SKEPTIC’S GUIDE TO INVESTING
Straight Talk for All, Nonsense for None
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Your Hosts - Meet Steve Davenport, CFA and Clem Miller, CFA as they discus the latest in news, markets and investments. They each bring over 25 years in the investment industry to their discussions. Steve brings a domestic stock and quantitative emphasis, Clem has a more fundamental and international perspective. They hope to bring experience, honesty and humility to these podcasts. There are a lot of acronyms and financial terms which confuse more than they help. There are many entertainers versus analysts promoting get rich quick ideas. Let’s cut through the nonsense with straight talk!
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SKEPTIC’S GUIDE TO INVESTING
Trump Puffery: Immigration in 2025
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The episode examines the exaggerated claim by Trump regarding the deportation of 30 million undocumented immigrants, exploring the realities behind such a statement. The hosts discuss the implications of immigration rhetoric on various industries, the need for nuanced policy reform, and the positive contributions of immigrants to society.
• Discussing the puffery surrounding Trump's 30 million deportation claim
• Explaining the implications of immigration policies on industries
• Evaluating the importance of H-1B visas in the tech sector
• Addressing the economic contributions of undocumented immigrants
• Highlighting the complexities of portraying immigrants as criminals
• Emphasizing the need for a smarter, compassionate immigration policy
• Exploring the future of immigration discussions in America
• Reflecting on the societal and economic dimensions of immigration
Straight Talk for All - Nonsense for None
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Hello everybody and welcome to Skeptic's Guide to Investing. I'm here with Steve Davenport and today we're going to talk about Trump puffery with regard to immigration and where we stand right now on that. So, steve, why don't you take us through your thoughts on where we stand, and I'll jump in occasionally on where we stand and I'll jump in occasionally, okay.
Speaker 2:Well, I think that the big number that's been on everybody's lips for the last two months has been 30 million, that Trump has promised to deport 30 million illegal immigrants here in the United States. And if we think about that 30 million as all the people that are unreported or undocumented and that we don't have good information on, and the reason to deport them has to do with their criminal records and that they're breaking down the fabric of the different cities with violence and gangs it's this discussion about immigration and gangs and criminality when, in reality, there are millions and my family being one of them who came here as immigrants and followed the laws and tried to do the right thing, and in reality, there are many more immigrants who do the right thing and we're talking about as an example of puffery. I think this might be one of the bigger ones. So, first of all, I'm not sure the government could raise and organize 30 million people for deportation if we gave them all four years, but to say you're going to do it on day one again is one of those things, like solving the Ukraine-Russia war on day one with one phone call to Putin. I don't know which of these ideas is the most outrageous. It's really a tough battle because there's just so many ideas that have so little actual foundation in fact. So let's try to look at this from an investment standpoint. Will companies be affected? Which companies will be affected and how affected will they be by this deportation? And my answer is probably not much, and the reason is it is a very difficult task. There's several different levels of rights and people who are working in these different industries, levels of rights and people who are working in these different industries, and I'm not sure that we're really talking about the right thing, even if we started to talk about this 30 million deportation.
Speaker 2:The one area that I get really kind of emotional about is because when I was at Columbia, I noticed all of the you know, international students who came there through a lot of trials and a lot of tribulation to get on the campus and then found the academics and the life in New York is difficult and so the life of an immigrant is difficult and to add difficulty to it with spurious threats and ideas. I understand all the college campuses now are having difficulties with international students and whether they want to register here because they're afraid they'll be deported when this you know first day of you know November, january 20th, happens Again. I don't know if this is going to be before the balls or after the balls, or we're going to. You know we're going to have a little break to sign some documents and you know all of these things will be taken care of by executive order. We've seen that executive order doesn't really work. It's not a full solution. It is a way for a person to grandstand, and so we will expect a lot of presidential orders, just as we did with Obama, just as we did with Trump 1, and Trump 2.0 will also have this.
