The Sharp Drop in the Number of High-Skilled Visas

Fun fact: the population of the US in 1790 was 3.9 million. Today it is 330 million. The reason not a single American from 1790 has a job today is because of the millions of immigrants who came to this country after 1790 and stole their jobs.

Most people don't know this but each country is allotted only so many jobs. That number is fixed. If you let too many new people into your country, native born people will not get one of those jobs. THE IMMIGRANT will take that job.

When the US was founded in 1787, the rich people who control the global economy did the calculations to determine how many jobs the US could have. That number has not changed in the 233 years since.
the eAnd here's the deal: if you're stupid enough to let in immigrants, they will just take some of those scarce jobs from you! Yes you! The American to whom that job should rightfully go.

So don't be a dupe and swallow all that nonsense about how regardless of whether your population is growing or shrinking by 10% a year what really determines the number of jobs you have is the levels of innovation and entrepreneurship - which in turn depends on investment in education, research, health, childcare, and levels of openness to other countries and cultures and nurturing a culture of experimentation and risk-taking. Don't let anyone fool you into thinking that it is actually possible to increase levels of prosperity and employment at the same time that you grow your population through birthrates and immigration. Don't be naive. Learn from North Korea. There is a simple rule for prosperity: nobody leaves and nobody comes in.

In related news, there has been a sharp drop off in the number of people coming into the country with high-skilled visas. Source of graph is Axios

Fear of Mexicans and Millionaires, or Immigrants and Billionaires Will Stop Defining American Politics

The 2018 and 2020 elections represent a return to normal politics.

After the Great Recession, we had Occupy Wall Street and the Tea Party. Occupy became the Sanders supporters. The Tea Party became the Trump supporters. They got all the press attention and assumed that they had all the voters. They didn't. They don't.

The average American is not afraid of Mexicans or millionaires, or immigrants and billionaires, and know that there isn't a single example of a prosperous economy that wasn't created by and didn't create both. (Show me an economy without any rich people or without any immigrants and I'll show you a really lousy economy.)

So in 2018 we did - and in 2020 we will - hear from the majority of Americans who are happy to have rich people (on top of everything else they do, they can help with all the taxes we have pay) and immigrants (they can help us to increase supply and demand, helping natives to start and work in businesses and buying the many products and services these businesses generate).

What a Shrinking Labor Force Means for the Job Market & the Economy

Since December, the labor force has shrunk by 770,000. This is one reason that the unemployment rate hit its lowest in this century in March. (It's been half a century since unemployment was at 3.6%.) This fall in labor force could be random variation but it may be a sign of a trend.

As you can see in this graph, the rate of growth in the labor force has been steadily falling in the last 5 decades.

Baby boomers and immigrants drove a big rise in the labor force. LBJ's Immigration and Nationality Act in 1965 ended the fairly racist quotas for immigration and increased the number of immigrants about the same time that baby boomers entered the job market. The birthrate for a stable population is about 2.1 births per woman. In 1960, the US had a birthrate of 3.65 and in 1973 it fell below 2, where it has stayed since.

The number of kids coming of age and the number of immigrants coming to our country have both steadily dropped since the 1970s. It is conceivable that in the 2020s, the labor force will actually stop growing.

This is good news for workers. Sort of.  It should be mean strong wage growth for the millennials whose careers started out in the midst of the Great Recession. Workers will have more power in negotiations with companies who are competing for a shrinking pool of workers. They deserve it and it could be good for their pocketbooks. This also suggests that house prices will increase at a slower rate as demand for housing eases.

The news is not as good for the economy for at least two reasons.

The most obvious is that the ratio of retired to those working will go up. That suggests more poverty among the retired than we'd otherwise have. (Baby boomers might care about this.) Elder care will be more expensive as wages rise.

Less obvious is what fewer workers mean for an economy.

Just today the New York Times published a story on how Hungary's economy is now limited by workers. Prime Minister Viktor Orban is, like Trump, an anti-immigrant nationalist.  Hungary is not the only European country experiencing lower birthrates, though. Demand for workers is up throughout much of Europe. Because of this, Hungarian workers are leaving for better paying jobs in big European cities. So Hungary's labor shortage is driven by two things: its own people emigrating to other countries and other people not immigrating into Hungary. As a result, businesses are turning away orders because they cannot fill them.

How are we i the US doing with immigration as birthrates fall?

Foreign student enrollment in American universities has fallen two years in a row - essentially since Trump has taken office. The immigrants we should most want - those able to get into our universities - are choosing to go elsewhere, raising the probability they will go work elsewhere.

There is something else going on here that rarely gets mentioned. As population increases, so does per capita GDP. More people stimulate more ideas, more creativity, more products, more technologies, and more businesses. This is a big reason why productivity and wages are so much higher in cities than in rural areas. Our creativity is stimulated by interactions with people; and the more diverse that group, the more creative our response.

The good news about diminishing growth in the labor force is that it will mean that workers will likely get more of the pie, be able to negotiate higher wages this year. The bad news is that there will be less pie, less creativity, innovation and entrepreneurship than we'd have with a larger, more diverse population and wages - while taking a higher percentage of corporate revenue - could actually be lower than they otherwise would be. (And that, of course, suggests company earnings would be smaller for two reasons: smaller portion of revenues going to profit and smaller revenues.)

