So this gives you a bit of a sense of how I perceive borders and these personal borders, I think, can relate in not too an obtuse manner to the political borders. And before I get out the phone number and we start taking calls, I want to mention a couple of other things in this regard.

The premise of the book, basically, is—one of the things that’s fun about talking about the book—and I’ve talked about the book a lot on the talk radio circuit, and I’ve talked about the book a lot on some of these extreme talk radio shows, both on the left side and the right side. You were on a kind of moderate show last night, right? What show were you on? Gene Burns. Oh, yeah.

Benjamin Powell

Gene Burns wasn’t the host last night. There was a substitute host.

Peter Laufer

He was very kind to this book. But at any rate, one of the things that works with any audience is this—and we can do it right here, right now. Is there anyone in this room who thinks that everything is hunky-dory on the U.S.-Mexico border, that the status quo is fine? Does anybody in this room think the status quo is fine?

Now, I know from already talking with some of you, that you’re on various sides of this issue. Some of you are proponents of open migration. Others want the border secured in various ways. But everybody agrees that the status quo is no good.

It’s a spectacular premise to work from. Because if you think about something else that’s current in our political interests, like say the war in Iraq—I don’t know about this particular room, but you certainly can go out into the society as any poll will show or any talk radio show will show, and you’ll get people who agree with the current policy. Maybe they might be unhappy that it’s not working as well as they would like to see it work. But they want the current policy to continue. Others who want a complete pullout. Others who want a partial pullout.

But there are people who are—that you’re not going to find some—you’re not going to be able to answer this question in the same way with this issue, the border issue, everybody agrees that what’s going on now is no good. I don’t know if there’s another issue where you could set up that same premise. So what I did is I looked at that and tried to figure out where to go next.

The next step that I come up with is that pretty much any Mexican who wants to come north, comes north. That’s the status of affairs currently. That’s one of the reasons why the border is out of control. There are other reasons why the border is out of control. But pretty much any Mexican who wants to come north, comes north.

Then the third part of this thing is we want them to come north. Whether we admit it or not, we want them to come north. That’s why they’re coming north. And this is when we’ll be taking calls here in a minute.

But when you take those three things in a row, then you get to where I come—and it takes me 300 pages or whatever just to try to make this argument in a way that I think is cogent and defendable. But since everybody’s coming anyway that wants to come, since we want them to come, since we all agree the status quo doesn’t work, why don’t we try something radically different. And what could that be? Well, we just regularize what’s going on anyway. Because we’ve got ancillary problems on the border.

There are people we don’t want to have come up here. Now, we want those Mexicans that we want up here for whatever reason they’re coming up here. Whether it’s to work, or to play and spend money, or to visit friends, or to look at the Grand Canyon. We’re fine with that. But there are people we don’t want up here. Drug traffickers maybe, crazed terrorists, rapists, murderers, robbers. And we can’t stop these people, because it is so chaotic currently on the border that those that we would like to keep out just are in the shadows of those that we’re embracing, that we’re yelling to come here, come here, come here, and who are coming up.

So if we regularize this traffic of Mexicans coming north—and Mexicans can come north for whatever they want to come north for. Let’s not talk about, as David mentioned, this bizarre proposal of the Bush Administration to tie guest workers to a three-year renewable, one time, three-year period connected to one employer, which creates an impossible employer-employee relationship and enables the employer to discard the employee who has to go back to Mexico. Or have the employee living in fear of what the employer is going to demand next. And doesn’t allow that employee to buy into the society, into the system in any way because they’re going to be shut down in six years anyway.

If we just regularize this traffic in, then we can take advantage of the Border Patrol, the largest uniformed police force in the United States. All of their incredible high-tech equipment. How many of you have ever been down on the border and gone out with the Border Patrol? Any of you? They run trips. I recommend everybody does it. It’s just absolutely fascinating. First of all, most of them are really terrific guys and gals. Great to hang out with. It’s an adventure. Nothing wrong with an adventure. But their equipment is phenomenal. They get in there with their night vision scopes and see people coming across, and seeing the reality at night of the border, and all their other equipment. Definitely worth the trip.

All of that equipment, all of that manpower to be used to keep out those that we really don’t want out or at least keep track of them? And have those that we wish to come in and go out come in and go out as they wish. This will attract some good phone calls I know in just a moment.

Let me read one other thing first. I don’t have a watch with me. I know I need to keep track of the time. Let me read this. Because I spent—thank you, Ben. I spent—it’s half past seven. Time for the news. We’ll be back after these commercials. I spent a lot of time on the border over many years for this book. And relatively recently, a couple of years ago, I went out with these vigilante guys, the ones that Arnold was talking about. And specifically there’s a fellow named Chris Simcox who’s been in the news quite a bit. A really clever self-promoter. This is one of the guys that’s heading up the so-called Minutemen. Quite obvious that they preempted or corralled that name which has such a great history.

At any rate, one of the things that goes back to what I was saying earlier about how we all agree that it’s out of control. I met a fascinating rancher down there with—who was so gracious to invite me to his place and to show me around. This is a guy that I’m sure if we spent any length of time together our politics would be so different, our social background would be so different, our likes and dislikes. But I empathized so with him as he showed me around his place, which is literally on the border. His ranch borders Mexico.

And let me just read a few paragraphs of this to give you a sense of him and a sense of this problem that exists, that shouldn’t exist, that this guy should not have to face.

