Friday, January 16, 2009

Memo to Lou Dobbs -- Fixing Immigration

Mr. Dobbs,

Lou, let's fix immigration, so those movie-stars can quit picking on you. I believe that this proposal is a fair compromise for most interested parties.

Immigration is a lot like borrowing... borrowing against future job growth and future housing growth. The banks now realize that America has borrowed too much.

Virtually all of U.S. immigration is financially motivated. The presence of 20 million illegal immigrants has financially destroyed the blue-collar workforce. Temporary worker programs are now destroying white-collar workforce, who have an even higher likelihood of servicing a mortgage. To address the plight of the all residents, legal and illegal, in a financially responsible manner, we must borrow against future immigration quotas to selectively adjust the status of illegal aliens who will help us destroy the job magnet.
Reserving future visas to adjust the status of those persons already here: The reduction in future new-arrival immigration will help the blue collar worker. Business related immigration must also be conducted in a fiscally responsible manner, business related immigration (temp. and perm.) must be performance based and limited to a small percentage of the prior year's employment growth. (Performance based business immigration quotas would discourage offshoring.)

Our global competitiveness issues are imposed upon us by our inflated housing costs. Inflated housing costs inflate salary requirement and the tax burden on higher salary, the result is the movement of existing jobs overseas. The government's attempts to place a floor under U.S. housing valuation is destroying the world's economic engine.
Fixing Illegal Immigration:

Fixing the job magnet is as simple as allowing illegal immigrants to testify against illegal employers in exchange for documentation. The recent sting operation against Boston Port Director, Lorraine Henderson, is an example of the long term solution to the job magnet. Witness testimony against illegal employers will forever fix the job magnet, if there are substantial penalties for the employer and reward for the employee. I would suggest an IRS audit to discover and retroactively recover illegally deducted wage expenses -- i.e. wages paid to undocumented aliens should be taxed as profit. A simple civil action -- no proof of foreknowledge required.

Perhaps, a short amnesty period for illegal employers who turn themselves in promptly, but after that, let the ACLU and U.S. Chamber of Commerce argue the fairness of recovering back taxes with the IRS.

Illegal employers have home addresses and assets to seize, why do we chase nomadic workers all over the countryside? With enforcement directed at the illegal employer, opportunities will dry up, those illegal immigrants without an employer to violate, will self-deport. Those who help with these prosecutions are the hard working migrants we want to keep.

The impact of mass-immigration is hyper-inflation in housing, 309.4% (1980 to 2007) and flat wages. America can not sustain this rate of inflation because the American salary-requirement and tax burden becomes globally uncompetitive and jobs move offshore.

To avoid more immigration driven, hyper-inflation in the housing market, we must borrow against future (non-business) immigration visa quotas to normalize the status of the otherwise law abiding illegal immigrants. (Selected by their willingness to participate.) Eventually, these migrant's (citizen) children will become of age to sponsor the parent(s) for citizenship. The end result is identical, with the exception of housing equity they might have attained (a hedge against rental inflation) to help them in their old age.

Growth from immigration would be cut in half. Counting 50% of the visas granted annually, to those already in our country, would address America's declining job growth problem and undocumented resident problem at the same time.

Its most-recent-year data show that the U.S. granted:
• 744,531 permanent green cards to working-age adults ages 20-64, and
• 912,735 new employment authorization documents to temporary foreign workers.

Source: NumbersUSA

Addressing our immigration policy will instill confidence within the banking systems, indicating that we are not interested in risking America's hard assets (and economic meltdown) in 'bubble' economic scams.

Fixing Employment Based Immigration:

High skill, employment based immigrants are the most likely group to displace an American worker with a performing mortgage. If my understanding of the fractional reserve banking system is accurate, foreclosures in a declining market are exponentially harmful to the lending reserve ratio.

Employment based immigration (non-immigrant and immigrant) must have floating caps that are relational to employment growth. Some small percentage of the prior year's employment growth would become the employment based visa cap for the following year.

However, we can't allow 100% of the employment growth in the STEM occupations to be awarded to foreign nationals with loyalties lying elsewhere. The employment based immigration caps must be a percentage of prior employment growth in the individual occupations.

Instead of a lottery for visa awards, the highest salary offers, within each occupation would "win" these scarce visas. Additionally, this plan would discourage employers from sending jobs offshore -- if they are interested in obtaining employment based visas in the coming year. Occupations with no employment growth in the prior period would be "closed" to new immigration and temporary worker renewals.

Finally, dual-intent, non-immigrant visas (H-1B & L-1), have removed the requirement for the non-immigrant to maintain a foreign residence. This also removes the requirement for the employer to offer a travel and housing Per-Diem, or relocation expenses.

