59% Want Legal Immigration Cut in Half

Railroaded Immigration Increases Likely, But No Wage Hike

by weaver

“The reason that Americans are not getting a raise right now is because there are 20 million Americans unemployed”
--Heritage Foundation Economist, Stephen Moore. 

 

First, let’s take a look at how much value the minimum wage has lost over the years.  In 1964, the minimum wage was $1.25 per hour, at that time you could choose to take your hour’s pay in silver Quarters (1964 was the last year of silver coinage).    As of this writing, coinflation.com place the melt-value of a 1964 Washington Quarter at $3.95.  So the commensurate minimum wage today would be  $19.75 per hour, or five silver Quarters.  What the policy wonks are telling us is, that we cannot afford to bring your wages up to 51% of 1964 levels ($10.10)  and we need to increase labor competition through increased immigration.

In January, Jennifer Moore, a former Hollywood labor attorney turned Washington Post blogger, vouches for Stephen Moore’s credentials as a fellow pro-Immigration Reform wonk.  But what I really interesting today is a 1997 article co-written by, Moore, and former Cato Institute immigration propagandist, Stuart Anderson, “Cutting Immigration Myths Down to Size”. 

The final myth: Immigration must be reduced because Americans say so in polls. When polled within the appropriate context, Americans favor immigration.

Bringing your attention to, “When polled within the appropriate context,…”  is what these highly paid knuckleheads have been doing for the past seventeen years, designing poll questions that will not allow the majority of respondents to honestly answer due to an incomplete array of possible answers, and/or the question itself is not representative of the findings they will spin in the media. 

Fortunately, NumbersUSA conducted a recent poll that was examined by the Washington Times, which allowed the 1000 likely voting respondents a complete access to a complete array of possible answers.

Americans want legal immigration cut in half: poll

By Stephen Dinan The Washington Times Friday, February 21, 2014

You won’t find a link to the NumbersUSA poll but it is published here: https://www.numbersusa.com/content/files/FEB2014_NationalPoll_0.pdf 

NumbersUSA didn’t have to create questions “within the appropriate context,”  straightforward questions and wide array of answers, I’ll leave you with a few findings.

• 59% want Legal Immigration reduced to 1/2 of current levels, 43% want Legal Immigration reduced to 1/10th of current levels. Only 11% are in favor of an immigration increase.

e* Currently the government allows one million legal immigrants each year. How many
legal immigrants should the government allow each year -- two million, one million, a
half-million, 100,000, or zero?

11% Two million
16% One million
16% Half a million
17% 100,000
26% Zero
14% Not sure

GROUPINGS
27% One million or more (keep same or increase)
59% Half-million or less (reduce by at least half)
43% Zero or 100,000

• On the question of controlling access to employment, social benefits and self deportation…

m* Do you strongly support, somewhat support, somewhat oppose or strongly oppose proposals to encourage most illegal immigrants to go back home on their own by keeping them from getting jobs and public benefits here?

41% Strongly support
22% Somewhat support
14% Somewhat oppose
14% Strongly oppose
9% Not sure

GROUPINGS:
63% Strongly or Somewhat SUPPORT
28% Strongly or Somewhat OPPOSE

• Dream Act

h* Concerning young adult illegal immigrants who came to the U.S. as children -- are
you very sympathetic, somewhat sympathetic, not very sympathetic or not at all
sympathetic to their request for lifetime work permits and legal status?

28% Very sympathetic
35% Somewhat sympathetic
20% Not very sympathetic
14% Not at all sympathetic
3% Not sure

GROUPING
63% Very or Somewhat Sympathetic
34% Not At All or Not Very Sympathetic

• Visa OverStay

i* Concerning adult foreign citizens who came here on vacation, as students or temporary
workers and then overstayed their visas -- are you very sympathetic, somewhat
sympathetic, not very sympathetic or not at all sympathetic to their request for lifetime
work permits and legal status?

