I, Nacho

Economics for toddlers.

By and
15

Having ascended from the proletariat to the ruling class in the hierarchy of the Cato Institute, Scott Lincicome returns to the Remnant not simply to flaunt his success, but to issue an urgent defense of an embattled concept: globalization. In these troubled times, many of the left and right alike have become hostile to the relatively free movement of people, goods, and ideas across national borders. But Scott maintains that globalization is an unequivocal force for good, and that the most common criticisms of it are rooted in myths. With that in mind, Cato has launched “Defending Globalization,” a new multimedia initiative dedicated to—shockingly enough—combating anti-globalization narratives. Can Scott make a compelling case for the project in the Remnant arena, or will he melt like nacho cheese under Jonah’s intense scrutiny?

Show Notes:

– Scott’s page at The Dispatch

– Scott’s work at the Cato Institute

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  1. G.Mcd

    I had a look at CATO’s immigration game, and it steals some major intellectual bases.
    1. It completely ignored family-based immigrant classifications. Immediate relatives of citizens generally have a visa available without a waitlist.
    2. It did not account for the fact that the H1B special lottery for graduates with advanced degrees from American universities gives them an extra bite at the apple.
    3. It did not account for how foreign students on student visas can use “curricular practical training” to get work authorization during schooling and “optional practical training” to do so once they graduate. Plus there are myriad low cost “learn English” programs that they can use to pay to stay.
    4. It did not account for how executive action has turned the H4 visa for dependents of H1Bs into a classification that allows employment authorization anywhere without restriction.
    5. It completely misunderstands the Department of Labor’s role in employment-based immigration.
    6. It largely ignores lawful nonimmigrant classifications that can put people in line for green cards.
    The picture CATO paints with its immigration game is ridiculously more restrictive than reality.

    I feel that there should be an immigration policy, and that we should have more immigration, and the current system is jacked, but it isn’t impenetrable.

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    Andy Napoli

    RE: backlash to immigration system. I agree with Scott that our current system is so complicated and hard to navigate, that it incentivizes people to come here illegally because there aren't actually meaningful paths for an economic migrant without a sponsoring family member, to gain legal status.

    One source of backlash is that most people do not realize that a person showing up seeking a better life economically, actually has very little chance of ever obtaining legal status. The average or median American still thinks our immigration system resembles the system we had back in the late 19th and early 20th century. It doesn't. To gain permanent residency status ("Green Card") you have to have an existing relative here already and utilize the family reunification pathway. All the other green card pathways are convoluted and dominated by special interest niche categories.

    This in turn causes most economic migrants to abuse the asylum process by claiming persecution. Once they can get asylum status, they can become an initial "anchor" and sponsor family members back home to apply under family reunification. People can clearly see and understand the abuse of the asylum system, but they don't understand why people are incentivized to abuse asylum.

    The third source of backlash, is the fact that the percentage of Americans who are foreign-born, has crept back to historic highs. We're at the point where the percentage of foreign-born are at or exceed the levels from the early 20th century. People forget that starting the in 1930s and all the way through the 1960s, the percentage of foreign born dropped in half or more. It didn't exceed ten percent until recently. Historically, anti-immigrant political backlashes occurred in the 1910s and 1920s at similar percentages of foreign born.

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    Ben Connelly

    I’m always down for more free trade fundamentalism from the Chief Neoliberal Shill over at Cato!

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  4. Austin from Atlanta

    Jonah - you’ve made the claim now a couple times that Switzerland is richer than the US. Have you been there lately? Your eyes will tell you that it is not. Going to Davos is like going to rural Tennessee. The infrastructure is old, the convention center is old, the homes are old, the appliances are old, the food options are limited, expensive, and of mid-level quality.

    It’s like how Ireland is technically per capita richer. That’s not the experience when you’re there. I’ve spent a few weeks at the Marker - the nicest hotel in Dublin. While it is technically a 5-star hotel, there may be, in all sincerity, 1,000 or more hotels in the US that are noticeably nicer. I can tell you from first-hand conversation that my Irish co-workers think the US is more advanced.

    I’m not sure what statistical anomalies are driving the results, but time in the countries speaks for itself. Perhaps there is enough very rich people and not enough poor people to skew the metric even if the actual economic quality of life isn’t there.

    I love both Switzerland and Ireland, but the idea that they are richer than the US just doesn’t pass the smell test.

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      Andy Napoli

      I think it's some kind of distortion associated with a very small country where they don't have as many totally destitute people.

      I also think that calculations of Purchasing Power Parity (PPP) are always fraught. A 5-star hotel experience in the US is just not comparable to a "5-star" equivalent in Ireland or Switzerland.

      I recently visited London and a few other cities in Europe and one example that jumps out is the lack of air conditioning in many of their hotels. In the US, even the crappiest EconoLodge has better HVAC than some of the nicer hotels or resorts in some major European cities. People in Europe just have lower expectations in certain aspects of life. Sweating one's you-know-whats-off in your hotel room at night when it's still over 80 degrees, is just expected and accepted. Maybe Europeans are right in that Americans are obssessed about air conditioning. But most people when they arrive in the US, quickly reach the conclusion that HVAC is a necessity in most climate areas. They don't retain their previous views.

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  5. Aaron H Frank

    Hello,

    Always fun to hear Mr. Lincicome!

    Can we please dispense with the myth of Marco Polo bringing pasta to Europe from China? The Romans had past over a thousand years before Marco Polo was born. Pasta, at its most elemental level is flour and water and salt. Pretty straight forward and available in some form in every culture around the world.