As birthrates fall across the West, smart countries will compete for immigrants, not shun them. Us? Well, apparently we're cashing in our lead in immigration and choosing to become more like Hungary.

Entitlement without Taxation

The notion that immigrants are a threat to your job has a few elements, just one that I want to explore here.

If an immigrant is a threat to your job it means that if you were to swap places with that immigrant, you would lose money. That is to say, the immigrant has an incentive to come here to take "your" job because it pays more than "his" job back home. And if you moved to his town to replace him, you would make much less.

So that suggests that there is a wage premium for living here in the US.

Curiously, the voters who assume that they are making more money for living here are also the ones who don't want to pay additional taxes to live here because "they earned it." It's an odd kind of recognition of a system they're reluctant to support.

How Trump Won (yes won) the Shutdown and What We Can Conclude About Immigration, Income and Crime

The general consensus is that Trump lost the government shutdown. I think he won it. Before I explain why, let's look at some data.

There is nothing like data to undermine certainty.

Donald Trump and Ann Coulter believe that more immigrants means more crime and higher unemployment and / or lower wages. Let's take a look.

First, let's look at a smattering of cities with a population between 200,000 and 300,000. 

Median household income varies greatly, from about $34k a year in Buffalo, NY to $96k in Irvine, CA. Irvine's population is about 40% foreign-born, 10X Buffalo's 4%. Irvine's income is nearly 3X as high.

The correlation between these two variables - income and immigration -  is not perfect but is positive through most of the cities. Immigration and incomes rise and fall together.

What about violent crime? Surely it will rise as the percentage of immigrants goes up, no?

Well, in the above table we can again look at the two cities with the highest and lowest percentage of immigrants to see how crime and immigration are correlated. In Buffalo, violent crime is 179% higher than the national average. That is nearly 3X higher. By contrast, in Irvine violent crime is 86% lower than the national average. (It could only be 100% lower for the simple reason that once violent crime drops to zero it cannot go any lower. 86% lower than the national average is kind of amazing.) We can, again, look at a graph to see a line that is the best fit through all those points.

It is obvious that factors other than immigration change crime rates but as the percentage of immigrants in a community rises, crime falls. 

What about the ten biggest cities in America, you ask. Immigration might be good for mid-size cities but what about cities of millions? (And as it turns out, only the country's ten biggest cities have populations of more than a million.) Well, I have a table for that as well.

Of America's ten biggest cities, Philadelphia has the lowest income and San Jose has the highest. And as it turns out, Philadelphia also has the lowest percentage of immigrants and San Jose has the highest. Immigrants make up only 13% of Philadelphia's population and 39% of San Jose's. Median household income in San Jose is nearly $100k and in Philadelphia is just over $40k. San Jose has 3X the immigrants and double the income.

Above is the graph plotting the relationship between these two variables for the cities over a million. 

Finally, we take a look at the relationship between the percentage of foreign born and violent crime rate in America's biggest cities. Chicago is the most violent of America's biggest cities and 21% of its population was born outside the US. San Jose is the least violent (its violent crime runs 6% lower than the national average) and has 39% immigrants.  The graph looks like this.

Now there are a few arguments you could make when faced with this data. One, you could say that immigrants move into more affluent or peaceful cities but don't help to create affluence or safety. Perhaps the best cities would be even better if not for the percentage of immigrants who move there. The data moves together but immigration doesn't cause higher incomes or lower crime, you say. Perhaps. The fact that the median home price in San Jose is over one million dollars and in Philadelphia is only $158k suggests that it is harder - not easier - to move into these safer, more prosperous areas. 

Or you could argue that immigration has a fairly weak correlation to income and crime, even if it is in the right direction for pro-immigration arguments. The R-squared measure is a simple measure of how well a line fits through the data; at best (median income and foreign-born % in cities of ~250,000) these move together about 40% and at worst (the relationship between violent crime and immigration in America's ten biggest cities) about 24%. So you might say, "Well sure, it seems positive but obviously other factors are a bigger determinant than immigration." And you are right. Education, infrastructure, research and development investments, culture, and social connections are all factors that matter. Immigration is just one dimension of what makes a city great. But the data nonetheless suggest that it IS one dimension of what makes a city great.

Those are valid - but fairly weak - arguments that you could make to discount the relationship between immigration and incomes or crime.

What is not valid to conclude from this data? Higher rates of immigration lower household income or raises crime. That simply does not fit the data. Given the data you could (sort of) challenge the claim that immigration makes a city better but you could not argue that it makes cities worse.

What does this mean? It means that Congress should ignore Trump's demands that they take immigration more seriously. Why? Because immigration is - at the least - a non-issue and - at most - is actually a huge positive that we should encourage rather than discourage. And in spite of that, Trump has forced House and Senate members to treat immigration as if it is an important issue to address. (They have three weeks to "resolve" the issue before another shutdown could hit.) It simply is not. And this is an argument that I've made recently here. Trump has won the shutdown because he has forced Congress to take a non-issue seriously. He has won because he has managed to change the focus of DC onto what he imagines is real, like getting your parents to lose sleep in order to fight the monster under your bed. It is such a waste of leadership potential to solve imaginary problems rather than real ones. (And more generally, a waste of leadership potential to fix old problems rather than create something new. Every successful company puts more money into new product development than it does product repair.)