I find it fascinating to talk to these guys with whom I would not necessarily hang out and don’t necessarily agree. And they pepper the book. And again it brings it around for me to the fascination of the fact that with this subject we have got this premise of agreement that we have a problem. And so it seems that we’re in awfully good shape to find a solution and to risk a radical solution, because the radical solution arguably is no different in terms of its effect on us than the problem. That means Mexicans coming up here. Without the kinds of problems that my new friend Ray Bouton faces.

So talk-show host that I am, I could go on and on and on. It’s one of the things, if you listen to talk shows late at night on maybe secondary stations, not like KGO, you hear these guys who aren’t getting calls. Have you heard these guys? They’re really great, and they just talk, and they talk, and they talk, and they talk. And that’s what we do for a living.

As David said, I was a news and program director at WRC in Washington, which is a talk radio station. The way I hired people is that I would sit a guy down in a room at a table with nothing in the room and tell him to start talking. It’s a very difficult thing to do. And you get rid of the ones that aren’t going to work out very fast that way.

So at any rate, I could talk and talk and talk, but I prefer to start mixing it up here with you guys if you’d like to participate. And if you don’t, I’ll keep talking at you. If that works with you guys for the format. There’s a microphone issue here I think that we have to wait for. Is that right, Carl? Let me get a glass of water while I do that.

Oh, OK, great. I think this fellow got his hand up very quickly.

Audience Member

While I think I would agree with your solution if I understand you correctly, it seems to me that you have a premise that whatever the decision that gets made here, the decision-makers are people who are already in the United States. You refer to “us” and “we” as opposed presumably to them being the Mexicans or the people currently outside the United States. I would argue that this is nationalist and that this is playing into the problem to a certain degree.

Peter Laufer

No question and I’ll stop you, as I said I would, because we’re moving around. I fall into the linguistic trap. It happened the other day. It’s a terrible thing, and thank you for busting me on that. Because it is a—certainly this problem on this border is not an us-and-them problem. It’s all of us. And I fell into this just the other day on a radio show that I do for National Geographic where I was talking to a CIA agent about 9/11 stuff. He was an Osama Bin Laden expert. I started to say “we.” And it’s not that I’m not an American, but in that context it should have been “the U.S.”

And in this context you’re right. And that brings up another reason why I stopped you now, and we’ll get right to somebody else, but I’ve been asked what about the Salvadorans, what about the Nicaraguans, what about the Chinese, what about the Poles? Everybody wants to come here. Well, we can’t all do everything. How many of you are plumbers? Nobody’s a plumber. OK, that’s something none of us can do. We can’t all do everything. I see this Mexican problem because I’ve been covering Mexico for a long time. And I go back and forth in Mexico. I’ve worked in Mexico.

The vast majority of so-called illegal aliens are Mexicans. And arguably it’s a singular situation. It’s different because we do have this border in common. This is the only place where the First and Third World meet on the land. The history of the countries are melded. We used to be them, they used to be us. We’ve invaded them, they’ve sold us tortillas that now outsell white bread. (And that’s a statistic in the book.) And so, this is different than all the others who want to come here. It’s one place to start to do something. But thank you for that. Thanks very much. Please?

Audience Member

It seems to me that this situation is analogous to the war on drugs, which is also failing, has been lost a long time ago. And the argument against that is the same thing as the argument of the immigration problem, and that is we’ll be overwhelmed, whether it’s drugs or whether it’s immigrants. And that’s why I think no politician touches this thing really except in a halfhearted way. Do you see any way to argue that it wouldn’t damage us?

Peter Laufer

Yeah, and I tried to in the book. It’s an important point. Are we going to be overwhelmed? Well, we’ve got a tiny birthrate. We need workers. We’ve got a big country. There are plenty of people who say we are overwhelmed. All you have to do is go down to East Oakland and look at the streets on a Saturday night, and everybody’s coming out of these apartments where they’re living twelve to a one-bedroom apartment.

When I look at the numbers and when I look historically—where I see some parallels, I’m not afraid. And this is largely an economic-driven migration. These types of migrations, especially when we’ve got this land border, tend to be self-regulating.

I spent a lot of time living and working in Europe at the time of the Berlin Wall coming down. And as the Southern European countries like Greece and Portugal and Spain were rising at the time when Germany was still an economic powerhouse and was drawing workers, those workers came up and filled those jobs. And yes, there are some residual problems with the Turks that were seduced into Germany in the ‘50s. And yes, there are some residual problems with Somalian students in the Eastern side of Germany. But in general workers then when the jobs collapsed went back, if they didn’t find other work, because what do they want to be unemployed in Germany for when they can be unemployed in Portugal? Give me a break.

Audience Member

Yes, I have an antithetical view to yours. I am in support of the Mexicans. And I worked closely with them when I worked for the county. And I find this cleverly deceptive. You don’t bother to name the Minutemen. You just say an armed group. They are unarmed. You know that and I know that.

Peter Laufer

Wait. Stop for just a second. I’m going to hang up—or I’ll put you on hold. I won’t hang up on you. OK? First of all the flyer, which I haven’t even read yet, comes from the gracious host organization. So I’ll have to look at it. But those boys are armed to the teeth. I hung out with them. They are—pardon me? Excuse me. The boys I hung out with—and this will be fun, don’t get upset please. I look forward to speaking with you.

Audience Member

But that’s totally wrong. That’s right. It’s wrong.

