Tuesday, February 17, 2009

Why are we slashing foreign H1-B visas?

My Claremont McKenna blogosphere friend Kevin Burke recently wrote an eloquent post on this and now I am embarrassed for not having done so earlier. As Kevin notes, many of the best finance students at CMC are foreigners. I can vouch that the same is true of Vassar's Investment Club.

Shekhar Gupta (via Tom Friedman) explains the logic behind why we should be happy about this:
“Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.”
The US's new policy means that any financial institution who recieved bailout money (read: most of them) will be restricted in the number of immigrant employees they can hire. That will not stimulate our economy but instead hinder it.

Bottom Line: Discrimination, whether it is against immigrants, women, people of different race, or those of a different class, will always hurt a company's profit margin. Therefore, the free market will punish those who practice it. State-sponsored discrimination, in all its myriad forms, is simply counter-productive.