Posted 70 days ago
A billionaire New York hedge fund manager who's a leading Democrat donor has come up with an unusual suggestion for reducing inflation - recommending that the U. S. government bring down wage costs by welcoming in more migrants.
Bill Ackman, who as CEO of investment firm Pershing Square Capital Management is worth an estimated $3.2 billion, said that the current tactics employed by the government to bring down inflation were 'a blunt tool' and not effective.
He claims increasing the supply of workers would also increase the output of the US economy, thus bringing down prices.
Inflation is currently at a 14-year high at 8.26 percent, and on Wednesday the Federal Reserve hiked interest rates by another 0.75 percentage points - its fifth interest rate increase since March.
Illegal immigration is also at similar record highs - although there's no suggestion Ackman was referring to undocumented migrants.
Jerome Powell, the chair of the Fed, said there was no 'painless way' to dampen inflation.
Ackman, however, said he had a solution.
'Inflation can be mitigated by reducing demand and/or by increasing supply,' he tweeted.
'The @federalreserve can only reduce demand by raising rates, a very blunt tool. Wage inflation will likely continue until rates rise to restrictive levels.
'Doesn't it make more sense to moderate wage inflation with increased immigration than by raising rates, destroying demand, putting people out of work, and causing a recession?'
Unemployment, at 3.7 percent, is near its lowest level in half a century and there are still roughly two open positions for every one person looking for a job.
Ackman, 56, said the U. S. should look to weaponize immigration by encouraging highly-skilled Russians to move.
'And if we can target immigration policy to achieve important political objectives like catalyzing a Russian talent drain to the US, why shouldn't we?' he concluded.
Ackman, a longtime Democratic donor, is not the first person to make such an argument, CNN reported.
The network reported that that issuing more migrant and temporary foreign worker visas is, in some studies, linked to more-stable supply chains and lower overall consumer costs.
His comments echoed those made on Monday by a Texas sheriff who launched an investigation into possible human trafficking by the governors of Texas and Florida after they flew a group of Venezuelan migrants to Martha's Vineyard.
Javier Salazar, a Democrat whose district, Bexar County, includes the city of San Antonio, said the U. S. needed to rethink its attitude towards migrants, and said flying them across the country was not the solution.
'I think at some point you're going to have to embrace the fact that this is happening, to a certain extent,' he told CNN.
Speaking hours after new Customs and Border Protection data showed that migrant arrivals had surpassed two million this year for the first time ever, Salazar said they were needed, as workers.
He said restaurants in his district needed the migrants as staff. 'I would say: look, you've got people that want to work,' he said.
'They want to do an honest day's work for an honest day's pay - not for slave wages, give them an honest day's pay.
'And you've got a shortage of workers.
'If you go to any restaurant in San Antonio, Texas, right now you're going to wait a long time to get your table, even though there are empty tables, because there are not enough wait staff to wait on you; you're going to wait a long time for your food because there are not enough people to cook it in the back. Half the cooks maybe aren't showing up for work, or they quit.'
Salazar said the solution was to employ the new arrivals - despite the fact that, having crossed illegally, they would not have work permits.... (Read more)