In the minds of Ann Coulter and Donald Trump, you could predict unemployment rates based on immigration rates. Immigrants steal jobs, they tell us. So, if one city of two million had no immigrants its unemployment rate would be zero and if another city of two million had a million immigrants, its unemployment rate would be 50%. And of course this is an inane way to think about an urban economy, almost as if you thought that brown bodies and white bodies were affected differently by gravity. When a person buys gas or groceries, the market hasn't a clue whether they were born within a block of that place or half a world away. 

There are any number of issues that congress should consider if they are intent on raising income, lowering crime and making life better. Immigration is not one of them. If anything, the data suggests that Congress should do what it can to increase immigration, not decrease it.

We're suffering from the worst recorded case ever of an old man talking back to his TV. Terrifyingly, making his narcissism seem justified rather than delusional, his TV then talks back to him. Trump is on a closed-circuit loop with Fox news. Facts have little influence on his thinking. He gets his talking points from Fox and then they report on what he has talked about. Like Hendrix's guitar, the feedback just increases the volume and the distortion as Trump talks to FOX (Frightened Old Xenophobes) and FOX talks back to him and Trump's story escalates from a campaign to a presidency to a Monty-Pythonesque tragedy.

My two cents? Congress should ignore his insistence that they treat immigration as a real problem and instead either insist on studies as prelude to policy or even celebrate immigration as a positive. It's time to de-escalate the feedback with facts before we are all made as crazy as Trump or waste anymore time chasing his hallucinations.

-----------------
Quick note: this data is for foreign born. It makes no distinction between legal and illegal immigration; the two move together.
https://cis.org/Report/Connection-Between-Legal-and-Illegal-Immigration

Two Lies to Support the Border Wall

In the late 1990s, illegal border crossings peaked. It was a crisis of near-apocalyptic proportions as immigrants streamed into the US in record numbers.

Wait. Wait. No. That did not happen.

In the late 1990s, illegal border crossing peaked. That's true. It's also true that from 1997 to 1999, the American economy created 3.2 million jobs per year (that's 824k more jobs a year than the economy has created in the last three years). Violent crime had fallen by a third from early in the decade. It was no crisis. No apocalypse. 

And illegal border crossings were 5X what they are now. 5X.

So, two lies in the claim that our current situation is a crisis for which we should close the government. The first lie is that illegal immigration is now high. It's not. The second lie is that illegal immigration drives a spike in unemployment and crime. It does not. 

#factsnotfear

Trade Wars, Immigration and the Invasion of Iraq

I remember feeling so utterly baffled as to why so many of my fellow Americans were eager to invade Iraq. The reasons we were given were so odd. Saddam might have weapons of mass destruction. (Without convincing proof that reason could be used to invade any nation.) This was retaliation for 9-11. (We already knew most of the terrorists of 9-11 were from Saudi Arabia and none were from Iraq and that Osama bin Laden was behind the attack, not Saddam.) We could "liberate" the people of Iraq by dropping bombs on them. Finally, the idea was that at the instant Saddam were taken out, democracy would bloom in its place. (There is no history to suggest that every community is a democracy waiting to bloom with the removal of a despot. The predecessors to democracy are more complicated by far.)

There were no experts who believed any of these weird claims. None of this made sense. And yet Americans were so excited to go do this and Bush and Cheney and Condoleezza Rice assured us that it would work. (Didn't explain how it would work or even what the risks were but instead just adamantly insisted that it would. As it turns out, this is a big sign that the person talking to us doesn't know what they are talking about.)

I never did understand how it was going to make our lives better here in the US but it did turn out to cost us $4 trillion, kill 4,000 American soldiers and somewhere between 100,000 to 2 million Iraqis, triggered a refugee crisis that still rocks Europe, was the catalyst for forming ISIS, which still terrorizes that region, and Iraq is not only now less stable but now so is its neighbor Syria. It turns out that anger isn't really a great guide to good policy.

Now Trump and his supporters are just as excited about immigration and trade as Bush and the country was about invading Iraq. Like then, this will create huge misery for others, some misery for us, and will cost us a lot.

Like the Iraq invasion, trade wars and cracking down on immigration apparently gives a lot of people a cathartic release but it is costly - like shooting up heroin before driving onto the freeway.


Trump has increased spending on border patrol. He was taken the dramatic and hateful steps of seizing children from asylum seekers coming to this country. He has claimed that trade wars are easy to win. Now he's even looking to rescind citizenship from people who have already been granted citizenship.

There are no experts who agree that trade wars are easy to win. Even the Trump administration's cost-benefit analysis of immigration saw it as net positive, and besides the rate of illegal immigration has been seriously lowered in this century. 

Illegal immigration is the weapons of mass destruction of this administration, the weird policy fixation that no expert understands but nonetheless seems to trigger every tribal instinct that drives GOP voters. 