Without a home to return to, the non-immigrant is at a disadvantage and is financially motivated to apply for citizenship if she doesn't want to abandon her possessions. Additionally, the travel and housing Per-Diem stimulates the local service and hospitality industries. The foreign residence requirement assures property equity levels are sustained in the donor country.

Banking and Housing:

The banking industry pulled the plug on the economy precisely when it became apparent that the CIR (Comprehensive Immigration Reform) would fail for the second time. Confidence in Mortgage Backed Securities evaporated at the moment America refused to double the intake of legal immigrants. Banks and investors well understood that immigration was driving housing inflation and took corrective action immediately. America must take the fiscally responsible corrective action, in light of the 30% decline in employment growth over population growth in this decade.

To illustrate how important housing is to the economy, the home ownership rates declined only 4.2 % during the Great Depression (47.8% in 1930, to 43.6% in 1940).

Currently, home ownership rates have already declined 1.1% in 2 years, (69% 3rd Qtr. 2006, to 67.9% in the 3rd Qtr. 2008).

The basis of capitalism is private ownership, free trade was an afterthought. Home ownership is the wage earner's hedge against rental-housing inflation and is also a hedge against an undignified retirement.

Historic: Home ownership rates -- Graph:

Historic: Home ownership rates --Tables:

Current: Home ownership rates -- Table (excel)


Jecc said...


Africa is such a poor continent because the money never flows in there from the developed world. China and India are developing fast because the money flows there - from the US, among other nations. Protectionism will not get you anywhere. The world order has to transform so it's a global village. Let's talk free market. In a free market, the person with more skill should win. An alien should not be made ineligible for a job just because of hs visa status. If an American who happens to be better-skilled for the job gets the job I am fine with that.

Weaver said...

Jecc wrote:
"The world order has to transform so it's a global village."

Currently, the WTO ruler of your "global villiage" refuses to consider pollution and labor standards.

Under your logic, the persons working within each economy, have their voices silenced to promote profits. In no way has prosperity been extended to the majority of people residing in China, nor India. Their water has been poisoned.

Your logic is the equivalent of saying America has no right to store grain or heating oil to survive a harsh winter.

Jecc wrote:

"If an American who happens to be better-skilled for the job gets the job I am fine with that."

That's why I promote the competitive-bid process for employment based visas.

If we don't provide employment for our 4m children we will have riots, so immigration must be limited. The definition of your skills are best determined by how much you are paid.

Protectionism/free trade.

Am I not "free" to trade with those who promote the interests of my children? And not to trade with those who don't?

If you are saying I have no right to protect my children, you have crossed a line...

Protectionism is a valid economic response to over-population from immigration, this is the time when comparative-advantages are rediscovered.

The current form of globalism cannot be sustained because it is vulnerable to transportation costs. Comparative advantage is never discovered and foreign investment is thwarted.

Krishnaswami said...

You had given me this link to your blog in reply to my comment in computer world. I am on EAD after 10 years here in USA. It is big money to USCIS every year from each EAD applicant and Advance Parole applicant. Each person pays every year for these documents. H1B is for 3 years, but EAD and AP is for year only. SO they love making us wait. And I will get Green card in another 25 years probably. I will be moving back to my country in another 18 months. Basically, the paperwork is too tiresome and too costly. And the immigration process has totally stopped. I have nothing to say about USCIS. US congress also wants us out through frustration.

You have many valid points. But you need the Senators to work on suggestions such as yours. What can Lou Dobb do? He is just a liar. He told that H1B workers does not pay any taxes. Outrageous lie. I have been paying taxes perfectly for the last 10 years and my payroll, SS and Medicare taxes are being paid as well. I get letters from Social Security office with confirmation of the same every year.

Lou Dobbs earn money by whipping up the hysteria. My only request to the Government is: Are you going to process our applications or not? This waiting game is just too much.

Will write more about your blog later this week.

Weaver said...


Lou Dobbs is not in the pockets of the AILA and NASSCOM our Senators are beholden to lobbyists. Dobbs, is one of the only people who are brave enough to discuss the "third rail of politics" which is immigration.

IMMACT98 and AC21 were lobbies for and written by immigration attorneys. I beleive that these attorneys, having the most $$ to gain from your continued USCIS denials are the cause of your suffering.

Have you noticed your attorney, always give the same speech, designed to enrage your emotions at USCIS?

My divorce attorney was a master at this type of "business" stimulation.

Weaver said...

Krishnaswami said...

"He [Dobbs] told that H1B workers does not pay any taxes. Outrageous lie."

I'm sure that you are misqouting Dobbs, some H-1Bs, from countries with Totalization agreements with the U.S. are not required to contribute to U.S. Social Security.

Lou Dobbs Transcripts:

Isn't it interesting that India, China and Mexico, the highest contributors to migration, do not have Totalization agreements?

Do you think this is by design?

I do.

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