Peter Laufer

Those boys are armed to the teeth, and I hung out with them. And the guys that you hung out with perhaps are not. But I spent time with this fellow Ray. In fact, in that chapter which I encourage you to read, this fellow Ray—the reason I had an opportunity to meet him was because he was the host for a group of these Minutemen guys who had come to his place to get arms training. So they are armed. It’s a moot point.

Audience Member

I have other points on this.

Peter Laufer

Fine, fine. I’ll take you off hold.

Audience Member

Even though it was not written by you, the promotional material for your talk says that the American employers are thrilled to reach out to the talent pool. That is also an untruth. They are thrilled for cheap labor with no benefits largely to the Mexicans. My own landlord employs the Mexicans. You don’t have to be a genius to know they’re not getting any benefits. And it talks about talent. They are no more talented than the homegrown American. If you want talent, you go to the union hall or you look in the telephone book where the professionals advertise.

A better way to express it would be that the Mexican workers—and the others, no matter where they come —Guatemala or Nicaragua—are willing workers. They are willing workers, they work hard, they need the money.

Peter Laufer

OK. Let me stop you with respect again because I’m watching the clock and I’m doing the moderator role. I really want to say because we are dealing with subject matter that is heated. And if I in my attempts to be clever say something flip, I want you to all know please in advance that no disrespect is meant. On the contrary. I’m so pleased that we can have this kind of a discussion.

And let me do what we do in talk radio, which is say thank you very much for the call, hang up on you and ask you to sit down. And say that there are varying points of view, and things that you say are correct in segments of this huge society that we’re talking about. Aside from the armed business, I don’t dispute these characterizations that you come up with.

The reality is, though, that this is too large a segment to pigeonhole in that manner. And so we get back to my premise, which is, we’ve got this going on. The reason you know this and are meeting these people is because they’re coming up anyway. So let’s regularize it so we know who they are and we know where they are within—fine, shake your head. Nobody is going to agree 100 percent. If I get that many people to even say, “Hmm, interesting,” I’m a happy guy. Back there in the back please.

Audience Member

Could you give a few more details of your plan? Is it just sort of let them all in? I don’t understand.

Peter Laufer

No. Let me answer that. I’m in the enviable perhaps position of not being a policymaker but being a troublemaker, in some respects, or a muckraker. I’m tossing these grenades. I am so lucky to have this forum and the radio shows. And basically I’m throwing out a concept. I would look for anybody who thinks there might be some merit in it to help refine it.

But the way I see it, people come through the border. The reason they’re not coming through the border now is because we’re not letting them in. So if they have some thing like national driver’s license that we might have sometime soon, or whatever it is that we all agree—the “we” being those of us who are in charge up here right now—but there’s kind of a card, a passport, whatever it is, and they come walking in and they wave it, and our guys say yeah, yeah, yeah at all these different checkpoints we have. We’ve got dozens of them along the southern border. They’re going to make mistakes. One of them is going to be Osama Bin Laden’s brother. Another one of them is going to be a cocaine dealer. But most of them are going to want to work at her apartment complex or its variant.

And so, they’re no longer running across the desert. They’re no longer dying in the desert. They’re no longer scaring Ray Bouton’s daughter. They are coming through in some kind of an organized manner, and they’re having to show something. So the really bad guys are the ones that are still out in the desert, and they’re no longer in the shadow of this hoard of people that’s coming up.

That’s as best I can come up with so far. So I look for refinement because that’s pretty sloppy. Yeah?

Audience Member

Hello. Isn’t this kind of a moot point? Because when we talk about rebuilding New Orleans, isn’t it going to be basically Mexican and Haitian immigrants that are going to do the rebuilding, and there’s going to be an awful lot of work there to rebuild New Orleans?

Peter Laufer

Well, one could argue that. Again, who knows we’re going to find out what this is. Would we all like it to be United States citizens that are card-carrying union guys? But in reality is it going to be that? If it is going to be that, again, should they be coming up, running across the desert, or should they be coming through Tijuana on a Greyhound bus waving something that approximates legal identification?

In the sweater. I forgot your name. We met earlier.

Audience Member

Who would have the economic incentive to regularize these workers? Right now they have so few rights, they contribute to the economy, and they don’t have unions.

Peter Laufer

Well, one can certainly make the argument that it serves employers incredibly well to have these people working black, and so they’re concerned about their legitimacy.

It’s in the rest of our interest, and since there is a general sense that what’s going on now is creating a chaos that we don’t want, perhaps we can get past that and end up paying a little bit more.

Also if there’s free movement of the labor here there will be competition in these workers. And in theory it’s not going to make the price of rebuilding New Orleans with the Haitians and Mexicans, or whomever it is that does it, so extraordinary.

I’ve been shut down. The network newscast is coming along. We are privileged to have Ben here to talk in the kind of specifics perhaps that my broad view doesn’t contain. So I think as we discussed earlier there’s going to be some compatibility to what we are saying, and I so very much appreciate the opportunity to yammer at you guys. Thank you.

Audience Members

(applause)

David Theroux

Now that we have you partly warmed up—by the way, another aspect of this to keep in mind is that immigration of course means the movement of people. And as Peter was saying, we’re talking about borders and boundaries. And of course people move within the United States a great deal. There’s been a considerable outflow of people job-wise and business-wise from California within recent years to Nevada and other states.

Should there be immigration restrictions? Some people actually have proposed that. Should there be immigration restrictions between people who live in Oakland and work in San Francisco? I’m not proposing that. But keep that in mind as what are the kind of general principles people should be considering as far as what is allowed and what is not.