Speaker 2:So the one point that I think gets missed, and what is really important when we think about STEM and the US integrity and ability in the AI space is H-1B visas for tech people. So there are right now, many PhDs and master's students who graduate from the United States and they wanna come work here and they've got a special tech skill or ability, and the question is it's our immigration policy is not really set up to give them any advantage versus the person who is claiming. You know, nicaraguan government is unfair in their treatment and they need to come to America for safety. These are different situations, these are different people, so therefore they need different solutions. I look at the H-1B issues and say if we were to focus on that because of the economic impact it would give to some of the technology companies, I think that immigration problem could be solved a lot quicker than anyone who has a criminal record in another country that the US doesn't have access to those records. It's kind of hard to determine that, isn't it? I mean, how are we going to tell if someone was a criminal in a country that we don't have the data for, unless they're an international criminal and they've conducted crimes in the US? It doesn't make sense that you're going to be able to easily identify and deport. So I think it's one of those imagery problems that we want to portray.
Speaker 2:The Trump administration wants to portray immigrants as all coming here to increase criminality when in reality the crime rate of the United States is similar or below you know, above the crime rate of these immigrants.
Speaker 2:So we've got people coming through the Mexican border who are Chinese nationals, who are trying to escape and get to the US, and they've paid somebody to get them to there, and they've paid someone to get them through the border.
Speaker 2:So, when these people are lined up and put into economic impact which isn't the way the person gets weighed, but it is a way that we can look at how do we make some of our policy it feels to me like we're again talking about something that really has very different meanings to very different people. I also think this immigration question is really about paying back the people who have voted for Trump in Florida, texas, louisiana, arizona. Those states were run and won on the idea that he was going to harden up the border, build the wall, and I think that that rhetoric has now expanded to deport 30 million, and I think that that rhetoric is, you know, it wasn't realistic to think of a wall going, you know, thousands of miles along the Mexican border and it's not realistic to think that 30 million people were going to get deported. So I think that companies who are being beat up beat up on this rhetoric, you know probably are being unfairly priced and there might be opportunity for us there. What do you think, clem?
Speaker 1:So you know there are a lot of dimensions to this whole issue. I think you know I don't fully agree with you on the H-1B visa issue. I understand that we need to have technology advancement in the United States, but I also believe that there are plenty of people in the US US citizens who have that, who also have the capability of being coders, capability of being coders, of being computer scientists and so on, and so I think there might be some degree of exploitation of H-1B workers because, in effect, if you know, if you know, they don't have the ability to stay in the US if they get laid off. So I'll give you an example so when Musk bought Twitter and all these people at at Twitter started leaving Twitter to go to other firms, the five the H-1B visa people couldn't leave because they otherwise would have had to have gone home. So you know, it's not. I mean, this may be an exaggeration, but to a certain degree they're, you know, sort of indentured servants here in the United States, indentured to the tech industry. So I don't know.
Speaker 2:Yeah, I mean it works for them. I mean I would, I would agree with you if I felt like there was a a a large group of people, and my son and your son are both tech people and we see what's going on in the industry and we see how it works and how it doesn't work for everyone. So I agree that it's not a simple problem. But looking at Meta, who laid off 29,000 people, they have 1,000 H-1B applications that they're working on right now per year, applications that they're working on right now per year. So laying off $29,000, is that $1,000 influencing? You know, because of their cost or because of their reliability? You know who they hire and who they don't hire?
Speaker 2:It seems that the organizations are so big that I'm not sure that increasing that 1,000 to 2,000 would necessarily change the work perspective of an organization of hundreds of thousands of employees. So I feel like my whole thing is human capital is what we need to improve if we want to improve lifestyle and grow in the United States. The UN capital some of the people were sending back to these countries where they are contributing is better allocated than the US.
Speaker 1:ED HARRISON. I agree. If what you're saying is why should the US educate the in the tech fields and only to have them return to their countries? I agree with you. I think anybody who yeah, I think anybody who graduates from a university here, especially with a tech degree, should have the right to a green card. I totally agree with that.
Speaker 2:Okay Well that's basically my.
Speaker 1:My argument is one right on that, but my second argument is it when we talk about immigration, we have to talk about the whole range of immigration and not just the person sneaking over the border to work well yeah, no, no, I mean, but you know a lot of these h-1b visas, uh, steve are, are people who are being hired you, you know, out of, say, indian, uh, computer science schools, uh and the like, right, they're not being hired out of us universities, right?
