CASEY DAILY DISPATCH - Casey Research
Weekend Edition: Doug Casey on the Welfare-Warfare System
(Interviewed by Louis James, Editor, International Speculator)
This interview was first published on May 19, 2010
Editor’s Note: In yesterday’s Weekend Edition, Casey Research founder Doug Casey explained why a free person should be able to go anywhere he or she wants.
Today, Doug explains that immigrants aren’t a problem. The U.S. government is…
Louis James: So, the basic answer to those who fear open borders is that free immigration is not the problem; the problem is the welfare-warfare system.
Doug: Right. It’s the government of the United States that is creating the problems that a lot of individual citizens resent. It’s rather inchoate anger, in most cases, but they do sense that something is wrong. Unfortunately, they don’t understand the causes, so they blame the immigrants, while they should be blaming their rulers and tossing them out of office.
L: Okay, but that’s the ideal answer. Realistically, it’s hard to imagine a sudden burst of reason in Washington causing the federal government to roll back its counterproductive welfare and warfare policies and to open the borders to the most creative, driven, and entrepreneurial people around the world.
Doug: Yes, that’s completely out of the question. They may make noises about national security in a world awash in terrorism, etc., but the truth is that every politician knows that opening the borders would allow a huge influx of relatively cheap and competent labor into the U.S. market. That would break the rice bowls of too many fat, overpaid U.S. laborers who think they have a birthright to $30, $50, or $70 per hour jobs. It’s not going to happen, not by vote of the parasitical/political class that rules the world today.
However, an equalization of wage levels around the world will happen, in time, as a result of economic trends that can’t be stopped. The Chinese fellow who works for $2 a day, doing the same thing a U.S. worker does for $20 per hour now, may soon be making $2 per hour - and so will the American. But the Chinese fellow might actually be better off than the U.S. worker at that time, because he won’t be burdened with the monstrous tax and regulatory burden of his U.S. counterpart.
L: And he won’t see anything wrong with working more than 40 hours a week.
Doug: Nor would he dream of taking sick days and three weeks of paid vacation. The Chinese guy will simply work harder than his U.S. counterpart.
L. That might change as the playing field levels. But the bottom line here is that you’re saying that people can be as closed-minded as they want, close the borders entirely, keep those different-looking people out - but you can’t keep the jobs in. Even if the U.S. adopts a law preventing companies from employing the cheapest labor available on the global market, that will just ensure that U.S. companies will be replaced by more nimble international competitors. It’s going to happen, regardless of what anyone wants, says, or votes for.
Doug: And, perversely, the more political action the U.S. takes to stop it from happening, the more certain the outcome is. It will happen.
L: I love the irony; the market will level the playing field, elevating the world’s poorest, most needy people - and it will do so where decades of wrong-headed and destructive foreign aid have failed.
Doug: Yes, and at that point, when opportunity abounds around the world, the nation-state as we know it will have no credible value to offer people, and it too will go into the dustbin of history.
And it’s already started. I happen to be speaking to you from Washington DC, and last night I went to the Tyson’s Corner shopping center…
L: I remember when that was a gas station out in the middle of nowhere…
Doug: I do too. It’s gigantic now. So, my wife and I were people watching. We didn’t do anything resembling scientific research, but we did consciously try to quantify what we were seeing. Looking at the people working in the shops, I would say that about 80% of them were discernibly foreigners. And then, we counted people riding the escalator from the first to the second floor, and we could immediately see that about 50% of the shoppers were discernibly foreigners.
L: What do you conclude from that?
Doug: That all these immigration laws do is raise the cost of entry. And what that does is discourage the sort of entrepreneurial middle-class people who’d have the easiest time contributing positively to the U.S. economy the moment they got here. Those people will go elsewhere, where there’s less state interference with opportunity, leaving more of the welfare-seekers who sneak in illegally. It’s completely perverse.
L: Any other comments on the Arizona law specifically?
Doug: Well, you know governments are always passing reams and reams of stupid laws. It’s what they do. I don’t believe stopping immigration is a legitimate function of government. If I did believe government was necessary, I’d restrict it to protecting Life, Liberty, and Property via police, courts, and military. But most people see the state as a magical cornucopia that will give them anything they want as long as they vote for it, and, more frighteningly, as a Big Brother that will make everyone play nice with them.
L: Heh. Yes, people forget that a government powerful enough to compel others to do what they want is powerful enough to compel them to do what others want. Big Brother…doesn’t anyone read anymore?
Doug: I don’t know; perhaps they just talk on their cell phones and watch reality TV. But it’s pretty alarming. These attitudes are sending what’s left of America down the wrong path fast. And as the economic situation winds down, Boobus Americanus is going to blame the immigrants. That’s bad enough, but for readers of this column, the more serious consequence will be that they will blame the emigrants as well. It’s a double-edged sword that cuts the wrong way, both ways.
