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Sunday, August 6, 2017

CURTAILING IMMIGRATION MAKES CAPITALISM WORK. ECONOMIC ILLITERATES VERSUS PRESIDENT TRUMP'S IMMIGRATION REFORM PLAN.

At the beginning of the week, President Trump along with Sens. Tom Cotton, R-Arkansas, and David Perdue, R-Georgia, announced the Reforming American Immigration for Strong Employment (RAISE) Act, bill to better manage immigration into the United States.

The RAISE Act would reduce legal immigration by half and would establish a merit-based system based on education, English-language ability, high-paying job offers, and age.

Currently, over one million immigrants gain residency yearly. Most are low or unskilled workers. More than 50% of all immigrant households receive welfare benefits, which is much higher than the 30% of native born Americans who do.

At the announcement, President Trump said, “This legislation demonstrates our compassion for struggling American families who deserve an immigration system that puts their needs first and that puts America first. This legislation will not only restore our competitive edge in the 21st century, but it will restore the sacred bonds of trust between America and its citizens.”

In spite of the lying rhetoric spewed by many, the United States is not a nation of immigrants. As I showed readers of the True Dollar Journal back on Tuesday, August 5, 2014, in THE BIG LIE: AMERICANS ARE A NATION OF IMMIGRANTS, the United States never has been a nation of immigrants.

From 1770 onward immigration has been a fraction of population, never exceeding 15% in any decade and having been as low as 0.6%.
Over the history of the USA, American-born population has averaged 91.7%.
It's only since Billy Clinton that Americans have witnessed an uptick in immigration population relative to Americans, averaging 12% since 1990. 


Economic illiterates everywhere, from current House speaker Paul Ryan, journalists at the Establishment's media and slew of dopey professors with PhDs in economics claim that economic growth of the United States will be harmed by curtailing immigration. 

Yet, during some of the best years of economic life in the USA, between 1940 and 1990, immigrant population averaged 6.7% of population. 

In truth, economic growth comes from increasing buying power and not from increasing population, ever.

If what the pro-immigrant pushers say is true, how do they explain Norway?

Norwegians are 1.23 times richer per person than Americans on much slower population growth. 

Norway population growth has remained under 1% a year every year since 1960 save seven between 2008 and 2015 when the rate barely exceeded 1%. Yet GDP per Norwegian in Norway is nearly $71,000. 




USA population growth has exceeded 1% nearly every year since 1960. Yet, Americans are poorer than Norwegians.





How Capitalism Really Works


Economic illiterates like Paul Ryan, John McCain, Lindsay Graham, the Establishment's media need lessons on capitalism, desperately. Here is how capitalism works:

  1. The source of wages are return to capital. 
  2. The source of more capital is increasing return to capital. 
  3. One only can get increasing returns under labor shortages.
  4. Thus higher wages only come under conditions of labor shortage.


Where there is no capital and thus no returns to capital there can be no wages (e.g., Africa). Where is little capital per worker, wages are low (e.g., China, India). 

The anti-competitive, political cronyism class would like to turn the USA into another India or China — high population of low-skill, no-skill workers.

We have been living under the capitalism death whorl because of the last 28 years of globalization which has flooded the United States with low-skill to no-skill working age immigrants.


  1. Wages come from the return to capital.
  2. Wages set all other prices.
  3. Increasing the working-age population faster than the return to capital rate makes real wages fall (not current dollar wages).
  4. When real wages fall, real prices fall (not current dollar prices).
  5. When real prices fall, the real returns to capital fall.
  6. When the real returns to capital fall, future capital investment falls.
  7. When future capital investment falls, future returns will be lower and thus future wages will be lower.
  8. In order to maintain profits by maintaining productivity, firms must increase the working-age population.
  9. And with that, we return to Step 3.
As I showed readers of the True Dollar Journal back on Thursday, May 22, 2014, in PRICES HAVE BEEN FALLING FOR YEARS! INFLATION? MAJOR DEFLATION HAS BEEN UNDERWAY SINCE 2007. SO WHY DOES LIFE SEEM HARDER?, true prices have been falling for years in spite of a rising current dollar prices. Since current prices get tallied in current dollars, Americans are under the illusion that prices, and wage rates are prices, keep going up.

Yet, once the effects of inflation get removed, it can be seen that prices expressed in True Dollars™ have been falling. That stands to reason. Every year, producers become slightly more efficient and thus can maintain margins (buying power) on lower true prices.


Legal immigration has been getting out of control increasingly since the 1970s. It needs to be cut if ordinary Americans ever hope to increase their true earnings.