The Long Road Back

Weekly Update on Immigration: Posturing on E-verify and Immigration Policies That Bring Shame and Danger to Our Communities

I. Immigrants Bear the Brunt of Political Posturing Yet Again - It is no coincidence that this morning USA Today published an article citing "experts" alleging that undocumented immigrants would obtain jobs from the money provided under the economic stimulus.  It just so happens that the U.S. Senate is considering an omnibus bill today that could extend the electronic verification system known as "E- verify" through September of 2009, or longer (depending on passage of certain amendments).  The absence of data indicates that these "experts" are simply jumping in on the politicking to vent their anti-immigrant views and to try to persuade public opinion to favor renewal of the current e-verify, which has been determined to be ineffective and impractical.  The article cites that "pro-immigrant and business groups" call e-verify dangerous and ineffective, but fails to note that e-verify is also determined as such by legitimate research institutions, government agencies (GAO and Inspector General reports, etc.), Congress, and others.   These "experts" provide no methodology to support their contention that of all the jobs created under the stimulus, 300,000 construction jobs would go to "illegal immigrants."  

Funds go to the construction industry because it's among the hardest hit, not because it employs immigrants.  The numbers used by CIS are from 2005, long before - as reported just a few days ago, also by USA Today - the unemployment rate in the construction industry hit 21.4%, causing layoffs among largely Hispanic workers, thus contributing to the now 10.9% unemployment rate among Latinos.  Leaders of labor groups have openly stated that the construction industry is in a "near depression."  According to the White House estimate of the impact of the stimulus, 18.4% of overall job creation would occur in the construction industry, translating to about 678,000 jobs.  CIS believes that half of these jobs would go to undocumented immigrants, but provides no basis for this. Yes, most construction workers are minorities, but CIS leaps to a very fragile connection between minorities and legal status, given that most Hispanics/Latinos in this country are in fact not "illegals."

Moreover, CIS has no credibility.  As we have discussed before, CIS is a recognized hate group.  Second, it has lost credibility because it's always wrong.  It was wrong about everything from the GOP no longer needing Latino voters to its allegations of the "surge" of immigrants that would "flood" into the U.S. after the 2008 Presidential election. Not only are their assumptions flawed, they even contradict each other.  In July 2008, CIS alleged that a "homeward-bound" exodus of immigrants leaving the U.S. was happening, and a few months later, in October, it argued there would be a "surge" of immigrants that would "flood" the U.S. after the elections.  Neither has occurred.  Clearly, their "research" is full of discretionary "data" and assumptions come up as needed, when needed.

Lastly, CIS has said it itself: it is against both legal and illegal immigration.  Data actually suggests that immigrants (both legal and illegal) contribute to state economies, as indicated by IPC research in several states.

This is yet another example of why Congress and the Administration can't be centrists on the issue of immigration.  As long as Comprehensive Immigration Reform is not enacted,  domestic policy and items like the omnibus will continue to get caught in the crossfire and held up over immigration proxy wars and political posturing.  This demonization of our community has to stop.

II. Immigration Policies That Bring Global Shame on the U.S. and Put Us At Risk - Another ember kindling the hatred against Hispanics is a little-known program called "287(g)," named after the section of immigration law that contains it. The 1996 immigration law ("IIRIRA")brought 287(g) into being, authorizing the federal government to enter into agreements with state and local law enforcement agencies to train local officers to perform functions of an immigration officer.  This week GAO presented testimony before Congress once again pointing out concerns about the inefficiency and dangers in this program, in addition to the fact that it is an unfunded mandate.  GAO concluded that the program lacks key internal controls: guidance on how and when to use the program authority is non-existent or inconsistent, there are no guidelines on how ICE officials are to supervise officers in participating agencies, and there are no performance measures to track and evaluate progress toward meeting the program objectives - probably because GAO also found that program objectives have not
been documented in any materials.  These findings are serious, and the investigation also concluded that 287(g) participation has led to documented violations and racial profiling.  Racial profiling, stopping motorists because they "look illegal" can't be accepted in the America that elected Barack Obama as president - a president that speaks about how we are all one, how we are all our brother's keeper.  

