Kdawson writes at Slashdot:

There are new developments in the case of the counterfeit Cisco routers, which we have been discussing for some time. The NYTimes updates the story after an FBI PowerPoint presentation made its way onto the Web. It seems that experts at Cisco have examined some of the counterfeit routers in detail and proclaimed that they contain no back doors. Others don’t believe we can be so sure.

Cisco, several years ago was one of the heaviest users of the H-1b program. The technical infrastructure of these “American” companies has been gutted by corporate greed and short-sightedness. Foreign interests now not only fabricate their hardware but have access to every detail of that hardware’s construction and software and the management of these companies depend on foreign interests for virtually every aspect of their major technical decisions.

These major security problems were a predictable consequence of hiring hundreds of thousands of young men from politically unstable or hostile nations to work on key technical projects in the US. Many of these workers came from nations in which it isn’t even possible to do an accurate background check. That means that if a foreign agency plants enough employees into any target company, it is likely they can get whatever trade secrets they want out of that company in time.

If the US ever gets into a serious conflict, the architects of US “security” policy could well replace the idiots in Belgium that hired German companies to defend against the German army as some of the biggest fools in military history.

Rick Merritt writes at EE Times:

The U.S. government fined a consulting firm $45,000 for placing online job ads for computer programmers that said only H-1B visa holders should apply. The case is just the tip of an iceberg of H-1B abuses, according to a lobbying group that filed the original complaint.

The Department of Justice said iGate Mastech Inc. (Pittsburgh) placed 30 online job ads in May and June 2006 asking for only H-1B visa holders. The case is one of 215 the DoJ has handled involving preference for H-1B workers over U.S. citizens since the year 2000.

One of the iGate ads was for a Java programmer in the Midwest. It stated “Only H-1s Apply, and should be willing to transfer H-1B.”

According to government figures from 2007 iGate Mastech employed 14 H1-B visa holders in 2007. It was one of nearly 30,000 companies employing a total of 126,219 H1-Bs last year.

First off, this is the tip of the iceberg. The H-1b program in fraudulent by its very nature. These folks just did it more blatantly than most. The value of each H-1b visa to the recipient is about $50K. The theoretic value of US citizenship is more like $300K–probably more like $225K in today’s conditions and with today’s expectations. In that kind of situation, with a low chance of getting caught, companies can pretty blatently risk $45K fines like this.

The real cost of the H-1b program goes beyond just the mining the citizenship rights of US technical workers. Some H-1b worker have access to extremely sensitive information-and can facilitate the export of entire US industries. Other H-1b workers can be used to facilitate huge financial frauds–as appears likely to be the case with Enron (I just don’t think it is a coincidence that Enron heavily hired Indian programmers and the company made idiotic investments in India that cost shareholders $2 billion). I fully expect that every major intelligence agency in the world has some H-1b workers planted in key positions in the US. It would be nice if some of the folks in the FBI and congress wake up and actually do their jobs.

Washtech writes:

The Department of Homeland Security is inviting public comment about a controversial rule that allows employers to retain foreign students for a longer period of time in the country.

DHS had, earlier this month, formulated an “interim rule” allowing employers to hire foreign students holding F-1 visas for “Optional Practical Training” for 29 months as opposed to the hitherto 12 months. The rule, applicable to almost 20,000 new graduate students holding degrees in STEM (Science, Technology, Engineering or Mathematics) annually (in addition to a fresh batch of 65,000 H1B visa holders, also arriving annually), poses a threat to American graduates finding gainful employment, as more people flood the job market, which is already under stress by a high unemployment rate nationwide.

The Washtech page has instructions on how VDARE.com readers can send your comments to the Department of Homeland Security. Please try to be concise and respectful when creating your comments. If you send me what you’ve written, I’ll try to publish the best here on VDARE.com.

I think it is important that we start getting a public record on what is happening with H-1b expansion. So far, the H-1b program has been an unmitigated disaster for the US leaving in its wake corpses like Enron.

If the US wants to compete effectively with fast growing economies like those in the Far East, we need an immigration system at least as good as what they have in countries like Singapore, where companies can get visas rather rapidly-but pay a fair amount for the privilege of using foreign workers and thus there are some real protections in place for local workers in Singapore.

Lou Dobbs said in a recent broadcast:

We don’t really think that that looks so good for you people in Washington, to be slobbering over billionaires who are asking for an unlimited number of H1-B visas no matter what the cost is to American workers. And Bill Gates, specifically for you, we have reserved a chair here at any time for you to come in and explain how you could testify as you did before Capitol Hill when only three percent, three percent of your 900 H1-B visa workers at Microsoft are considered level four and keep giving us those speeches on the best and the brightest, Mr. Gates, because you’re just doing it, just doing it beautifully. Except for one thing — you look like a complete and utter fool and we really don’t understand why a man so smart as you would choose to look like a fool, especially in the nation’s Capitol.

I don’t think that Gates–or for that matter Greenspan–look like fools. They remind me more
like a crook who “can’t remember” anything when placed on the stand. In this case,
we have men who are quite bright except when it comes to issues that might affect their personal bottom line or position in society.