Our next speaker is Benjamin Powell who’s Research Fellow and Director of the Center on Entrepreneurial Innovation here at the Independent Institute. He’s also Assistant Professor of Economics at San Jose State University. Ben received his Ph.D. in Economics from George Mason University, and he’s been a Fellow at the Mercatus Center, and a Fellow also at the American Institute for Economic Research in Massachusetts.

He’s the author of the study Housing Supply and Affordability. I should mention he’s currently working on a book project for us on housing as well as other areas that touch on some of these topics. His articles have appeared in many volumes and many journals. Many of you may have seen his articles in various newspapers ranging from Investors Business Daily and the Washington Post to the Orange County Register and San Francisco Business Journal. So I’m delighted to introduce Ben Powell.

Audience Members

(applause)

Benjamin Powell
Director, Center on Entrepreneurial Innovation, The Independent Institute

Thank you, David. I’m very pleased to be here to talk to you about this controversial issue tonight. I’m also pleased to share the podium with Peter, who’s written the excellent book as you now know, since he shared just enough of it with you to whet your appetite.

Peter mentioned that radio talk show hosts can “talk, talk, talk.” Well, as David mentioned, I’m a university professor. It didn’t get any easier. And in fact worse than that I’m an economist at the university. So I’ll be doing well if I don’t open that thing up and start giving you graphs to look at. Oh, I should mention too since David mentioned the housing studies, my co-author on that’s Ed Stringham. He’s in the audience tonight to keep me honest.

Now, Peter and I, I think, come at this from very different angles of this issue. I come as an economist, concerned in part with economic efficiency. He comes as a journalist with years of first-hand experience in witnessing these events. Also I’m not positive, but after reading your book I’m going to guess politically you come from a more liberal background and I come from a more classically liberal, libertarian background.

Peter Laufer

We have to have a few more beers to find out.

Benjamin Powell

As my students are in the audience, know I won’t object to that.

Benjamin Powell

But despite the different perspectives that we come with, we both come to basically the same conclusion. That an open immigration policy where we allow all workers in who don’t have demonstrated criminal records or are a known terrorist threat would be beneficial compared to the status quo.

And I think it’s not just liberals and libertarians that can agree on this. In fact six months ago I debated in front of a predominantly conservative audience and tried to convince them for most of the objections that they have they too should favor a more open immigration policy.

And actually there was a good article that motivated how I organize my thoughts tonight. In the San Francisco Chronicle reporting from a bunch of interviews done with the Friends of the Border Patrol that’s down in the Southern California border right now, civilians monitoring things. And they interviewed them and asked, “why are you dong this?” And there were a host of different quotes that came from them. And I looked, I said, well, I think a lot of these objections are objections to the status quo. They’re not objections that say we need to close the border. They’re objections that can be satisfied with policies like Peter has advocated while he’s up here.

Now I say most, not all. I think there’s some that aren’t reconcilable. There was one example. A person named Beverly Crawford who was living in the Pacific Northwest and returned to L.A. after a number of years. And she thought, “I thought this is not right. Everything was written in Spanish first and American language second. I’m hoping we can get back to the way we were 20 years ago when this was an American state.”

Now, I’m not sure what language or ethnicity requirements there are to be an American state, but I don’t know of any. Despite that, this isn’t going to be reconciled with open borders if she doesn’t want particular types of people around. However, I think that view is a minority view for the most part. Most of the objections are more concrete and have to do with economic reasons, concerns for property right, concerns for security.

Before I turn to each of these, a little bit from the perspective of Mexico or Mexican workers, or at least as much as an Irishman can try to be in their perspective. Why do they come here? They obviously come here because the job opportunities and the wages they can get here are better than what they can get at Mexico--even though they currently face a Border Patrol that’s pushing them through the deserts, risking their lives with dangerous “coyotes,” the name of the people who are transporting them across the border, and having to stay for a long time in the U.S. because they can’t freely cross back to visit their family. With all these hardships factored in, and admittedly not getting so many benefits along with their job, they’re still willing to come for these wages because it’s better than their next best alternative: staying in Mexico.

When President Fox from Mexico--he wrote a letter in the New York Times, and actually I’m quoting from Peter’s book here--he said, “the violent deaths of my countrymen on the border are simply intolerable.” And I agree with him.

But what he went on to say was, how can we narrow the gap on income on both sides of the border? How can we in the long term equal the levels of development between our countries so that we can become real friends, real partners, real neighbors? How can we build up the opportunities in Mexico so our 12-year-old and 14-year-old children don’t leave home and don’t have to move to the United States for opportunities?

Well, that problem is not fundamentally one of American immigration policy. That’s one of bad policies in Mexico. Mexico taxes too much, spends too much, regulates too much, inflates too much, and is too corrupt. All of these things have to end to have better opportunities in Mexico.

Now, why do I bring this up? Well, Douglas, Arizona, Mayor Ray Borane was quoted as saying—and he’s writing to a New York audience, “It is what your demand for cheap and unregulated labor supply services has driven these Mexicans to.” And by that he means risking their lives in the desert. Well, no, he’s got it backwards: Mexico’s bad policies and poor opportunities have driven them to look for something better and they’re coming here to get it.

