Finding Populist Equilibrium

Shift vibes, not people

In Latin American journalism, the term la ultraderecha comes up often. If you passed high school Spanish, you may recognize this is a translation of “far-right,” if you don’t, there you go. I admit that I’m partial to the Spanish construction since the term “ultra” sounds way cooler, perhaps even a little “anime” than the rather boring “far” prefix American journalists use when discussing politicians they don’t like.

La ultraderecha is a kind of shorthand in Latin American journalism for the figures you might expect—Javier Milei, Nayib Bukele, Jair Bolsonaro, and, yes, Donald Trump. Of course, if you know anything about the actual policies of these presidents, you know this is not such a coherent grouping. Milei identifies as a free-market libertarian. Bukele is the former member of a party that traces its origins to El Salvador’s communist movement, with his only known ideological commitments outside of El Salvador perhaps being that he likes Bitcoin and “busts heads.” Trump publicly embraces protectionist trade policies that Milei himself disavows, though he also seems to like Bitcoin and busting heads. (Let’s ignore Bolsonaro, who has been sidelined for the foreseeable future.)

And while Trump and Milei may be chummy, the relationship between Bukele and Trump is not on such sound footing, seeing as Trump cannot quite resist the urge to blame a Central American president for all of the US’s woes even if they attend CPAC and talk about George Soros.

What really unites la ultraderecha is its antagonism. According to la ultraderecha, there is an entrenched contingent of bureaucrats, journalists, and academics holding the nation back. Maybe they support free trade—maybe the opposite. Almost certainly, this contingent sees critical elements of the current order as sacred. You can’t just put everyone in prison. You can’t just get rid of half the government. You can’t just threaten NATO. Liberation from this contingent’s amber will usher in prosperity, la ultraderecha argues.

One thing that can actually be said about Milei and Bukele is that even if you dislike their tone, policy, or whatever, they have so far accomplished much of what they set out to do. And in their respective swamps, what they set out to do was not considered so simple. Bukele wanted to implement la mano dura, a policy that has failed before and was widely condemned by experts toting degrees in the full slate of social sciences and humanities. Milei wanted to implement a very aggressive austerity program that would plunge Argentina into deeper economic chaos in the short term—something that had been done—and undone—before.

These are hard things to do as a president. You have to coordinate with opposition leaders and make tactical compromises. Maybe you have to bend the Constitution or rewrite it (perhaps this isn’t so hard in Central America). And the incentives for democratically constrained politicians are generally not to do hard, risky things. But Argentina and El Salvador were unusual in just how screwed up they were.

As an example, if you go to Argentina, you might find that the air conditioner in your room was manufactured in the province of Tierra del Fuego—as in “the End of the World.” And when you look into this, you might find that Argentina really was using a bundle of tariffs and tax breaks to prop up an industrial park next to Antarctica and that as a result, Argentinians pay around three times what Chileans do for household appliances. (If only you could see their balance of trade.)

The Argentine National Congress in Buenos Aires. Photo by me.

Thankfully, Argentina is starting to look better (for now). And you probably already know the score on El Salvador. Plausibly, these turnarounds are not a story of heroes, but strong incentives to fix the problem. Because the problems are not an abstraction for most people. They are material, day-to-day problems, and if you don’t fix them, people will notice, and you will be just another feckless president in a long line of feckless presidents. Oh, and if you solve the problem, maybe you get to be president for life.

But how material are Trump’s populist causes to most people? Let’s take immigration. If Americans did not have access to media, it is unlikely that many would think about illegal immigration much in their day-to-day lives. Most people will never get robbed by an illegal immigrant or lose their job to one. So illegal immigration is largely an abstract concern for all but a minority. Note that this does not preclude the possibility that it will cause larger-scale material problems later, but for now, it is mostly an abstract problem. The arguments about illegal immigration center on potentialities.

An American populist thus operates in a very different swamp than an Argentinian or Salvadoran one. And for something as complex as illegal immigration, you could argue that the incentives for an American populist are to create mostly abstract changes. Maximize your “vibe shift” to “actually doing stuff” ratio. Again, it is possible that the abstract concerns, if not solved now, will cause greater harm later. But politicians, like their voters, do not operate with decades-spanning time horizons. They are likely to optimize for the path of least resistance. Changing narratives is easier than, say, moving over 10 million people.

Consider Texas. At this very moment, Texas is, by global standards, a very good place to live. It is growing rapidly, attracting new residents from throughout the US, and retains relatively affordable housing prices. Some tell me you can make as much as a British doctor by working at a beaver-themed gas station in the Lone Star State. (Can we get some H1Bs going for Buc’ees gas station managers? I want a Slurpee from William Harvey’s descendants.)

But some would say Texas is marred in a crucial respect—it has more illegal immigrants than any state in the US except California. Now, maybe this really will cause serious, irredeemable problems down the line, but the crucial point is that right now it does not—you can make six figures at a beaver-themed gas station.

Could Texas even do more about its illegal immigrants? Actually, yes.

There are basically two ways to stop illegal immigration—one entails stopping people from crossing the border or deporting them once they are here. States can maybe do the former and definitely not do the latter since immigration is the purview of the federal government.

But the other way is to stop illegal immigrants from entering economic exchanges with American citizens. If illegal immigrants cannot enter economic exchanges with American citizens, they have no financial basis for being here and will leave or not come to begin with. And the crucial thing to understand is that states, not just the federal government, can theoretically do this! You just make laws that make it hard to hire undocumented immigrants and enforce those laws. But note, this takes a lot of resolve—the kind of resolve that sending your economy into a recession or arresting two percent of your population takes.

