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Christopher Caldwell: Immigration and the faltering economy

Christopher Caldwell is one of four "friends of the show" panelists, a rotating guest position on CNN's Take 5. He joined the chat room from Washington D.C.

CNN: Good afternoon Christopher Caldwell, and welcome to Take 5 chat.


CNN: Christopher, Mexico's President Vincente Fox is pushing for an immigration agreement with the U.S. by the end of this year. How likely is that and what are some of the most likely compromise agreements?

CALDWELL: In general, too early to tell. But an agreement by the end of the year is unlikely. President Bush would like one, for a variety of reasons, including strengthening Fox himself. But Congress is going to be very reluctant to come up with a fix for a highly emotional issue where they don't consider that anything is broken.

CNN: When do you suppose we'll see this issue start to be debated in Congress?

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CALDWELL: The President needs to firm up his own proposal first. As soon as he decides what the mix of elements is going to be -- between amnesty, guest worker status, and outright grants of citizenship -- and as soon as Congress has figured out how many immigrants we actually have in the country, then there will probably be a Republican-sponsored bill in the House, reflecting the President's wishes. I assume this can be taken care of in this Congress.

CHAT PARTICIPANT: What is Mexico willing to give the U.S. for this consideration?

CALDWELL: Good question, and that's why Fox has been so forward on this trip. Mexico feels that immigration is an even exchange between the two countries, not a "favor" that the United States is doing for its poor neighbors. Mexico feels that immigration inflicts dislocations on its own labor market, . So, the short answer is, Mexico is interested in regularizing the immigrant relationship, not in paying us off to take more of their poor.

CHAT PARTICIPANT: Mr. Caldwell, our northern border with Canada is open for the most part. There are places where you can just walk across, Why is it so different with Mexico?

CALDWELL: A few reasons, the primary one being that there is much, much more immigrant flow from all the countries of Latin America, not just Mexico, across our southern border.

CHAT PARTICIPANT: Isn't the Bush administration getting panicky about this economy's lack of signs of turnaround, given all the promises he made about the tax cut, and the plans he made for spending out the projected surplus (now gone)?

CALDWELL: Panic might be the wrong word. They are aware that the most obvious tools in their tool kit -- especially the seven interest-rate cuts Alan Greenspan has ordered in recent months -- aren't working. As for the tax cut, none of Bush's advisors expected it to work instantaneously. But they are mystified.

CHAT PARTICIPANT: Is Bush timing an economic recovery to the 2004 election?

CALDWELL: I'm sure he wishes he could. But this recession appears to have deep structural causes in the private sector -- "inventory overhangs," for example -- that Bush is powerless to affect.

CHAT PARTICIPANT: Christopher, how much did it cost for the taxpayers to fund the Bush/Fox campaign trip? I saw no less than 5 military helicopters delivering them all to D.C. last night. How many planes did they need? How many limos? Is it coming out of the surplus?

CALDWELL: The state dinner itself was not pricier than other state dinners. Most controversy has revolved around the spectacular, and unannounced, fireworks show that woke up half of Washington two nights ago. The only source I've seen on the cost of that has been the Drudge Report. I believe he estimated it at about $250,000.

CHAT PARTICIPANT: Japan's economy is faltering now, waiting for America's to improve. Isn't this a very serious situation considering the Argentinian economy has already gone under?

CALDWELL: Yes. The U.S. economy has allowed struggling foreign countries to piggyback on our demand. What happens when the U.S. starts importing less is problematic. The big significance of Argentina may be to end the vogue for currency boards and other tight-money policies that we've seen for the last 15 years. Certainly, European economists view it that way.

CHAT PARTICIPANT: Do you think there will be a backlash in the 2002 election against Republicans because of the performance of the economy during the Bush administration?

CALDWELL: If the economy continues weak, there certainly will. In this case, it would be compounded by the fact that voters remember Clinton as the author of an uninterrupted prosperity, and Bush as the son of the man who presided over our last recession.

CHAT PARTICIPANT: Isn't a recession of some degree a normal part of any business cycle?

CALDWELL: Yes. And it surprises me that more attention hasn't been paid to whether artificially keeping a boom economy running doesn't pose its own risks. Painful as they are, recessions do help clear away inefficiencies and dead wood.

CNN: Do you have any final thoughts for us today?

CALDWELL: Just have a terrific weekend!

CNN: Thank you for joining us today, Chris Caldwell.

CALDWELL: You're most welcome.

Christopher Caldwell joined the chat room by telephone and CNN provided a typist. This is an edited transcript of the interview which took place on Friday, September 7, 2001.

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