbook approach, which has been tried and tested.  

So, we'll let the policy cowboys at CIS and FAIR gamble with turning Phoenix into Chicago.  Princeton Policy will stick with solutions grounded in theory and proven in practice.

How Tennessee tells us deporting illegals is hopeless

In the presidential election, Donald Trump beat Hillary Clinton by 26 percentage points in Tennessee.  It is Trump country.  

So what do Tennessee voters say about illegal immigration?  

Incredibly, only 1/3 of Tennessee registered voters think undocumented immigrants in general -- the 11 million of them -- should be required to leave the US.   Even Trump supporters only seek deportation by 1 percentage point.  Notwithstanding ICE raids here or there, the public does not support any large scale removal of undocumented aliens.  And that's in Trump country.

As for those 3.6 million child arrivals (DACA + Dreamer eligible), only 28% of Trump supporters want to deport them, and only 16% of all registered Tennessee voters.

So, to my conservative friends, here's the reality: You don't have the votes.  Not even among Trump supporters.  If conservatives do not come up with a more creative approach, count on the DACA eligible, and very possibly the Dreamers, to be grandfathered in after the November elections, exactly as President Trump recently signed an omnibus bill which he himself disavowed.

The rationale will be exactly the same as in 1986: a granting of amnesty in return for promises of border enforcement which will never come.  So if you're a conservative, you'd better start looking fast for Plan B, something which gets you much of what you want and will still be supported by a broader electoral coalition. 

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