President Obama's decision to deploy U.S. marines to Australia is not surprising given that he was born in Hawaii, spent his boyhood years in Indonesia and calls himself "America's first Pacific President." Beyond his personal ties to the Pacific rim, President Obama is paying more attention to the region in what he perceives to be the Pacific century: a region that will drive global politics well into the 21st century.
This new orientation of U.S. foreign policy towards the Pacific may be useful to counter China's growing ambitions or to assure our allies in Asia that they are not alone but it is the wrong policy. The economic well-being of America requires a focused, consistent and engaged policy towards Latin America. What we need is not a Pacific President but a "Latin American President." In other words, America's military, diplomatic, economic and political attention should be shifted towards our neighbors to the south: from Mexico, through Central American and into Latin America.
The central argument is that what happens in Latin American countries impinges on and directly impacts America's economy far more than our trade with China. It is true that inexpensive Chinese goods have helped American consumers, but the manner in which our broken immigration system has affected our labor markets must be one of the top priorities of any American president.
Since 1990, roughly 13.5 million Latin American have immigrated to America, with 7.6 million Mexicans comprising the bulk of this figure. Something terribly unjust has happened to hardworking Hispanics from Latin America to leave their countries and seek justice in America. In short, the governments in Mexico, Venezuela, El Salvador, Guatemala and Peru, to name a few, lack good governance. Costa Rica, on the other hand, has exported intel chips to the U.S. instead of humans because the government has put a premium on education and prides itself on serving its citizens.
In economic parlance, these millions of souls whose governments have failed them have entered the U.S. labor market and shifted the supply curve to the right. In other words, an oversupply of low-wage workers has not only displaced native Americans but also brought downward pressure on wages. Nowhere has this structural shift in labor market dynamics affected more than in America's black communities, which face unemployment levels as high as 20 percent. For example, unemployed blacks in Georgia, Alabama or Mississippi would normally move to Orlando for employment but today the labor force share of Hispanics in this tourist destination is 24 percent, thus crowding out blacks who make up only 14 percent of the labor force. Fixing immigration will go a long way to addressing America's unemployment woes.
A "Latin American president" would acknowledge that America's failed immigration system is the flip side of a failed foreign policy. For example, Mexican officials are allowed to export their revolution to the United States by failing to provide a decent standard of living for their citizens, who then have to come to the U.S. in search of a better future. In short, America has not insisted on good governance in places like Mexico. But beyond stating the obvious, the American president must take four simultaneous corrective measures so as to allow Hispanic immigrants the chance to voluntarily return to their home countries.
First, country specific micro loans should be offered to any immigrant (legal or illegal) who needs start-up capital to open up a business back home. For example, micro loans totaling $500 million could allow 100,000 El Salvadorans to start a new business in their home country. The voluntary departure of 100,000 immigrants means the potential to hire 100,000 unemployed blacks. Second, through private-public partnerships with oil producing counties in the Middle East, manufacturing plants can be built in places like Mexico, El Salvador or Peru and goods that American consumers buy from China can be bought from Latin America. In 2008, America imported $5.79 billion worth of toys from China. By decoupling our trade from China and reorienting it to our southern neighbors, a massive incentive will have been created for the hardworking citizens of Latin America to stay home and not immigrate to the U.S. in search of jobs. Third, each state must pass the Dream Act that allows for in-state tuition to illegal students. But in exchange, armed with their degrees, these students must fan out across Latin America and help rebuild their communities. And finally, the Voice of America must launch non-stop programming in Spanish that educates the public south of our borders about good governance and what to expect from their leaders.
President Obama has talked about his desire to become a transformational president. He can accomplish this by becoming America's first "Latin American President."