I know that some voters are hopelessly enamored of the power to take lives, whether it be through actual killing in an invasion or in the form of seizing children from their parents as they cross the border. Obviously you people are beyond reaching. But there are some folks who don't get excited about creating misery for others who have nonetheless continued to be Republican. If this is you, if you are excited about the crack down on unfair trade and immigration, ask some important questions.

How much is this anti-trade, anti-immigration effort going to cost? 
How is this going to make your life better? 
Which experts defend this and how do they explain it? 
At least importantly, how does Trump himself explain how this is going to make life better? Is there data to support any of these claims?

As an American voter, you can increase or decrease the level of misery on the planet, including your own. Take that responsibility seriously.

Conservatives are Just Obsolete Liberals (The Supreme Court We Will Have for the Next Generation)

In this week's decision to support the president's immigration ban on 7 countries, Chief Justice John Roberts ruled that the Supreme Court's 1944 ruling upholding FDR's internment camps for Japanese Americans - Korematsu vs. United States - "was gravely wrong the day it was decided." It didn't seem that way at the time, of course, but 74 years later it seems obvious. This is how progress works.

About Trump's immigration ban. Trump made it clear that he wanted to ban Muslims. The minority position was that his tailoring the words in the ban to make his religious discrimination less obvious was irrelevant: this was still religious discrimination and thus unconstitutional. The majority ruled that the president has this kind of power and that his previous words about this being a religious ban didn't matter.

Two things about this.

One, with Kennedy's retirement due soon, the Supreme Court will be dominated by conservatives for probably the next quarter of a century. Kennedy was a swing vote and Trump will surely replace him with someone very conservative. Through roughly 2040 - at least - we will get Republican decisions from the court. This seems inevitable to me. So we may as well get used to this. It will likely be going on until I die.

Two, conservatives do eventually come around. Conservatives did not believe in religious freedom. At first. Now they do. Conservatives did not believe that the power of kings should be usurped by representative legislatures and democratically elected executives. Now they do. Conservatives believed that the race of American citizens (the Japanese interned in camps, for instance) was sufficient reason to imprison them. Now - 74 years later - they don't.

Conservatives have the same beliefs as liberals. They just hold them for one to three generations longer. So, even this conservative (and soon to be even more conservative) Supreme Court will eventually catch up with the times. It is rather stupid to have rotary dial phones when you can have touch pad or touch pad phones when you can cellular flip phones or cellular flip phones when you can have smart phones but at least Americans will eventually get the latest policy .... about a generation or two later than it is available.

Open vs. Closed Economy

The San Diego Union Tribune was gracious enough to let me make an argument for an open economy here:

http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-economy-trade-war-20180308-story.html

We're Getting Older, Fewer are Working and GDP Growth is Slowing: Next Decade's Economy in 4 Simple Graphs

In October, the Bureau of Labor Statistics released a report forecasting some key numbers for the next decade. You can find it here.

Here in simple graphs is the story it tells. The punchline is that the U.S. is getting old and GDP growth is slowing.

First, population growth will slow. Babies and immigrants will be coming into the country at a slower rate.

As population growth slows, the population will get older. The percentage of the workforce 55 and older will continue to rise.

People 55 and older are less likely to work than people 25 to 55. So, as the population becomes older, labor force participation rate drops.

Finally, the BLS is projecting increases in productivity. That partly offsets a drop in population growth. Nonetheless, given a smaller portion of Americans will be working, GDP growth will be up higher than last decade (a period that included the devastating Great Recession) but lower than the decade before that (and what it was most of last century).

Demographics is destiny. Baby boomers were at their peak working years 1996 to 2006 and thanks to babies and immigrants (and the babies of immigrants) population growth was robust. Over the next decade that changes and with it will come a change in economic growth.

Job Growth During the Trump Administration and Beyond

In the last year, the number employed has gone up 1.8 million but the number in the labor force has gone up only 1.1 million. Because the number employed has gone up faster than the number in the labor force, the unemployment rate has dropped (from 4.7% to 4.3%).

Since 1983, the unemployment rate has been lower than its current 4.3% just 5% of the time - and all of that between 1999 and 2001. Outside of that period, it's never been lower than it is now.

So what does that mean when it comes to forecasting job growth? It means that at some point between now and the end of 2018, the unemployment rate will be as low as it can go. At that point the rate of job growth will be limited by the rate of labor force growth.

Labor force growth in the last year has been nearly 100,000 a month. (And shrank by more than 400,000 people in May as baby boomers retired and fewer Americans looked for work.)  During the recovery from 2011 to 2016, job growth averaged 203,000. That gap is not sustainable at full employment.

This makes a couple of things predictable for the Trump term.
1. Job growth in the first four years of Trump's administration will be about half what it was in the last four years of Obama's administration. (Closer to 100,000 jobs a month than 214,000).
2. We will have our first month of negative job growth within the next 18 months. (Simply put, given normal variation, a median value of 100k is far more vulnerable to slipping below zero than is a median value of 200k. For instance, in March the economy created only 50,000 jobs.)

There are other factors.

On a positive note, the labor force participation rate could rise, prolonging the time when job growth exceeds labor force growth.