More than a "program," I see 287(g) as a symptom of a larger disease; it is an expression of the disease of hate and demonization of Hispanics that has spread across the country. It is telling that 287(g) came into being in 1996, but the first 287(g) agreement didn't come into being until 2002 - that means that for six years we had undocumented migration, but no one felt it necessary to send police after immigrants.  But all that changed after 9/11.  The desire to seek out and scapegoat immigrants for all our ills took hold as the far right, anti-immigrant talk show hosts and narrative flared.  From 2002-2008, we saw the number of 287(g) agreements balloon to 67, in 29 states. 

Although the GAO did not track the amount of resources a state diverts away from fighting actual crime when it decides to shift its energy to acting as immigration police, there are plenty of other reports documenting the increase in the number of criminal investigations that languish unsolved as police decide to instead stake out U.S. residents or citizens of color to make sure they're "legal."  This lack of attention to criminals and particularly to organized crime could not come at a worse time.  We are definitely facing a war against drug traffickers at the border.  And this war is not only the responsibility of the Mexican government, the U.S. must decide to fully engage its resources - DHS, FBI, DOJ - to find and pursue the drug buyers and suppliers in the U.S. - the ones providing Mexican cartels with business.  Therefore, the unintended consequences of 287(g) go far beyond the serious offense of racial profiling, we are putting our communities at risk by irrationally and unjustly changing the priorities of our first responders.  The priority should be to keep our communities safe and pursue criminals. Immigrants do not threaten our lives and our safety, criminals and drug traffickers do. With limited resources, let's keep our eye on the ball.   

For more information, check out an IPC fact sheet on 287(g) partnerships, and a report by Justice Strategies.

III. More on the Economics of Immigration - Scientists fear that the broken immigration system and the troublesome visa system will drive foreign students to other countries.  Business Week reports that some data shows skilled immigrants are actually leaving the U.S. as debate over programs like the H-1B visa intensifies. And a very interesting article in Nashville, TN reminds us of an important lesson: Tennessee has actually used immigration to bolster its economy since the era of Reconstruction.

IV. We Can't Stress the Importance of the 2010 Census enough - The GAO presented assessments of Census methodology at House and Senate hearings last week, and warns that at this moment, the bureau is behind schedule.  Moreover, the accuracy of the 2010 Census remains threatened by computer problems and untested methods the Census Bureau plans to use for conducting the count, according to testimony by Robert Goldenkoff, director of strategic issues for the GAO. And we can't forget that the Congressional Black Caucus has been calling for a very involved President in the development of the Census.  If they work together, the CHC and CBC can carry a great deal of influence on this process to the benefit of minority communities.  

V. The Race for Rahm's Seat - Cook County Commissioner Mike Quigley won the Democratic special primary election to contend for Rahm Emmanuel's seat on April 7.  On immigration, Quigley noted, "I sponsored a measure with Cook County Commissioner Roberto Maldonado to create an immigrant protection ordinance in our Cook County system."  This is another race in which we have a pro-CIR Democratic candidate against an anti-immigrant Republican candidate.  In this case, the Republican is Rosanna Pulido, director of the Illinois Minuteman Project (I know, go figure).  We'll keep a close eye on this one. 

VI. And in case you missed it - the "Top 10 Immigration Issues From 2008."

NDN Backgrounder: Fighting Economic and Ideological Bankruptcy

With new, frightening unemployment numbers out today, take a look at some of NDN's latest thinking on the economy. What government policies are needed to stabilize the financial sector? Why is the Republican minority so obstructionist? How should everyday Americans deal with their balance sheets?

  • A Stimulus for the Long Run by Simon Rosenberg and Dr. Robert Shapiro, 11/14/2008 – This important essay lays out the now widely agreed-upon argument that the upcoming economic stimulus package must include investments in the basic elements of growth for the next decade, including elements that create a low-carbon, energy-efficient economy.
  • Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective.
  • Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.

