Sometimes a news report provides informative juxtapositions that underscore the foolishness of our immigration policies. Case in point is the New York Times piece on reforming the EB-5 visa system, "Making Visas-for-Dollars Work".
The basic idea of the program is simple. The United States sells visas to those who invest between $500,000 and $1 million here and create at least 10 domestic jobs from that investment within two years. If they do so, they get a green card. (My colleague David North has written extensively on the program.)
The EB-5 program is, says the author, "among the most popular tools for attracting foreign investment to the United States," and "seems like the perfect win-win". Except it isn't.
The program is rife with fraud and has a long a troubled history, according to an in-depth analysis by three Reuters reporters.
The list of problems is a long one and includes unscrupulous middle-men who promise a quick, easy way to gain legal entry to the United States, while having the ability "to make a potential profit in the bargain".
Then, there is the lack of supervision of the program by U.S. Citizenship and Immigration Services (USCIS) and the U.S. Securities and Exchange Commission (SEC), both of which administer the program.
But perhaps the biggest problem is mentioned in passing by the New York Times article and that is that, "Aside from accusations of outright fraud, there is also a clear lack of understanding among government administrators about how to manage an investment program. As a result, they often approve businesses that are simple to understand, like a condo development or a grocery store, but whose business models don't generate enough profit to hire workers, while rejecting more sophisticated businesses that stand a greater potential of generating profits and jobs."
Sound familiar? It should. Think Solyndra.
The issue here is that that bringing in immigrant entrepreneurs to rescue the American economy is shortsighted and foolish. Applicants may have money, but few have any hands-on experience with the American capitalist culture, not to mention the American culture that is its foundation. In the vast American economy a $500,000 dollar investment is not going to go very far, even if the venture is successful. Almost half are not.
Still, the government, searching for instant fixes other than the most obvious ones like lowering corporate and personal taxes, reducing regulation, and encouraging prudent risk, is poised to expand this troubled program.
Next thing you know, the government will be offering visas and a "path to citizenship" for foreigners who buy real estate in the depressed housing market.
Oh, my goodness! That's just what they're doing.
Senators Chuck Schumer (D-N.Y.) and Mike Lee (R-Utah) have introduced legislation that would "offer visas to any foreigner making investments of at least $500,000 on residential real estate — a single-family house, condo, or townhouse. Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out."
According to a Wall Street Journal article, "The measure would complement existing visa programs that allow foreigners to enter the United States if they invest in new businesses that create jobs."
Well, actually displace is a better word. In a perfect example of government thinking, if we may call it that, it now wants to offer a visa and a residence in which to enjoy it without all the risk of losing your money and your visa as have many who have tried the EB-5 program.