On a negative note, Trump's policies will discourage immigration of all kinds. Tourism has already dropped. Universities are reporting fewer applicants from abroad. This sort of things takes time to show up in numbers but as foreigners are less willing to live in an xenophobic America, we lose twice. Once because those immigrants don't come here to join our workforce and a second time because as they choose to live and work in places like Eindhoven, Netherlands or Vancouver, British Columbia, they create more jobs in those communities rather than ours. An Iranian who works on robotic sensors will help to make a team successful in some other country and all of the jobs that ripple out from that effort - the project managers and administrators within his company or the restaurateur or furniture salesperson outside of his company -  will be in a different country as well.

Pew forecasts 18 million fewer potential workers without immigration. In such a scenario, the number employed would shrink for decades, shrinking the economy with it.

You might easily dismiss this prospect of a sharp decline in immigration as unthinkable. Of course just a year ago, the thought that Republicans would be arguing that we should ally with Russia rather than NATO would have been unthinkable, as would have cuts of 21% to National Health Institute (NIH) or slashing Medicare by half. Trump is disruptive and prides himself on that. It would be silly to bet on him reversing his position on immigration.

Three other huge variables are trade deals, climate change technology, and cuts to science funding. If Trump slaps tariffs onto trading partners and sets off a trade war, our economy will slump. If his policies continue to focus on protecting coal mining jobs that originated in 1740 rather than creating new technologies and jobs in alternative energy, our economy will fail to thrive. If he slashes funding for science and research (like his proposed 21% cut to NIH), he will undermine the creation of new products and technologies that would create jobs in two to twenty years.

Job growth will be less vibrant under Trump. (And to be fair, it would have been with anyone, from Sanders to Clinton to Bush to Trump.) If he gets his way with policy proposals on immigration, trade, and defunding the development of alternative energy and other technologies (new medicines that could have emerged from NIH research, for instance), we will be measuring the net loss of jobs each year, not their creation, tracking a steady decline of 100,000 jobs each month rather than bemoaning a gain of only 200,000 a month as anemic.

What Border Agents Might Consider

Today Muhammad Ali Jr. was detained by border agents as he returned to the US from Jamaica. He was held for nearly 2 hours as they repeatedly questioned him about his religion, where he was born, and his name. He's considering legal action.

This sort of thing did not happen before Trump's election. Trump wants to ban Muslims and border agents are acting on his wishes even though courts have thrown out his first executive order aimed at enacting that ban.

This is blatantly unconstitutional and there are only a couple of ways this can go.

The most unlikely direction is that this sort of discrimination becomes the new normal and we become a less open and diverse country, realizing the ideal of white nationalists like Steven Bannon. The implications of this direction are so dire - our universities, corporations, conferences, tech hubs, intellects and inventors all become second rate as the best in the world begin to choose new places to learn, work, live, and collaborate. Too many rich and powerful people will oppose this to allow people as small as Trump and Bannon to vandalize our country like this. This is certainly a possible outcome but it is unlikely to be sustainable.

A more probable outcome is that this gross infraction of constitutional law will prove to be temporary. At that point the border agents engaged in this behavior will have to be prepared for investigations that could result in legal action against them. Unconstitutional behavior has consequences for everyone from president to entry-level agent. The only reason there is currently no consequence for this is because Republicans have the House and Senate and they don't care about constitutional niceties nearly as much as they care about offending Trump and his base and exploiting a monopoly on power to get their agenda passed. But when they lose even one branch of Congress, the investigations will begin. Once a special investigator was appointed for Watergate or Lewinsky, impeachment followed and nobody in Congress could stop that train. This will happen eventually. Either the Republicans do it now or the Democrats will do it later. And when it does, border agents and people throughout the organization below Trump will either be on the side of the constitution or find themselves in legal trouble.

It might be exciting to go against the constitution in pursuit of some grand vision but American history isn't kind to parties who do. Rather than being excited about the opportunity to crack down on people they don't care for, border agents might think about trouble with other people they don't care for: lawyers. It's wildly improbable that any of the Muslim immigrants or visitors that worry them will take action against them; it is distinctly possible that lawyers will. This might be worth considering.

Trump's Wildly Impractical Immigration Ban and Why 120 Companies Are Suing Him Over It

Trump's ban on immigrants shows a disrespect for our constitution and an ignorance of modern economic realities. 

Let's start with Syria, a country on the banned list. Put aside for a moment the motivation of simple human compassion to help people who've been bombed out of their homes. Among the other reasons to challenge this ban is one ancient and one modern.

First the ancient. Jesus healed people in Syria and Paul preached there, which suggests a connection to a predominantly Christian nation.

Then the modern. Steve Jobs' father came to the US from Homs, Syria. This is what it looks like now.

This is what the Apple campus looks like, headquarters to the world's most valuable publicly traded company, a company currently worth nearly $700 billion (about 9X Syria's GDP), a company co-founded and reinvented by Steve Jobs, son of Syrian immigrant.

And that brings us to the heart of this argument: modern business is international business. This is bigger than Syria. Immigrants are an integral part of the American economy. Friday I was with a client in Orange County and met with 3 project managers and their core technical teams of four. As so often is the case in those situations, the teams were dominated by immigrants. One team of four had two people from the Middle East (Orange County has a very large Iranian community and they may have been part of that) but each of the three four-person teams had at least two foreign born team members. One team member, Peter, I just thought was American until he spoke in an impeccable British accent. The project managers were all from California but their team members were from China, Philippines, Iran, the UK, and India. Oh, and a couple were from California.

