An Idea that Will Piss Everyone Off, but Just Might Work



As my life has descended into chaos this week, I haven't had much time to update this blog. I hope my dear readers don't mind. I've been meaning to write a big piece in defense of Russia in the financial crisis, but it will probably have to wait til next week. In any case, the markets are up 43% or something this week, so it seems the market has beaten me to the punch.

In any case, the American economy is the really interesting story in the world, right now, of course. As I've been harping upon in a few of my recent posts, the real culprit seems to me to be our current account deficit. We've spent more than we've earned recently. While America is still the world's third largest exporter, behind Germany and China, totaling around $1.15 trillion in 2007, our production is nowhere near enough to make up for our consumption. As I mentioned in a previous piece, the United States' current account deficit stood at $800 billion or 5.8% of GDP over the same period.

The structure of the American economy that has developed over the past few years is largely to blame for our current trade imbalances. In 2007, only 23.2% of the work force was dedicated to agriculture or manufacturing. The remainder was dedicated to management and the service sector, effectively making our consumption more efficient but not helping solve our problems of over-consumption. As I stated in my last piece, unions have been a major part of the problem, as they have driven manufacturing wages up in the country, making production in America uneconomical. Additionally, the United States has undergone a gentrification over the past 40 or so years. Today, many Americans regard blue collar jobs as beneath them and demand extra pay to occupy those positions.

Nevertheless, just south of the border there are hoards of people who are willing to work blue collar jobs for minimal pay, who can't get visas to work in America. If we were to begin employing workers from Latin America under a special visa plan, allowing employers to give them work at below the current minimum wage, we could easily provide a much needed boost to American industry, even providing businesses incentives for moving industries such as textiles and other consumer goods to move back to America. Many will see the plan as inherently racist, but at the end of the day, these people are not American citizens and it is their choice. Besides, race would not be a criteria, merely country of origin and we already employ those restrictions. Ask any Russian how hard it is to get a US visa. Relaxing requirements for these new visas would provide the American economy with much needed, cheap workers in the manufacturing sector, and at the end of the day, it would just legitimize and bring under a legal umbrella a system that already exists.