Ep38 -- Alien Evasion

 I recently read the 2020 novel American Dirt by Jeanine Cummins.  It's the story of a mother and child who are desperately fleeing unspeakable violence in Southern Mexico, and join the flow of migrants northward, attempting to enter the United States.  While the book has been widely praised, it was an Oprah Book Club selection, it is also sparked controversy with charges of cultural appropriation, inauthenticity, and so on. 

The author is not a migrant and has long identified as white.  And there are also accusations of the book being the product of a publishing industry more interested in making money off actual immigrant stories, than serving as a platform for their own stories.  It has also been critiqued as just being not very well written. 

I'll admit that I found it a very engaging, often thrilling and harrowing story.  And for me, it served an important purpose.  Yes, at times it traffics in stereotypes, supposedly smart characters do stupid things, and it is often maddeningly apolitical and ahistorical.  But,  for those of us for whom immigration is an abstraction, a collection of statistics, a campaign strategy, it forces us to consciously acknowledge that it is a phenomenon, however complex its causes and effects, that is nonetheless made up of real human beings.  The specifics of how those people are represented in this one novel will understandably not satisfy a lot of people. But I would argue that the impact of this one novel, to force its readers to simply recognize the fact that there are real people out there right now, and this is the reality of their entire lives all day, every day,  I think that's enough to say that this novel is making a positive impact on the world.  And hopefully, its success will encourage the publishing industry to release more books on this topic, firsthand accounts, more nuanced and authentic, to fill in the inevitable gaps left by this one, breakthrough novel. 

But for now, I'll take that reminder and do the best I can in my safe, secure life to appreciate the desperation and the hope that these real people carry with them. And to remember Gregory Bateson's ecosystem, the one that we all occupy. And try to understand how I may have benefited from policies and government actions that may have exacerbated their desperation.  And be open to solutions that very well may require some sacrifice on my part. 

As you probably guessed this week, I want to talk a little bit about immigration with a particular focus on the disinformation around the issue and what that says about the assumptions that pervade our discussions of pretty much every other important issue on people's minds these days.

Stay tuned.

I'm Craig Boreth and this is The Great Ungaslighting, a podcast about how we all get conned into accepting a manmade culture that's out of sync with our human nature and how we can fight back, and put the kind back into humankind. 

But first a word about a sponsor. 

This week's episode of The Great Ungaslighting is not brought to you by Safelite Solutions, which is about to pay out to its private equity owners the largest dividend recapitalization in history, just under $5 billion. Now what is a dividend recapitalization, you might ask? Well, would it surprise you to know that it's a way for private equity investors to give themselves a massive payday while not decreasing their stake in the company they own or taking on any real risk? Yeah, me neither. 

It's essentially when a private equity owner loads more debt onto a company they own in order to give themselves a big bonus.  A great example of a dividend recapitalization happened with Simmons Mattress Company a bunch of years ago. After being in business for over 130 years and being a hugely successful brand, Simmons was holding $1.3 billion in debt and filed for bankruptcy. 

What had happened was Simmons was sold seven times in the previous 20 years. Each time it was sold, the new owners would take on the existing debt and then sell bonds to load more debt onto the company to pay themselves back for what they just spent to buy the company. Then later on, they'd sell the company and pocket that money, and so on and so on.  And in the end, the bankruptcy screws over the bondholders and probably causes massive layoffs for rank-and-file workers, but the private equity firms have all done very, very well indeed. 

So Safelite's private equity owners will raise $4.9 billion in new debt and pocket that money themselves. But who is Safelite? In order to take on that much debt, they must make internet security software, or maybe they're big players in the AI space. Nope.  Auto glass.  Safelite installs auto glass. You get a crack in your windshield, take it to a Safelite shop and get it fixed. Now in your mind, put an auto glass company on one side of the scale and $5 billion in new debt on the other side.  It's hard to make that balance out, right? Well, that's because Safelite isn't just an auto glass repair company. It's also a G B M. Remember a couple of weeks ago, we talked about PBMs pharmacy benefits managers, who insert themselves between health insurance companies and pharmacies, often owning the pharmacies, and screw over patients with high deductible health plans. You can think of Safelite as a glass benefits manager or GBM.  Safelite has inserted itself as a middleman between your car insurance company and auto glass repair shops. And while there has yet to be definitive proof that Safelite the middleman is steering customers to Safelite the glass repair shops, there are a lot of allegations swirling around.  And as Matt Stoller at the BIG newsletter observes, "One of the more remarkable aspects of following a bunch of different antitrust cases is how they all start to rhyme.  Pharmacy benefits managers are middlemen who use list prices and high deductibles to control consumers and pharmacists. Visa uses its position as a middleman to use list prices and rebates to control merchants and consumers. Google uses rebates to control advertisers and publishers and so on and so forth."