Speaker 2:Well, I think that's where we we don't have enough data.
Speaker 1:So so now let's talk. I got. I have another point, several points, but I wanted to make this point, which is that you know, if you allow the tech industry, you know, the freedom to import as many immigrants as possible, doesn't that disadvantage the construction industry and the agriculture industry and the health services industry and the retail and luxury you know, restaurants industries? I mean, there are a huge number of service industries which rely on, on immigrants and I think if I were, if I were a man, if I were an owner of one of these companies, if I were a shareholder of one of these companies, I would be uh peeved if the tech industry gets all the benefits and I don't partake in those benefits as well.
Speaker 2:Yeah. I guess I've never said unlimited visas to tech people, so I don't know. That's a non sequitur, so what? I'm saying is, if we look at people who have gone to school here and they're going to be sent back, my thing is, I think we should figure out a way to keep people who are talented and have been educated by our universities to stay here.
Speaker 2:I think your second issue of people directly coming from colleges in these countries is a valid point, but I really just want to take the people that we've invested money in here in US universities, because they've been invested in by US universities who are sponsored by US companies and the government. So therefore my tax dollars to help this person get it.
Speaker 1:If anything, they should be required to pay that money back if they go back home.
Speaker 2:If anything, they should be required to pay that money back if they go back home. I don't want to run to your club, I just want to walk. Ok, I want to walk.
Speaker 1:So so the other point I wanted to make, you know, besides the point that I think a lot of industries would be upset if all of a sudden there were workplace raids, you know, on construction sites and the rest. I think a lot of industries would be upset about that. I think the other point I wanted to make was that there actually is a lot of revenue to the federal and state government that comes from undocumented immigrants.
Speaker 2:Correct. I think that what I'm saying is that-.
Speaker 1:Don't we want that government revenue Around the edges. I think that what I'm saying is that Don't we want that government revenue?
Speaker 2:Around the edges. I think there are reasons for us to be able to try to improve our process and that the overall puffery of we're going to send 30 million home is just exaggeration and is hyperbole.
Speaker 1:No, no, it's not.
Speaker 2:And my point is we could do something simple like hey, if you have a criminal record, you're not allowed to immigrate. Let's focus on, if that's the issue, that's not 30 million, that's some percentage of the 30 million and there's some percentage in that that we could probably be more disciplined on. And the other point is there's some percentage of people who are sent back because of education. Are those two percentages the same? Not at all. I don't know how many they are, but all my point is is that they're both examples of how this process, you know, is a one or a zero, a digital decision. You're an immigrant, you're illegally, you're deported. I think there needs to be what I'll call something a little bit smarter to be undertaken, which is has the person been here and been paying taxes and has he done anything criminal? No, yeah.
Speaker 2:I agree with that that's you know, that's a different story.
Speaker 1:Yeah, I totally agree with that, and obviously that's not what the rhetoric has been.
Speaker 2:Correct. I'm saying that the rhetoric and the reality are that we have a chance when we address an issue. There's just an outside wild ass chance that we might actually get something. That's better.
Speaker 1:Here's the problem. So I think that you know that you know within the administration, you know there are some people who are just a little bit too extreme on this issue. So Stephen Miller, for example, tom Homan, you know quite extreme on this issue. So I think they might try to push this in a direction that you know not only would be devastating, I think, for the economy, but also could result in a humanitarian tragedy. So I think that's something I think there's chances for this to go wrong.
Speaker 2:But I guess what I would say is I'm not sure the whole system is gonna break down on January 20th and that immigrants need to, you know.
Speaker 1:I can't. Imagine.
Speaker 2:Let's just say it this way I can't imagine the government finding the ability to locate immigrants, evaluate and deport 30 million people. Even if they started on January 20th, I would say that the probability of that task being completed in one year, two years and three years is zero, and in four years is probably that's almost, that's almost one 10th of the U?
Speaker 1:S population. So forget about it. Right, it's about it Right. It's not going to happen.
Speaker 2:I think that that's my point is that this is just another example of puffery that is probably. You know. It helped you get elected in Texas and Florida and I think that the fact that he's not going to go for reelection kind of tells you that the, the, the claims and and the um, the the puffery is just going to get bigger. I mean, do you think the claims are going to get less or do you think they're going to get larger?
