The Trump administration’s response to the coronavirus has been pretty woeful, but it is worth appreciating the few bright spots, which primarily have to do with the economy. The Federal Reserve’s leadership has been extraordinary, offering substantial swap lines to other central banks and injecting $2 trillion into the U.S. economy, double the amount of what was done in the months after Lehman Brothers collapsed. On the fiscal side, Congress passed the $2 trillion Cares Act, which included one-time payouts for most adults and their children, plus expanded unemployment benefits and payroll protection for small businesses. As the Atlantic’s Annie Lowrey notes, these moves prevented the economy from straight-up crashing in March.
Despite these huge infusions of money into the economy, interest rates declined during this same period. This highlights a key source of American power: the primacy of the dollar and the ability of the federal government to effortlessly issue new debt. Sebastian Mallaby recently wrote in Foreign Affairs: “Since the start of the pandemic, the United States has unleashed the world’s biggest monetary stimulus and the world’s biggest budgetary stimulus. Miraculously, it has been able to do this at virtually no cost.” If a key measure of state power is the capacity to spend in an unconstrained manner, then the United States remains a unique superpower.
The dollar is only one of several structural advantages most Americans take for granted because it has been supreme for as long as anyone can remember. The United States possesses significant advantages in technology and culture. Silicon Valley, Hollywood and the Ivy League are enormous attracters of global talent. It is not just about attracting the best of the best, however. As I noted in Foreign Affairs last year, “An immigrant culture has constantly replenished this country’s demographic strength, helping the United States avoid the aging problems that plague parts of Europe and the Pacific Rim.”
U.S. advantages in technology, film and higher education are powerful, but policy can undercut them, like someone pulling blocks out of a Jenga tower. And that appears to be what the Trump administration was doing on immigration last week. According to Wired’s Aarian Marshall:
President Trump on Monday signed an executive order temporarily suspending many nonimmigrant visas, including temporary H-1B visas popular among tech companies. Industry executives say the move will push highly skilled tech workers and prospective innovators to other countries.The executive order also suspends for the rest of the year some J visas, including those for camp counselors and au pairs; H-2B visas for seasonal nonagricultural workers; and L-1 visas, which companies use to transfer existing employees to offices in the US. The order will not affect workers who are already in the country.The administration says that, while the US continues to suffer from the economic fallout of the Covid-19 pandemic, nonimmigrant visa programs “pose an unusual threat to the employment of American workers.” The administration said the move will give US workers access to an additional 525,000 jobs, including the 170,000 vacated by an April ban on green-card holders coming to the US.
As Marshall observes, the Trump administration’s claims of unusual threat are bogus, particularly for H-1B visas. According to a recent National Foundation for American Policy paper, “H-1B visa holders do not adversely affect U.S. workers, according to new research. On the contrary, the evidence points to the presence of H-1B visa holders being associated with lower unemployment rates and faster earnings growth among college graduates, including recent college graduates.”
Edward Alden makes a similar point in Foreign Policy, pointing to the global sources for U.S. talent in artificial intelligence that the hard-working staff here at Spoiler Alerts cited earlier this month. According to Alden, “Rather than strengthening the U.S. economy and enhancing security, these restrictions would be a serious blow to the United States’ lead in cutting-edge technologies. … The ability to recruit and retain many of the top scientific minds from China and many other countries provides an enormous head start.”
Why is the Trump administration implementing own-goals for the U.S. economy? FiveThirtyEight’s Perry Bacon Jr. is probably correct when he noted months ago that any Trump move to restrict immigration is about the president’s preference for fewer immigrants than anything else.
The irony, of course, is that President Trump does not need to implement any restrictionist policies to reduce immigration into the United States. His inept handling of the novel coronavirus has done that all on its own. As U.S. cases skyrocket again, American universities are anticipating significant drop-offs in international students. Little wonder that the European Union plans to block most travelers from the United States. Trump’s desire to restrict immigration into the United States has succeeded because he has turned the United States into, as he might put it, a s---hole country.
One can hope that Trump’s executive order leads to a temporary and impermanent lull in attracting global talent. One must fear the opposite, however, especially after reading the Financial Times’s Andrew Edgecliffe-Johnson. Because there is one big winner from the current administration’s cretinous policies: our neighbor to the North. He quotes Cisco Systems chief executive Chuck Robbins as saying, “This may be a Canadian Jobs Creation Act. You can go to Toronto and hire people there and work quite effectively.”
It will be a bitter irony that the president who insisted his administration was grounded on the idea of “America First” wound up, through prejudice and sheer ineptitude, implementing policies that made Canada great again. In the process, however, he has undercut a key pillar of American greatness.