Why Is the Dow In the Tank? Why Michael Boskin and So Many Others are So, So Wrong

In today's Wall Street Journal, Michael J. Boskin, former Chair of the Council of Economic Advisors for President George H.W. Bush and a Senior Fellow at the aptly named Hoover Institution, lays out a list of conservative talking points against the President’s budget. Dr. Robert Shapiro laid out a pretty compelling analysis of the problems with this type of thinking, but the real issue with the column is that, preceding the talking points, Boskin says this:

Obama's Radicalism Is Killing the Dow

A financial crisis is the worst time to change the foundations of American capitalism.

It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.

The column proceeds with the list of conservative complaints about the budget, and provides no substantive reason why President Obama’s allegedly flawed budget blueprint is specifically making the Dow tank.

I have another reason in mind why the Dow might be tanking. Let's try it on for size:

The economy is in the tank.

That's right, the actual state of the economy, including the massive financial and housing crises, is the actual force driving down the stock prices of the large companies that comprise the Dow Jones Industrial Average. It's not that Obama is some sort of radical. (Take a look at David Brooks today, who comes around on the notion that Obama and his people are pragmatists, even if he’s not fully on board with their brand of pragmatism.) Rather, it's that the American economy is in its worst shape since the Great Depression.

The causation (more on causation from Mankiw today) Boskin implies (and he's by no means the only one, the media – especially business media – is obsessed with attributing the ups and downs of the Dow to various policies or how confidently the President is speaking, or how much the budget weighs or quickly it can be deep fried), is largely misplaced, and ultimately dangerous. There are times when markets react to government policy, and that's been happening somewhat lately too, but, right now, the Dow is in the tank because that's where the economy is, and its not getting fixed by today's closing bell.

The Dukes of Moral Hazard

I’d imagine that everyone has seen Rick Santelli’s absolutely absurd tirade on CNBC yesterday, but in case you haven't:

Santelli's tirade is remarkable for his anger about (amongst many other things) the idea that the Obama mortgage plan throws the concept moral hazard to the wind. According to Santelli's line of argument, people are now going to make irresponsible decisions about their housing and general economic behavior because of this government policy. And he’s getting cheered by a bunch of stock traders behind him.

The irony (as if there's only one) is that much of his cheering section had long ago thrown caution to the wind, as they took tremendous risks, many of which were premised on the notion that, if things got really bad, government salvation was a foregone conclusion. Big banks knew they were too big to fail; the financial world felt invulnerable. And I didn't hear them complaining about moral hazard when now more than a trillion dollars has been thrown at these banks, which makes the Obama housing plan, which will affect 8-10 million Americans and cost $75 billion, look cheap.

In the current economic climate, moral hazard has become a convenient piece of poorly understood economic theology that critics of any given government plan use to oppose it. The economy is in such shape that being overly concerned with this theology is folly. Policymakers need to focus on pragmatic solutions that fix these incredibly serious problems with the economy, including the housing market, in large part because figuring out the incentives that will nudge Americans’ behavior in the proper direction in incredibly complex markets is not going to happen by tonight’s closing bell.

David Brooks writes on this today as well.

Update: Press Secretary Robert Gibbs delivers harsh words for Santelli at today's White House press conference. Then Gibbs offers to buy him a cup of coffee -- decaf.

Dealing with Mark to Market

New York City - Last fall, I wrote about an obscure accounting rule contributing to the financial crisis.  Trillions of dollars in taxpayer outlays and guarantees later, it is time to revist the subject. 

Since the financial crisis began last year, many commentators have pointed to an obscure accounting rule as playing a major role in the the crisis. Called mark to market accounting, the rule requires public firms to reprice their assets every quarter, and in the event of a decline, take a huge paper loss. 

Supporters--principally accountants and advocates of shareholder rights--defend the rule on the free market principle of transparency.  Opponents who include many in Congress, say forced writedowns on illiquid assets to fire sale prices for the last year is illogical and has led not only to the losses booked by large financial insitutions in the last year, but also to the need for billions in taxpayer bailouts. 

Mark to market is not controversial for easily priced assets such as those traded on exchanges.  However, in 2007, the FASB which writes these rules issued a modification known as FAS 157, which instructed firms to begin repricing so-called Level 3 assets--those which by definition are extremely hard to value.  That change took effect last year and has helped drive many of the paper losses that have roiled the economy.

