Nobel Prize

The Nobel Case for Immigration

by Ryan Young on October 26, 2010

in Deregulate to Stimulate, Economy, International, Labor

Over at The American Spectator, my colleague Alex Nowrasteh and I make the case for expanding skilled immigration. Our main points:

  • 1 in 8 Americans are foreign-born, but 1 in 4 American Nobel laureates since 1901 are foreign-born. Immigrants, it seems, are chronic overachievers. America would benefit by letting more in.
  • The H-1B visa for skilled immigrants is capped at 85,000. In non-recession years, those 85,000 spots are typically filled in a single day.
  • Genius-level intellects are missing out on the chance to flower at the world’s best universities. They’re also missing out on one of the world’s best entrepreneurial environments. And Americans are missing out on cutting-edge jobs in high-tech fields. Consumers lose out on products that are never invented.
  • The number of Nobel-caliber intellects who have lost their opportunity to do research in this country is unknown. What is known is that the U.S. government has kept out millions of the most inventive, brilliant, and entrepreneurial people in the world for no good reason.

Read the whole piece here.

Obama Pushes More Bailouts; Nobel Laureate Criticizes Obama Policies

by Hans Bader on August 5, 2010

in Bailout Watch, Economy, Employment, Politics as Usual, Sanctimony, Stimulus to Nowhere, Zeitgeist

Nobel Laureate Vernon Smith criticizes the Obama Administration’s  stimulus package and skyrocketing deficit spending, saying that deficit-financed stimulus is “the problem, not the solution.”

So what has been the government’s response in the current crisis? Besides spending stimulus, it was tax incentives for new home buyers and cash for clunkers if you bought a new car. All three are programs for borrowing output, homes and cars from future production and sales. Using subsidies to pump up home sales beyond what people could afford was the problem that led to the crisis. Now the problem is touted as the solution.

The stimulus package is now going to cost $75 billion more than the Obama Administration estimated, and foolish provisions in it wiped out thousands of jobs.

Undaunted by its record of failure, the Obama Administration recently persuaded the Senate to approve borrowing even more money, billions more, to bail out public employee unions, and subsidize bloated and mismanaged school systems.  The House is expected to pass the measure soon.

Months ago, the Congressional Budget Office already estimated that Obama’s polices would add $9.7 trillion to the national debt.

Earlier,  another Nobel Prize winning economist, Gary Becker, said that Obama’s policies were delaying an economic recovery.

Nobel Prize Winning Economist Says Obama Policies Delaying Economic Recovery

by Hans Bader on January 8, 2010 · 3 comments

in Deregulate to Stimulate, Economy, Employment, Energy, Environment, Global Warming, Health and Illness, Healthcare, Insurance, International, Labor, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Stimulus to Nowhere, Trade

In the Wall Street Journal, Nobel Prize-winning economist Gary Becker and others explain how President Obama’s policies are delaying and retarding the inevitable economic recovery, keeping unemployment high even though the recession Obama inherited was similar to others in the past that gave way to rapid recoveries:

In terms of U.S. output contractions, the so-called Great Recession was not much more severe than the recessions in 1973-75 and 1981-82. Yet recovery from the latest recession has started out much more slowly. For example, real GDP expanded by 7.7% in 1983 after unemployment peaked at 10.8% in December 1982, whereas GDP grew at an unimpressive annual rate of 2.2% in the third quarter of 2009. Although the fourth quarter is likely to show better numbers–probably much better–there are no signs of an explosive take off from the recession. …

In terms of discouraging a rapid recovery, other government proposals created greater uncertainty and risk for businesses and investors. These include plans to increase greatly marginal tax rates for higher incomes. In addition, discussions at the Copenhagen conference and by the president to impose high taxes on carbon dioxide emissions must surely discourage investments in refineries, power plants, factories and other businesses that are big emitters of greenhouse gases.

Congressional ‘reforms’ of the American health delivery system have gone through dozens of versions. The separate bills passed by the House and Senate worry small businesses, in particular. They fear their labor costs will increase because of mandates to spend much more on health insurance for their employees. The resulting reluctance of small businesses to invest, expand and hire harms households as well, because it slows the creation of new jobs and the growth of labor incomes. …

Even though some of the proposed antibusiness policies might never be implemented, they generate considerable uncertainty for businesses and households. Faced with a highly uncertain policy environment, the prudent course is to set aside or delay costly commitments that are hard to reverse. The result is reluctance by banks to increase lending–despite their huge excess reserves–reluctance by businesses to undertake new capital expenditures or expand work forces, and decisions by households to postpone major purchases.