So, why do I bring this up? In part, I think the open-border policy would contribute to making Mexico’s policies better in the long run, hopefully. There’s a well-known model of competition between governments, the Tiebout model in economics, where basically jurisdictions are concerned with their citizens leaving when they’re free to migrate to other areas because they lose their tax base, they lose workers, they lose potential defenders of their country. Well, look at what happened in eastern Europe: you had a whole bunch of bad policies there. They literally built walls to keep their people in. Mexico hasn’t built a wall, to keep people in, with bad policy; we built it for them. Let’s take it down so as they move there’s more pressure on the Mexican government to have to reform in order for it to keep its people there.

Then as they do reform—and you alluded to this with the migration patterns in Europe—people tend to move back as they do better. Look at Ireland, a country that for years had net out-mitration. They had a fiscal crisis, they had to reform in the 1990s and 1980s. When they did, all of the sudden since the mid-1990s they’ve had net immigrant inflows into their country, something unheard of in Ireland. It could happen in Mexico, too. So apart from that with Mexico, let’s turn to the perspective of the United States a little bit.

One of the more common objectives—and I guess we’ve already covered it a little bit—is security. We’re worried about terrorists coming in. That’s what one of the people with Friends of the Border Patrol said. Ken Woytek, from Riverside: "Iraqis and Saudis are getting in. They come to Mexico, learn Spanish and come up here in terrifying numbers. I want to try to prevent that in my small way."

Well, this is a problem with the status quo of the border, not with open borders. As long as we open—and I don’t mean willy-nilly so that we can jump across the Rio Grande wherever you see fit--but at all legal checkpoints and border stations and make a credible commitment that anybody can come in as long as they’re not a known terrorist or criminal. We get rid of this mass of people coming across the border for legitimate reasons. And now it’s only terrorists and criminals running. Instead of looking for a needle in a haystack of legitimate workers when they’re looking.... They’re only looking for the bad guys . So I think this problem isn’t one open borders, it’s one with the current policy.

Next that comes are economic objections. One of the retired Las Vegas policeman on this particular weekend, he was worried that illegal immigrants are taking jobs from American workers and they’re swamping our schools and hospitals. Now everybody knows, especially anybody who lives in California, when immigrants come they do tend to use social services. Some are incarcerated, many go school or send their children to school, use health services, some might even go on welfare. Yes, they do use services. But we have to look at what they contribute on net.

Now, in immigration we know its hotly debated—and lots of different people produce policy studies—some are going to make all sorts of different claims. Now, there’s one that’s relatively more objective than some of the others and it came from the Nation Academy of Sciences in 1997—this is one that’s fairly widely cited. They basically found that immigrants have no net social costs over the course of their lifetime. When they first come they might be a little more like that than later, or it might depend more on individual cases, but on net they find they don’t suck up the social services. Some have made the claim recently that the new immigrants that come—now it’s this next generation that’s coming, more recent ones—that are more likely to be welfare dependent. Well, an article in our own Independent Review, that David mentioned, by Vedder and Gallaway, and Moore—they look at this from 1970 to present, and they say that once you control for some other factors and changes in the system, they’re no more likely to go on welfare than immigrants back in 1970 were.

If they’re not a drain on social services, really, what about our economy in general? When I debated this in front of a more conservative audience, actually it was with Peter Brimelow, and it was in Miami, and he made the claim that immigrants destroy local economies and I kind of snickered because I had to ask, did you pull the shade of the plane when you were flying into town? You look out the window, and I’ve never seen a skyline with more cranes on it. There’re condos going up all over the place there, but what about on net when we look at the U.S. economy overall? So I’ll take another economist who takes a bit different view from us, George Borjas, he’s more of a critic of immigration, and he’s the one that Brimelow loves to cite as well, but his most recent estimates—and this comes from David R. Henderson’s new Encylcopedia of Economics—estimates that about $22 billion in net gain to current United States people, not to the immigrants themselves coming here—a $22 billion net gain from current levels of immigration. Now, that gain can be bigger if more people are coming in in the future.

Economists used what is called a Harberger triangle to estimate these things. This is what economists were using to look at government-granted monopolies to see how much inefficiency they caused back in the 1960s. It took Gordon Tulluck to say, listen these things are politically determined and you have to look at enforcement costs, political lobbying costs, and everything else that goes into imposing them, to look at the real total costs to the economy. In the case of immigration, some costs that jump out right away as being obvious for a restrictive border— Already in 2002, border patrol had a $1.6 billion budget, toss that in. The INS costs $6.2 billion. If we were really going to seal the border, which already I’m skeptical of, huge resources would have to be devoted. But that’s just the tip of the iceberg. You have to count the political lobbying costs of fighting that will occur and employer compliance costs. If anybody in here has tried hire someone from another country, you know what a burden it is paperwork-wise. And then avoidance costs that go in. When we look at international trade restrictions, there was an article that came out in the Journal of Political Economy recently that said when we factor in the political losses, we end up with a loss ten times the size of the triangle estimate. Bringing this back to immigration, if that ratio holds, then we’re talking about two-hundred and twenty billion, not twenty-two billion. Now we’re talking much more significant for the economy.

Well, sure, economists might talk about overall gains. What about American workers? What about them losing jobs? Look at the post-war years in the United States. About the last 60 years, we’ve had a huge increase in the labor force and a huge increase in the total quantity of jobs. Now there’s always been a little gap between them called unemployment. But they’ve tracked each other very well. They’ve both increased over the last 60 years. Basically, we want lots of stuff here. Give us more people to work, we’ll have more things that we’ll want them to make.