For banks, venture capital funds, hedge funds and others that hold illiquid investments like stakes in Internet companies and untraded derivatives, mark to "make believe", as it is known is not easy. How, after all, do you value an investment in an Internet company that has yet to turn a profit (think YouTube before its sale to Google), or a mortgage backed derivative when buyers disappear.  The answer, more often than not, is an arbitrary guess.

A valid criticism of all mark to market for untraded assets is that it's pro-cyclical, promoting exuberance in good times and fear in bad ones.  Enron officials loved mark to market in the year 2000, as I wrote last year, because it let them report paper profits as they marked up their portfolio, inflating their stock price.  During the real estate bubble a few years ago, mark to market also fueled the upward trend.

Falling markets, however, exaggerate losses on the downside.  In the last year, the rule has forced holders of illiquid assets--those firms whose names have been in the news--to take huge losses on paper that the government has had to staunch with real funds from the TARP supplied by taxpayers.  Today, fear of mark to markdowns lies behind uncertainty that continues to block the flow of credit through the economy.

While the SEC oversees accounting standards, it has traditionally outsourced them to the Financial Accounting Standards Board or FASB.  Bush SEC Chairman Cox was especially loathe to tackle the issue.  The Obama team may be more open to action on this issue that has reportedly been a hot topic of debate in the White House. 

The reason is that escaping mark to market may be a requirement of the Geithner plan to entice private investors to buy up troubled assets.  Markdown risk is a disincentive to private investors even going into the deal proposed by Secretary Geithner, let alone paying a reasonable price for assets. 

The government could offer investors in distressed assets a special deal.  However, that would raise the question of fairness.  One approach would be to extend a guaranty to distressed assets for those who buy them from current owners.  However, this raises the question, why should taxpayers foot the bill for a trillion dollar guaranty that could have been reduced or eliminated with a press release from the SEC modifying a rule that only took effect last year.  (Practically speaking, tweaking the rule would involve a clarification from the SEC to explicitly prevent revaluations of illiquid securities. 

It also raises the broader question, given the trillions of losses the taxpayer has borne and is now facing--and the collapse of faith in markets around the world that may alter our relationship with markets for a generation--whether defending an obscure rule that didn't even exist until 2007, is worth the spectacular cost.  Shareholder rights advocates may be missing the forest for a tree.

Changing treatment of illiquid assets might also give the Administration breathing room to implement its plan.  The rule in question introduced only in 2007 at the height of market fundamentalism is hardly an American tradition.  It is time to deal with this issue.

NDN Backgrounder: Recovery, the Financial System, and Protectionism

With the economic recovery plan on the verge of final passage, please find some of NDN's best and latest thinking on the plan, the great recession, and the financial system: 

  • The Fallout of the Great Recession for Trade by Dr. Robert Shapiro, 2/11/2009 - Shapiro argues that the world is currently experiencing the economic symptoms of protectionism without actual protectionist measures being put in place, which could have dangerous consequences for the global economy.
  • Optimism and Hope by Michael Moynihan, 2/11/2009 - Moynihan points out that an optimistic message is the best way for the Obama Administration to lead the country through these difficult economic times.
  • Stabilizing the Financial System by Michael Moynihan, 2/10/2009 - Moynihan examines the reaction to Treasury Secretary Tim Geithner's speech and the necessary next steps for the financial system.
  • Recovery Without E-verify and Buy American by Simon Rosenberg, 2/10/2009 - Rosenberg advocates for the removal of "Buy American" and E-verify provisions from the stimulus, provisions that will not stimulate the economy and will do more harm than good. 
  • Politics and the Economic Crisis by Dr. Robert Shapiro, 1/9/2009 - Shapiro argues that, for an economic recovery plan to be effective, we must also address the underlying causes of the "Great Recession," including the housing crisis.
  • A Stimulus for the Long Run by Simon Rosenberg and Dr. Robert Shapiro, 11/14/2008 – This important essay lays out the now widely agreed-upon argument that the upcoming economic stimulus package must include investments in the basic elements of growth for the next decade, including elements that create a low-carbon, energy-efficient economy.
  • Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective.
  • Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.