I'm with Matt on this one. I'd be really surprised if Safelite and its private equity overlords are not doing the exact same thing.  And it's up to the FTC to finally begin to protect consumers from these kinds of schemes.  And the more people learn about what's really going on in the world of high finance these days, the more pissed off they become.  Which is why I really don't understand why vice-president Harris won't give a full-throated defense of Lina Khan and the FTC.  Come on Kamala, read the room. 

And we are back. 

There's a funny little semantic trick that gets used when folks want to demonize immigrants.  They take the least powerful, absolutely most vulnerable people you can possibly imagine, and impart upon them an almost supernatural, supremely dangerous power. They're "stealing your jobs," they're "destroying the fabric of society." The stealing your jobs thing is particularly ridiculous. Like some swarthy new immigrant struts into your boss's office and says, I can do a better job in those gringos and for less money.  The reality is your boss is giving your job to someone willing to work for less, in the case of undocumented immigrants, a lot less, and pocketing the difference himself.  Now you may be thinking, sure that might be a more accurate way to think about it, but those new immigrants willing to work for less are depressing wages for native workers. And if you just look at the labor side of the equation, then that would be a reasonable assumption to make.  And if you're a dishonest politician, a redundancy, I know, you want to make sure all anybody looks at is the labor supply side.

But the truth is new immigrants and everyone really aren't solely workers. We are all also consumers.  And as you move further down the economic ladder, more and more of the wages earned get immediately spent in the local economy. And when you factor that consumption into the equation, which in turn increases the demand for workers, you'll find that the net result for native workers is pretty much a wash. That is, there is no wage depression caused by low-skill immigration.  The Atlantic published a piece last week that looked at this issue.  They started off with a natural experiment that occurred in 1980 when Fidel Castro lifted Cuba's ban on emigration and 125,000 people came to Florida in what became known as the Mariel boatlift.  In the span of a few months, Miami saw an increase in its workforce, mostly from people with no high school education, that was 25 times larger than the increase in the national workforce for an entire year.  Economist David Card analyzed the Miami wage and employment data and found, "...the boatlift had virtually no effect on either the wages or employment, prospects of native-born workers in Miami, including those who lacked a college degree."  Now, if you know anything about this research, you probably know that there are some folks out there who dispute Card's conclusion. In 2015, Harvard economist, George Borjas wrote a paper concluding that while wages didn't go down on average, when you look at just workers without a high school diploma, their wages had gone down significantly as a result of the Cuban immigration.  To this day, you're likely to hear references to this paper from immigration opponents, like former Trump advisor Stephen Miller. 

But when you look at Borjas's results, you can see that he clearly massaged his data to get the outcome he wanted. He basically eliminated groups of native-born workers whose wages weren't affected until he found a specific group whose wages did go down. The problem is that group is tiny, including only 17 workers a year.  And with a sample size that small, there's no way to tell whether the effect was real or just statistical noise.  The truth is, as Princeton economist Leah Boustan input it. "Economic models have long predicted that low-skill immigration would hurt the wages of low-skill workers. But that turns out not to be true when we actually look at what happens in the real world."

There are also data showing that deporting immigrants hurts native-born workers. From 2008 to 2014, about a half a million undocumented immigrants were deported by the Department of Homeland Security.  These deportations were done in different counties at different times. And when you compare counties where deportations are happening with unaffected counties, you find that for every hundred migrant workers who were deported, there were nine fewer jobs for natives.  And native workers' wages actually fell slightly. 

I suppose you could say in a weird way, it's actually a sign of progress that anti-immigrant politicians have resorted to lying about immigrants eating our pets.  They've realized that the lies they've been spreading for decades about the economic impacts of immigration don't scare people as much as they used to. So now they have to come up with a whole new line of desperate, outrageous bullshit. 

I guess all this is to remind everyone that we really are a nation of immigrants, but we're also a nation that has always included people who really don't like immigrants. And every insult that's being hurled at South American and Central American immigrants these days has been used against Irish and Italian and Asian immigrants in the past.  And are there immigrants who commit crimes when they get here? Sure. But the data are conclusive that immigrants are significantly less likely to commit crimes than native-born people.  But you know what immigrants are way more likely to do than native-born people? Start businesses.  A 2022 MIT paper found that immigrants were 80% more likely to start a business than native-born Americans. And it makes perfect sense if you think about it.  If you read books like American Dirt, even for all its flaws and shortcomings, you can't deny that the people who leave everything behind, struggle and suffer through ordeal after ordeal to get here, are likely to be smart, resourceful, and ambitious risk takers.  In other words, exactly the kind of people that would make any country truly great.  

Well, that's it for this week. If you like this episode, please share it with a few friends who you think would also enjoy it. And until next time, be kind to yourself. Cut each other, some slack, and use your damn turn signal.