Subject: Less-skilled immigrants, long-term unemployed, and tax reforms at home and abroad (AEI Economics Ledger) If you

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Chart of the week: Fake savings in the House farm bill Clip of the week: Ed Pinto on the Fannie Mae and Freddie Mac lawsuit

Immigration Reform
NEW RESEARCH Do less-skilled immigrants take jobs from Americans, or are they filling jobs Americans are unable or unwilling to do? New research coauthored by Madeline Zavodny finds that low-skilled immigrants meet a vital need and rarely compete with Americans for jobs. The report concludes that creating a way for low-skilled immigrants to enter legally is only common sense. Zavodnys previous work has shown that increasing high-skilled immigration also improves the US economy. For instance, adding 100 H-1B temporary skilled worker visas results in an additional 183 jobs for Americans.

US Economy and Recovery

Long-term unemployment is devastating. Kevin Hassett sat down with the Washington Posts Wonk Blog to discuss his recent testimony before the Joint Economic Committee on long-term unemployment and what can be done. He discussed the benefits of a direct hiring program, the discrimination faced by the long-term unemployed, the German model of privatized job training, and potential solutions to the crisis. In case you missed it, Michael Strain highlighted the most important numbers from the latest jobs report and has argued that the US could do a lot more to find solutions, a new jobs agenda. Jason Furmans nomination: A good thing. On Monday, President Obama nominated Jason Furman to chair the White House Council of Economic Advisers. Eleven AEI economists coauthored a blog post praising his work and abilities and explaining that if confirmed, they are confident that he will serve the president and the nation with distinction. From the archives . . . Back in 2007, Jason Furman and several AEI scholars filed an amicus brief in Davis v. Kentucky Department of Revenue, a case dealing with the taxation of interest income from various government bonds.

State-Level Tax Policy

NEW RESEARCH, VIDEO, AND GRAPHIC Do tax and expenditure limits work? A new paper by Ben Zycher looks at the history of tax and expenditure limits (TELs) in 49 states over 40 years. He finds a striking, almost-universal weakness of TELs, which he argues cannot substitute for the hard work of long-term public education and persuasion about the central benefits of limited government. Zycher discussed his research at an AEI event this week, and as this infographic makes clear, there is not much to show for TELs.

Eurocrisis
Is the ECB too meek? The European Central Bank (ECB) has decided to keep its policy interest rate unchanged, not joining the US and Japan in pursuing additional quantitative easing. Desmond Lachman explains that without bold action, it is difficult to see how the European periphery can avoid sinking even deeper into recession. Is the IMF too big? While the administration presses Congress to expand the US contribution to the International Monetary Fund (IMF), Lachman asks: do we really need a bigger IMF? Despite assurances that throughout its history the IMF has sustained minimal loan losses, Lachman notes that the IMF has also never before loaned resources on its current scale to Greece, Portugal, and Ireland. Lesson for the US? In an article in the Cato Journal, Desmond Lachman explains that now is the time for the US to take advantage of Europes debt crisis. US policymakers should learn by observation the lessons Europe has learned through experience. Europes economic problems have led to historically low borrowing rates. The US should not be lulled into a false sense of security by those low rates but instead should use this opportunity to start a serious program of medium-term budget retrenchment.

GSEs and Housing Finance

TESTIMONY We dont need GSEs for housing finance. This week, Alex Pollock testified before the House Committee on Finance Services on examples of successful housing finance models without explicit government guarantees. He highlighted the unusual, dominant, and disproportionate role that Fannie Mae and Freddie Mac play in the US housing finance sector compared to the role of GSEs abroad. AEI scholars have done extensive work in the area of GSE reform. Phillip Swagel testified in May on ways to return private capital to mortgage markets, and Peter Wallison, Alex Pollock, and Ed Pinto coauthored a white paper setting forth principles for reforming the housing finance market.

International Tax Competitiveness

RESEARCH Whats going on in Israel? In a new report this week, Alex Brill explains that Israels competitive corporate tax system, which has encouraged foreign direct investment and innovation, is being placed at risk by a new proposal backed by Finance Minister Yair Lapid. Shot and chaser. Coverage of Brills report in the Jerusalem Post prompted a response from the Ministry of Finance. Stay tuned, there is more to come.

Mark Your Calendar

6.18 AEI Event: The next digital crossroads: Regulating competition in the Internet ecosystem. Join Jeffrey Eisenach for a discussion with Jonathan Nuechterlein and Philip Weiser about the new edition of their book Digital Crossroads: Telecommunications Law and Policy in the Internet Age. 6.18 AEI Event: Economic liberty and human flourishing: Perspectives from political philosophy. Join Michael Strain, Steve Bilakovics, Ryan Patrick Hanley, Harvey Mansfield, and Stan Veuger as they discuss the relationship between economic liberty and human flourishing. 6.20 AEI Event: Balance: The economics of great powers from ancient Rome to modern America. Join Kevin Hassett, Michael Barone, Jared Bernstein, Glenn Hubbard, Tim Kane, and Matt Miller as they discuss Hubbard and Kanes new book.

6.25 AEI Event: Essential workers? Less-skilled immigrants and the changing US economy. Join Kevin Hassett, Tamar Jacoby, Andrew Puzder, Walter Shapiro, Frank Bean, Joshua Bernstein, and Madeline Zavodny to discuss the need for less-skilled immigrants in the US. *** @AEIecon Sign up for a weekly copy of the LEDGER here. Read more from the American Enterprise Institute economic policy team at www.aei.org. Questions or comments about what you read? Contact Veronika Polakova at veronika.polakova@aei.org. American Enterprise Institute for Public Policy Research | 1150 Seventeenth Street, NW, Washington DC 20036 | 202.862.5800 | www.aei.org If you were forwarded this message, click here to subscribe to AEI newsletters. Click here to unsubscribe or manage your subscriptions.