Memo to Dave Brat: Stick to Cutting Government Spending

Congressman Dave Brat has penned an Op-Ed in Roll Call (with Senator Jeff Sessions) on immigration. The column is illuminating for a number of reasons, none of which involves any wisdom in its content (for that doesn’t exist).

For starters, Brat and Sessions make it clear their aiming at immigration in total. There is no focus on illegal immigration here; in fact “illegal” is mentioned a grand total of once. No discussion of the security issues that come with unauthorized immigration was in the column, at all.

Instead it was all freshman-seminar-level economics, along with some statistical three-card-monty.

To wit, Brat and Sessions write…

Following the 1880-1920 immigration wave, which saw the foreign-born population double from 7 million to 14 million people, Congress passed a law to reduce future immigration. Between 1920 and 1970, America’s foreign-born population shrank from 14 million to 9.6 million. For half a century, the number of immigrants declined both in total number and as a share of the population.

This period witnessed rapid wage growth.

They neglected to mention that it also included the Great Depression.

They go on…

The Congressional Research Service reports that during the 43 years between 1970 and 2013 — when the foreign-born population grew 325 percent — incomes for the bottom 90 percent of earners fell nearly 8 percent.

Never mind that “between 1970 and 2013” also included the Great Inflation.

In fact, that dovetails into the larger problem with Brat and Sessions’ analysis: the complete lack of discussion on prices. They act as if wages are the only part of the discussion.

That doesn’t even make sense if we’re just focused on workplace effects. For example the authors blithely assume that high-skilled immigration must depress wages because H-1B visas do. Never mind that the very nature of the visas create hundreds of mini-monopsonies that would not happen if high-skilled immigration was freed of the H-1B regime. On low-skilled immigrants, the authors assume more labor means lower wages (which is defensible) and that low nominal wages are always bad (which is far less so, especially as it leads to lower prices for consumers).

In short, Brat and Sessions fall for the neo-Malthusian snake oil that has afflicted American economic thinking ever since the “Iron Law of Wages” nonsense from the 19th Century.

There are two sides to every market – product and resource. Brat and Sessions avoid the former and fixate on a simplistic view of the latter.

To be fair, Brat and Sessions have been very good on matters outside of this issue (be it the Fed’s effect on prices, or excessive government spending on the same). Sessions in particular voted against the Bank Bailout in 2008 and the Pitchfork Corporatist Farm Bill of 2014. They and their constituents would be better served if they stuck to that very good work.