That strategy may work quite well for keeping out of jail–or keeping power or financial privileges.

The problem is that that kind of self-serving behavior just doesn’t have a place at the top of the economic food chain–and if it is done, it must be done in ways that don’t draw any attention. Any criminal who is successful enough will face a time when they simply have to “go legit”, because you can’t effectively organize an entire society around criminality.

In this case, Greenspan and Gates are having trouble adjusting to the fact that they have clawed their way to the top and history will evaluate them not by whether they can accumulate a bit more money or power–but what they really do with what they have gotten.

In the case of H-1b expansion, we had a mass failure of the political, academic and financial system. I think the elites who depend on these systems will have a horrible price to pay as this Ponzi scheme reaches its inevitable conclusion.

Peter S. Goodman writes at the New York Times:

The gradual erosion of the paycheck has become a stealth force driving the American economic downturn. Most of the attention has focused on the loss of jobs and the risk of layoffs. But the less-noticeable shrinking of hours and pay for millions of workers around the country appears to be a bigger contributor to the decline, which has already spread from housing and finance to other important areas of the economy.While official unemployment has risen only modestly, to 5.1 percent, the reduction of wages and working hours for those still employed has become a primary cause of distress, pushing many more Americans into a downward spiral, economists say.[Workers Get Fewer Hours, Deepening the Downturn, by Peter S. Goodman, April 18, 2008]

As I reported in The Jobs Crunch, there has been a serious erosion of many dimensions of job quality. Reduction of disposable income is one dimension of this erosion. We can see folks moving from low rent rural areas to high rent urban areas and have significantly less income left after taxes, housing, insurance and transportation costs. Another dimension is that people in a harsh economic climate may take jobs that are simply unpleasant or even morally offensive to them.

I tend to think that in many respects, jobs quality and living standards may have peaked in the US right before the Kennedy-inspired expansion of immigration. The result has been transfer of trillions of dollars of assets into the hands of the wealthy-and the gutting of the American economy.

Turning around over 40 years of gross mismanagement of a huge economy will be hard. What articles like this one in the New York Times are suggesting is that the economic decline of America is becoming so obvious, it cannot be ignored any longer.

Theodp writes at Slashdot:

“The Department of Homeland Security stepped up to the plate Friday for corporate H-1B visa interests as it changed immigration rules without notice to allow employers to hire an unlimited number of foreign students majoring in science, technology, engineering and math to work in the U.S. for 29 months after graduating with a bachelor’s degree or higher — longer if an H-1B visa is pending — provided they studied in the States for one academic year under an F-1 visa and their employer enrolls in the Department’s e-Verify program. ‘This rule will enable businesses to attract and retain highly skilled foreign workers, giving U.S. companies a competitive advantage in the world economy,’ said Homeland Security Secretary Michael Chertoff in justifying the change, which the DHS made without notice or comment by exploiting a ‘good cause’ exception that allows procedural rules to be bypassed to prevent ’serious damage to important interests.’ In explaining its motivation, the DHS cited testimony by Bill Gates (’I don’t think there should be any limit’) as well as the Task Force on the Future of American Innovation, which counts major H-1B stakeholders Google, IBM, Intel, and Microsoft among its members.”

Would anyone but a lawyer not think that hiring a bunch of young men from areas that have either a tendency towards substantial financial scams or extremely active intelligence agencies, might just bring substantial security problems?

Can the US government even do an adequate background check on folks coming in from places like India and China?

This issue is being discussed more here.

In his saner moments, Alan Greenspan says things about economic inequality that are fairly reasonable:

As I’ve often said… this [increasing income inequality] is not the type of thing which a democratic society—a capitalist democratic society—can really accept without addressing. - Alan Greenspan, June 2005 ”

Alan Greenspan has also called income inequality a “very disturbing trend.”

However, Dan Stein points out, this is part of a contradictory view on the part of Greenspan:

But former Federal Reserve Chairman Alan Greenspan recently admitted the real agenda: “Significantly opening up immigration to skilled workers … would compete with high-income people, driving more income equality.” In 2007, he further opined that, “Our skilled wages are higher than anywhere in the world. If we open up a significant window for skilled (foreign) workers, that would suppress the skilled-wage level and end the concentration of income

Now, there are some basic problems here. Many of the countries that have the least inequality of wealth and income have rather restrictive immigration policies. Japan is a good example.

Furthermore, many of these “skilled worker” visas apply to jobs that aren’t widely well paying. The profession most impacted by skilled worker visas has been computer professionals. The median income for computer professionals in 2003 was 60,350-and the median income for H-1b workers was $53000. That level of income would not have put either group into the upper 20% for Americans in that year(median income was $43,318 and the upper 20% had income of $86,000.

There are other important factors here too. Many IT professional-particularly those on the upper income end, work in areas like New York City, Washington, DC, or Silicon Valley with exceptionally high cost of living (and in the case of Silicon Valley, the hidden cost of a community with more men per capita than Alaska). Thus, for many technical workers, a higher than average income isn’t necessarily a ticket to obtaining substantial assets–or even getting in a position to support a family comfortably.