Several pieces of evidence point to extreme caution by businesses and households. A regular survey by the National Federation of Independent Businesses (NFIB) shows that recent capital expenditures and near-term plans for new capital investments remain stuck at 35-year lows. The same survey reveals that only 7% of small businesses see the next few months as a good time to expand. Only 8% of small businesses report job openings, as compared to 14%-24% in 2008, depending on month, and 19%-26% in 2007.

Obama’s $800 billion stimulus package, which failed to cut unemployment, is now pressuring states to raise taxes, thanks to costly requirements it imposed on states at the behest of powerful public-employee unions.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.”  Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.  The Obama Administration claims credit for creating imaginary jobs in non-existent Congressional districts.

As the Examiner notes, “If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.”

The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion).  It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).

The stimulus package has since spawned countless examples of government waste and corruption.  Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.  Obama’s alleged justification for firing the inspector general turned out to be false.

This Year’s Economics Nobel Winners

by Ryan Young on October 12, 2009

in Economy, Zeitgeist

Congratulations to Elinor Ostrom and Oliver Williamson. Both are highly deserving.

Ostrom’s work shows that market behavior emerges in settings not usually thought of as markets (condo associations, within government etc.).

Williamson has made brilliant contributions to the New Institutional Economics (NIE), which says that changing the rules of the game (the existing institutions) will alter the behavior of the people affected. Williamson’s work applies the economic way of thinking to deduce exactly how, with an emphasis on how transaction costs affect the interplay between individuals and firms.

Nobel Prize “Gift” Double Standard

by Hans Bader on October 9, 2009 · 1 comment

in International, Legal, Politics as Usual, Sanctimony

Drug companies are apparently forbidden from offering freebies to doctors in certain liberal states like Massachusetts and Vermont, under the theory that doctors’ loyalty can be bought simply by giving them free pens and beverages worth a few cents.

And the FTC just moved to restrict bloggers from praising books they receive as gifts from publishers, without disclosing the gift, under the theory that bloggers would praise dreck in order to receive it for free.

Yet when President Obama was awarded a far more substantial gift — a $1.4 million Nobel Peace Prize — by a foreign government, questions about its propriety were ridiculed by liberal commentators.  (Nobel Peace Prize winners are selected by a committee chosen by Norway’s parliament.  Obama was nominated after less than two weeks in office — when he had yet to achieve anything — seemingly to influence his future conduct in office as well as to reward him for not being George Bush).

In fact, some liberal commentators dismiss objections as being unpatriotic and putting the questioner on par with terrorists like the Taliban.  (So much for their disingenuous claim during the Bush years that “dissent is the highest form of patriotism” — a phrase they falsely attributed to Jefferson, who never said it).

Why the double standard?  Are doctors less trustworthy than politicians?

Given the notorious politicization of the Justice Department under Obama and his firing of inspector generals who uncover corruption and misuse of federal funds by Obama supporters (as well as the Bush Administration’s disgraceful “torture memos”), I would argue that presidents, like politicians in general, are less trustworthy than doctors, and ought to be subject to more scrutiny about the gifts they receive, not less.

Obama has already proven himself willing to take positions designed to cater to an international audience at the expense of civil liberties, such as backing UN proposals to ban hate speech and anti-Islam speech in the name of forging international consensus.  Such bans may be popular in Europe, and in Norway’s socialist-led parliament (which recently imposed confiscatory taxes on the shipping industry), but they are contrary to America’s First Amendment and Supreme Court decisions like R.A.V. v. St. Paul (1992).   What the international community wants is sometimes at odds with U.S. interests.  The UN recently declared Cuba’s longtime anti-American dictator  Castro a “World Hero.”

The Founding Fathers thought that federal officials like the President were in serious danger of being influenced by foreign gift givers.  That’s why they drafted the Constitution to ban federal officials from accepting “any present” from foreign governments without Congressional consent.  Constitutional law professor Eugene Volokh discusses the issue here.

Given that Norway is usually a friendly country, Obama’s Nobel Prize money may not cause any tangible harm, putting aside any legal issues (although Norway has differed with the U.S. on some major foreign policy issues in the past, like the Vietnam War).  But it certainly is hypocritical to turn a blind eye to Obama’s lucrative $1.4 million, while obsessing over free pens and beverages being given to doctors, or free books given to bloggers.  (Even if Obama gives the $1.4 million to charity, it still won’t change matters.  A gift is a gift even if it’s later given to charity, and most people would be thrilled to have $1.4 million to give to charity).