L: Emigrants - those bastards. Why won’t they stay here and let us tax them more so they can pay for us to live beyond our means? Where’s their patriotism? Traitors. I bet they don’t even like baseball and apple pie!
Doug: The only good news about that is that wealthier people are generally welcome in other countries. So, for many reasons we’ve talked about before, it’s important to diversify your assets out of the U.S., or wherever your home country is, and start looking for places where you’ll be more welcome.
L: Makes me wonder why any smart person would want to immigrate to the U.S. I guess they still see it as America.
Doug: Well, most of those who do come here to study go back where they came from. It’s mostly Asians, who go to U.S. universities for higher degrees in advanced sciences and the like (while their U.S. counterparts are taking courses like gender studies and sociology), and then take that knowledge home. They can see that the U.S. still has more capital, but it’s on a curve going down, while other places are on a curve going up, which is a much smarter place to build an enterprise. And they can feel that immigrants are not welcome in this country anymore.
L: That would seem to have investment implications. Would you rather place bets in Shanghai than Wall Street?
Doug: I’m not inclined towards stocks anywhere right now. I hate to employ an overused phrase, but it’s perfectly apt to say that we’re facing a perfect storm. This and many other trends we’ve discussed - just about every trend I can see - they all point to very dire consequences for the U.S., making conventional U.S.-centered investment strategies very risky. It’s not just stormy weather but a Class 5 hurricane on the horizon, and this attitude towards immigrants is one strong sign of our times. Not good.
L: It’s gone way beyond straws in the wind; we’ve got whole hay bales blowing by. And they say: “Short Wall Street!”
Doug: That’s right. Short Wall Street. Short the dollar and the euro - paper currencies in general. Short bonds. Get more of your cash out of the U.S. before they ratchet up the currency controls. Go long on the precious metals, quality energy plays, and certain agricultural commodities, especially productive land. It’s the same thing we’ve been saying all along in these conversations, only it’s getting more urgent.
It’s just amazing. You’d think that people could see this train wreck coming and try to prevent it, or at least get out of the way. Instead, they’re asking the government to throw more coal into the boiler, as the locomotive heads towards the tracks dangling over the edge of the cliff.
L: Right then. Off I go - got some hatches to batten down.
Doug: You do that, and we’ll talk again soon.
Doug Casey is a multimillionaire speculator and the founder of Casey Research. He literally wrote the book on profiting during economic turmoil.
Weekend Edition: Doug Casey on the Welfare-Warfare System
(Interviewed by Louis James, Editor, International Speculator)
This interview was first published on May 19, 2010
Editor’s Note: In yesterday’s Weekend Edition, Casey Research founder Doug Casey explained why a free person should be able to go anywhere he or she wants.
Today, Doug explains that immigrants aren’t a problem. The U.S. government is…
Louis James: So, the basic answer to those who fear open borders is that free immigration is not the problem; the problem is the welfare-warfare system.
Doug: Right. It’s the government of the United States that is creating the problems that a lot of individual citizens resent. It’s rather inchoate anger, in most cases, but they do sense that something is wrong. Unfortunately, they don’t understand the causes, so they blame the immigrants, while they should be blaming their rulers and tossing them out of office.
L: Okay, but that’s the ideal answer. Realistically, it’s hard to imagine a sudden burst of reason in Washington causing the federal government to roll back its counterproductive welfare and warfare policies and to open the borders to the most creative, driven, and entrepreneurial people around the world.
Doug: Yes, that’s completely out of the question. They may make noises about national security in a world awash in terrorism, etc., but the truth is that every politician knows that opening the borders would allow a huge influx of relatively cheap and competent labor into the U.S. market. That would break the rice bowls of too many fat, overpaid U.S. laborers who think they have a birthright to $30, $50, or $70 per hour jobs. It’s not going to happen, not by vote of the parasitical/political class that rules the world today.
However, an equalization of wage levels around the world will happen, in time, as a result of economic trends that can’t be stopped. The Chinese fellow who works for $2 a day, doing the same thing a U.S. worker does for $20 per hour now, may soon be making $2 per hour - and so will the American. But the Chinese fellow might actually be better off than the U.S. worker at that time, because he won’t be burdened with the monstrous tax and regulatory burden of his U.S. counterpart.
L: And he won’t see anything wrong with working more than 40 hours a week.
Doug: Nor would he dream of taking sick days and three weeks of paid vacation. The Chinese guy will simply work harder than his U.S. counterpart.
L. That might change as the playing field levels. But the bottom line here is that you’re saying that people can be as closed-minded as they want, close the borders entirely, keep those different-looking people out - but you can’t keep the jobs in. Even if the U.S. adopts a law preventing companies from employing the cheapest labor available on the global market, that will just ensure that U.S. companies will be replaced by more nimble international competitors. It’s going to happen, regardless of what anyone wants, says, or votes for.