6% Very sympathetic
21% Somewhat sympathetic
32% Not very sympathetic
38% Not at all sympathetic
3% Not sure

GROUPING
27% Very or Somewhat Sympathetic
70% Not At All or Not Very Sympathetic

In closing, I suggest that the American voters insist that any adjustment for those who are out of status (illegal), decrement the count of future available (legal) visas on a one to one basis.  Under a program where we sort out the mess first, before taking in new immigrants that will immediately need employment and housing. I contend we will get wages and spending up during a immigration moratorium and then re-examine job creation data to determine realistic legal immigration levels.

How much immigration is too much immigration?

"He [David Ricardo] posited that the growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits." (Wikipedia: Economics)

After decades of employment growth at above 80 percent of labor force growth, employment growth has fallen below 5 percent for working age adults entering the labor force. Yet, 600,000 skilled temporary workers are added to the labor force annually, and the Bureau of Census reports that there were 12.88 million foreign born non-citizens employed in the U.S. in 2007.  In the first decade of the 21st century, only 1 million jobs were added to the working age population.

Immigration has deleterious and advantageous effects to the U.S. economy, nobody is suggesting that the U.S. should have a zero immigration policy, but how much immigration is too much immigration?

Just like the native born, the foreign born require employment, housing and government services. Most of the immigration debate is at the macro level because Congress reserves right to set immigration policy, this paper takes a look at the levels of foreign-born employment by each State and how those States are performing economically.

Displayed in the images below are the "Worst 10" States and the "Best 10" States, by ranking, based upon the following criteria:

Highest percent of foreign-born employed in labor force by State
Highest foreclosure rate by State
Highest unemployment rate by State
Highest percent state spending over budget by State
(For these columns the worst score is 1 (1st) -- the best score is 50 (50th))
(In the "Score" column, the four grades are aggregated for scoring, a perfect score would be 200)

click images to enlarge

10 Worst performing States in U.S.

10 Best performing States in U.S.

Sometimes, the best way to evaluate policy is to see which States are doing the right things and which States are doing the wrong things. The states doing wrong things financially have pervasively high rates of foreign-born in the labor force.

10 worst performing States: Employed Foreign born in labor force (ranking)
Nevada = 4th
California = 1st
Florida = 5th
Arizona = 8th
Illinois = 9th
New Jersey = 3rd
Georgia = 17th
Rhode Island = 13th
Oregon = 16th
Idaho = 26th

On the other hand, the states with the least financial difficulties have predominately lower percentages of foreign-born employment.

10 best performing States: Employed Foreign born in labor force (ranking)
Oklahoma = 28th
Louisiana = 40th
Iowa = 37th
Nebraska= 29th
West Virginia = 49th
Vermont = 42nd
South Dakota = 48th
Wyoming = 44th
Montana = 50th
North Dakota = 47th (the most fiscally responsible state in the nation)

If you are inclined to disagree with me, you could stop reading and label me a racist, but try to understand that the needs of the foreign-born population are different than population growth through birthrate. Migrants arrive with employment and housing needs on the very first day. It’s as if we had another baby-boom, except all of those kids needed employment and separate housing on the day they were born. With native children, the economy has 18 years to adjust to their growing needs; with migration the economic equilibrium is shocked, housing cost spiral upward while demand for labor wanes.

Similarities to the Great Depression:

The only hiccup in the growth of the home ownership rate in the entire last century was during the Great Depression. In the 1940 Census, the home ownership rate fell to 43.6% from 47.8% listed in the previous census (-4.2%).  Since 2005, the home ownership rate has fallen 2 percentage points nationally.

Home Ownership rates 2005 Q1
United States 69.1
Northeast 65.4
Midwest 73.1
South 71.1
West 64.9

Home Ownership rates 2010 Q1
United States 67.1 (-2.0%)
Northeast 64.4 (-1.0%)
Midwest 70.9 (-2.2%)
South 69.2 (-1.9%)
West 61.9 (-3.0%)

Source: Current Population Survey/Housing Vacancy Survey,
Series H-111 Reports, Bureau of the Census, Washington, DC 20233.