What has been driving economic inequality in the US hasn’t been the income of workers in that band from the top 20% though the top 5%. Rather economic inequality in the US has been driven by the increased wealth and income of folks in the upper 1%.

Now, a big chunk of those folks in the upper 1% do it with income from property. According to Ed Wolff, at NYU, about 1% of American families have assets above $5 Million. Now, income from that level of property would be at least $150,000/year even if invested instruments that are carefully protected from inflation. That means about 20% of the top 5% of US worker get to that income level purely by ownership of property. Now others do a mix of activities-they work, but they do work that you have to have property as a ticket into the game (i.e. like people who buy a seat in the stock exchange or commercial realtors who trade substantial properties). Another big chunk of high income earners have direct personal relationships with the wealthy.

Some of the skills most likely to get someone into that upper 5% or 1% are hard to get outside the USA. A Yale Law degree or Harvard MBA don’t really have any foreign equivalents. For that matter, just getting licensed to practice law or accountancy in the US would be hard for folks to do without coming to the US.

What skilled worker visas mean is that wealthy interests in the US can pay employees by mining the value of the citizenship of specific groups of Americans-those that have invested in the “human capital” of the affected careers. US citizenship is valuable-and there are lot of folks willing to work to obtain that value. Thus, the shareholders of large companies-and those individuals with the wealth to directly hire such benefit inordinately-not the mythical consumer.

What this all means, is that skilled worker immigration may actually be making income inequality–and other forms of economic inequality in the US worse rather than better. If you want to address economic inequality, you need to get to the root of the problem. Wealth is more unequal in its distribution than income. If our goal is to contain economic inequality, it would make more sense to tax wealth directly as proposed by Huey Long decades ago–and more recently supported by Ralph Nader–than to target folks slightly more successful than average via predatory immigration policies.

All open borders can ultimately do is make economic conditions in the US more closely reflect that of the rest of the world. Now, as a whole, the world is a pretty oligarchical place with political and economic power concentrated in a few hands. The existence of a democratic republic like the US is a rarity by global standards-and something that will require real care to maintain.

Bill Rochelle and Bob Willis write at Bloomberg:

The states most affected by the housing recession, including California, Nevada and Florida, were among those with the largest increases in bankruptcies.

Sen. Charles Grassley has recently written letter to the Senate Majority Leader and Speaker Pelosi promoting some legislation he’s supporting–S.1035, which is supposed to lower the level of H-1b fraud.

The thing is, a program like H-1b will inevitably displace US workers unless it is very carefully structured. Competent oligarchs in countries like Singapore manage guest worker programs with a degree of careful structure. A similar program for a democratic nation will require even more care.

The fundamental problem is that each H-1b visa has a market value of around $50,000. When something that valuable is given to companies free of charge, they rapidly become addicted to this corporate welfare–and learning to live without that corporate welfare will be very difficult for the companies involved.

All S. 1035 does is raise the bar for abuse–and focus the corporate welfare aspect of guest worker visas abuse.

Faye Bowers writes at the Christian Science Monitor:

The state already at the cutting edge of immigration reform seems poised to undertake yet another experiment: a guest worker program created and administered by a state rather than by the federal government.

The Arizona legislature is expected on Monday to fast track bills to create a temporary worker program in the state. Even with the backing of top lawmakers, the bills face big hurdles, including sign-off from the feds. But if approved, they would streamline the process for Arizona employers to hire temporary workers from Mexico – and would serve as a model for national reform, say supporters……..

Changes include a procedure to more fairly calculate wages for foreign workers and ways to cut red tape, making it easier and swifter to hire foreign workers, particularly at harvest time. To protect domestic workers, the proposed changes increase the time employers would be required to recruit American workers before resorting to hiring foreign labor.

I don’t have a problem in theory with state administered programs. Frankly, federally administered immigration has been a mess. The problem is that that the basic economics behind guest worker programs in the US have been fundamentally bad. I question whether guest worker programs have much of place in a democratic society. One possibly legitimate exception I can see is for true multinational corporations that both hire US citizens overseas and sometimes want to bring a similar number of foreign workers into the US.

Authoritarian countries like Saudi Arabia make extensive use of guest workers programs in part to control their own populations. Singapore has a good example of a competently administered and widely used guest worker program–but the fees for their program are far in excess of anything being proposed here.

What lawmakers need to come to grips with: US citizenship has substantial economic value. Guest worker programs that don’t have substantial fees and aren’t very carefully administered create a false illusion of being economically viable by mining the value of the citizenship of other Americans.

Now, in this case, the citizenship values the proposed Arizona program mines are those of the least skilled, and least economically viable Americans. Basically, we have holders of some rather valuable real estate in Arizona who are used less expensive immigrant labor to maintain higher property values instead of hiring American workers. It isn’t like there aren’t a lot of unskilled Americans that could do jobs.

Major American cities are full of such people. With reasonable incentives, these folks can and would move to Arizona to pick lettuce. Now, at the price at which they would pick lettuce, it might make more sense to automate the process, and provide employment for US technical workers.

Ultimately we have a choice here:Do we want a technologically advanced, democratic society or do we want to maintain the property values of large real estate owners in places like Arizona?