Well, what about wages? Wouldn’t an economist say that if you have more workers it will push down wages? This is quoting from the Journal of Economic Perspectives, which is a mainstream economics journal that summarizes all the existing literature that’s out there on a particular topic and comes to some conclusion. What they say at the end of this one is, “Despite the popular belief that immigrants have a large adverse impact on wages and employment opportunities on the native-born population, the literature on this question does not provide much support for this conclusion.” This is not economists denying the law of supply and demand. It’s going to depend on the relative price responsiveness to employers and employees. But also as we bring more workers in we expand our pool of labor, we can specialize more and get more gains from what economists call comparative advantage.

But there are other issues too: They don’t come in and replace American workers. There’re not just substitutes, they can be complements to American workers. They can come in and make us better on jobs that we’re not doing. This is particularly relevant in California right now. A report just came out for this fall’s crop estimated in the Central Valley that between 70,000 and 80,000 workers short of what we need to harvest the crop. That means about $1 billion in projected losses. This isn’t trivial and it isn’t crazy speculation, because something similar happened in Arizona last year. In Arizona last year the winter lettuce crop—they only enough labor to harvest 30 percent of it. They only harvested about 30 percent of it and they lost about $1 billion there too. Now of course, your response might be, sure there might be more American workers if the work was easy and the pay was better, but the fact of the matter is, the farming in parts of the United States often doesn’t justify paying the workers more and giving them more benefits to attract them there. It would mean the loss of farming if we don’t have the labor willing to work under those conditions, and that’s what was happening here when they lost the crops. It simply was even going to be less profitable to go ahead and hire people for higher wages to get the work done. So we need them here for the crops. A good non-economic film that’s actually Hollywood getting the economics right—“A Day without Mexicans.” I don’t know if you’ve ever seen it. It’s mainstream enough that you can get it at Blockbuster and it’s what California would look like if all the Mexicans left tomorrow; it’s not a pretty picture.

Now the last objection I want to cover—and it was alluded to with our discussion of vigilante groups or Minutemen as properly rights. In fact one of the groups mentioned in your book, Ranch Rescue—their motto is “private property first, foremost, always.” Now, I have great sympathy with these groups. While I may disagree with their methods a little bit, this is a valid objection to what’s going on today.

I’ve talked with some of the ranchers down on the border at the last presentation like this. You gave a great story that you just read from your book, so I guess I don’t need to elaborate much. But when your property’s being trespassed on, you’re dealing with litter, your fences are being cut, your hoses are being cut possibly, you’re losing water in an area where you might need the water for your crops, these people have legitimate concerns. Their property should not be trespassed on.

However, along with these property rights, there come other property rights for other people in this country. And by enforcing the borders for these people we’re going to end up violating other people’s private-property rights. Because the people on the border point out that private-property rights include the freedom to keep others off your property, a freedom of disassociation.

However, the flip side of this is if you’re a property owner, you also have a freedom of association. You should be able to invite anybody you want on your land to live or work for you. Current policy violates both people’s rights. People are getting their property trampled on, and there’re firms that want to hire workers but who can’t bring them here—and relatives living in the United States who want to bring family members here who can’t bring them here. Property rights are being violated in both directions.

The answer to how do we solve this, of course, is with a more open border policy where we make a commitment to let everybody through the legal checkpoints so there’s no reason to be running across Texas ranchers’ land. And the people who already live in the United States are able to bring the people on their property that they want to bring on their property. That’s the way to go about solving the private-property problem. It’s a legitimate concern these groups have that I’m sympathetic to. But I don’t think the answer is clamping down on the border. Precisely the opposite.

To conclude here, I think we agree—or most people agree—that the current immigration system is completely flawed. I’d say it’s bad for impoverished Mexicans. It’s bad for the U.S. economy. It violates the property rights of Americans near and far from the border.

Now, in California our Assembly Speaker Fabian Nunez himself, someone born in San Diego but who grew up in Tijuana, says, “Any discussion of immigration reform must involve taking a balanced approach that includes figuring out how do you stop or slow the flow of people coming across the border.” I don’t think so. I think instead we must ask: why do we want to stop or slow that flow? Basically it’s good for Mexicans and, hopefully, in the long run for Mexico. It’s good for our economy. It’s good for our security. And it will lower these property rights violations that are taking place.

In the end, I honestly think the only humane, moral and efficient solution is one that involves the free passages of all people of all races, and all places of origin, in any quantity so long a they are free from demonstrated criminal intent or terrorist activity. Thanks.

Audience Members

(applause)

David Theroux

Thank you very much, Ben. One other thing I might point out real quick before we go back to our Q&A discussion is sort of to tie in what Peter and Ben were both saying about the idea of property rights and borders, and so forth—and to realize that the property owner is the person who determines the rules of the use of that property. A hotel has immigration policies. A school has immigration policies. A shopping center. The Coliseum. This building. We have immigration policies.

So the idea is that you want the property owner to set the immigration policies. Now if you have a society which has very large commons—government domains—which might be parks or welfare institutions or government schools or whatever they might be, then you have a tendency, especially if they’re priced at zero, to be overused. Or to be abused. And so the response to that understandably is to have the government set restrictions to regulate the use of that commons.

The problem is that the government really doesn’t know how to do that. And by doing that you end up with these unforeseen consequences—part of what Ben is referring to. So, one thing to keep in mind is that if you want to have a system of property rights and immigration policy that is equitable, what you want to do is move away from having these commons to a system of property rights where owners set the rules.