Home ownership Rates: 1900 to 2000

Prior to the Great Depression, immigration rates to the United States doubled (see post), in 1900 and 1910, the percentage of foreign born in the labor force exceeded 20%. Since 1980, the number of foreign born in the labor force has roughly quadrupled, from 7.1 million to 23.9 million in 2007.

Much like the “DotCom” recession preceded the Mortgage meltdown recession, the Great Depression was preceded by the Depression of 1920-1921. In 2007, the year of the Mortgage meltdown, the percentage of foreign born in the labor force reached the levels of the Great Depression at over 15%.

The most productive decades in the United States
had low impact from immigration.

Factoid:

2007 Foreign Born
U.S. Labor Force = 23,838,000 (15.6%)
Employed = 22,538,000 (94.5%)

2007 Native Born
U.S. Labor Force = 128,373,000
Employed = 120,050,000 (93.5%)
http://www.census.gov/prod/2009pubs/acs-10.pdf

May 2010 (Foreign and Native born)
U-6 Unemployment = 39,424,834 (16.6%)
U-3 Unemployment = 23,037,403 (9.7%)
http://www.bls.gov/news.release/empsit.t15.htm

High-skilled temporary foreign labor, Housing and Education

I’ve documented in other blog entries that there is no labor shortage and H-1B and L-1 non-immigrant workers assume more than 100% of employment growth in Computer-related occupations. (And here)

There is no need for the H-1B, nor L-1 non-immigrant visa programs. There are enough visas in the EB greencard (PERM) program to naturalize every foreign Science & Engineering postgraduate educated in the U.S. each year. The non-immigrant programs simply create a backlog in the PERM greencard system and disadvantage the both the foreign worker and native worker.  During recessions, these foreign workers displace or disadvantage domestic workers which leads to housing foreclosures.

The dual-intent temporary foreign worker programs remove the requirement to maintain a foreign residence, which in turn, removes the employer's responsibility to pay per-Diem to the traveling worker. The employer is not contributing to the local service and hospitality industries and once again our economic troubles are related to housing.

Graph: Education Levels --Native, Naturalized citizen, Not a citizen.

As we can see from the graph above, we are not going to immigrate our way to prosperity with highly skilled immigrants in a jobless recovery, we have plenty of educated citizens.  Immigration can however cause more housing foreclosures where persons became unemployed in an ever more difficult employment market.

During the most prosperous and innovative decades (1940s - 1990s) in the history of the U.S., the levels of foreign-born in the U.S. labor force was below 10%,  and the worst decades at 15% and above.

"He [David Ricardo] posited that the growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits." (Wikipedia: Economics)

Source:

U.S. Bureau of Census
“The Foreign-Born Labor Force in the United States: 2007”
December of 2009,
http://www.census.gov/prod/2009pubs/acs-10.pdf

U.S. Bureau of Census
Housing Characteristics In The U.S. - Tables
http://www.census.gov/hhes/www/housing/census/histcensushsg.html

U.S.Bureau of Labor Statistics
Table A-15. Alternative measures of labor underutilization
http://www.bls.gov/news.release/empsit.t15.htm

BLS Unemployment Rates by State


Data Table:

