From the WSJ: Eric Cantor Defeat Imperils Prospects for Immigration Overhaul :
Mr. Cantor’s defeat is likely to be seen as confirmation immigration politics are too dicey for this election year and may spook rank-and-file members who advocates have been pressing for support.
In response to a questionnaire from the Richmond Times-Dispatch, David Brat wrote:
With 50 million Americans in their working years unemployed, the last thing we should do is provide amnesty or any form of work authorization to illegal immigrants. Yet, Eric Cantor believes that we need to import more low-wage foreign workers at the expense of lower wages and fewer jobs for Virginia families. Cantor also favors the Dream Act and Enlist Act principles. A vote for Eric Cantor is a vote for open borders and corporate handouts.
Did David Brat cause the market to fall today? This would not come as a surprise since stocks would respond favorably to amnesty and more corporate handouts and Cantor losing makes this less of a possibility. The market’s rationale for supporting amnesty is that wages are possibly are still too high (especially after recent efforts to raise the minimum wage) and immigrants would boost consumer spending, as well as helping the economy in numerous other ways. Crony capitalism, the ever reliable whipping boy for fanning populist support, has created wealth in the form of Tesla, defense spending, as well as the super-effective bank bailouts, which continue to pay dividends to this very day in the form of this massive bull market and economic expansion.
So while Brat’s message may resonate with voters, the market is not happy, which like many previous examples shows how what most people think is good for the economy, in reality, isn’t. Many of these people were content with letting the banks fail in 2008 or for the govt. to default on its debt, etc. The problem is putting emotion over sound policy; letting the wanting of higher wages and more overpaid jobs impede the natural progression of the economy towards one with fewer overpaid jobs and lower wages in exchange for higher productivity and higher profits. Wall St. would prefer that the status quo not be upset to appease the populists.
Just like IQ being important, why do we want policy that will empower the dumb?