And if you could imagine a society, say during the earlier part of this country, in which there are very few government commons, there was no immigration issue. Because the only people who would travel were people who were hired, bought a house, had an apartment, or whatever. In other words they were contracts-based. There were agreements involved with the people and the association.

So, anyway, I don’t want to go off too much on that tangent. But I thought I’d throw that out.

So we’re open for Q&A to continue that. Carl has the mic. Please keep your remarks to a short question and just say who you’d like the question to go to.

Audience Member

I want to make two statements before I ask my question to just kind clear things up for me. Ben had mentioned a couple of things. He had said we want things in this country. We want more people to come in to get more things made. I was under the assumption manufacturing is down, which is hurting the economy. I could be wrong.

He also mentioned that as private-property owners we have the right to invite people on our properties. If that’s the case, we invite whoever it is we want on our properties. Doesn’t that also justify a lateral argument that we can do what we want on our private properties such as brothels, things along that lines? Would that be good for the whole or good for us?

And the only question that I really wanted to point out was, and it’s more that I’m just not aware of, it’s the three-year immigration policy Bush is talking about. And I believe the author had mentioned it. A bizarre three-year immigration policy, visa policy.

My wife came in as a computer analyst with a company where she had to work two or three years under contract. She now has permanent residence, going for citizenship. On the contrary, her friend, who just was asked to leave the country, came under similar contract to work for two or three years but wasn’t given citizenship and then had to leave. How is Bush’s policy different than my friend having to leave the country? Contracts are made not to be equal, 50/50, but so that both parties can win.

Peter Laufer

Ben, do you want to respond first?

Benjamin Powell

Sure. I can do that relatively quickly. The first point about the manufacturing jobs. Sure, we have fewer manufacturing jobs than we did before. But this is just the changing structure of our job base, not total number of jobs. If we look now in our nation’s history, in the last five years, we’ve had more total jobs than probably any time in our history before that. The number of jobs and the economy has expanded tremendously the last 50 years.

And the second point, I’ll take debate. I love questions like that, that push you to your logical conclusion. Yeah, this is the system that David was just describing. If it’s a private property owner, as long as you’re not physically harming others on other property nearby, you should be able to do what you want. And by physically, I mean violently harming them. You should be able to do what you want on your own property.

David Theroux

President, Independent Institute

There is a gentleman here.

Audience Member

You had 20 minutes. Couldn’t remember everything you said. Couple of things. You talked about that we need the workers on the farms, that the produce isn’t being picked. I think that they have options there. He could either pay more, or he could mechanize, or go out of business and those jobs could go to Mexico where that is the source of the problem. We are only dealing with the symptoms of the problem.

I’m tired of having to pay taxes to support all the medical costs when these illegals are sending billions of dollars to Mexico—over, what, $10 billion or more where now those remittances are the single largest source of income to that country. So that delays the day when the Mexican government takes care of the corruption and gets jobs for those people. So it’s not rocket.

Audience Members

(applause)

Benjamin Powell

The point about the jobs, and the farmers, and the sending back of money—the point of the first question, this is what I talked about the 1997 site. On net, your taxes aren’t paying for the immigrants. They’re paying their own way over the course of their lifetime. But you can look at a bunch of different conflicting studies on this. I was just talking about one of the most widely cited ones.

The point about the money going back to Mexico, a lot of people bring this up. It’s worth addressing. This is completely irrelevant for our economy that they send the money back there. This is part of international trade and mixing things up a bit.

When we send the money there, what happens? Does it just go into a black hole? No. Mexicans use some of it to buy things in Mexico. But eventually it’s going to have an effect on exchange rates if they never convert them and send it back to the United States. And it’s going to equalize the production. It’s not going to have a negative effect for our economy.

David Theroux

This gentleman right here.

Audience Member

I will quickly give the background. I am an immigrant so I know the issues involved when I came to this country. I came to this country with $60 alone. And with $60 I got bachelor’s and master’s degrees and become the California State Community College President of all the community colleges. So I have created my boundary. I have created my own lifestyle I want to do.

So what I am going to say, I disagree with you, both of you. I feel very strongly. Let’s take care of the issues and the problems we have in America. We have unemployment, we have poor people. The money is going all over the world from this country. We’ve got to protect that. And I think what you say, the $10 billion —and I’m not talking only Mexican border.

Peter Laufer

Do you have a question?

Audience Member

Yeah, I am talking Indians, Europeans, and Mexicans, all these people. We should get the people we want to this country and not illegal. Illegal means something is wrong.

Audience Members

(applause)

David Theroux

Do you want to comment on that?

Peter Laufer

Yeah, David just asked if I wanted to comment. And I think my comment is that it’s great to hear the mix of opinion and the passion that this question brings up. And it only reinforces my feelings that we have to do something else. And obviously I’m a proponent of my choice for something to try, which has been so nicely reinforced with the facts and figures that came from Ben.

So I come out of this again graciously appreciating, I hope graciously appreciating, what you say. But so firmly believing that we’re going down the wrong path.

David Theroux

The lady right here.

Audience Member

Hi. Ben, one of your last statements was that the Latins, just as a generic group, that they’re good for our economy and good for our security. But since 26 percent of California’s prison population are Mexicans or other Latins, And there’s an undisputed, by the state of California, $10.5 million drain on its economy. And my husband and I are just sick of seeing those in line at the grocery store who are buying food on food stamps, including often we see strapping young men who are trying to buy liquor with food stamps. How can you say that this is not a drain on the economy and that it’s good for our security?