Speaker 1:well, that's an interesting question. I think that over time, uh the uh, I think over time, I think over time, the goals in terms of numbers of immigrants to be sent back will decline, I think, as realism begins to set in. So I don't know, it's probably going to be less than a million in my view, and talking about a million over four years.
Speaker 2:MARK CUBAN, md, phd. The numbers I remember about Doge, the Musk effort. He originally said I'm going to eliminate $2 trillion from the US budget and the total discretionary part of the budget is $1.7 trillion. So you can't eliminate more of the budget than there exists.
Speaker 2:So I think we might be at a peak of puffery, is my point, and that as we get into reality and you have the ability to make changes, the question will become you promised this ability to make changes. The question will become you promised this, why aren't you doing it Right? And then I think you know we'll have to see what happens on the 21st and 22nd. But if I were, you know, trying to look at this, I think there is an opportunity here for people, reasonable people to improve something like the H-1B, like the graduates with the masters and doctorates, like the people who are honest, hardworking and have never done anything wrong. If they've been paying taxes for that long and supporting the government, I think there's some reason that we should try to work with them to try to come up with a solution.
Speaker 1:We both agree with that and um, that's across all industries, of course, right, yeah, um I don't have a.
Speaker 2:I don't have a bias for tech and not for pharma and others but, my point is is that if some of these people we've spent a good deal of money on in terms of developing them through their college and doctorate process, then it feels like we should, we should try to, you know get a return on that investment, absolutely not have that person return to his country, and I agree, you know, capital to that country.
Speaker 1:I 100 percent agree with that. And um, and you know, at the end of the day I mean this is puffery. You know, the immigration issue, um, you know Trump has made a lot of promises to his base and I think a lot of them will have turned out to be, um, you know you want to call it lies, exaggerations there's a lot of ways you can describe it. I'll give you another example that's not related to immigration. You know you had this promise from him that he would release all the January 6th. Uh, convicts right, or pardon them and release them.
Speaker 1:And you know you had JD Vance come on the talk shows on Sunday and he said well, of course we're not going to release the violent ones. Well, guess who's still in jail? It's the violent ones. So you know he's got an issue there with that because he's made these promises. You know he's been puffed up about January 6th and if he doesn't release some of these folks who are quite violent and who have gone out those who have been released already have gone out to commit additional crimes. You know he's got to worry about his own physical security, right, with respect to these people yeah, he seems to uh have attracted a certain uh following of people that uh, and they could turn.
Speaker 2:They could easily turn against him yeah, I mean I I'd really like to see what the solution is that we come up with, and not you know what I mean More problems. So I agree that there is, you know, there is some degree of criminality that goes with this and there's some degree of figuring out a solution for people that makes sense, and I'm not sure that we'll get to that ideal goal. But I do think that this is an area that we've just been ignoring and it causes problems with elections.
Speaker 1:It causes problems with, you know, as a tax policy Right, and Steve, it's not. This is, the question of illegal immigration is an issue that impacts a lot of countries. It's dry, it's the issue that's driving, I mean, inflation to a degree, but lesser. But immigration is driving populism, uh, throughout the world. And so you've got you know the equivalence of Trump in Europe, for example, who, um, are coming to the fore based on, based on immigration issues. So I I just think you know it's got, there has to be a solution. You're right, uh, on the immigration issue.
Speaker 2:Yeah, I hope. Um, so I think we're going to wrap it here with immigration puffery and do you have any final comments, Clem?
Speaker 2:We've also covered on other podcasts episodes that we've done just now on, you know, tariffs, and also on foreign policy puffery. Well, I think we've covered the puffery concept pretty well and it all starts anew with the new administration on January 20th and we'll be back next week with a new podcast. We're interviewing a German portfolio manager who will give us some of the insights he has on growth in Europe and some of the ideas that he's following up on. Do you have anything else you want to say about our guests next week?
Speaker 1:No, but yeah, I look forward to it, and, and, and you know we will talk more about him when we bring them on. All right, okay, thank you, everybody. Okay, thank you.
