The dangers of Trump’s immigration crackdown
THE DANGERS OF TRUMP’S IMMIGRATION CRACKDOWN — This week’s POLITICO Money podcast focuses on immigration and the economy featuring Moody’s Analytics Mark Zandi and Idaho dairy farmer Pete Wiersma, who says he can’t hope to milk all his cows without more immigration.
Here’s Zandi on the impact of lower immigration in a 3.8 percent unemployment economy: “The labor market is very tight and we have a record number of open positions already and it’s just going to get worse …
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“If the president wants to build his wall between Mexico and the United States he’s going to have to hire Mexicans to do it because there are literally no American construction workers there to do anything other than build the homes that are going up …
WHAT HAPPENS WITHOUT MORE IMMIGRATION — “It’s pretty clear that if we don’t increase the number of immigrants coming into the country, the growth in the labor force is going to come to a standstill and it’s going to be very difficult if not impossible for businesses to find the workers that they need … And if they can’t find the workers then growth is going to remain weak and it could even slow.”
THE VIEW FROM IDAHO — From Wiersma: “We really need a system of legal migrant workers to help us in agriculture. It’s really the only thing that is going to matter to us. There needs to be a legal, reasonable, sensible system to allow migrant workers to come in and work.”
On the idea that many immigrants to the United States are dangerous criminals that need to be kept out: “My experience with my employees is that they are just regular people, regular family folks … They like to spend time with their kids. They want to provide well for their families. They are decent, they are honorable, we get along great and treat each other with respect.”
BONUS ZANDI on some of what’s driving anti-immigrant sentiment: “Clearly culture matters. I think it scares people. The minority population will become the majority by 2050 so I do think that makes people nervous. They are looking at people who don’t look like themselves and I think that’s the natural reaction to that. …
“I think economics do matter. It’s only been very recently, in the last year or two, that the economy has kind of found it’s way back and we are fully employed. Before then the economy was really struggling. The Great Recession was devastating. …. You had a lot of people who were struggling financially and in that kind of environment to say you want more immigrants that’s kind of tough because you are competing for jobs.”
ANOTHER ONE GONE… The Trump White House has lost another key economic adviser, as POLITICO’s Andrew Restuccia scooped here: “Everett Eissenstat, a senior White House official who represented President Donald Trump at major international meetings, including this month’s dramatic G-7 summit in Canada, is leaving the administration next month. Eissenstat, a former top aide to Sen. Orrin Hatch (R-Utah), joined the administration last year for a joint appointment on the National Economic Council and the National Security Council, where he focused on international economic affairs.
“It’s the latest high-level staff departure from the White House in recent months. His departure further diminishes the White House’s policy chops. The announcement comes just weeks after Shahira Knight, the NEC’s top domestic policy adviser, announced plans to leave the White House. Knight, who is a candidate to replace the White House legislative affairs director, Marc Short, decided to stay on temporarily in the aftermath of NEC Director Larry Kudlow’s recent heart attack.”
THE RICH FAMILY LIST— Bloomberg this morning posted its first list of the world’s 25 richest families: “These 25 families, whose wealth comes from a wide variety of sources including Mars Bars, Hermes scarves, supermarkets, hotels, and drug markers control $1.1 trillion of wealth. That’s more than the market cap of Apple Inc., all the deposits held by Citigroup Inc. or the entire GDP of Indonesia. …
“Families making our list include Walton (Walmart) at #1, Koch (Koch Industries) at #2, Wertheimer (Chanel) at #6, Quandt (BMW) at #8, Lee (Samsung) at #16 and Ferrero (Ferrero chocolate) at #25. Families that did not make the list include: Pulitzers, Vanderbilts and Woolworths. Their exclusion illustrates how common it is for even the biggest family fortunes to be squandered.”
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AUTOMAKERS WARN TRUMP — POLITICO’s Megan Cassella: “Trump says he wants to save the U.S. auto industry by slapping tariffs as high as 25 percent on foreign-made cars, but there’s a problem: Automakers don’t want his help. The White House thinks the penalties would encourage domestic investment and automotive production and support U.S. workers — and Trump is pressing his staff to speed up the move so he can claim credit for it before the midterm elections.
“But America’s carmakers, including Ford, General Motors and Fiat Chrysler, are wary as they watch what’s happening to other companies caught in Trump’s trade war, such as Harley-Davidson. … The auto industry is also raising concerns about the intricacy and global nature of how cars and trucks are made, with parts crossing borders many times to build one automobile. Domestic and foreign brands alike are concerned that penalties would disrupt sales and hurt their bottom lines.” Read more.
VIEW FROM WALL STREET — Cumberland Advisors’ David Kotok emails: “The Trump-Navarro confusion worsens daily. Harley is just the tip of iceberg as we shall start to see sequential notices and announcements. Navarro should know he has disturbed cap-ex plans and created a deferral of decision environment.
“We already see it in early discussions with clients and consultants. No intelligent business person would advance a project in the midst of the risk raising rhetoric. Prudence says wait, defer, delay. The benefits of tax bill and repatriation and deregulation are being replaced or muted with higher uncertainty premia and more cost. Navarro has already induced a slowing of growth in H2. If the Trump-Navarro drumbeat continues, they are inviting global growth slowdown and maybe even recession. American policy has become chaotic and unpredictable. A real and shameful disservice to our nation.”
THE UGLY DEBT PICTURE — Via the latest CBO outlook: “At 78 percent of gross domestic product (GDP), federal debt held by the public is now at its highest level since shortly after World War II. If current laws generally remained unchanged, CBO projects, growing budget deficits would boost that debt sharply over the next 30 years; it would approach 100 percent of GDP by the end of the next decade and 152 percent by 2048.
“That amount would be the highest in the nation’s history by far. Moreover, if lawmakers changed current law to maintain certain policies now in place—preventing a significant increase in individual income taxes in 2026, for example—the result would be even larger increases in debt. The prospect of large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges.”
PRIMARY ROUND-UP: CROWLEY LOSES IN SHOCKER — POLITICO’s James Arkin and Scott Bland: “Rep. Joe Crowley, the powerful chairman of the House Democratic Caucus seen as a potential future speaker, was unseated Tuesday night by primary challenger Alexandria Ocasio-Cortez in his New York district.
“Ocasio-Cortez had 58 percent of the Democratic primary vote to 42 percent for Crowley when the Associated Press called the race with 85 percent of precincts reporting. Ocasio-Cortez, 28, challenged Crowley on ideological and racial grounds, arguing that the 10-term congressman was not in step with his majority-minority district and was too cozy with corporate donors.” Read more.
TRUMP REACTED on Twitter: “Wow! Big Trump Hater Congressman Joe Crowley, who many expected was going to take Nancy Pelosi’s place, just LOST his primary election. In other words, he’s out! That is a big one that nobody saw happening. Perhaps he should have been nicer, and more respectful, to his President!”
Crowley’s district is part Bronx, part Queens, 50 percent Hispanic and went 78 percent for Hillary Clinton in 2016. Not being nicer to Trump is probably not the reason Crowley lost.
THIS MORNING ON POLITICO PRO FINANCIAL SERVICES — Patrick Temple-West on the Senate Banking Committee’s consideration of new government oversight on businesses that are key to the surge in socially conscious investing. To get Morning Money every day before 6 a.m., please contact Pro Services at (703) 341-4600 or [email protected]