So what does Texas’s majority Republican state legislature do about interrupting these exchanges with illegal immigrants? So far, it has required the use of E-Verify, a program for checking an employee’s resident status, for state agencies, public universities, and their subcontractors.

But what about private employers? Texas does require that massage parlors and strip clubs use E-Verify, surely protecting the jobs of the many all-American strippers and masseuses who make this country great. (The competition from Tijuana is indeed “stiff.”) But strangely, the majority Republican legislature never passed the bill to require it for all private businesses. You know, like construction businesses. Governor Greg Abbott, who makes a big show of sending buses full of migrants to New York, has never even mentioned an E-Verify mandate for all businesses. He talks a lot about sending the National Guard to the border, though.

Given that the vast majority of Texans support a universal E-Verify mandate, why not? Well, presumably if Abbott and the legislature made a huge swathe of Texas’s labor force self-deport, many people would get angry. They wouldn’t act like an Argentinian CEO who tolerates Milei’s austerity, because they don’t actually have many imminent, material problems stemming from their illegal workforce—the concerns about migrant crime and stolen jobs are mostly abstraction—the loss of revenue is not. And how reproachable is the status quo, anyway? Texas keeps growing, and Abbott keeps winning elections. To my knowledge, there are no grooming gangs.

Texas indeed demonstrates the correct equilibrium on illegal immigration in a place where you can make six figures as the manager of a beaver-themed gas station: out of mind, out of sight. Control the narrative by sending buses of migrants to NYC. Attack the visibility of illegal immigration by forbidding sanctuary cities. Deter some migrants, but mostly leave the undocumented shadow economy—and the incentives for migration therein—in place.

To be fair, some states mandate E-Verify for all private businesses. Even Arizona, a state with a Democratic governor does. But we should look at the fine print on E-Verify and consider: does this even work?

In the populist oasis of Florida, with the third largest undocumented illegal immigrant population, Ron Desantis recently signed a bill requiring E-Verify for private businesses. Promises made, promises kept! Ah, but check the fine print—Florida’s law covers only businesses with more than 25 employees.

But why not make everyone use E-Verify? Why not make people E-Verify their yard crews and nannies? Well, then you would intrude on individuals—not HR departments—engaged in a consensual exchange. Who wants that? Maybe some frog on X, maybe the CCP, but not regular American citizens. Remember, Florida is a pretty nice place to live, hurricanes and bath salts aside.

So Florida is Very Serious about stopping the illegal immigrants who are qualified to work at real businesses instead of tending to lawns. Think of this as a reverse H1B: You can stay as long as you stick to leaf-blowing.

But what about those larger businesses required to use E-Verify? The Tampa Bay Times suggests many have already solved Desantis’ riddle:

Subcontractors hire the company, which is registered to the worker. Technically, it’s a legal hire because the subcontractor is hiring the company — not the worker.

OK, one loophole. Let’s pretend it’s the only one.

But what if businesses just don’t use E-Verify? That is, what if businesses break the law? Surely the state would do something drastic—such businesses would be hiring potential undocumented criminals!

Let’s look at Alabama, where there is a universal E-Verify mandate—to be clear, every employer in Alabama is legally required to use E-Verify, with penalties in place for noncompliers. That is the idea, but what is the reality?

Well, in reality, around half of businesses just don’t bother to use the program. What happens to these noncompliers? Are they punished as the law entails? No, nothing happens. Actually, I couldn’t find a single recorded case of a business being penalized for failing to use E-Verify. Why? Because Alabama already controlled the narrative. The war on illegal immigration was won as soon as an intern at the Southern Poverty Law Center said the state was threatening undocumented immigrants with its “mandatory” E-Verify program.

The correct response to an abstract problem is to create more abstractions—it is not to move hoards of people around like Bukele shuffling MS-13 through a detention center, or create short-term economic havoc like Milei. Those are really hard things to do! You better have pressing reasons to do them. So we come up with legal solutions. Legally, it is not allowed to be in the US without a visa—and now legally, you can’t be hired! Legally, you shouldn’t jaywalk, either.

Note that I am not arguing that E-Verify does nothing—some immigrants really have migrated out of Florida to other states since its implementation. The point is that it does very little relative to the scale of the problem identified by its proponents. E-Verify in states like Florida and Alabama is a great way to maximize the “vibe shift” to “actually doing stuff” ratio. It is, by design, a partial solution.

The obvious problem with ruthlessly enforcing E-Verify is that most people, in their day-to-day reality, like consensual exchanges, including with illegal immigrants. What people don't like are videos of undocumented Guatemalans setting subway passengers on fire, or caravans flooding across the border. They want a sense that things are “under control.”

The distinction here can be thought of as daytime and nighttime preferences. At night when watching the news, many people are worried about illegal immigration—this is the realm of abstraction, where pixels of a woman burned alive by a Guatemalan migrant grace TV screens like shadows on the walls of Plato’s cave. Here, law and order prevail. But in the day-to-day, people go back to behaving like mostly rational economic agents, entering consensual exchanges with undocumented Guatemalans. The correct equilibrium if you are a skilled politician, of course, is to pander to the former while preserving the latter. Results may vary depending on the immigrant population in question, but suffice it to say, this isn’t so difficult in Texas.

Who understands the equilibrium best? Trump, who in 2019 offered this when questioned about mandating E-Verify at the federal level:

So it's a very tough thing to ask a farmer to go through that. So in a certain way, I speak against myself, but you also have to have a world of some practicality.

Trump understands this balance intuitively because he is a media man and a businessman, i.e., a man of abstraction and an economic creature. The former cries for mass deportations, appealing to abstractions like “law and order”; the latter knows people are materialists who like consensual exchanges.

Now ask: which is likely to win out?