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Posted at 2:08 PM ET, 02/25/2011

How to run America like a business

By Ezra Klein

Matthew Yglesias has a plan:

If you’re trying to look at America from a balance-sheet perspective the problem is very clear. It’s not “entitlements” and it’s not “Social Security” and it’s not “Medicare” and it’s not “health care costs” it’s the existence of old people. Old people, generally speaking, don’t produce anything of economic value. They sit around, retired, consuming goods and services and produce nothing but the occasional turn at babysitting. The optimal economic growth policy isn’t to slash Social Security or Medicare benefits, it’s to euthanize 70 year-olds and harvest their organs for auction. With that in place, you could cut taxes and massively ramp-up investments in physical infrastructure, early childhood education, and be on easy street.

Allow me to make a less-modest proposal. The opposite of "fewer old people" is "more young people." There's a straightforward way to make more young people, of course, but it's best that the federal government doesn't involve itself in it. Slightly less straightforward, but more proper for policymakers to consider, is allowing more young immigrants to come to America. Other countries have lots of young people, and a good percentage of those young people would like to live here. They'd like to live here so much that they'll risk their lives to come here illegally and work for pitiful wages under the constant threat of deportation.

One of the puzzling elements of the immigration debate is that people find it intuitive that a high birthrate is good for the economy and unintuitive that more immigration is good for the economy. But immigrants, if anything, are less competitive with native workers than, well, native workers are. And there are so many of them, and they have all sorts of different skill levels and age profiles. If you want to think of America like a business, we're a business with an envious advantage: an enormous number of talented people want to work for us, and they're willing to pay us for the privilege. We should take advantage of it.

By Ezra Klein  | February 25, 2011; 2:08 PM ET
Categories:  Immigration  
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Comments

"But immigrants, if anything, are less competitive with native workers than, well, native workers are."

Good luck advancing this argument when there are currently zero jobs available for 10% of the "native workers."

Posted by: Patrick_M | February 25, 2011 2:13 PM | Report abuse

"consuming goods and services;" in defense of we old-types, it is that very consuming of goods and services that is producing something - a job for someone. in today's economy, it is many of us self-same old types that are not only supporting ourselves but our kids and sometimes grandkids. we help pay for that higher education, we make rent or mortgage payments, car payments, insurance payments and a host of other expenses which produce jobs that keeps the economy afloat. in fact many of us have said or thought, "geez, if we could ever get our kids off our payroll, we would be doing even better." :)

Posted by: sbvpav | February 25, 2011 2:20 PM | Report abuse

Ezra, that's easily your worst idea all year.
If you think that income inequality might be an issue worth addressing (and I can't imagine that you don't), it hardly seems equitable to kick the crap out of the wages of the lowest skilled (and poorest) Americans.

"from 1980 to 2000, immigration had reduced the average annual income of native-born high-school dropouts ("who roughly correspond to the poorest tenth of the workforce") by 7.4 percent. In a subsequent 2006 study with Harvard economist Lawrence Katz, this one focusing solely on immigration from Mexico, Borjas calculated that from 1980 to 2000, Mexican immigrants reduced annual income for native-born high-school dropouts by 8.2 percent.
http://www.slate.com/id/2266025/entry/2266506/

Posted by: beowulf_ | February 25, 2011 2:23 PM | Report abuse

Yglesias has a brilliant idea, but not exactly an original thought. The 2007 novel by Chris Buckley "Boomsday" is written on this excat premise. A young blogger proposes a fix to the budget crisis by trying to get 70 year olds to agree to "Voluntary Transitioning" in exchange for tax breaks for their relatives. Then a maverick Senator runnng for president uses the idea as his platform. A very funny read and a brilliant fix to our budget problems ;-)

Posted by: pundit115 | February 25, 2011 2:30 PM | Report abuse

"If you want to think of America like a business, we're a business with an envious advantage: an enormous number of talented people want to work for us, and they're willing to pay us for the privilege. We should take advantage of it."

But that would make sense. And if there's one thing that Washington doesn't much demonstrate these days is common sense. It ruins politics.

Posted by: tomcammarata | February 25, 2011 2:39 PM | Report abuse

Ezra, you just don't think like a good CEO (good means earning at least seven figures in compensation). Think short-term and earn your bonus. If you get rid of oldies, your workers will inherit their money and fewer will beg for crumbs. Instead, get rid of children: no more teacher unions (no schools), no more day care challenges diverting the attention of your employees, and many more immediate benefits. Also, if we had such good CEOs running the country in the 60s--when we really did have a high dependency ratio ruining our economic performance--then we wouldn't have all these baby boomers about to retire.

