While the U.S. economy is beginning to boom under new President Donald Trump, there are some concerns that Trump’s “America First” platform may be beginning to erode, based on recent cabinet nominations and appointments by the president.
One such nomination, in particular, is that of a man named Kevin Hassett for the chairman of the Council of Economic Advisors, a White House agency that steers the president on matters of economic policy.
Both liberal outlet Axios (a new startup from the founders of Politico) and the globalist Financial Times of Britain have made Hassett out to be pro-immigration, pro-free trade and pro-outsourcing, despite President Trump’s previously stated positions that are exactly opposed to these stances.
While Hassett was an economist at the conservative American Enterprise Institute, Axios noted that as regards China, Hassett believes that bashing previous U.S.-China trade policies would “bring the U.S. back to the downward [protectionist] spiral of the 1930s.”
Hassett was further quoted as saying that “an absolute prerequisite for long-term U.S. economic growth is full participation in the global economy and trading system” and that as regards immigration, he believes “economic growth could expand significantly if immigration in the U.S. were expanded.”
The Financial Times used longer quotes in an article about Hassett, ominously arguing that “nationalist forces have lost some ground when it comes to the economic advice reaching the president.”
Specifically, regarding immigration, Hassett was noted as saying, “With lackluster GDP growth threatening to become our new normal, allowing more immigrants to enter [our country] for the sake of employment is one of the few policies that might restore our old normal. If the U.S. doubled its total immigration and prioritized bringing in new workers, it could add more than half a percentage point a year to expected GDP growth.”
While it’s impossible to say with complete authority that the Financial Times and Axios are correct in their assessments of Hassett, it should be noted that GDP is not the end-all, be-all of a nation’s economy. In fact, it’s quite possible for a nation to have tremendous GDP while its people are just getting by, or even starving.
Quite simply, high GDP (Gross Domestic Product) does not translate to income. So, while President Trump does indeed want to raise the United States’ GDP, it’s far more important that people’s incomes rise and that true production-economy (as opposed to service-sector economy) unemployment decreases.
In fact, even if the nation’s GDP became very negative at the expense of people’s incomes vastly increasing (a highly unlikely scenario), most people would say they’d be alright with that.
Furthermore, Hassett said he believes “Liberalized trade — in broadly multilateral, regional or bilateral agreements — is a key ingredient in the recipe for prosperity… An absolute prerequisite for long-term economic growth is full participation in the global economy and trading system.”
Was Hassett arguing for pro-globalist free-trade agreements? It certainly sounds that way. Of course, there’s nothing wrong with “long-term economic growth,” but when only a few billionaires get richer (accounting for the growth) while most people get poorer, this is most certainly not desirable.
And how does Hassett see this growth happening? The Financial Times further quotes him as saying, “It begins by reviewing the immigration practices of our OECD trading partners and documenting that immigration as a share of the workforce is well below international norms. The literature identifying the economic impact of immigration is reviewed, suggesting that economic growth could expand significantly if immigration in the U.S. were expanded.”
While the context of the above quote isn’t given, it should be said that indeed, immigration can enormously expand GDP, but this goes back to the previous argument — if GDP is increased at the expense of most people’s salaries, nobody wins, except for the few billionaires who gamed the system.
For people like Hassett, simply growing the economy can become an overwhelming, all-encompassing goal where the end justifies the means — GDP rises, business tax revenues increase and there are pronouncements that financially, the nation is “in great health.”
But left out of all the rosy news is how it was engineered and who hurts from it. This is essentially what got us to where we are today with the Trump presidency.
According to a study conducted by the National Academy of Sciences, Engineering and Medicine, “each new unskilled immigrant costs state and local taxpayers $1,600 per year… The annual cost of legal and illegal immigration to state and local taxpayer is at least $57 billion, and each unskilled immigrant is a net loss to taxpayers for the next 75 years.”
The same study shows that immigration shifts roughly $500 billion per year from people’s wages to the profits of companies, stock market investors and Wall Street.
For economists of Hassett’s ilk, only the upside of immigration is typically considered vis à vis its impact on retail sales, food and entertainment consumption, oil and gas use, etc. Immigrants also give the federal government more power.
But left out of the equation is the cost of these immigrants to the nation’s welfare system. Also left out is that increases of unskilled workers in the country discourage companies from investing in labor-saving technology that elevates wages by boosting productivity.
Essentially, companies are spending their money foolishly, by hiring cheap labor instead of making existing workers more productive. In the meantime, foreign firms have no such compunction about making these investments, increasing their global competitiveness and hurting our economy.
It should be said that Hassett has the support of former Council of Economic Advisors Chairman Jason Furman, who served under ex-President Obama. If all of this isn’t enough to worry conservatives, what is?
~ Conservative Zone