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The Citigroup bailout
Lots of opinions. Ugh. Arnold Kling says ugh too, with this good line: "...the employment benefit of infrastructure projects is more likely to go to the illegal immigrants who were laid off from housing construction and who otherwise would be headed back home."
Posted by Tyler Cowen on November 24, 2008 at 07:37 AM in Current Affairs | Permalink
Comments
My mother became a victim of mortgage fraud, CitiBank's shoddy underwriting, identity theft, etc. One of the sick parts of this complex mess was that Citi refused to acknowledge the fraud and act because the suspect was making the monthly payments. CitiBank should be getting ready to take a loss of about $740,000 now.
Posted by: MS at Nov 24, 2008 8:44:48 AM
You call AK's line a good one? Are you assuming that Mexico's economy is not integrated with US's economy? If all the infrastructure projects were in California, do you think Florida's economy would not benefit? As long as the economies are integrated it doesn't matter who works: it only matters who is willing to work for the money the government pays.
Posted by: E. Barandiaran at Nov 24, 2008 9:02:56 AM
About the illegals...
In the northern states highway and bridge jobs will to to unionized skilled tradesmen.
In the south many of the jobs will go to illegals.
The last I looked, Texas led the country in crane accidents, the price of putting amatuers at the controls of complex, expensive machines.
Posted by: save_the_rustbelt at Nov 24, 2008 9:11:33 AM
Kling's line before was a much better word picture:
When I see Obama's proposals for a big investment in infrastructure, I get this picture in my head of former mortgage brokers and bond salesmen on highway construction projects wearing hard hats and driving bulldozers.
I would add the big bankers and some current and former federal folks: picture Paulson, Pandit, Barney Frank, Bernanke, Franklin Raines, etc., standing around leaning on their shovels and complaining about the job, while illegal immigrants do all the work.
the price of putting amatuers at the controls of complex, expensive machines.
Kind of like what has happened in DC and on Wall Street....
Posted by: at Nov 24, 2008 9:49:49 AM
That comment about illegals in the north versus south is simply not true. There are tons of illegal workers in New England for example. Give me a break.
Posted by: rrgg at Nov 24, 2008 10:34:39 AM
rrgg:
Likely the illegals in the north are involved in home construction, rather than heavy highway and commercial.
Very few illegals are in AFL-CIO trade unions.
Posted by: save_the_rustbelt at Nov 24, 2008 10:52:46 AM
$300B in guarantees but zero changes to management. How is it not Molotov cocktail time?
Posted by: David at Nov 24, 2008 11:28:54 AM
“…employment benefit of infrastructure projects is more likely to go to the illegal immigrants…”
What? So, all those planners, engineers and CM staffers who design the highway projects are really illegal immigrants from Mexico. Hardly! Design, construction management and materials (taken together) are FAR more expensive than labor.
You guys are so funny!
Posted by: P. Blank at Nov 24, 2008 2:23:30 PM
Don't highway construction jobs pay pretty well? Why do we need immigrants to do them? The mortgage brokers and bond salesmen are too prissy to take these jobs, so we need a financial industry bailout to protect their incomes?
Posted by: Dirk at Nov 24, 2008 2:33:51 PM
With $billions sloshing around at what seems to be the whim of a small group of federal officials, and with lots of CEO bonuses at stake, the potential for corruption is huge.
I don't see any attention being paid to this problem.
Posted by: ZBicyclist at Nov 24, 2008 2:43:20 PM
…not to mention CAD licenses, GIS software, traffic counts, equipment rental……My point is that roadway projects are much more complicated than just F(L,K)!
It really bugs me when economists get things so wrong because of over simplifications of inputs.
Posted by: P. Blank at Nov 24, 2008 2:47:15 PM
The last time I checked, 50% of the foreclosures and probably over 70% of the defaulted mortgage dollars were in just the four "sand states:" California, Arizona, Nevada, and Florida.
The Housing Bubble was in large part an outcome of the plan of Karl Rove and George W. Bush to turn Hispanics into home-owning Republicans through easy mortgage credit. Thus, Bush campaigned against down payments from June 2002 onward as part of his goal of 5.5 million more minority homeowners by 2010.
The Housing Bubble didn't do much for workers in places like Detroit and Cleveland, who, in the past, might have moved to Las Vegas for the construction jobs. They were consistently underbid by illegal immigrants.
Posted by: Steve Sailer at Nov 24, 2008 2:54:27 PM
Care to cite anything on your Texas crane accident fact, save_the_rustbelt? Make sure whatever you cite controls for the number of construction projects with cranes in a state, the total number of cranes in a state, or at least the population of the state. Since there are only ~300 crane accidents per year, I doubt such statistics exist beyond "one of the biggest, warmest, most populous states in the nation had the most crane accidents over a two year period."