For additional recent thinking from NDN on the economy, click here for last week's backgrounder and click here for more on NDN's work to keep people in their homes.

NDN Backgrounder: The Politics of Economic Recovery

As the U.S. Senate continues its consideration of the American Recovery and Reinvestment Act, NDN is pleased to offer much of our recent, narrative shaping work on the economy, recovery, and keeping the focus on everyday people. For last week's economic backgrounder, click here

  • Politics and the Economic Crisis by Dr. Robert Shapiro, 1/9/2009 - Shapiro argues that, for an economic recovery plan to be effective, we must also address the underlying causes of the "Great Recession," including the housing crisis.
  • Getting the Stimulus Right by Michael Moynihan, 1/6/2009 - Moynihan makes a number of suggestions for ensuring that the upcoming, record-size stimulus package is a success, including a board to oversee the vast expenditures.
  • A Stimulus for the Long Run by Simon Rosenberg and Dr. Robert Shapiro, 11/14/2008 – This important essay lays out the now widely agreed-upon argument that the upcoming economic stimulus package must include investments in the basic elements of growth for the next decade, including elements that create a low-carbon, energy-efficient economy.
  • Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective.
  • Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.
  • Video: At the 2008 Democratic National Convention in Denver, Newark Mayor Cory Booker discusses his work reinventing a vision for government and innovation. This message of change is timely as America works through these tough economic times and begins to shape a 21st century economy and 21st century government.

Monday Buzz: Chip's Other Song, Immigration Politics, More

It was a good week for NDN in the media. After NDN broke the story of Chip Saltsman's Other Song on Thursday, our post was featured in Politico and as the feature story on the front page of the The Huffinton Post. The story was also picked up by Kos over at DailyKos, and even made it into The New York Times's Sunday editorial.

Along the same lines, Simon was quoted in the Spanish-language paper Terra on immigration reform, and was the lone voice of reason in a Los Angeles Times op-ed by Ira Mehlman on the same topic. His recent essay about the Republican party and race, "Steele, the GOP and Confronting the Southern Strategy," was also featured on the front page of the Huffington Post. Finally, Simon was also quoted in AFP and Red Orbit about how President Obama will use his Web-based campaign organization moving forward. From the AFP piece, entitled "Obama Retools Campaign Machine":

Simon Rosenberg, president of NDN, a progressive think tank here, likened Organizing for America to former president Bill Clinton's attempt to build a grass roots pressure group on health care reform but agreed that "there really hasn't ever been anything like it before."
"Barack is not like any other candidate," he said. "He comes to Washington with more supporters and more modern tools than anyone in history. Barack is going to reinvent the presidency the way he reinvented the campaign."

Rob was quoted in the Los Angeles Times about cap-and-trave versus a carbon tax, and in the  International Herald-Tribune on the stimulus package. From the IHT piece:

Economist Rob Shapiro, a top Commerce Department official in the Clinton administration who was on Obama's transition advisory team, questioned the effectiveness of the $275 billion in tax cuts in the measure now before the House. "These tax cuts are not only not stimulative, but we're going to have to pay for them eventually."

Still, Shapiro, now an official with NDN, a think tank formerly known as the New Democratic Network, said it is more important not to let the debate over the stimulus package "degenerate into politics as usual. If the country believes this has turned into a package of special-interest spending and tax provisions, then the efforts to restore confidence will be damaged."

Finally, Morley and Mike had an op-ed published in Roll Call entitled "Obama Typifies Spirit of Civic Engagement." For those of you who don't subscribe to Roll Call, you can view an earlier version of this essay posted on the NDN blog here.

What Race Means in America is Changing

Here's a video I just recorded on the idea of how race is changing in America. Some additional links to related essays are below.

 

Majority Minority

 

Southern Strategy

For more of NDN's analysis of race in American politics, please see:

The GOP and Magic Negros - 12/30/08

Virginia and the New Coalition - 11/30/08

The Long Road Back - 11/18/08

"The Tipping Point" - VIBE, 10/14/08

Race and 21st Century America - 3/18/08

On Obama, Race, and the End of the Southern Strategy - 1/4/08

The 50 Year Strategy - Mother Jones, 11/07

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