More seriously, you are correct that immigration is America's strength. Always has been.

Posted by: pjro | February 25, 2011 2:41 PM | Report abuse

It further points out that a business by its nature is immoral. While it may employ moral people and be governed by "champions of morality" when the going gets tough, the gloves come off. This points out why there needs to be regulation to prevent the immorality from getting out of hand.
To take the analogy even further, I wonder if the conservatives would support deporting the unemployed, unhealthy and liberals if they could get away with it (like the British did with their debtor's prisons).

Posted by: EducatingTheFools | February 25, 2011 2:48 PM | Report abuse

we tried the high birthrate idea in the 50's remember. Its what put us in this mess in the first place. All you'd do now with that is cause problems 70 years from now.

Given the choice of the two give me more of Yglesias' and less of yours. MORE DEATH PANELS!!

See I said it and I wasn't struck down.

(before i get attacked it was a JOKE)

You're also conflating small businesses wtih large ones. They have different values, morals etc. that's like comparing my city council to the House of Representatives.

Posted by: visionbrkr | February 25, 2011 2:56 PM | Report abuse

we tried the high birthrate idea in the 50's remember. Its what put us in this mess in the first place. All you'd do now with that is cause problems 70 years from now.

Given the choice of the two give me more of Yglesias' and less of yours. MORE DEATH PANELS!!

See I said it and I wasn't struck down.

(before i get attacked it was a JOKE)

You're also conflating small businesses wtih large ones. They have different values, morals etc. that's like comparing my city council to the House of Representatives.

Posted by: visionbrkr | February 25, 2011 2:58 PM | Report abuse

It's an interesting idea, although I wonder what impact euthanizing the elderly would have on Denny's bottom line. Would the Early Bird special go away, and if so, what affect would that have on overall GDP? The orthotics lobby might have something to say about this plan, as well.

Posted by: workmonkey | February 25, 2011 3:00 PM | Report abuse

"One of the puzzling elements of the immigration debate is that people find it intuitive that a high birthrate is good for the economy and unintuitive that more immigration is good for the economy. But immigrants, if anything, are less competitive with native workers than, well, native workers are. And there are so many of them, and they have all sorts of different skill levels and age profiles. If you want to think of America like a business, we're a business with an envious advantage: an enormous number of talented people want to work for us, and they're willing to pay us for the privilege. We should take advantage of it."

Paul Krugman provided the answer on why unlimited immigration is unsustainable with a large welfare state.

http://select.nytimes.com/2006/03/27/opinion/27krugman.html?hp

http://krugman.blogs.nytimes.com/2006/03/27/notes-on-immigration/

http://krugman.blogs.nytimes.com/2010/04/26/the-curious-politics-of-immigration/

See also:

http://www.salon.com/news/opinion/feature/2010/05/04/immigration_open_borders_welfare_state

For myself, I'd prefer more immigration and less welfare state.

Posted by: jnc4p | February 25, 2011 3:03 PM | Report abuse

And, you don't have to pay to educate them -- as their nation has already paid for that.

It's really like stealing a productive asset.

Of course, it won't be possible (politically) until jobs are available in greater numbers. And, given our insane political system, it could be a while. See England.

Posted by: rat-raceparent | February 25, 2011 3:32 PM | Report abuse

Interesting, Ezra Klein unwittingly making an argument for outlawing abortion.

Posted by: Jenga918 | February 25, 2011 3:42 PM | Report abuse

It's a great fallacy to think that legal abortion suppresses the birth rate. Most women will have the same two point something children. It's just that, with legal abortion available, they will be able to have them at the right times rather than the wrong times.

Posted by: Virginia7 | February 25, 2011 3:50 PM | Report abuse

"Paul Krugman provided the answer on why unlimited immigration is unsustainable with a large welfare state."

And we should support transfers to relatively rich Americans as opposed to letting the very poor from other countries come here and work because...?

Posted by: justin84 | February 25, 2011 3:53 PM | Report abuse

Funny, but economically completely wrong!

Letting old people govern is foolish, but having them in the marketplace is terrific for the economy. They tend to spend much more on a per capita basis in American produced goods and services than their younger counterparts. Also they are often net creditors, lending their money to institutions rather than being debtors of those same institutions.

