Milton Friedman On Charlie Rose (Part Three)

The late Milton Friedman, on Charlie Rose December 26, 2005 continued.

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[joaquinveyron]

Where is part IV???

[Mkundera]

Yeah, where is part IV and VI??

[stealthswimmer]

@scottvska

They are upwardly mobile and the data shows this. Jason Riley gave a talk about this on reason . tv

I suggest checking it out. After the first generation, the kids start moving up, including in education, so you're just factually incorrect.

[stealthswimmer]

@scottvska

So what if they produce very little? A NET gain is a net gain.

And who cares about per capita GDP? It's not like per capita GDP is what everyone actually makes. It's a nice measure but you have to keep it in context. If people coming in produce little and bring down the average, that does not necessarily mean that anyone else's income is lowered - and it turns out the people who have incomes lowered are people with college graduate degrees and high school dropouts.

[scottvska]

The median household income of Mexican-Americans is lower than the median income of black households. There are more "Hispanics" (a nebulous term which includes white Cubans and mestizos) living in poverty than any other group, except American indians. Mexicans have low savings rates, poor or little access to credit (because they don't save), and their academic performance is dismal. They are not an upwardly mobile ethnic group like Cuban and Vietnamese-Americans, both of whom came here poor.

[scottvska]

The first two sentences make no sense. If there are 12-20 million illegal immigrants from Mexico living here, and their net contribution to GDP is $22 billion, then the average Mexican worker produces very little. That reduces per capita GDP, a barometer of a country's wealth. Having low income (define low income) doesn't preclude saving. Poor immigrants from Vietnam and Cambodia emigrated here in the 70s, and they had high personal savings rates. Mexicans are just not an entrepreneurial people.

[stealthswimmer]

@scottvska

Actually, not it doesn't prove your point. First of all, you don't "need" milk or shoes, but you are better off with those choices being there if you want them, the same way that immigrants make us better off. Like I said, a net gain is a net gain. And no it's not that it doesn't occur to Mexicans to save, it's that they're low income and don't have much to save. It also turns out that by 2nd or 3rd generation, they are upwardly mobile, so your arguments have no leg to stand on

[scottvska]

@stealthswimmer If that GDP figure is accurate, it only proves my point. The average Latin American immigrant (let's be honest - most of them are from Mexico) produces very little, because he possesses little human capital. The last thing our economy needs is more consumer spending; it need more domestic investment and production to satisfy demand. Of course, it doesn't occur to Mexicans to save their earnings to finance productive capital assets. Mexicans are not a thrifty people.

[stealthswimmer]

@scottvska

not so. They contribute about 22 billion dollars to GDP on net balance - a very small percentage, but still a net gain.

As for things we can know logically - they increase the division of labor and trade specialization, and the native population can then move on to other jobs (jobs that may be capital intensive). Their spending means increased demand for other goods, some of which may need capital to be produced. And it turns out that they are upwardly mobile

[scottvska]

@stealthswimmer Mass immigration lowers of the standard of living by making the economy more labor-intensive, rather than capital-intensive. Most of Latin American immigrants don't save their earnings; instead, their wages are blown on consumption spending. They're not upwardly mobile entrepreneurs. So employers may save on the cost of production, but the country's entire standard of living declines.