I once sat in a conference room with a technical team making a next generation computer chip for a Fortune 100 company. There were about 12 of us in the room. The conversation at lunch time went to green cards and visas and every single person had a story. (Mine was about my Canadian wife.Theirs was about their own experience of migrating to the US for school or work.) 

About a week ago, one of the team leads I had worked with last year at a startup on Google's campus posted something about giving a demonstration of the surgical robot he'd helped to create to Sergei Brin, the co-founder of Google who is now worth nearly $40 billion. He was delighted by that but almost more delighted that Brin had gone to the protest against Trump's ban at the San Francisco airport. Why was he so delighted? He's from Iran. Brin's show of solidarity not only was affirming but raises the probability that as he pursues his career in the US his own parents will be able to come to visit him. 

The teams within our leading companies are so intertwined with other countries. Monday of last week, the second person I spoke to at my new client's campus was a man from Iran whose mother is on her deathbed. He had to cancel his trip to see her, losing thousands of dollars in nonrefundable fares and - more poignantly - the chance to see his mother one last time. 

What Trump supporters don't realize is that banning travel between countries is - to the modern corporation - as impractical as banning travel between states for American families. Imagine not being able to visit your mother in Oregon because you'd taken a job in and married a fellow from California. It's inane and it's no wonder that leading tech companies like Alphabet (nee Google), Apple, Airbnb, Facebook, Microsoft, Tesla, Intel, Lyft, Netflix, Snap and Uber are among the technology companies that participated" in the legal brief to oppose Trump's ban. 

The modern corporation is a multinational institution. It's customers and suppliers come from around the world and even its development teams are scattered across continents.  For American based companies, 10 PM meetings with teams in India are normal, as are 6 AM meetings with teams in Europe. So many of the essential specialists who know how to design a computer circuit or heart valve or nanotechnology scope or the machinery on which such intricate and advanced equipment can be made are rare. It is normal - not unusual - for the technical teams I work with who are creating the next generation product to come from half a dozen different countries. I don't remember a single instance of working with a product development team made up only of Americans but I can remember multiple instances of working with teams who were completely from foreign countries.

What Americans don't realize is that if those team members aren't here, they will still get hired to create next generation products. They will just work in Mumbai or Shanghai or Eindhoven, Netherlands. And when that happens, the restaurants, dry cleaners, carpenters, car repair crew, hundreds of other service people who work with and for them will be in Mumbai, Shanghai and Eindhoven. They won't be here in San Jose or Austin or Boston. The result will be fewer, not more jobs. We're not protecting jobs by barring immigrants; we're shifting them to other places where multi-national teams are free to assemble. The teams of experts will assemble, the only question is where. Given how open we've been here in the US, the natural answer to the question of where best to assemble those teams has been the US. That could change.

It would be enough if Trump's ban was simply unconstitutional. It would be enough if it simply banned immigrants from countries who have never once killed an American on our soil, a policy based on irrational fear. But even if all that doesn't matter - and it should, it should matter greatly - this ban is based on such a wildly naive and ignorant model of how modern corporations actually work, how dependent we are on a vast web of specialists, technologies, and knowledge that respects borders about as much as the flow of air currents. The ban is ignorant. The global economy is a vast, evolving, and interdependent thing that has lifted billions out of poverty and given us a quality of life the description of which generations 100 to 150 ago would find fantastical, nonsensical and about as believable as teams made up of men and women from every continent working together on next generation products. I'm sure that there were elements of Stalin's Five Year plans that were more firmly planted in economic reality than Trump's immigrant ban. 

The companies who oppose his ban aren't trying to be cute or politically correct or compassionate. They're simply trying to run a business and when borders become walls that becomes incredibly difficult. Difficult enough that some of our best jobs might just go outside of the US. 

Inventions Matter More Than People

Inventions matter more than people. 

There are two kinds of inventions that fuel progress. Technological inventions like your smart phone or a bullet train give us what past generations would have thought of as super powers. Social inventions like nation-states or the modern corporation also transform lives.

If people mattered more than inventions, a "good enough" person could run faster than a bullet train or a "good enough" person could create a great and prosperous life even in the midst of anarchy and chaos. In the words of W. Edwards Deming, though, "A bad system will beat a good person every time." 

Racist: my race is better

Patriarch: men are better

The argument of racists and patriarchs is that we white men have ended up at the top of the heap because we're better. The simplest evidence of this is that we're wealthier and more powerful than people of color or white women. It is not that we've had better access to better inventions. It's simply that we're better people.

But differences in people do not explain differences in lifestyle or wealth. An American in 2000 made 6 to 8X what an American in 1900 made and could expect to live 30 years longer. Not because the American in 2000 worked harder or was morally better or was innately more intelligent. The average work week in 1900 was sixty hours (10 hours a day, six days a week). The average work week now is less than 40 hours.

