February 18, 2010

Remitting the Market

Justin Katz

In reading Karen Lee Ziner's summary of a report about immigrants' financial remittances to their home countries, it's tempting to muse about the use of public universities to generate content for political think tanks:

The report, "Many Happy Returns: Remittances and their Impact," by political science professor Kristin Johnson, was released Tuesday by the Immigration Policy Center, a nonpartisan research and policy arm of the American Immigration Council in Washington. ...

Among the report's conclusions: remittances — whose recipients are among the most impoverished sectors of the population in developing countries — increase the consumer capacity of those individuals; help build financial infrastructure and provide otherwise unavailable micro-financing for small businesses.

Remittance outflows also dramatically increase the pool of possible foreign consumers for U.S. goods; contribute to economic stability in developing countries; and increase profits of financial companies and banks through increasing reliance on electronic fund transfers.

Having read the report itself, it's difficult to characterize it as anything other than an extended opinion piece. At no point does it provide a straightforward table of remittances to particular regions corresponding with changes in product exports to the same regions. Instead, the reader gets such factoids as this:

Remittances to Mexico reached their peak in 2006, at nearly $6.2 billion dollars, and in 2007, Mexico was one of the top three global remittance recipients.

Which contrasts peculiarly with this, later in the document:

Export increases from three states that comprise over half of U.S. trade with Mexico also increased substantially from 2005‐2008; Texas realized $50 million in exports to Mexico in 2005 which rose to $62 million in 2008, with an increase of 10.9% from 2007 to 2008 alone.

Apart from the huge disparity in the dollar numbers, themselves, it's curious that money transfers to Mexico began to decrease after 2006, but Texan exports to the country increased in subsequent years. Where's the correlation?

In a general way, it makes an intuitive sense that money sent to poor countries might help the global economy. Residents in developed nations might waste or store away wealth, whereas the residents of poorer nations have incentive to make the most of every dollar — whether being judicious in their expenditures or finding ways to compound the value of resources through investment and business activity. But those sending the money out of the wealthier nation are not likely to be among its wealthier workers. Moreover, to the extent that increases in the immigrant population decrease the wages of low-end workers, the domestic effect is likely to be an upward flow of wealth away from Americans who share the incentive to use their income efficiently.

These are all mere considerations; there are a number of ways to adjust the balance in a reasonable way. The clincher, for me, is from a global perspective: There's a reason some nations export their workers and derive significant portions of their national income from remittances. They aren't, themselves, conducive to economic activity, whether for reasons of corruption or a lack of regional resources (most often the former, I'd wager). In other words, on a larger scale, remittances are a poor investment propping up social structures that deserve to fail and to be refigured.

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This is a great example of the dumbing-down and politicization of higher education by the Progressives.

The lack of objective standards and intellectual rigor in the "social sciences" has created a devil's playground for thoroughly corrupt special-interests. The analysis in the report Justin cited is barely high-school level.

All funded by your tax dollars, directly or indirectly.

Posted by: BobN at February 18, 2010 9:59 AM

In my small world view, (inner city Providence) people come here to work, legally or not, live very meager existences while here, use our valuable resources such as emergency rooms and 911 services, educate their children at our expense, destroy rental property, leave a huge pile of unpaid bills, send money that could be going into the local economy back home to support their families, then leave. Most have no intention of staying here, want nothing to do with the American Dream. The more we give, the more they take.

I do not blame the immigrants. Human nature steers us toward survival. I'm actually impressed by their tenacity. If I were in their shoes I would do the same thing.

The problem is people exploiting cheap labor, polititians looking for votes creating programs that attract needy people to them and the guilt driven need to help those less fortunate than ourselves.

Posted by: michael at February 18, 2010 10:22 AM

Wow, I guess no surprise to see know nothing anti-intellectualism and bashing of immigrants on this kind of a diary.

"Most [immigrants] have no intention of staying here, want nothing to do with the American Dream. The more we give, the more they take."

As someone from the south side of Providence (a community with a large number of immigrants), I can only wonder how anyone could hold such an uniformed or maybe biased opinion. Not to mention that "immigrants" by definition intend to stay (look it up). It can't happen here?