    There are myriad reasons why employers cannot hire enough people. There is a large number of employable people who have given up and left the workforce because continuing to receive rejections while hearing about a shortage of capable people is depressing. The low unemployment rate is just one part of a much more complex problem but Scott and Jonah already know that. So don't trivialize it here, even for the sake of time. The labor force participation rate is equally as important.

    Immigration is good. People who have the energy to get up and move to a new country, even one as great as the US, are people who will be a benefit to us all!

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    EricRemcon@gmail

    I don’t make the time for many podcasts (I am lucky to not have a long commute) so I complain (too often, I know, Jonah) about missing content because there are rarely transcripts available.

    I have a different complaint about this one – it was TOO SHORT! A few more hours would have been great.

    Scott, great answer on Jonah’s immigration question. I interpreted you as saying: The system is 90% broken right now, lets get it closer to a 50% broken state before we even start an ‘open border’ argument. Next time maybe you guys could do a dedicated hour (or 3) on that topic.

    I have also bookmarked your new CATO project site so that I can get my ‘gloooooobalist’ fix at a faster clip than your Capitolism newsletter. Good luck in changing the current tide working against free-ish trade (even an eternal optimist, like you, must realize it will never be technically free).

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    Matt Y.

    So I have questions that have to do with history.

    How and when did the pro-labor, pro-"little guy" position reverse? I mean, we think lower tariffs and freer trade are good for everyone and thus actually pro-little guy, but the populist, pro-labor union, anti-elitist people out there don't agree. But 100 years ago, the capitalist, "business of America is business", small government Coolidge types were passing higher and higher tariff rates. William Jennings Bryan and (trigger warning) Woodrow Wilson supported lower tariff rates. Bryan spoke thus in Congress, "You can impose no tax for the benefit of the producer of raw material which does not...press with accumulated weight upon the person who uses the finished product." He declared, "What I denounce is a protective tariff, levied purely and solely for the purpose of protection."

    When did it become populist to want tariffs, and pro-business to oppose them?

    Also another question, which maybe is related to the first one: Does the infancy and growth of a nation's industries have an effect on the advisability of protective tariffs? Or was the economy in the late 1700s and early 1800s different in ways that made protective tariffs better then than now?
    I ask because the early Federalists like Hamilton, so brilliant with much of their economic policies, also supported tariffs. The Jeffersonian Republicans didn't understand economics very well (they were idealistic agrarians) and skated by on prosperity built from Federalist policies; whenever they tried economic policies (e.g. the Embargo Act), they failed. Jackson also made an idiotic move by getting rid of the Bank of the United States, instead of reforming it, leading directly to economic crashes. But the Jacksonian Democrats usually supported low tariffs. In 1845, Polk signed a tariff bill that lowered rates and had a positive economic impact, so I would say at least by then, lowering rates had become advisable.

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      This comment has been deleted

  8. Zack F

    feeding an AI audio generator Lincicome quotes and Stephen Fry audiobooks to create the ultimate psychological decompression track for econ wonks

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    Dave T

    Great show! Tiny note -- Xi Jinping is pronounced like "she" as in "she's not my wife, she's the president of China", rather than "gee" as in "gee, I hope nobody throws me into a political prison."

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    1. G.Mcd

      Incidentally, what morons came up with the ridiculous non-phonetic transliteration-of-Chinese system that has been foisted on us? Seems like the ability to know the accepted pronunciation of Deng Xiaoping is “Dung Shaoping” is like a signal to the cognoscenti that you’re one of them.

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        Dave T

        In my case, it's a signal that I speak Mandarin, though badly. There's a world outside the English language; there are about a billion low-income folks who know how to pronounce Deng Xiaoping and who wouldn't know the cognoscenti if it bit them in the rear end.

        In the same vein, romanization systems for languages that use other scripts are not necessarily designed by or for English speakers. In the case of pinyin -- the name of the romanization system for Mandarin Chinese -- the project was carried out by Chinese linguists at the beginning of the PRC era.

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    The Bell Tower

    I just ordered Guanciale last night from Amazon because Vincenzo on YouTube says that’s the correct way to make Carbonara and since he’s from Abruzzo, I’m gonna take his word for it. Do you really think my parents could have done that in Florida in the late 60’s without breaking the bank?

    I think about this kind of thing every time I hear momos like AOC talk about their idiotic buy local nonsense. Essentially, they’d have us go back to only eating food that can be grown in the region where we live and then only if our approved cultural background matches the appropriate cuisine from our own culture. It’s enough to make my brain want to collapse into itself to escape the stupidity.

    Finding ingredients you can’t grow natively is the essence of progress. The great explorers sought gold but also spices. Oh sorry, people like AOC call progress “colonialism.” They’re effing Luddites. Someone tell her to Google that one.

    Which brings me to “conventional wisdom.” It’s a terrible misnomer. It should be called conventional ignorance. A lot of modern journalists aren’t dumb, they just know so many things that aren’t so, as Reagan would say. And they buy into inane streams of consciousness spouting from the AOC wing of the Democratic clown car as if they are indisputable facts.

    Scott is accurate when he notices that many of these are underlying assumptions. Americans are poorer, inequality is a thing we must care about, we’re running out of everything from oil to carrots, automation destroys jobs…. all of these and many more are just inane half stories but I can point to a million self serious “news” pieces that take those fallacies as articles of faith and then spend their ink pontificating about it without ever checking the basic claim.

    Thank goodness for Scott’s objective of bringing light to the masses on this subject. No idea if it will succeed in moving the needle on all of this ignorance but Scott is the best economist this side of John Cochrane. I wouldn’t bet against him.

    Jones Act delenda est!

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