Archive for Wednesday, May 10, 2006

History offers some insight on immigration, energy

May 10, 2006


Life, as Harry Chapin ("All My Life's a Circle") and Joni Mitchell ("The Circle Game") sang to us over the years, repeats itself.

That is why it might be prudent to look back two to three decades to see how the United States then handled its two most vexing current problems - high energy prices and immigration - before deciding how to proceed in the 21st century.

Of course, the failures of the policy choices made then to solve these problems are why we must deal with them today. We should be wary of making the same mistakes in a misguided attempt to calm these twin storms.

To be sure, no two situations are analogous, and 2006 places both energy prices and immigration in greatly different historical contexts than in the 1980s. The war on terror has added a new dimension to immigration concerns, while in the last two decades the U.S. image in the oil-producing Arab world has tumbled.

But the issues remain eerily similar now as then, and unfortunately, time has probably made both problems even more worrisome.

First, high fuel prices, especially gasoline. But we should remember that a mild winter this year made the energy situation much better than it might otherwise have been.

The reason many states instituted gas rationing in 1979 - depending on your license plate number you could only buy gasoline on specified days - was, as today, the tightness in supply. The shortage in supply has not led to suggestions of rationing these days.

In response, Congress passed and President Carter signed a windfall profits tax on oil companies that were making huge profits. Those prone to see conspiracies saw the oil firms as profiteers. By March 1981, the cost of a gallon of gasoline in today's dollars averaged more than $3.10, slightly higher than now.

The windfall profits tax may have been good politics, although it did not help Carter get re-elected.

But it was lousy policy. Between 1980, when the law took effect, and 1986, when a crash in energy prices made it irrelevant, domestic oil production fell 1.3 billion barrels. That's because the tax removed the incentive for companies to produce more, and at the margins they left their crude in the ground.

The result, between 1980 and 1986, according to a March 2006 report from the nonpartisan Congressional Research Service, was that domestic oil production fell between 1 percent and 5 percent. At the same time, imports of foreign oil increased 3 percent to 13 percent directly because of the windfall profits tax, CRS said. The law was finally taken off the books in 1988.

Given that history, why would anyone with a brain believe instituting a new windfall profits tax - or anything else that would discourage domestic production - would help, rather than exacerbate, America's current energy woes?

On immigration, it was 20 years ago when Congress passed its last bill aimed at stemming the flow of undocumented workers across the Mexican border.

That law had two major provisions which proved ineffective. One declared an amnesty and allowed illegal immigrants to become citizens. Many did; others didn't but remained here working illegally. Second, the 1986 law created penalties for U.S. businesses that knowingly hired undocumented workers. It sounded good, but in practice the law lacked teeth and was not vigorously enforced. One reason might be the belief that without undocumented workers the U.S. economy would slow.

There are now proposals in Congress to put teeth into the employer sanctions and create a path for undocumented immigrants to work legally and eventually become citizens. But the differences from the 1986 law are not being discussed.

At any rate, when the 1986 bill was signed by President Reagan, there were an estimated 4 million illegal immigrants. Today the estimate is 12 million.

Two old friends, the late presidential scholar Robert Neustadt and his fellow Harvard historian Ernest May, wrote a book called "Thinking in Time: The Uses of History for Decision Makers."

The country would be better off if each member of Congress and the White House staff took the time to consider the suggestion of their title.

Peter A. Brown is the assistant director of the Quinnipiac University Polling Institute and a former editorial columnist for the Orlando Sentinel.


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