Posted by: Russ at February 18, 2010 12:56 PM

BobN- Disagreeing with someone is one thing, throwing loaded statments like these
" This is a great example of the dumbing-down and politicization of higher education by the Progressives.
The lack of objective standards and intellectual rigor in the "social sciences" has created a devil's playground for thoroughly corrupt special-interests. The analysis in the report Justin cited is barely high-school level."
is another matter. She is an educator yes, but as you know that is only one role of a professor. To slame someones work in a think tank report and compare it to the state of higher education is a stretch. The work done in that piece is not high school level , sorry, and while i disagree with what she is saying it is not a puff piece. As someone that has taken classes with Prof.Johnson a few years back, I know her to be a fair and decent educator. You attack her as progressive without knowing her work (besides one piece) or her. She does not fall into the "left wing" biases that you claim infect all classrooms. She is not the kind of educator that should be attacked for low standards.
I see you post hear all the time with your higher than thou attitude. Slamming everyone who REMOTELY disagrees with you. There in lies the main problem with you, and the tea party movement in this state in general. You think you stand for us, the working man who barely scraps by enough money to get an education and works two jobs while doing it. You are more of an elitist than the east side liberals. Anything not fitting exactly your qualifications as "intellectual" gets laughed at without detailing the exact issues with the piece. You are why the everyday Rhode Islander votes democratic and leans liberal. You can sit on your throne and comment on everyone else, I've seen it in other posts and now in this one. How about saying things other than talking points and rhetoric for once. Many people in this state are confused into supporting liberals/democrats because of people like you.

Posted by: steadman at February 18, 2010 1:54 PM

Most was a poor choice of words. After reading the article I thought of the many people I meet who send their money home. No excuse, really, consider myself spanked.

Posted by: michael at February 18, 2010 1:55 PM

Steadman, you're reading your own fantasies into my words. While you have quite an imagination, you have done nothing but call me names. I reject your accusations as they are completely unsupported by anything but your own suppositions about me.

Do you have anything to say on the topic? I believe that you on the Left so often go ad hominem immediately because you are unable to engage in the debate which is the topic of this conversation. Care to prove me wrong?

I stand by my claim: the report as described is no kind of scholarship; it is a biased, agenda-promoting puff piece. I read news stories about unprofessional conduct by university professors every week.

My daughter went to URI and I have a good friend who studied nursing there. I was appalled by the low quality of materials and instruction outside of a few specialty departments, such as nursing.

Finally do you have any evidence to support your claim that "Many people in this state are confused into supporting liberals/democrats because of people like you"? Increasingly, people I talk with tell me they are developing more conservative views on public issues, even those who have traditionally described themselves as Democrats or liberals.

Posted by: BobN at February 18, 2010 4:14 PM

BobN- First off, I'm on the left? What did I say in this post, and in any here, that makes that so? Disagreeing with you makes me a leftist? Or maybe its because I went to a public university.My ad hominem attack? What about your first post here, wouldn't that also qualify? And I'm the one who insulted you and didnt offer any substance? Look at your post here and on most others, thats exactly what you do. What evidence do you have the supports most of the things you rant on? Your like the Glenn Beck of Anchor Rising.
The fact of the matter is you and I prob. would agree on most matters. You attack me as left without knowing me, yet I base my critism on you fully knowing who you are and what you stand for. You don't like the fact that I hit the nail on the head. Your an elitist and look down on anyone who doesnt conform to your views exactly. This point is proven by your quick assumption I'm a liberal loon. You attempt to discredit and attack any criticism that comes your way, without responding or attempting to understand. You simply are out of touch with the average man, your postings here show that. What kind of evidence do i have that supports my claim that its people like you that confuse people into supporting liberals? Why do you think the tea party in RI hasn't gained mass traction yet and the fact that this state still hasn't fully woken up to the issues at hand? Do you think people are just stupid and unable to see whos at fault? Maybe its the methods, actions, and words of you and many of your colleagues that make it so the average person is confused/mislead. The hard working average man of this state doesn't care for an elitist droning on about Obama and the democrats. We actually feel the effects of it and have to deal with the issues daily, in ways you cannot possibly understand. You come on here acting holier than thou. Usually I ignore your attacks and posts.I only responded today because I personally have met Prof.Johnston, read that article, and find your take on it motivated only by political reasons. I clearly stated I did not agree with some of the conclusions and evidence used by Dr.Johnson, but you were too busy trying to insult me to read what I said. I'm sorry you want to hold others to standards you won't hold to yourself, such as using specific examples and not unsupported data.

