At least five interesting things: Bad Policy edition (#67)

I’ve got a bunch of interesting stuff for you this week, much of it related to the theme of “bad policy is bad”. But first, here’s an incredibly fun and interesting discussion I had with Sam D’Amico, the founder and CEO of Impulse Labs (a hardware startup that I invested in). Sam has a lot of good thoughts about why China has suddenly started to dominate the world in so many key manufacturing industries at the same time. It’s not just because of government subsidies or cheap bank loans; China’s companies have mastered a suite of new electric technologies that can be used to manufacture everything from cars to robots to drones more efficiently and effectively than the technologies America uses. He calls it the Electric Tech Stack:

We’ll be coauthoring a post about the Electric Tech Stack soon. It’s an incredibly important concept that almost no Americans seem to grasp yet, and so we have a lot of work to do in terms of educating the public.

In the meantime, here’s this week’s list of interesting things!

1. Americans really don’t like mass deportation

If you believe the polls, Americans elected Trump to do two things: stop inflation and stop the wave of quasi-legal and illegal immigration pouring across the southern border. Immigration was generally regarded as Trump’s strongest issue. There were all kinds of polls showing that Americans approved of Trump’s tough policies on the border, and some even found that Americans had begun to approve of mass deportations. And general attitudes toward immigration became much more negative during Biden’s term.

But in August of last year, I warned that if Trump overplayed his hand with regard to mass deportations, it would provoke a backlash:

Finding people to deport would require deep intrusion into communities across America…People who are in the country illegally, and whom Trump’s campaign would target, have mostly been here many years, and are embedded invisibly within cities and neighborhoods across America…[T]o deport a million people, as J.D. Vance promised, ICE would have to do 3000 raids the size of the one in Mississippi in 2019 — or many more thousands of smaller raids. The scene of government agents storming through communities, rounding people up, and demanding to see their citizenship papers would become a fairly commonplace one. This would generate a far larger amount of terror and unease among the populace than scattered ICE raids did during Trump’s first term.

My prophecy has now come to pass. Masked ICE agents without uniforms are rampaging through American communities, arresting people arbitrarily on suspicion of being in the country illegally. And just as I predicted, this is provoking a sharp backlash in public opinion. CNN reports:

The most recent polling on this comes from Gallup, where the findings are worse than those of any poll in Trump’s second term…The nearly monthlong survey conducted in June found Americans disapproved of Trump’s handling of immigration by a wide margin: 62% to 35%. And more than twice as many Americans strongly disapproved (45%) as strongly approved (21%)…It also found nearly 7 in 10 independents disapproved…These are Trump’s worst numbers on immigration yet. But the trend has clearly been downward – especially in high-quality polling like Gallup’s…An NPR-PBS News-Marist College poll conducted late last month, for instance, showed 59% of independents disapproved of Trump on immigration. And a Quinnipiac University poll showed 66% of independents disapproved.

Let’s take a look at some of the charts from that recent Gallup poll. Pro-immigration attitudes have surged among all political groups since Trump took office, but the shift among Republicans is perhaps the most notable:

And support for mass deportation is falling, while support for a path to citizenship for the undocumented is high and rising:

Americans generally fear authoritarian rule a lot more than they fear a “Great Replacement”. And masked, non-uniformed secret police arbitrarily grabbing law-abiding people off the street and demanding their citizenship papers feels uncomfortably like something an authoritarian ruler would do.

Trump and his subordinates like Stephen Miller have overreached badly. A wave of pro-immigrant politics in America seems to be on the way.

2. Bad progressive policy ideas are bad

Creating a more egalitarian society is a great goal, but I find that a lot of progressives go for shortcuts that turn out to be a mirage. For example, there’s Inclusionary Zoning, the policy that forces new housing development to offer some units at below-market rates. This makes development much less economical for developers, and limits the amount of housing that gets built, thus depriving both middle-class and poor tenants of a place to live. This ends up making society less egalitarian, since it means only rich people can afford to live in the scarce housing units, and everyone else gets priced out.

Another problem with Inclusionary Zoning is that it means that every new housing development will include poor people. This provides a very strong incentive for rich people to become NIMBYs, blocking development in rich areas in order to keep out poor people. They are usually very successful at this.

Now California has a new housing policy, enacted in the wake of the recent Los Angeles area wildfires, that will only exacerbate this effect:

California Gov. Gavin Newsom unveiled $101 million in funding Tuesday for “multifamily low-income housing development”…The grant includes multiple funding streams, including…taxpayer-funded