As it says on the Statue of Liberty:
Give me your rich and well-fed,
Your huddled elites yearning to live in Beverly Hills,
Affluent wretches from your teeming shores,
Send these, the multiple mansion owners, the deep-pocketed, to me,
I lift my lamp for those with gold galore!
This poem might as well be the mission statement for the U.S. government’s EB-5 visa program, which sells a quick path to American citizenship. Could there be a more perfect fit?
A bipartisan collection of self-appointed “good government” types recently tried to reform, or end, this program. That would be a mistake. EB-5 is an outstanding example of a public-private partnership. The American public takes most of the risks, while the private sector (foreign investors and well-connected U.S. crony capitalists) get most of the benefits. For now, the reform effort failed, but EB-5 will be up for renewal again in September.
In simple terms, the EB-5 “immigrant investors” program allows a non-American to make a below-market rate investment of $500,000 in a low-population rural area or an area with a high unemployment rate. This investment is usually a loan, and it’s typically secured by real estate or other collateral. After all, we wouldn’t want wealthy foreigners to risk losing their money.
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In exchange for this below-market loan to a grateful developer (who purportedly will create about 10 jobs per lender) and fees collected by grateful middlemen, the U.S. government gives the wealthy foreign lender the chance to apply for a Green Card. This lender can use that Green Card to become a citizen and to bring in a spouse and children. Now, don’t call this “chain migration.” When the immigrants are prosperous, it’s “family reunification.”
President Trump loves the “Dreamers” so much that he has killed the Deferred Action for Childhood Arrivals program that allowed these undocumented people brought here as kids to legally live and work in the United States. He loves us so much he’s fighting hard to save his “travel ban” on visitors from mostly Muslim countries, all to keep us safe. He was so outraged by the Assad regime’s atrocities that he bombed Syria. And he’s so concerned about destitute Syrian refugees that he’s doing just about everything possible to keep them out of the U.S. So far in 2018, America admitted only 11 Syrian refugees (down from nearly 800 in the same time period in 2016).
The EB-5 visa authorization, however, is for 10,000 people per year (and potentially 20,000 to 50,000 people per year with “family reunification”). Don’t priorities like these make you proud to be an American?
EB-5 are supposed to be made in economically distressed areas. But the boundaries of the distressed areas are decided by the middlemen — lawyers and other professionals organized as Regional Centers. With clever economic gerrymandering, pretty much anything can be made to look like a distressed area. That’s how real estate developers like the Kushners (Trump’s in-laws) can use below-market rate loans from EB-5 investors to build luxury apartment buildings.
Look, market rate loans are for working people who need to borrow to pay for their homes and health care. Someone has to help real estate investors get wealthier — you can’t expect them to figure out how to earn a profit without government help. By some estimates, close to 90% of EB-5’s low interest rate loans are made in areas that may not need the money.
Real red-blooded capitalist Americans know that programs like EB-5 shouldn’t be eliminated or reformed. Instead, they should be unchained from existing bureaucratic restraints. Government regulation is the problem, never the solution. Let’s deregulate. Let’s unleash the power of the marketplace on the EB-5 program.
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First, the cap on the number of EB-5 visas has got to go! It interferes with the God-given right of people like the Kushners to make even more money. Let’s issue unlimited numbers of EB-5 visas — think of all the rich foreigners we could attract! Think of the billions that would flood into the U.S., and all the profits real estate developers could make. Some of those profits might even trickle down to the rest of us.
Next, let’s end the cloud of negativity about EB-5. As just one example, the Office of the Inspector General of the Department of Homeland Security commented that the government “cannot demonstrate that the EB-5 program is improving the U.S. economy and creating jobs for U.S. citizens as intended by Congress.” It’s time the Trump administration handles this negative information the same way it deals with inconvenient data about climate change and gun violence. Stop collecting data about EB-5, and suppress the reports that exist!
Third, let’s welcome foreign government ownership of EB-5 Regional Centers instead of worrying about it. When deep-pocket Russian spy agencies can establish their own Regional Centers in the U.S., this will open up an entirely new and lucrative market for the EB-5 program, while making it much easier for Putin’s friends to infiltrate America unchallenged.
Some U.S. civil servants foolishly fear that foreign spies, bankrolled by their intelligence agencies, are already sneaking into the U.S. using easy-to-obtain EB-5 visas. Government investigators have found “individuals with possible ties to Chinese and Iranian intelligence … had infiltrated the EB-5 program.” The U.S. government should stop investigating EB-5 visa participants. We shouldn’t waste scarce resources on investigating rich people who have the funds (whatever the source) to buy American citizenship.
My suggestions will simplify the EB-5 program while simultaneously making it even more effective at achieving its true aims: assisting American crony capitalists in getting even wealthier, and helping rich foreigners (with potentially dubious backgrounds) become American citizens. Problem solved!
Steven Strauss, a member of USA TODAY’s Board of Contributors, is a lecturer and visiting professor at Princeton University’s Woodrow Wilson School. Follow him on Twitter: @Steven_Strauss.