Posted by: steadman at February 18, 2010 5:24 PM

Should I conclude from the emotionality of your reply that you are not prepared to discuss the validity of Dr. Johnson's claims?

Regardless of the politically-interested sponsorship of the report, Johnson's work must stand on its own as a credible analysis if she wants it to be taken seriously. It does not. In my opinion, the American Immigration Council did not get its money's worth. They got a transparent piece of propaganda. If that is a typical example of her standards of analyzing causes and effects, I stand by my low opinion of modern liberal arts scholarship (in general, of course - I know there are also some very good scholars and thinkers in the field). I generalize my opinion based on the many examples I have read of mediocre or worse scholarship in today's universities. (For a sample I suggest you look at some of Mike Adams's columns at townhall.com.)

I find it interesting that you can divine my motivation in criticizing Johnson's paper as "only by political reasons." In fact, I admire and quite envy your mysterious power to read minds. If you had disagreed with me intellectually rather than remotely I would not be so irritated. And thank you for the comparison to Glenn Beck. He is a serious student of history and politics and a keen mind, and is particularly impressive for being self-taught, and self-made in the career success he has achieved.

Back to the topic:

People come to America because it is (still at least relatively) free and has a civil society based on the principle that the purpose of government is to protect the rights of the citizens. That freedom, and the sanctity in which we hold those rights are the secrets of our economic success. Lack of freedom is the primary cause of poverty in all the other countries. If Mexico and the other countries emulated the United States, two-way trade and the global standard of living would be much higher, and we would not have all these illegal immigrants because they would have ample opportunity for the good life at home.

There are good examples of this phenomenon, particularly the increases in living standards in Eastern Europe. I visited Eastern Europe while it was still Communist. Freedom and low tax rates after 1989 caused one of the fastest positive changes in economic conditions in human history. (Russia is not an example, because the Communists were immediately replaced by a similar oligarchy of politically connected insiders whose corruption and growing tyranny have held the people down. Were it not for oil and gas, Russia would be a total basket case.) I used to work in Hong Kong. Hong Kong was nothing but a rock in the ocean 110 years ago. The British installed a freedom-based regime with low taxes, no government subsidies, minimal "social safety net" programs and free trade, and human creativity, energy and work ethic created one of the world's most successful societies and an enormous exporter of high value-added goods. Indeed it is terribly ironic that Britain failed to learn the lesson that it taught the people of Hong Kong.

Translated to Rhode Island's economy, high taxes together with oppressive government and its associated corruption drive good business people away, while lavish "social services" attract the slothful and dishonest and keep them that way. Our state will turn around only when these fundamental political conditions are radically changed and the original relationship between free people and Constitutionally-limited government is restored.

Thousands of people who previously avoided being active in politics, or even thinking about the topic, have joined the Tea Party because they have become aware of the current threats to those American principles that have enabled their way of life. Over two million people were sufficiently motivated to travel from all over America to protest oppressive, Progressivist government in the capital on September 12, 2009. Significantly, they were not following any charismatic leader; they were expressing their personal convictions. I am not aware of any stories of ordinary citizens who have been driven toward the Left by the policies or rhetoric of the Tea Party. Can you cite any?

Posted by: BobN at February 18, 2010 7:18 PM

Your reading of my comment as emotionally charged shows how bothered you were by being called out as an elitist who is out of touch with the common man. To respond to your criticism to the article, I still have no idea what your issue is. You attack the lack of scholarship and rigor of the piece. You call it "propaganda" with weak standards of cause and effect analysis. No where did you point out an example of this weak cause and effect analysis. This is the exact reason I accused you of criticizing her piece for political reasons. She is not advocating that remittances are a contributing factor for success for residents of other countries, she states that they provide for some excess income. She also does not state that money sent to other nations causes trade to increase greatly or that it in fact increases the overall betterment of the general population.

Your discussion on how to transform markets overseas and trade is accurate. I agree with you and no where did I state anything different. You assumed I had different motives for my criticism and simply had ideological differences. I think your analysis on Rhode Islands problems is mostly true, but I think it runs deeper and is much more institutional. I'm not going to respond to your juiced 2million number that showed up to the 9-12 rally. Your a bagger, so there's really no sense arguing anything on that matter. I only stated that you and many of your colleagues here in RI do not understand remotely how the current economic and political environment affects the everyday citizen. You attack everything and everyone that thinks slightly different. Your attitude, which is condescending and arrogant, only prove the criticisms made against you.