State	Rank: Highest Percent of Employed Foreign Born	Rank: Highest Housing Foreclosures per capita	Rank: Highest Unemployment rate	Rank: State Over budget (by percent over budget)	SCORE
Nevada	4	1	1	1	7
California	1	3	3	4	11
Florida	5	4	5	14	28
Arizona	8	2	18	2	30
Illinois	9	10	9	11	39
New Jersey	3	15	17	12	47
Georgia	17	7	15	9	48
Rhode Island	13	26	4	10	53
Oregon	16	11	11	19	57
Idaho	26	5	23	8	62
Massachusetts	10	17	20	17	64
Utah	20	6	35	6	67
Colorado	19	9	32	7	67
South Carolina	32	24	7	5	68
Michigan	27	8	2	39	76
Hawaii	6	14	44	16	80
Maryland	12	12	36	23	83
Tennessee	34	22	13	15	84
Alaska	22	33	28	3	86
Washington	14	23	22	27	86
Connecticut	11	25	24	28	88
Virginia	15	16	38	22	91
North Carolina	23	36	14	20	93
Alabama	41	32	8	13	94
Ohio	39	13	10	35	97
Indiana	36	20	16	30	102
Missouri	38	30	19	18	105
New York	2	39	29	38	108
Pennsylvania	30	34	21	24	109
New Mexico	18	35	27	29	109
Texas	7	28	30	49	114
Wisconsin	35	19	31	31	116
Delaware	21	38	26	32	117
Mississippi	46	40	6	26	118
Minnesota	24	18	39	41	122
New Hampshire	31	27	46	21	125
Kentucky	45	41	12	36	134
Arkansas	33	21	34	46	134
Kansas	25	31	45	40	141
Maine	43	42	33	25	143
Oklahoma	28	29	43	44	144
Louisiana	40	37	41	37	155
Iowa	37	43	42	42	164
Nebraska	29	45	48	43	165
West Virginia	49	48	25	48	170
Vermont	42	50	47	33	172
South Dakota	48	44	49	34	175
Wyoming	44	46	40	45	175
Montana	50	47	37	47	181
North Dakota	47	49	50	50	196

Comprehensive Immigration Reform

A very wise man (my Dad) told me, "It's a good thing we don't get all the government we pay for."

While looking for the H-1B temporary worker program publications which have been missing since Fy 2005, I found a report called, "The Triennial Comprehensive Report on Immigration." Browsing through the 162 page pdf file, I was looking for the information/concerns that would be relevant to U.S. citizens and permanent residents.

Employment
Housing
Environment

I happened upon this priceless quote:

"For the issue areas of the labor market, the housing market, and environmental quality, no specific material is included because the relevant Federal agencies could not provide sufficient information to support such a discussion."

http://www.uscis.gov/USCIS/Resources/Reports%20and%20Studies/tri3fullreport.pdf

In the 2006 and 2007 versions of Comprehensive Immigrations Reform (thankfully rejected by grassroots activism), the headline of the legislation was an amnesty for the 12 to 20 million illegal- immigrants, but the legislation also doubled the amount of legal immigration. How can our wise politicians, economists and lobbyists support doubling the amount of legal immigration, if they have no data on employment, housing and the environment?

Senator Schumer is taking the lead on the emerging version of Comprehensive Immigration Reform, here are a couple of quotes...

Remarks by U.S. Senator Charles E. Schumer
6th Annual Immigration Law and Policy Conference
Migration Policy Institute
June 24, 2009

"Fifth, we need to recognize that reuniting families is an important value of our
immigration system. By dramatically reducing the number of illegal aliens
who are able to enter the United States, we will create room for both families
and employment-based immigrants so that the total number of immigrants to our
country is no greater than today."

I assume that it is yet to be determined whether the total number of immigrants means illegal-immigrants plus legal immigrants. I'm sure the cheap-labor lobby will insist upon some sort of increase. On the other hand, Senator Schumer seems to have a better understanding of the current highly-skilled labor-arbitrage problems/programs (non-immigrant employment visas).

"Sixth, we need to recognize the important contribution that high-skilled immigrants have already made, and must continue to make, toward revitalizing and reinventing the American economy. "

"No immigration system would be worthwhile if it is unable to attract the best and brightest minds of the world to come to the United States and create jobs for Americans—as has been the case for Yahoo, Google, Intel, E-Bay, and countless other companies."

"That being said, any reformed immigration system must be successful in encouraging the next Albert Einstein to emigrate permanently to the United States while, at the same time, discouraging underpaid, temporary workers from taking jobs that could and should be filled by qualified American workers.

