Greenspan advocates outsourcing to solve housing market woes
The “Maestro”, whose tenure at the Fed saw low interest rates and which helped precipitate the financial crisis came out recently in favour of outsourcing skilled American jobs:
“Greatly expanding quotas for highly skilled workers would lower wage premiums of skilled over lesser skilled,” Mr. Greenspan said. Current skill shortages in the U.S. create a “privileged elite” with noncompetitive high incomes. Those skill shortages exist because “we are shielding our skilled labor force from world competition,” he said.
Yes this was the same Greenspan who for some reason refused to raise interest rates to cool the speculative housing bubble which burst in 2006 under his successor Bernanke. What’s hilarious is that he said the above in a suggestion to prop up demand for American homes so as to cushion the ongoing fall in home prices:
WASHINGTON — Former Federal Reserve Chairman Alan Greenspan said Thursday that increasing skilled foreign workers in the U.S. could mollify housing-price declines that have caused “the plunge in the value of the vast quantity of U.S. mortgage-based securities.”
If the U.S. were to open its doors more widely to skilled foreign workers, those employees would bring their families to the country and move into vacant housing units, “the current glut of which is depressing prices of American homes,” Mr. Greenspan said at a Senate Judiciary Immigration Subcommittee hearing.
Really? The bulk of foreign workers would bring their families to the US if they could, and buy homes there? That seems to me a stupid solution to what really isn’t a problem. Anyone armed with nothing more than common sense would tell you that home prices are dropping because of market correction. It was speculative fever which aritificially inflated those prices in the first place. Now Greenspan is saying we ought to open America’s doors to more foreigners so they’ll buy up property.
Well I’ve got news for Greenspan. Singapore has thrown open its doors completely to foreigners and look what resulted. You guessed it, a bubble. Sometimes people just have to learn to shut up completely.