Posted by: steadman at February 18, 2010 10:31 PM

Russ-it amazes whenever you "progressives" suddenly find it convenient to use proper definitions.Yes,you're right-immigrants are here on a permanent basis,and whether they become citizens or not,is up to them once the statutory waiting period(different in various cases)is up.
It seems that when it suits the purposes of "progressives"the term immigrant is very loosely used,being applied to illegal aliens,calling them "undocumented immigrants"which is a contradiction in terms.Any immigrant is well-documented.
In my career I found that some people hed no desire to become part of our society,while others did.One size fits all is not applicable to millions of people.They're individuals with differing outlooks,just like you or I.
I do believe that illegal aliens are courted by certain politicians as a potential source of support.These don't have to be "ethnic" politicians either-Sheldon Whitehouse,case in point.David Cicilline,another.
A lot of professional activists like Pat Crowley,Matt Jerzyk,Shana Kurland,and Juan Garcia also and want you to think it's all out of altruism.I don't think so.I think their motive is to swell the ranks of radical movements.

Posted by: joe bernstein at February 19, 2010 5:41 AM

My point is simply that I agree with Justin: the Johnson piece is a poor piece of analysis written to support a political position. I then follow it up with a generalization - that professors in universities writing such puff pieces for hire or to advance Leftist ideology themselves is unworthy of the term "scholarship" and evidence of an improper relationship with political sponsors. It certainly is true that I have developed a disdain for most of the "social sciences" as I believe they fraudulently wear the trappings of science and scholarship to indulge in mere polemics, frequently on trivial topics that are of no value outside the academy.

A much larger example of the same phenomenon is Climategate. We now know that massive funding was available for global warmists and skepticism cost people their jobs based on the fraudulent advocacy of a political position. If that isn't a clear sign of corrupt relations between academe and Leftist special-interests, then nothing is.

And only Lefties call Tea Party members "baggers" so you just outed yourself. Do you realize how arrogantly insulting that term is?

Posted by: BobN at February 19, 2010 7:27 AM

BobM- Heres a shocker, maybe you do not represent the whole conservative and republican spectrum. Because I do not bow down to your tea baggers, glenn beck, or others does not make me a "leftist". I know you think your high and mighty, that the tea party is conservatism, but your wrong. It is the elite attitude and inability to relate to the real working person that shows what is wrong with the movement. You prove my whole point exactly. You do not respond to criticism, you think your holier than thou, and attack/mock anyone who disagrees with you. Not every single person who doesnt share your beliefs to a T is a leftie. Get off your high horse. I'm what the tea party stands for, I'm the working man who pays taxes at the expense of his life. When has paying taxes effected
what type of bills you pay BobN? When has the economic policies of this administration or state affected you in a real concrete way? Your the problem with the tea party movement. We don't need lawyers, bankers, media clowns, and politicians anymore. You can't criticize, don't you work with the same banks that are in bed with Obama? But thats different right? Your the problem pal, your not that average citizen that struggles under liberal policies. Your not really affected. You play this game. These issues are a game and hobby for you, but actually affect real people's lives. I dont need to take my orders from you baggers, your a group of nobodies who think your greater than everyone else. You keep accusing me of being a leftie just because I don't bow at your alter or the bagger alter, the definition of a Conservative elitist. Get a clue about the average citizen

Posted by: steadman at February 19, 2010 9:57 AM

For someone I've never met, you sure do seem to know a lot about me.

You know, we could have had an interesting, perhaps even pleasant, conversation had you written on the topic instead of making it all about me.

Posted by: BobN at February 19, 2010 11:22 AM

With all the money that is sent out of this Country by the illegal aliens, it's plain to see why our economy is so bad. If an American was working the job, would he be sending money out of the Country? I think not. It would re-circulated into our economy.

Here is another example of the destruction of America by the illegal aliens.





If this don't start, refresh.

When we get rid of ALL the illegal aliens, we will get rid of ALL the problems that go with them. THAT IS A FACT!

Posted by: Delaware Bob at March 5, 2010 5:04 PM
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