Certainly the health care aspect is a deficit problem, but that's a problem of too many old people RUNNING the country, not in the economy.

Posted by: johnmarshall5446 | February 25, 2011 3:54 PM | Report abuse

"For myself, I'd prefer more immigration and less welfare state."

Agreed.

Posted by: justin84 | February 25, 2011 3:56 PM | Report abuse

If you run a business, you want to grow it. That means mergers and acquisitions. Now taking that to the endpoint in a free market, one company will finally own all the other companies. That results in central planning and we all know that means communism. Capitalism RIP. Your soul, of course, will be owned by the company store as the song goes.

Posted by: denim39 | February 25, 2011 4:00 PM | Report abuse

"It’s not “entitlements” and it’s not “Social Security” and it’s not “Medicare” and it’s not “health care costs” it’s the existence of old people."

It's the existence of entitlement programs, not the old people.

It would be analagous to a private company charging customers $10 for a $20 product and killing the customer when it is time to deliver the product because otherwise the system doesn't work and the company is bankrupt.

The problem isn't the customer's existence, the problem is a bad line of business. You kill the failing business line, not the customer.

"The optimal economic growth policy isn’t to slash Social Security or Medicare benefits, it’s to euthanize 70 year-olds and harvest their organs for auction."

This is exactly why utilitarianism is wrong.

Posted by: justin84 | February 25, 2011 4:31 PM | Report abuse

Ezra,

I got chills when reading Matt's Ygelesias comments, and the movie Soylent Green with Charlton Heston came to mind.

Have you ever seen it?

MM

Posted by: downtownone | February 25, 2011 4:35 PM | Report abuse

"Now taking that to the endpoint in a free market, one company will finally own all the other companies."

Bad assumption.

Posted by: justin84 | February 25, 2011 4:46 PM | Report abuse

--*If you want to think of America like a business, we're a business with an envious advantage: an enormous number of talented people want to work for us, and they're willing to pay us for the privilege. We should take advantage of it.*--

The incompetent, corrupt State Department can't process the applications fast enough as it is. Consequently, there is a black market in people paying to sneak in.

While hordes used to come for the promise of the American dream, many now are tempted by the stolen fruits of the welfare state.

Posted by: msoja | February 25, 2011 5:07 PM | Report abuse

I think it's less like residency and more like shareholders.

People like more shareholders because it means a more and bigger base. Growing that base locally is good.

Having a massive influx of outside shareholders is going to change the makeup of the company. If 30% new people come in, they don't have the same culture and experience and present a challenge to the existing culture.

That's why people don't view immigration as an equivalent to a high birth rate.

Posted by: rpixley220 | February 25, 2011 5:28 PM | Report abuse

On a related note, if you do an analysis comparing the different maternity leave policies of various countries against the size of their labor force, a very pleasant graph comes about. Countries with a labor shortage or coming labor shortage do, demonstrably, tend to give oceans of time off for new families.

Posted by: ThomasEN | February 25, 2011 6:10 PM | Report abuse

And, to put a different perspective slant on it, there is much talk about China running away with the largest economy prize due to its enormous population. But China is geographically almost identical in size to the US (around 9.5 million km2).

To compete with China, we need more headcount! The fastest way to get it is to import it.

Posted by: truthwillout | February 25, 2011 6:26 PM | Report abuse

"entitlements" , its like fingernails on a blackboard to me when I hear that word ,,, this is "earned income " it was a program that was paid in to every single pay period .... it is what every civilized country does for their citizens , it means that in old age you are not a burden to your children , and you have some dignity . For some reason Republicans think this is evil in some way , Medicare and Social Security are some of the best things America has ever implemented . This war on the Middle Class will not end well . Republicans and Blue Dogs beware , the country is ahead of you both .... there will be a Liberal revival . Bernie Sanders is looking better and better ...

Posted by: sligowoman | February 25, 2011 8:48 PM | Report abuse

--*Medicare and Social Security are some of the best things America has ever implemented*--

Social Security is good if you're a middle class or better white woman, but not so good if you're a black man.

Medicare is just a disaster that keeps on growing.

Posted by: msoja | February 25, 2011 9:35 PM | Report abuse

"it was a program that was paid in to every single pay period"

It was given to other people, not put into a personal account for you. Much like the rest of the money you send to the government each year.