But good try at spinning that into a pro-union, pro-rustbelt talking point, none-the-less.
Posted by: Save_the_Unions at Nov 24, 2008 3:14:45 PM
Government work projects didn't work in the 30's and they will not work now especially since they are not remotely close to solving the root cause of the current economic problem. Use the money to convert individual faulty mortgages to 30 year
standard mortgages on a shared appreciation basis if the principal cannot afford the monthly payment. Clean up the specific problem.
Posted by: Mike Pugaczewski at Nov 24, 2008 3:19:53 PM
A major goal of the Obama Administration is to keep millions of illegal immigrants from going home, thus depriving the Democratic Party of large numbers of votes in coming decades from them and their American-born (and thus birthright citizen) children. Spending hundreds of billions of the taxpayers' dollars to keep illegal immigrant construction workers previously employed putting up unneeded McMansions in exurban Las Vegas from going back home is a small price to pay for future Democratic dominance.
Posted by: Steve Sailer at Nov 24, 2008 3:32:45 PM
Housing starts peaked in 2005. Under optimistic assumptions using public works as stimulous would actually start spending in 2010.
Does Arnold have any idea what all the displaced alien workers would be doing over that five year gap?
Posted by: spencer at Nov 24, 2008 4:29:58 PM
That is an ugly line on illegal immigrants, and a classic case of picking on vulnerable
groups to attack a policy. I just lost a lot of respect for Mr. Kling.
Posted by: krishna at Nov 24, 2008 5:30:33 PM
P. Blank: "What? So, all those planners, engineers and CM staffers who design the highway projects are really illegal immigrants from Mexico."
Nobody said that. Kling said the words "more likely".
Saying "more likely" isn't the same as saying "100% of jobs" going to illegal immigrants.
Also, if you think that your point would satisfy the majority of american citizens, then you must believe in the false dichotomy about 100% highly skilled/educated american citizens vs 100% unskilled illegal immigrants (the former part of the dichotomy is far less true than the latter).
Posted by: scottynx at Nov 24, 2008 5:38:38 PM
Krishna, there are ethnic slurs in the comment. It is not ugly. You should make a good-faith assumption that Kling believes the comment is true, as opposed to assuming it is something made up to attack Obama's plan.
Maybe you should tackle that small detail of whether or not Kling's comment is true or not.
Posted by: scottynx at Nov 24, 2008 5:47:27 PM
"Krishna, there are ethnic slurs in the comment"
my comment should read "there are no ethnic slurs in the comment"
Posted by: scottynx at Nov 24, 2008 5:48:15 PM
[i]I would add the big bankers and some current and former federal folks: picture Paulson, Pandit, Barney Frank, Bernanke, Franklin Raines, etc., standing around leaning on their shovels and complaining about the job, while illegal immigrants do all the work.[/i]
Wearing, of course, an orange suit.
Posted by: Julian at Nov 24, 2008 6:56:35 PM
"...the employment benefit of infrastructure projects is more likely to go to the illegal immigrants who were laid off from housing construction and who otherwise would be headed back home."
Fortunately, none of the employment benefit of private sector construction ever goes to illegal immigrants.
Posted by: Consumatopia at Nov 24, 2008 6:59:28 PM
The last I looked, Texas led the country in crane accidents ...
A number of people in NYC did in fact die this year (because of the bribery scandal where crane operators paid off the inspectors and licensing people) due to crane accidents.
In Stamford, CT the building across the street from a new high rise had to put up protective walkways because the highly skilled workers kept dropping stuff off their building, endangering drivers and pedestrians.
Good skill levels shown there!
Posted by: at Nov 24, 2008 7:21:41 PM
Tyler and Arnold are starting to figure out the manifold connections between the conventional wisdom among elites endorsing illegal immigration and the mortgage meltdown.
Posted by: Steve Sailer at Nov 24, 2008 8:25:15 PM
Can someone please direct me to the statements of Bernanke and Paulson where they talk about why they do what they are doing? I hear a lot of people talking about how bad these bailouts are, but I don't see any viable alternatives. Where is the evidence that these bailouts are a bad thing? And I guarantee that if you want to build a road with your bachelor's degree, you could get hired. I don't think aliens are going to leave just because there is a shortage of jobs now. Living in the USA is still better than walking back to Mexico to sleep on the streets there. We would be lucky if illegal immigrants drive the demand for housing UP. Its only a matter of time before they are legalized and save us from a depression.
Posted by: Brainwarped at Nov 25, 2008 1:56:53 AM