It is true that Americans in 2000 were "smarter" than Americans in 1900 but that was not because of any innate intelligence. It was because of the popularization of social inventions like a K-12 education and the modern corporation that our efforts were leveraged into such (relatively) great lives. The American in 2000 simply had far better inventions than a person in 1900.

The notion behind white supremacy or anti-immigration, or patriarchy is that people matter most. In the minds of these people the systems are invisible and the people who sit atop them is all they can see. It's like thinking that the driver of the car is responsible for going 70 mph rather than realizing that anyone in that position could match or better the speed.

There are a host of reasons why racists and patriarchs are such passionate defenders of the border. A chief one is that they're convinced that the people living in more impoverished parts of the world are that way because they are lesser people. In fact, what has made our country great is that the inventions we've popularized - from Montessori schools to smart phones - make us better. It doesn't just work for our children; it can work for anyone's children.

When you welcome immigrants you're expressing confidence in the power of your systems to change life for anyone. When you reject immigrants you're saying that our inventions - our systems - are incidental to who we are and if other people come here to use them those people will still be lesser people, will be a burden on us.

There are obviously limits to the number of immigrants a country can absorb and migration laws do matter. But focusing on the border as a basis for prosperity is misleading for so many reasons. The most important reason that it shifts a country's focus and policies onto protecting borders rather than creating inclusive inventions that make more people more able to make themselves and others happy. It shifts the focus from inventing and change to protection and resistance. 

We've gotten off the path to progress. Hopefully someone will still find that path or else the global economy will stagnate and when modern economies stagnate, modern democracies flounder.

California vs. West Virginia: A Question About Which Direction the Country is Heading

Even some of my California friends had posted things like, "If you subtract California from the national vote, Trump won the popular vote." My counter to this is, "If you subtract the former confederacy from the national vote, Clinton won by 6.5 million votes."

Apparently there are folks threatening to boycott California because the state is out of sync with Trump nation. Such sentiments inspired this tweet:

Trump won by his biggest margin in West Virginia, by 42.2%. Clinton won by her biggest margin in California, by 30.4%. Let's compare those states and consider what it means to dismiss California as a place that is out of touch with the rest of the country.

California ranks third for median household income.

West Virginia ranks 49th.

California is the most populous state in the union. In 1950 it had 10.7 million and now it has about 40 million, nearly 4X as many. The simple fact that California has grown so rapidly is testament to its ability to create jobs.

West Virginia had 2 million people in 1950. Today it has 1.8 million, a drop of 10%. West Virginia has not been able to create jobs or even a net gain in population.

If you believe that people just are who people are, you might think that it makes sense that West Virginia would register a protest vote against the status quo. It's had trouble in this new economy and of course those poor people will vote for change. But if you believe that people are who their institutions are - if you believe that we're defined by our culture, schools, media, government, policies, and prevailing norms - then it is a terrible thing to follow the lead of a place like West Virginia. Why? Because the policies and norms it has chosen has made its people less able to thrive in the modern economy. History shows us that it's not how hard people work or who they are genetically that determines how prosperous they are. It is, instead, the systems they work with and within. Incomes were 6 to 8X higher in 2000 than they were in 1900 in spite of the average workweek dropping from 60 hours to 40. Incomes weren't higher because people were "better." They were higher because people learned, worked in, and were able to use better systems. If you believe that people can't change, than West Virginia was right to vote for different policies and leaders than California; if you believe that people can change and there is no intrinsic reason that West Virginia can't be as prosperous as California than it's a terrible thing that the nation is now going to follow after policies West Virginia voters think sound great rather than the ones that Californian voters think would be great. West Virginia's thinking doesn't make its people as prosperous as California's.

Here are just a few fundamental issues that Californians would find alarming in Trump's policies that apparently comfort West Virginians: immigration, free trade, and free religion.

California has the largest share of foreign-
born people, West Virginia the lowest. 

Trump wants to limit immigration, both legal and illegal. California is a land of immigrants. About 40% of Silicon Valley startups have at least one foreign founder. On a personal note, I was working with a startup on Google's campus this year and one of the departments (robotic sensors) had five people from five countries: the US, Iran, Italy, Poland, and South Korea. It's a global economy and California doesn't just sell to customers from all over the world, it hires and partners with people from all over the world.

Trump has chastised Apple for manufacturing its iPhone in China. He doesn't really like free trade and has threatened to levy a 35% tariff against Mexico and a 45% tariff against China. This could easily start a trade war. (Does anyone believe that other countries will merely pay huge tariffs and allow the US to continue to sell into their markets without levying an offsetting tariff? How naive do you have to be to believe that?) But it also misses the point. 75% of iPhones are sold outside of the US. Apple is headquartered in the US but it is an international company with an international product, customers, suppliers and partners. This is true of most of the products coming out of Silicon Valley, from Intel's chips to Uber's app.

Finally, Trump wants to limit the immigration of Muslims. This is a special kind of exclusion that is not only anti-constitutional (read the first amendment to be reminded that Congress shall pass no law regarding religion) but shows a complete confusion about where creativity comes from. Trump knows which religion is right and which is not. Really creative people don't even know which process is best or which theory will hold up for a century or will be dis-proven tomorrow. Freedom of thought - freedom to question or challenge established "truths" is fundamental to creativity. It's no accident that the free speech movement began in Berkeley just as the computer revolution was beginning. Freedom of religion is elementary compared to the freedom of thought needed to create new scientific theories, new social paradigms, new technologies, new businesses and new business models.