"it means that in old age you are not a burden to your children"

Um, having your children pay for you indirectly via taxes rather than sending you money directly out of their bank accounts does not change the fact that you are a burden on your children.

If you had that 15.3% of your income to save each and every year, you might not actually be a burden on your children when retirement hits.

Posted by: justin84 | February 25, 2011 10:09 PM | Report abuse

SOYLENT GREEN IS PEOPLE....IT'S PEOPLE!!!!!!

Posted by: vintagejulie | February 25, 2011 10:23 PM | Report abuse

Smart idea Klein, plus you make Yglesias look like a fool for his over the top silliness. Too bad the unions won't go along with this one.

Posted by: staticvars | February 25, 2011 11:18 PM | Report abuse


There can be a difference between what you and a health insurance company consider healthy. Some insurers will say that you have a health condition if you smoke, are overweight, are taking prescriptions, or had a medical condition in the past. If this describes you, you may want to search and read “Wise Health Insurance” on the web.

Posted by: ruthrichard123 | February 26, 2011 2:54 AM | Report abuse


After dealing with several lenders in Austin, I finally called 123 mortgage refi.I am a Realtor, and have several relationships in the mortgage business including major banks. I wish I would have been introduced to 123 sooner. They got solution to lower your interest

Posted by: alexiskeegan | February 26, 2011 2:55 AM | Report abuse

"And we should support transfers to relatively rich Americans as opposed to letting the very poor from other countries come here and work because...?"

Look up the word "patriotism", here I'll do it for you...
"devoted love, support, and defense of one's country; national loyalty."
http://dictionary.reference.com/browse/patriotism

We owe a higher duty to our fellow Americans than to the rest of the world, that's why cutting the wages of our citizens at the bottom by bringing in more unskilled labor is such a terrible, unpatriotic policy. If nothing else, the rest of us are obliged to pay more taxes to make up in welfare payments to the working poor what they'd have otherwise earned in wages.

Posted by: beowulf_ | February 27, 2011 2:51 AM | Report abuse

"Look up the word "patriotism", here I'll do it for you..."

So your motivation is xenophobia. Got it.

"We owe a higher duty to our fellow Americans than to the rest of the world"

Mexicans aren't as worthy as Americans just because they happened to be born a few miles south of the border? Starving, AIDS afflicted Africans are less deserving of help than an American single mother earning $15,000/yr? Your standard is quite artificial.

I myself care far more about the Asians and Europeans I know personally than the roughly 310 million Americans I have never met. If you say my foreign friends are not deserving of my help if they need it, I'm certainly not going to care about the 310 million strangers.

"that's why cutting the wages of our citizens at the bottom by bringing in more unskilled labor is such a terrible, unpatriotic policy."

But it would increase utility, and as such you cannot consistently appeal to utilitarianism when justifying redistributive taxation.

In fact, you are attacking the freedom of employers and foreigners to freely associate. Why should I support your xenophobic assault on freedom?

"If nothing else, the rest of us are obliged to pay more taxes to make up in welfare payments to the working poor what they'd have otherwise earned in wages."

We are obliged nothing. You've discarded the moral concepts of utilitarianism and altruism. I insist that people have an absolute right to their property, and as such redistributive taxation is immoral and evil.

Posted by: justin84 | February 27, 2011 12:08 PM | Report abuse

Funny article, and the point is worth contemplating in a weird and general way. I thought it was going to be another daft comparison of business and government. (I love how folks think that its valid to compare how the government is run to how business is run - like we're making widgets or something). If Matthew's morbidly comical suggestion were to take root in some alternate reality, you and I know that big business would be the first to exploit that expanding organ market. I can see keeping our old family members healthy up to the end would help garner the best price of his spleen on the organ market. Unless of course, the pesky Democrats over-regulate it with their socialist agenda. More granola Grandpa?

Posted by: breedforpeace | February 28, 2011 8:11 AM | Report abuse

If I were not so convinced that this article was written to demonstrate absurdity by being aburd, I would comment on it's premise that millions of illiterate, desease ridden persons invading the U.S.S.A. is a solution. Meanwhile, we tax current citizens at an ever increasing rate to provide services for this human debris ... to the end that the citizens have fewer children. Vicious cycle of deterioration.

Posted by: IQ168 | February 28, 2011 8:15 AM | Report abuse

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