Counterparties: The immigration stimulus

November 9, 2012

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As Wonkblog and others noted today, conservatives like John Boehner, Sean Hannity and Charles Krauthhammer are signaling that immigration reform may finally be coming. While it’s a politically and racially loaded issue, immigration is economically simple: letting more people come to America would help the economy.

A 2010 study by the San Francisco Fed found that U.S. immigration is associated with higher productivity, an increase in average hours for workers, and has “positive, long-run effects” on incomes for non-immigrant Americans. The Kauffman Foundation has produced reams of research on how immigration boosts entrepreneurship, and recently estimated that companies with immigrant founders produced $63 billion in sales over the last 6 years. Gordon Hanson of the Cato Institute — which dedicated an entire issue of its journal to the subject earlier this year — finds that immigration is valuable whether it’s high-skilled PhDs or low-skilled laborers.

There are, of course, non-economic benefits to bringing more immigrants to the US. Noah Smith last month suggested that drawing the increasingly rich Asian population to the US would help relations with the region. Matt Yglesias suggested we can address the problems of “global poverty and misgovernment” by opening our borders to the world.

In light of the election’s demographic lessons, it’s also worth nothing that immigration is already having a powerful effect of America. The WSJ today examines how the “Latino diaspora” is revitalizing towns like Ottumwa, Iowa and much of the Midwest:

Between 2000 and 2010, the Hispanic population in the Midwest swelled 49%, more
than 12 times the 4% overall population growth there, according to the census.

The number of Latinos climbed 82% in Iowa during that decade and now represents 5% of the state’s population, the census found. The Hispanic population grew 82% in Indiana, 77% in Nebraska and 74.5% in Minnesota.

An Ottumwa bank officer put it this way: “Hispanics are pulling this town out of a long recession”. — Ryan McCarthy

And on to today’s links:

Occupy’s next move: Buy your debt from banks and forgive it – David Rees

How to solve the fiscal cliff: “The Obamaney Plan” – Greg Ip
Let’s not make a deal — Paul Krugman

Public Works
How NYC managed to get its subway back so quickly – NYT

Yes, companies are harvesting — and selling — your Facebook profile – ProPublica

HSBC’s “wink/nod” business model in allegedly running money for drug dealers and gun runners — Telegraph

“Congratulations, you’ve become a Goldman Sachs Partner” – Guardian
Ex-Goldman trader charged with defrauding the bank of $118 million – Reuters

Bionic hand helps amputeee feel human again – Guardian

Official Statements
Bain Capital to investors: We’re still non-partisan. Really. — Dan Primack

Apple’s stock is at its lowest P/E ratio since 2001 – Quartz


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