Benjamin Powell

Listen, to say a drain on the economy, we can always cite specific examples of things where they are negative. What I’m saying is you must balance the positives against those. And it comes out in favor of the positives, not the negatives.

A quick side point though on the prison population thing. An intermediate thing that I’m not abject to, because I say known criminals shouldn’t be allowed in the United States. If they’re an immigrant and they come in as a criminal, maybe we should brand them as criminals, send them out and never let them back in again. I’m not necessarily opposed to that as something intermediate on it.

David Theroux

Gentleman right there.

Audience Member—

It seems to me that there’s a lot of parallels with the trade deficit. Can we work much more on reciprocity? As Mexico and other countries progress in the world, there are more opportunities for Americans. There are a lot that we Americans could do in Mexico to help Mexico grow. Just to use Mexico as an example. And that is true very—a lot of places in the world. Fraud and corruption—those are rampant in countries where there are not other sources of capital. People can’t work their way up. And so they find corrupt ways to do things. Have you looked at that aspect of it, is my question.

David Theroux

Before I pass it on, one thing might be helpful for people: One of our books, in fact we had a forum on this earlier this summer, is called Liberty for Latin America. And it’s a book on the problems of countries in Latin America based on what both Peter and Ben, and we’ve been hearing about, as far as the corruption, the high taxes, the regulations, the cronyism that government officials are involved in, and so on, and so forth. If you’re interested in what should be done, this is the book to read.

So anyway, let me just pass the question on to whomever would like to—

Benjamin Powell

If you want to elaborate, go ahead.

Peter Laufer

Pardon me? No. If you wish. But I think it just was a statement.

Benjamin Powell

Yeah, this is what I made reference to about Mexico’s problems being Mexico’s institutions. Really what we fundamentally need and what Alvaro abvocates in his book is an end to the arbitrary state power that’s in all these places—and an emphasis on markets and property rights there to get them going. And this is in part why if we didn’t allow the Mexicans in here, the farm jobs wouldn’t just go to Mexico for them to then export to us, because the institutional environment’s just not good for the investment there.

David Theroux

Right behind, the young man.

Audience Member

I just would like you to comment on this. But it seems like the two sides are talking past each other a little bit. I don’t really think that the objections so far have been on the actual policy of letting people in. The objections have all been, well, they’re going to take advantage of the social welfare benefits, the laws that we already have in place in this country. That really seems like that’s the main problem—it isn’t the Border Patrol. The problem is once they get in, what other laws in place?

Peter Laufer

I wish that that were as you characterize it. And unfortunately I hear otherwise. If we look at what has happened historically in this country regarding immigration, the next guys coming in have always been on the receiving end of this kind of prejudice. Whether it’s prejudice against the current crop of immigrants because they’re Mexicans is really moot. Because if you look at what we have done in the past, it’s always been the case. Those at the bottom rung are labeled in the way, not understanding our culture, not speaking our language. Not following our laws. Overpopulating us. Taking away jobs.

And my best example case is my own cousin—my father is an immigrant. I’m prejudice, and I lay that out on the first page in favor of immigrants just from a familial standpoint. Of course, we’re all immigrants. But my father’s sister married a man from China. So my cousin grew up half-Chinese and half-Hungarian in Massachusetts in the ‘50s. So when they weren’t calling him Honky, they were calling him Chink. Of course, if he were growing up now he’d have Tiger Woods in front of him, and everybody would love him because he’d be intriguing.

But, unfortunately, I don’t think it’s as straightforward a solution as you suggest because of that history that we continue to perpetuate.

David Theroux

So, there’s time for one more question. There is a gentleman right here.

Audience Member

Actually just wanted to comment. We’ve always complained about the wave of immigrants. Ben Franklin complained about the Germans. When my ancestors were living here we complained when the Irish came. Nothing personal.

Audience Members

(laughter)

Audience Member

And every generation—we’ve always had a labor shortage. And like you said, jobs have always increased if the economy increased. So it’s more an issue of, we’re not dealing with it.

We denigrate the Mexicans when we make them illegal. Who of us used the phrase “get a Mexican to do the job”? Means you’ve got somebody who’s so desperate for work they’ll do anything. Is that fair to them? And what does it do to us?

David Theroux

Well, obviously there’s a lot more to be discussed with this. I’d like to suggest again that I do think that there is a concern that if people come to the United States or, as I said, move from San Francisco to Oakland, to take advantage of various government programs that others then are forced to pay, people are not going to be very happy about that. And so my question is, what is the solution? Is the solution people moving or the government programs?

I want to thank everyone for joining with us for a very special event we’ve had tonight on a very important topic. I want to particularly thank Peter for his book. If you want a really great book on the subject, this is the one to get. It’s a fabulous read. It will provoke you. It’ll stimulate on and I think you’ll learn a great deal about it.

I want to thank Ben for his work in this area too. We have a book project, as we always have on just about everything, on immigration currently, which is being done by an economist by the name of Richard Vedder, who Ben mentioned had an article in our journal. There are copies of Wetback Nation upstairs for those if you don’t have copies. And I know that Peter would be delighted to autograph copies for you.

And please continue the discussion. We’re here and we appreciate it. Thank you for coming. (applause)

Peter Laufer

Thank you.

Benjamin Powell

Thank you.