National Politics

Trump Fed pick once said migrants are 'economic heroes'

'They are risk takers,' she says

One of President Donald Trump's picks for a seat on the Federal Reserve board once praised undocumented immigrants to the United States as "economic heroes" and "entrepreneurs" -- a position at odds with much of the President's rhetoric on immigration.

Judy Shelton, a conservative economist and 2016 Trump campaign adviser, said in a September 2016 interview on "The Exchange," a Reuters podcast, that she spent years teaching at a business school in Monterrey, Mexico, and found that those who migrate to the US "are not the least educated," instead describing migrants as "venture capitalists."

"They are risk takers and admirable for that," Shelton said at the time. "They are also the venture capitalists for their own country because they send all of that money back home and then they have relatives buying real estate, improving housing. So they're truly the economic heroes."

Her comments stand in contrast to Trump's position then and now on migrants from Mexico and elsewhere in Central America, who he's described repeatedly as "criminals," including in a Cabinet meeting this week.

Shelton has long advocated positions at odds with Trump's on the border and free trade. A CNN KFile review of her record found she once criticized opponents of NAFTA as "shortsighted" nationalists and called tariff proposals from candidate Trump "misplaced."

The Washington Post reported in early July Shelton wrote an article titled "North America Doesn't Need Borders" in the Wall Street Journal supporting the notion of the freer flow of goods and people between the US and Mexico in a 2000 op-ed. In another op-ed in 2001 in the Wall Street Journal, Shelton argued for immigration reform partially because foreign workers from Mexico "diffuses wage pressures."

Trump said last month he plans to nominate Shelton to the Federal Reserve board along with Christopher Waller, the research director and executive vice president for the Fed's regional bank in St. Louis. Neither has yet been formally nominated. The picks come after Trump's two controversial previous choices, commentator Stephen Moore and former Republican presidential contender Herman Cain, withdrew earlier this year amid opposition from Republican senators.

Shelton told CNN this week that her views align with the President's demands for increased border enforcement combined with changes to immigration law.

"Having grown up in Southern California, I had no doubts about the family values and work ethics of many Mexicans who were performing manual labor with diligence and developed skills," Shelton told CNN when asked about her earlier comments. "I admire such people. But there need to be legal procedures to permit foreign people wishing to enter the United States in pursuit of work in strict compliance with well-defined rules."

Shelton is not the only Trump adviser to have differed strongly on immigration and trade from the President. Another Trump campaign economic adviser, Larry Kudlow, who now serves as White House's chief economic adviser, previously harshly criticized the President's rhetoric on trade and immigration in 2015, at one point comparing his calls for the deportation of undocumented immigrants to the worst parts of World War II -- in an apparent reference to the Holocaust. Kudlow told CNN's KFile, he "should've never said it because it was never true."

A White House spokesman did not respond to a request for comment.

 

Experience in Mexico

 

In her 2016 Reuters interview, Shelton said she spent six years in Mexico teaching at the Duxx Graduate School of Business Leadership in Monterrey in the late 1990s and early 2000s. She described her students as "very well-to-do students" and the sons and daughters of local ultra-wealthy families. She said during her time there, she frequently met with then-Mexican President Vicente Fox on the topic of immigration and trade with the United States. In the interview, she described a conversation in which Fox asked why conservatives dislike immigration and immigrants from Mexico. Shelton faulted the Mexican government for not creating conditions to keep immigrants at home.

"On many occasions when Fox would personally upbraid me," Shelton told Reuters. "I guess I was a barometer of conservative opinion in the U.S., and said, "Why don't you let our people come because they help your economy so much and they're such wonderful people and they're hard working and they have great values?"

"I said, 'They are so hardworking, great values. They are truly wonderful people.' In fact, the ones who do make the dangerous journey to the United States, studies by my own students showed these are not the least educated people. These are actually the entrepreneurs. These are the ones willing to take a risk," added Shelton.