California has given birth to blue jeans, the Hollywood that generates TV shows and blockbuster movies, and a music industry that gave us acts like the Grateful Dead and the Eagles. It's been the source of so many cultural and business trends.  The most defining "industry" in California is Silicon Valley, a place that gave us Apple, Facebook, Intel, HP, Twitter, the internet, and venture capitalism. The most defining business in West Virginia is coal mining.

To this day we revere the ancient Greeks yet their golden age was only a century or two. Socrates died in 399 BC and Aristotle died in 322 BC. It was during the century or so around their lives that so much of what we know of their inventions - from philosophy to math to theater and democracy - emerged. It was an incredible time that the Greeks experienced only for awhile even though the world has felt its impact for the thousands of years since.

If this move towards West Virginia and away from California proves defining of the country's future, the US will go the way of other great and defining communities in history. We will have had our time and so much of what has come out of the US in the last century in particular is likely to continue to define the world in the way that the Athens of 4th century BC continues to define the world to this day. Civilization continues to carry forward the great inventions like money and democracy, even if it fumbles and drops them from time to time. It builds on what came before. Evolution - biological and social - doesn't throw away so much as build on. In that sense, the US of the 20th century will likely be with civilization for millennia to come. What isn't certain, though, is whether it will - like modern Greece - become just another also-ran as some other community becomes the innovators who we all follow with some odd mix of envy, reluctance, and excited mimicry.

For now, swing voters in the US have decided to follow the lead of a state that hasn't invented a new industry since coal mining in the 1740s rather than a state that is even now incubating industries as different as self-driving cars and genetic engineering. It's chosen to try going back to an earlier time when jobs were being created for coal miners rather than for entrepreneurs. If Trump is successful at creating such jobs it means that we'll be going in the direction of the 1700s rather than the late 2100s. That should be a sobering thought.

Obama's Big Miss on Immigration Today

Obama missed a huge opportunity today. We may have 10 million illegal immigrants. Let's assume that half of them have jobs. Just think of what an incredible jobs program he could have launched.

One, he could have announced the forced deportation of all illegals. That would require hundreds of thousands of people searching records and houses to find them. It would require hundreds of thousands of swat team members to raid homes and work places to seize and deport these people, thousands more to drive them south. (All of them should be driven south. Even the Canadians and Germans who are here illegally. Let them sort out their troubles with AeroMexico.) That alone could create jobs for a million Americans over the course of 12 to 36 months.

Two, once the 10 million illegal aliens were deported, we'd have 5 million jobs to fill. (Well, maybe not a full 5 million. We would have - of course - lost 10 million consumers, so demand might dip a bit.) Those young men and women in swat gear who rounded up the illegal aliens could then take those jobs, picking fruit, changing sheets, and cooking meals.

If only Obama were more visionary, more committed to creating jobs. 

My Nomination for the 2006 Campaign's Most Amazing Moment

At one point during his campaign, Arnold Schwarzenegger was standing in Chinatown in LA, surrounded by the delightful buildings and sights made to look like China. Arnold - the Austrian immigrant who thinks he governs a place called Callie-forn-ya. And he says, The key to success as an immigrant is to assimilate.

Rather than comment, I will resort to another quote, this one by Bill Moyers, from an interview he did for Salon in April of 2003.

"I just did a six-hour series, five years in the making, on the Chinese in America. I thought the timing would be unfortunate, but it turned out to be fortuitous. This is the first series I've ever done, in 30 years, in which I actually found the answer to the question that provoked me to do it. I wanted to find out what the Chinese had to say about becoming American, about the American dream.

"One woman I interviewed, out of the dozens of people I spoke with while making that series, explained it all to me. She began to talk to me about eating chicken feet. You've seen chicken feet in Chinese restaurants, right?"

"Yeah. They're terrifying."

"Well, yes, they're ugly, they don't look particularly nutritious, people are squeamish about them. She said to me, 'As an American, I can eat chicken feet. But I don't have to eat chicken feet. I can turn around and eat at McDonald's and nobody questions me.' I said to her, 'What the hell does that have to do with the American dream?' She says, 'That is the American dream! That I can compose my own life. That I can invent who I want to be.'

"We are creating a new American identity, and to take our identity as being opposed to the world, instead of being of the world, is the greatest mistake that George W. Bush has made."

The Nonsense of Linking Illegal Immigration and National Security

A great deal of noise is made about how illegal immigrants are "illegal" and that should settle the issue. Proponents of this issue as one that matters continue to say that this is also a security issue, although they never offer a single statistic to substantiate this claim as any thing other than speculation.

To illustrate the absurdity of this, imagine taking an issue that also cracks down on "illegal" behavior and actually has statistics to show that it is a national security issue - something that kills about 20,000 Americans a year. Imagine trying to win an election on the basis of "cracking down" on speeding.

Illegal immigration as a political issue is not about legality or about security. It is about xenophobia, which I am pretty sure is Greek for fear of Hispanics.