"http://schumer.senate.gov/new_website/record.cfm?id=314990

The speech is a pretty good read, a vast improvement over the 2007 version, but I'll reserve any more judgement until after the lobbyists get ahold of the plan -- which again has no housing, employment and environmental input of "...sufficient information to support such a discussion."

Oh wait, here's the price tag for all that government we don't get -- courtesy of Wikipedia.

U.S. College Degree: Return on Investment

Something got me wondering about the "Return on Investment" of a college degree the other day. I think the best way to look at ROI on education is to see how many years the College Graduate can expect to be employed before being replaced.

The yearly average shortfall in College Graduate employment is 451,824. Persons reaching retirement age is now at 16.12% (up from 15.69% end of 1992). This (16.12% retirement rate) would put the employment shortfall for college graduates at 378,986 per year. Assuming that all 1,493,000 new class of 2009 college graduates are interested in working, this would create an "non-emloyment" rate of 25.38%.

In 2006 Occupational shock to the economy from high-skill temporary visas are as follows:

H-1B Specialty occupations requiring bachelor’s equivalent = 135,421
L-1 Intracompany transfers = 72,613
O-1 People of extraordinary ability = 6,961
O-2 Workers assisting O-1 = 3,726
TN NAFTA high-skilled visa (most from Canada) = 2,972

Total high skill visas (generally require a Bachelors): 221,693
http://www.nsf.gov/statistics/seind08/c3/tt03-28.htm

If we remove these temporary visas, the "non-employment" rate would fall to
10.54%

Period 1993 to 2009 (Aug.)

Yearly
Avg. Increase in College Graduates = 1,418,588
Avg. Increase in College Grad Employment = 966,765

Totals:
Total increase in College Grads = 24,116,000
Total increase in CG employment = 16,435,000

Divide (increase in CG emp) by (yrly avg increase in CGs)

(16,435,000 / 966,765)

Avg Length of College Graduate (employment) career = 11.58 years

BLS - CPS Data:
College Degrees

Series title: (Seas) Population Level - Bachelor?s degree and higher, 25 yrs. & over
Series title: (Seas) Employment Level - Bachelor?s degree and higher, 25 yrs. & over

Retirement:

Series title: (Unadj) Population Level - 65 yrs. & over
Series title: (Unadj) Population Level

Something to Teaparty about.

Current U.S. employment growth is below the levels of the 1950's -- not just in percentages -- in real numbers.

Employment growth when divided by Population growth, to create a percentage statistic, is a meager 19.57%. This means that there has only been one job created for every five persons (16 and older) entering the workforce since Dec. 31, 1999.

How can we bring in over one million legal immigrants per year, if we can't create enough jobs to employ our own children? If this isn't a depression, the government seems hell-bent to create one.

The reason we Teaparty is because our Representatives appear to represent citizens of other countries and Global Corporate Citizens.

1950's
Population Growth = 11,516,000
Employment Growth = 7,215,000 (62.65%)

1960's
Population Growth = 19,449,000
Employment Growth = 13,862,000 (71.27%)

1970's
Population Growth = 30,811,000 (Depression in Mexico)
Employment Growth = 21,224,000 (68.88%)

1980's
Population Growth = 20,865,000
Employment Growth = 17,685,000 (84.76%)

1990's
Population Growth = 21,667,000
Employment Growth = 16,998,000 (78.45%)

2000's (Mar. 2009)
Population Growth = 26,254,000
Employment Growth = 5,137,000 (19.57%)

Avg for previous 1950'- 1990's = (73.20%)
Avg. employment growth for 2000's should/would have been: = 19,218,994

Employment Shortfall 2000-2009 (March) = 14,081,994

From David Ricardo. On Wages

The market price of labour is the price which is really paid for it, from the natural operation of the proportion of the supply to the demand; labour is dear when it is scarce, and cheap when it is plentiful. However much the market price of labour may deviate from its natural price, it has, like commodities, a tendency to conform to it.

