THE POWER OF ARBITRAGE ARGUMENTS.

Tyler "Marginal Revolution" Cowen's latest Bloomberg column, "Immigration Policy Is Hard" is able to rest his entire case on an arbitrage condition. "Basically, more and more people will leave Guatemala until the costs of leaving and staying are roughly equal."  Everything else follows from that, and you really can't talk about solving a problem, about the best you can do is make the least-unpleasant trade-off.

The U.S. could help improve conditions in the nations sending migrants, for instance by decriminalizing the drug trade to lower gang profits and violence. That would be difficult to pull off politically, to put it mildly.

Another alternative is to recognize that America is not facing a major immigration crisis and assimilation is proceeding at acceptable rates, and therefore can afford to take in more people. That is my preferred approach, but I recognize it is likely to result in more mishaps, danger and bad treatment along migration routes.

What about opening up a fully secure route for migrants to use? This also makes sense, but it’s worth thinking through what it actually means. It would be politically infeasible and logistically impractical to force all migrants to take approved routes, not least because it would require some kind of approval process to be set up outside the U.S.

I claim no original insight in a paragraph from a post last week:  there are numerous domestic policy benefits to legalization, as well as the defunding of Central American drug gangs (and Afghan poppy farmers.)

If the cause is persecution, or corruption, or drug kingpin violence back home, there's another policy lever: make the drugs legal (the demand is likely inelastic) and tax their sale such that the legal price is similar to the current street prices: that defunds the drug lords to the south, the runners who this border crackdown is intended to interdict, and the corner boys who can't shoot straight in these United States.

Easier to offer such ideas than to sell them, but perhaps after Our Political Masters have tried everything else and found all else wanting, they'll tackle the harder, but more likely to work, approach.

Making legal entry easier?  That might be something to consider, even at the expense of setting up approval offices outside the States.  (Isn't that what embassies and consulates are supposed to do? -- ed.)  And again, there's an arbitrage condition at work: where there are parallel legal tracks and illegal tracks for entering a country, the cost of obtaining legal entry affects, at the margin, the decision of a potential migrant to sneak in and hope for a future amnesty.  Here's how I wrote about it, twelve years ago.

Is it cheaper to build the fence (using the underground economy?) or to revise the laws? The existence of a rich country with both ample opportunities for entrepreneurial people and generous social services is in itself temptation to residents in countries less rich.

I based that post in part on remarks by people whose names you might know, and in part on this research (the Northern Illinois link to that paper likely long gone into the memory hole.)

Here, though, is where arbitrage comes to the rescue again: the more difficult legal entry is (the anecdotal evidence I have is that Professor Cowen's "can afford to take in more people" is in part driven by "Regularization is too d**n expensive") the more tempting running the risks to sneak in (which might include overstaying tourist visas, this focus on the southern border misses that) becomes.  As I noted, "Congress has to balance the potential burdens on social services against the cheap labor subsidies and the admission of entrepreneurial people who might not possess the verifiable credentials of a university graduate."

Thus, Professor Cowen's summation is straightforward.

Too broad a definition of asylum rights encourages potential migrants to engage in a dangerous kind of “regulatory arbitrage” as they seek the immigration status that gives their claim the maximum chance of being heard. If asylum seekers had their claims approved before they reached America, and made the journey by bus or plane, it would be safer and simpler for all concerned. If the costs of such pre-approval are too high, we can respond by simply taking in more legal immigrants.

So my grand immigration bargain looks like this: much more legal immigration, safe routes of transit, better enforcement at the border and restricted asylum rights. Right now, that seems far away. In the meantime, the problems will fester.

And here's where we were in January.

Congressional Democrats would like a clean amnesty for "Dreamers" (and perhaps for their parents as well.) Congressional Republicans might prefer to bundle the amnesty with appropriations for a stronger border fence, and perhaps additional resources for border enforcement. Our President appears to favor the bundle.

Sigh.