She further accused Fox as casting the US as the "villain" on matters of immigration when the goal is to have both countries work together. "I think immigration is very much in Mexico's interest and the US is not a villain here. The idea working for mutually agreeable and desirable goals," Shelton said. "You know it's not fault finding, except with encouraging criminal elements because you have a lawless situation on our border. I think that needs to be corrected."

In her comments to CNN, Shelton said: "I remember my conversation with President Fox very clearly. He was indeed berating the United States for not welcoming the hard-working Mexicans seeking entry into the United States in search of work—insinuating that it was somehow the fault of an unfeeling U.S. government and citing horrific instances of people drowning in the Rio Grande."

She added: "I asked him very directly: 'Why are they all swimming north? Why can't these brave, hard-working people be successful in their own country? Why are they forced to seek a decent living by having to leave their families, their homes, and being subjected to danger and indignities? Whose fault is that? It is the fault of the Mexican government, sir, which you will soon head.'"

 

Push for immigration reform

 

But Shelton has also said the influx of foreign labor from Mexico was good for the US, economy, writing it diffused wage pressure. In the Wall Street Journal in 2001, Shelton wrote that Fox and then-President George W. Bush should push immigration reform because it would benefit both countries.

"The irony is that immigrant workers from across our southern border have never had a stronger champion than Mr. Fox, who hails them as heroes who incur great risk and hardship to improve the economic prospects of their families back home," Shelton wrote. "Such thoughts are echoed by Mr. Bush, with his observation that people who are "willing to walk across miles of desert to do work that some Americans won't do" should be treated with respect."

"If the moral factor weren't enough, there are also economic reasons for both presidents to forge meaningful immigration reform as the centerpiece of this week's summit," she continued. "For the US, the inflow of foreign labor diffuses wage pressures; for Mexico, the inflow of capital from workers, who remit home some $8 billion annually, raises living standards and provides the nation with its third-largest source of income."

Shelton told CNN that she stands by her call for immigration reform, but said American citizens should be given priority in hiring over non-citizen workers.

"Where demand for certain types of labor cannot be adequately met domestically, it might be reasonable to have a visa or special work permit system in place to offer employment opportunities through a legally-validated and well-regulated program," Shelton said. "Priority should always be given to US citizens, who should always be the primary beneficiaries of expanded employment opportunities facilitated by the impact of pro-growth economic policies."

 

Support for NAFTA

 

Shelton also previously supported the 1994 North American Free Trade Agreement, which Trump is moving to replace.

Writing in 1994 in her book Money Meltdown, Shelton slammed the rhetoric of critics of NAFTA and called those who opposed it engaging in "shortsighted nationalism" and protectionism.

"U.S. approval of NAFTA carries a strong symbolic message concerning the future of democratic capitalism, not only in Mexico, but throughout Latin America. Contradicting that message, however, have been cries of concern in the United States over the prospect of losing jobs to Mexican workers, who are willing to work for lower wages," Shelton wrote. "References by presidential aspirant Ross Perot to a 'giant sucking sound' as U.S. jobs are drawn south play on the fears of American workers already hit hard by recession and gloomy economic forecasts. In tragic irony, just as Mexico seems ready to shed its resentment toward the long-hated Yanquis and begin working together to achieve mutually beneficial economic rewards, the United States is leaning toward protectionism and displaying signs of shortsighted nationalism."

"When rhetoric goes beyond arguments about the economic impact of removing tariffs and crosses the line into thinly veiled insults about the aspirations of whole populations, national sensibilities are deeply offended and real political damage is done," she added.

Shelton told CNN that the collapse of the value of the peso in relation to the dollar had shifted the terms of trade between the United States and Mexico.

"The exchange-rate value of the Mexican peso to the U.S. dollar was 3.5; after the peso collapse in December of 1994, the exchange-rate went to 7 pesos to the dollar and today it is roughly 19 pesos to the dollar," Shelton told CNN. "When I insist, as I have for more than 25 years, that exchange-rate shifts fundamentally change the terms of trade, this is a very clear example."


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