It is when the market price of labour exceeds its natural price, that the condition of the labourer is flourishing and happy, that he has it in his power to command a greater proportion of the necessaries and enjoyments of life, and therefore to rear a healthy and numerous family. When, however, by the encouragement which high wages give to the increase of population, the number of labourers is increased, wages again fall to their natural price, and indeed from a reaction sometimes fall below it.

When the market price of labour is below its natural price, the condition of the labourers is most wretched: then poverty deprives them of those comforts which custom renders absolute necessaries. It is only after their privations have reduced their number, or the demand for labour has increased, that the market price of labour will rise to its natural price, and that the labourer will have the moderate comforts which the natural rate of wages will afford.

http://www.fordham.edu/halsall/mod/ricardo-wages.html

Source Data:
BLS CPS Downloaded on 4/20/2009
http://www.bls.gov/data/

Formula: Each decade represents EOY Dec XXX9 to EOY Dec XXX9
Example: Decade of 1950's = Dec 1949 to Dec. 1959.

Series Id: LNU00000000
Not Seasonally Adjusted
Series title: (Unadj) Population Level
Labor force status: Civilian noninstitutional population
Age: 16 years and over

Series Id: LNU02000000
Not Seasonally Adjusted
Series title: (Unadj) Employment Level
Labor force status: Employed
Age: 16 years and over

Mortgage Meltdown -- Housing Inflation - Immigration

I've brought up some thoughts and data in postings here linking the causes of the
mortgage-meltdown to excessive immigration. Our government is in complete immigration denial and the two topics, housing and immigration, are never uttered in the same breath.

Raising the stakes in the financial debate would be the linking of mass-immigration to housing inflation and the ensuing mortgage meltdown. Linking these topics is not a hard thing to do. The final stages of desperation, is the importation of highly skilled labor -- the H-1B and L-1 visa -- these are mercenary workers who are most likely to displace a wage-earner with a performing mortgage.

The first step for curing the disease of mass-immigration is admitting you have a problem. In the decades leading up to the Great Depression, the economy was also "shocked" with mass-immigration.

Pre Great Depression Immigration rates:
1821-1830 143,439 immigrants arrive.
1831-1840 599,125 immigrants arrive.
1841-1850 1,713,251 immigrants arrive.
1851-1860 2,598,214 immigrants arrive.
1861-1870 2,314,825 immigrants arrive.
1871-1880 2,812,191 immigrants arrive.
1881-1890 5,246,613 immigrants arrive.
1891-1900 3,687,564 immigrants arrive.

Pre 1900 Total 19,115,132 (80 years)


1901-1910 8,795,386 immigrants arrive.
1911-1920 5,735,811 immigrants arrive.
1921-1930 4,107,209 immigrants arrive.
1931-1940 532,431 immigrants arrive.

Post 1900 Total 19,170,840 (40 years)

http://ocp.hul.harvard.edu/immigration/dates.html


To illustrate how important housing is to the economy, home ownership rates declined only 4.2% during the Great Depression (47.8% in 1930, to 43.6% in 1940).
http://www.census.gov/hhes/www/housing/census/historic/owner.html

Currently, home ownership rates have already declined 1.7% in 4 years, (69.2% 4th Qtr. 2004, to 67.5% in the 4th Qtr. 2008).
http://www.census.gov/hhes/www/housing/hvs/historic/files/histtab14.xls


Next we look at the housing availability in recent times.

Percent Change in House Prices Period Ended June 30, 2007
(United States) Since 1980 = 309.4%
http://www.ofheo.gov/media/pdf/2q07hpi.pdf


Then, we have the tiny Rental Housing growth compared to growth in the labor force.
1993 through 2007

Growth Rental Housing (Occupied Plus Vacant for rent) = 1,002,000
BLS Growth Civ NonInstitutionalized Labor Force (16 and over) = 39,372,000
http://www.census.gov/hhes/www/housing/hvs/historic/files/histtab7.xls

Our immigration policy has tried to cram 39 people (immigrants and our children) into each new rental housing unit in 15 a year period -- it is no wonder the housing market hyper-inflated. The flattening of wages and the ever declining population of wage-earners who could qualify for a traditional Prime mortgage caused the banking industry to create EZ and No-Doc loans out of self-preservation -- these mortgages were repackages and sold to unsuspecting foreigners -- they didn't become toxic assets, they were always toxic, the banks refused to hold them.

