Milwaukee Biz Blog: The consequences of short-term political actions

Last updated on July 3rd, 2019 at 03:42 pm

What happens when short-term political actions are taken without thinking about future consequences?

Like in life, you need to have an idea so you can prepare for the problems that could follow.

I am using anti-immigration and trade policy here, but I could have used foreign policy. The bashing of our NATO alliance has made French President Emmanuel Macron declare that Europe should have its own army. German Chancellor Angela Merkel suggests that Europe reposition itself against China, the U.S. and Russia. She believes that the old certainties of the postwar order no longer exist. European Commission President Jean-Claude Juncker says that the EC ought to set up its own military co-operation as it cannot rely on the U.S. to defend the bloc.

For now, let us take the recent actions that the U.S. government has taken regarding immigration. The vast majority of those seeking asylum from Central America are women and children fleeing crime, violence and poor economic circumstances. Most come from three Central American countries, whose aid recently has been taken away. This aid was designed to improve conditions in these countries to reduce immigration.

Ironically the elimination of this support gave a powerful message and has increased convoys from these three countries. Asylum seekers are frightened that the border will be closed.

Much of the immigration controversy is political in nature so we need to remind ourselves that most illegal immigration comes from those who overstay their visas when they arrive by boat, plane or auto.

President Donald Trump declared that “The system is full. We can’t take you anymore.” But the “system” is not full. We have a need for workers at both ends of the labor spectrum. Farmers in California and Texas need field hands; Wisconsin needs labor for dairy farms. Wage increases at Walmart and McDonald’s are being raised to attract workers.

In 2008 I predicted that we’d have unemployment below 5% by 2015, a confident prediction to make when it was above 10% in our mini-depression. Yet our demographics indicated this low rate when including retiring baby boomers. I did not factor in a change in illegal immigration.

Has the immigration crisis been manufactured? After all the problem could be reduced by tripling the number immigration judges to hear cases. This would be less costly than warehousing people. Bottlenecks could be eliminated. They are there to annoy and frustrate, but they are not working and serve only to annoy.

President Dwight Eisenhower issued large numbers of temporary work permits and went after employers who hired illegals. He also had some income held back which could only be collected when the worker returned to Mexico. He thought out his strategy.

But there is a larger consequence to our current policy on immigrants and foreigners. America has had a poor record in welcoming newcomers. Catholics and Jews were discriminated; Chinese and Japanese were excluded. Poles, Czechs, Russians, Nordics were given the worst jobs. Have I left any group out? You can fill in the blanks. It is one of our less admirable legacies, now being aimed at Muslims and other recent immigrants.

In short, the U.S. has not been hospitable. But now it is worst, especially for foreign students. “You can study here, but don’t expect a job.”

The U.S. is currently in first place for international students, followed by the U.K. and Canada. Canada will soon overtake the U.K. The U.S. has a 327.2 million population versus the UK with 66 million and Canada with 37 million (about 1/9th of the US).

In Canada Chinese students make up about 140,000 students, followed by 125,000 students from India. The total is about 246,000 students, versus 1.1 million foreign students in the U.S. Canada has about double by percent of population. Most foreign students are in STEM, the sciences, where the U.S. has a big deficit.

Canada welcomes these foreign students, but fewer foreign students are welcome to the U.S. where they are demeaned and see foreigners terrorized because of their race, religion or ethnic background.

Do we need new blood in our society? Absolutely.

Foreign doctors now make up about 1/3 of our medical system. Many are with the VA system, which is short 1,600 doctors.

Look at how wealth is created in the U.S. by reading the Forbes 400 list of wealthy Americans. Many, I estimate about 28%, are foreign born or first generation. 11% or 45 are foreign. These billionaires come from Russia, Hungary, Ukraine, South Africa, Australia, France, Switzerland, Pakistan, China, Korea, Canada, Vietnam, Egypt, Greece, Germany, Israel, Argentina, India, Burma, the U.K., Italy, Kenya, Morocco, Sweden, Iraq, Romania and Turkey. These folks come from all sorts of backgrounds. It is quite a list!

Our history is founded on immigrants. Andrew Carnegie was born in Scotland as was Alexander Graham Bell. They built our railroads, our roads, and our skyscrapers. They packed our meat, grew our food, educated our nation. They fought our wars. Their inventions and innovations gave us power.

Canada benefits from our immigration policies and jingoistic attitudes. They embrace refugees and foreign students.

Next let us review the trade war with China. I have written elsewhere that America is negotiating with the China that was and not the China of today.

The U.S. negotiators view China as a technology stealing manufacturing economy dependent on exports.

This may have been true decades ago, but not now. They are the second largest issuer of patents and scientific papers (and now have a reason to protect intellectual property). In some fields, such as AI, they are ahead of us. Their economy is more dependent on services. It is a domestic economy now. Indeed the American government’s attack on Huawei has little to do with “defense” policies and much to do with the politics of negotiations. Huawei’s technology in 5G is excellent which is why the EC is not banning them. As a solution for rural communities in the U.S., they own it.

China should- could- be a massive market for our goods.

One area that the Chinese have put tariffs on is agriculture. From the American farmer’s perspective, it took years to build up relationships with China, and now those relationships are being destroyed. China is developing new relationships with Russia, Brazil, Argentina, Australia and many African countries for alternative sources of food.

Have you ever bought an automobile from a dealer and got a lemon, that the manufacturer did not make right and, indeed, ignored you? Have you ever bought that brand again or worked with the dealer? I bet not. This is what has and is occurring with agriculture.

The years building up relationships has been destroyed.

As a futurist and a businessman, I know the dangers of not thinking about the future and not thinking about the consequences of what one does. A classic example from the past was General Douglas MacArthur’s crossing the Yalu River. China clearly telegraphed that they would view this as an invasion. How many lives would have been saved if he had not taken this foolish step?

Bob Chernow is a Milwaukee businessman and the former vice chair of the World Future Society. He served in military intelligence during the Vietnam War.

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