Doug: And, perversely, the more political action the U.S. takes to stop it from happening, the more certain the outcome is. It will happen.
L: I love the irony; the market will level the playing field, elevating the world’s poorest, most needy people - and it will do so where decades of wrong-headed and destructive foreign aid have failed.
Doug: Yes, and at that point, when opportunity abounds around the world, the nation-state as we know it will have no credible value to offer people, and it too will go into the dustbin of history.
And it’s already started. I happen to be speaking to you from Washington DC, and last night I went to the Tyson’s Corner shopping center…
L: I remember when that was a gas station out in the middle of nowhere…
Doug: I do too. It’s gigantic now. So, my wife and I were people watching. We didn’t do anything resembling scientific research, but we did consciously try to quantify what we were seeing. Looking at the people working in the shops, I would say that about 80% of them were discernibly foreigners. And then, we counted people riding the escalator from the first to the second floor, and we could immediately see that about 50% of the shoppers were discernibly foreigners.
L: What do you conclude from that?
Doug: That all these immigration laws do is raise the cost of entry. And what that does is discourage the sort of entrepreneurial middle-class people who’d have the easiest time contributing positively to the U.S. economy the moment they got here. Those people will go elsewhere, where there’s less state interference with opportunity, leaving more of the welfare-seekers who sneak in illegally. It’s completely perverse.
L: Any other comments on the Arizona law specifically?
Doug: Well, you know governments are always passing reams and reams of stupid laws. It’s what they do. I don’t believe stopping immigration is a legitimate function of government. If I did believe government was necessary, I’d restrict it to protecting Life, Liberty, and Property via police, courts, and military. But most people see the state as a magical cornucopia that will give them anything they want as long as they vote for it, and, more frighteningly, as a Big Brother that will make everyone play nice with them.
L: Heh. Yes, people forget that a government powerful enough to compel others to do what they want is powerful enough to compel them to do what others want. Big Brother…doesn’t anyone read anymore?
Doug: I don’t know; perhaps they just talk on their cell phones and watch reality TV. But it’s pretty alarming. These attitudes are sending what’s left of America down the wrong path fast. And as the economic situation winds down, Boobus Americanus is going to blame the immigrants. That’s bad enough, but for readers of this column, the more serious consequence will be that they will blame the emigrants as well. It’s a double-edged sword that cuts the wrong way, both ways.
L: Emigrants - those bastards. Why won’t they stay here and let us tax them more so they can pay for us to live beyond our means? Where’s their patriotism? Traitors. I bet they don’t even like baseball and apple pie!
Doug: The only good news about that is that wealthier people are generally welcome in other countries. So, for many reasons we’ve talked about before, it’s important to diversify your assets out of the U.S., or wherever your home country is, and start looking for places where you’ll be more welcome.
L: Makes me wonder why any smart person would want to immigrate to the U.S. I guess they still see it as America.
Doug: Well, most of those who do come here to study go back where they came from. It’s mostly Asians, who go to U.S. universities for higher degrees in advanced sciences and the like (while their U.S. counterparts are taking courses like gender studies and sociology), and then take that knowledge home. They can see that the U.S. still has more capital, but it’s on a curve going down, while other places are on a curve going up, which is a much smarter place to build an enterprise. And they can feel that immigrants are not welcome in this country anymore.
L: That would seem to have investment implications. Would you rather place bets in Shanghai than Wall Street?
Doug: I’m not inclined towards stocks anywhere right now. I hate to employ an overused phrase, but it’s perfectly apt to say that we’re facing a perfect storm. This and many other trends we’ve discussed - just about every trend I can see - they all point to very dire consequences for the U.S., making conventional U.S.-centered investment strategies very risky. It’s not just stormy weather but a Class 5 hurricane on the horizon, and this attitude towards immigrants is one strong sign of our times. Not good.
L: It’s gone way beyond straws in the wind; we’ve got whole hay bales blowing by. And they say: “Short Wall Street!”
Doug: That’s right. Short Wall Street. Short the dollar and the euro - paper currencies in general. Short bonds. Get more of your cash out of the U.S. before they ratchet up the currency controls. Go long on the precious metals, quality energy plays, and certain agricultural commodities, especially productive land. It’s the same thing we’ve been saying all along in these conversations, only it’s getting more urgent.
It’s just amazing. You’d think that people could see this train wreck coming and try to prevent it, or at least get out of the way. Instead, they’re asking the government to throw more coal into the boiler, as the locomotive heads towards the tracks dangling over the edge of the cliff.
L: Right then. Off I go - got some hatches to batten down.
Doug: You do that, and we’ll talk again soon.
Doug Casey is a multimillionaire speculator and the founder of Casey Research. He literally wrote the book on profiting during economic turmoil.