Housing data from Harvard displays the decline of the qualified mortgage customers.

Data from: Table A-1. Income and Housing Costs, US Totals: 1975-2007
In 2007 Dollars.

Increase Home Owner income = 13%
Increase in Home Price = 74%

Even with lower interest rates, the after tax mortgage payment is 49% higher than 1975.

Increase in renter income = (-3%)
Increase in Renter cost gross rent = 10%

http://www.jchs.harvard.edu/publications/markets/son2008/son2008_appendix_tables.xls

The solution:

The key is to present a solution that make financial sense, especially to banks and investors, taking into account ALL of the causes of the problem.

First, control immigration and reduce the numbers of new immigrants until "dryfoot" illegal immigrants and guest-workers can be investigated and brought into some sort of naturalized status -- frauds and criminals deported. The honorable migrants already have jobs and housing and cannot damage the economy as much as newly arriving immigrants who shock the economy with wage declines.

Second, "Nationalism" of banks and creation of a "Bad Bank" to hold toxic assets are both incorrect terminology. In the Insurance Industry, a temporary "nationalization" is called a Conservation and the "Bad Bank" is called a Trust.

The so called Toxic Assets have not matured yet, even if though some are in default. MBS and CDO investments are largely long term investments and the capital is only lost when the asset is liquidated in a foreclosure sale.

If we are to allow a Conservation of these MBS/CDO investments, to conserve the paper value of the capital investment, we need time for the assets to recover in value. Nationalization and bailouts are undesirable. A Conservation is a favor to the investor and the banker, the rules are suspended to preserve the paper capital, but in return for this favor they must agree to our terms. The alternative is that we can simply allow Mark to Market rules devalue the paper value of the capital investment.

The liquidity problem is the absence of the circulation of currency, with this in mind, mortgage workouts and cramdowns should be negotiated to the traditional 30% income level. Lender who wish to remain predatory mortgage providers should be punished, unprotected in the open market. In the case that the house is foreclosed, and standing empty, it must be introduced into the rental housing market to generate dividends for the MBS/CDO investor and property taxes paid. The homes must be occupied and productive to be included in the Conservation.

The circulation of currency is the key to our fractional reserve banking system, we must somehow generate currency flow in order to put the 1 to 9 leveraged lending rations back to work.

There were 35,147,000 renters in the U.S. in 2007. Flooding the rental housing market with currently vacant homes would reduce the housing costs of renters. A $200.00 savings in rental cost per renter would inject $7,029,400,000.00 per month of disposable income into the consumer markets without a wage increase. Some of the $7 billion monthly would circulate through the banks and improve lending reserves at the $1 to $9 fractional reserve leveraged rate. Theoretically, this $7 billion could be leveraged to $63 billion per month.

Similarly, cramdowns will also generate billions of dollars in disposable income and stimulate our fractional reserve lending system by the circulation of currency. Stable housing costs will stabilize labor costs -- the temptation to move overseas will be reduced -- keeping housing costs affordable in the U.S. is the key to global competitiveness.

Final note:
I suspect that both the immigration oversubscription and the property valuation problem will take about a decade to recover. The MBS/CDO investors are going to have to be patient if they want to preserve their capital. If we publicly provide a comprehensive solution that addresses immigration, I think they will be patient.

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.

Overview:

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:
http://www.census.gov/hhes/www/housing/census/historic/hograph.html

Historic: Home ownership rates --Tables:
http://www.census.gov/hhes/www/housing/census/historic/owner.html

Current: Home ownership rates -- Table (excel)
http://www.census.gov/hhes/www/housing/hvs/historic/files/histtab14.xls