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Eisenbrey argues against increasing US visas for high-skilled work

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Ross Eisenbrey of the Economic Policy Institute has written an op-ed in the New York Times titled “America’s Genius Glut” with the argument that the United States should not increase non-immigrant guest worker visas for (allegedly) high-skilled workers (the H1B visa category). Eisenbrey’s argument is thoughtful and nuanced, and he comes at this restrictionist conclusion from a more progressive stance than the majority of restrictionists I read (though, to be fair, many allegedly right-wing restrictionist groups often use very similar rhetorical arguments).

Below are my quick thoughts on Eisenbrey’s piece. These were written very quickly, hence my sincere apologies to Mr. Eisenbrey if I misrepresented his position. I’ve also tried to argue based on (what I understand to be) Mr. Eisenbrey’s framework of assumptions and goals, even though I don’t share them in many respects.

  • Eisenbrey writes:

    But America’s technology leadership is not, in fact, endangered. According to the economist Richard B. Freeman, the United States, with just 5 percent of the world’s population, employs a third of its high-tech researchers, accounts for 40 percent of its research and development, and publishes over a third of its science and engineering articles. And a marked new crop of billion-dollar high-tech companies has sprung up in Silicon Valley recently, without the help of an expanded guest-worker program.

    I’m in broad agreement with Eisenbrey that the United States (or for that matter, the world at large), is not at risk of systemic collapse if it fails to increase H1B quotas or relax the requirements for getting a H1B visa. I expect that things will keep getting better for the world, with or without open borders. I don’t think that Silicon Valley, or any other stereotypical high-skilled worker sector, is at risk of folding up due to a lack of immigrant labor. The current guest worker visa regime seems good enough to keep these sectors alive, though at the same time they may face competition from other jurisdictions outside the US that are easier to migrate to (see, for instance, here and here). Those who claim imminent collapse are probably mistaken.

    But while the crisis argument is misguided, that is hardly an argument for the status quo and hardly an argument against improvement. The relevant question to consider with any proposal is how it compares with the alternative, not whether it is absolutely necessary. So overall, while it’s valuable to point out what Eisenbrey did, the point of contention is still open to debate.

  • Eisenbrey writes:

    almost 90 percent of the Chinese students who earn science and technology doctorates in America stay here; the number is only slightly lower for Indians. If they’re talented enough to get a job here, they’re already almost guaranteed a visa.

    I think it’s true that the vast majority of high-skilled and qualified workers educated in the US can stay in the US if that is their primary aim. But not necessarily doing the job of their choice, or the job that would create the maximum value for society (from either a citizenist or universalist perspective). The existing H1B regime favors (in relative terms) large established companies that can afford the legal fees and other resources to help procure visas. Of course, this isn’t to say that these large established companies are favored in absolute terms — even these companies would prefer not to have to make these outlays. But what’s an inconvenience for large established companies can be a dealbreaker for startups and small companies. Also, the inflexibility of the guest worker visa program means that it’s difficult for workers to do short-run internships at companies before deciding whether to work there long-term, and other intermediate and flexible arrangements may also be ruled out. Many foreigners who want to create a startup, or work at one, or attempt a flexible arrangement of this sort may compromise either by not choosing to stay in the US, or working at a large company instead. John Lee’s recent post had some examples, see also the quote from Natalie MacNeil here or the story of entrepreneur Amit Aharoni.

  • Eisenbrey writes:

    If there is no shortage of high-tech workers, why would companies be pushing for more? Simple: workers under the H-1B program aren’t like domestic workers — because they have to be sponsored by an employer, they are more or less indentured, tied to their job and whatever wage the employer decides to give them.

    I’m not sure if, controlling for all relevant skill variables, this is true, but if, in fact, those on H1B visas get paid less than identically skilled natives, one simple explanation might be all the legal outlays, as well as uncertainty, associated with H1B hiring, which factor into the cost on the employer side but don’t actually reach the employee’s pocket. That’s the demand-side story. The supply of workers story is that workers prefer to take lower wages than natives that are still substantially higher than wages in their home country.

    Eisenbrey is also correct that guest worker programs that are tied to a single program lock workers in and may allow employers to offer lower wages to workers because of lower fear of exit. But this also cuts in another direction: employers aren’t able to “poach” such guest workers that easily from their competitors. Overall, I don’t think that the inflexible guest worker programs are all that beneficial to employers in the big picture (though you could make an argument that employers as a whole benefit modestly by keeping wages slightly lower than they would be in a market equilibrium, this effect would still be lower than the naive estimate due to greater friction in hiring employees from competitors). In any case, in so far as the proposal being critiqued by Eisenbrey fails to offer flexibility with respect to changing employers, this is a valid critique. However, in as much as it doesn’t make things worse than the status quo, I’m hard-pressed to see why Eisenbrey would oppose it. (note that most versions of guest worker programs proposed by open borders advocates allow for easy change of employers — see here and here).

  • Eisenbrey writes:

    Bringing over more — there are already 500,000 workers on H-1B visas — would obviously darken job prospects for America’s struggling young scientists and engineers.

    The citizenist connotations here are striking, but it would be pointless to critique citizenism yet again here. Still, there is an interesting question: to what extent does high-skilled immigrant labor depress the wages of high-skilled native labor? It’s hard to measure “skill” so most labor economists use proxies such as education level and type of degree. There are theoretical reasons to believe that many sectors using high-skilled work may enjoy more complementarity than substitution between different workers. At any rate, that’s my guess, as I mentioned here. But this is a controversial position. The most pessimistic estimate I’m aware of is that by George Borjas, which estimates that the last few decades of immigration have depressed the wages of college graduates by 3.9% in the short run and 0.5% in the long run (interestingly, in Borjas’s numbers, the only groups experiencing long run wage declines are college graduates and high school dropouts). I think that Borjas’s model by design ignores complementarities, making some of these conclusions suspect from my perspective, but this is something I’d need to examine far more closely than I’ve had time for so far.

    Now, obviously, the numbers could look a lot different under open borders. But Eisenbrey is talking of marginal changes to an existing system, not complete open borders. A 0.5% long run wage decline is nothing to be laughed at, but it is hardly a catastrophe, and not the same as destroying people’s livelihoods and life prospects.

  • Eisenbrey writes:

    But it would also hurt our efforts to produce more: if the message to American students is, “Don’t bother working hard for a high-tech degree, because we can import someone to do the job for less,” we could do significant long-term damage to the high-tech educational system we value so dearly.

    Although I’ve read many restrictionist arguments, this is a new one: immigration of high-skilled workers lowers the pay for high-skilled native workers, which lowers the payoff of acquiring high skills, which lowers people’s degree of education. I’d have to think a lot more about this to come up with a clear view on the matter, but offhand, this does seem plausible once you agree with the preceding claim that high-skilled immigration lowers high-skilled natives’ wages (again, in practice, we’ll proxy “high-skilled” with “college graduate” or something similar when measuring stuff).

    Still, if this is true, is this an additional reason to worry about high-skilled immigration? I don’t see why. If, for some reason (immigration or otherwise) the returns to high-skilled work fall, and people respond by pursuing less of education in those skill areas, this seems like an appropriate response to the changed economic conditions, that is both privately and socially beneficial. If you believe that education is mostly about signaling, then this is even more socially beneficial than it appears. The only way I see where you’d consider this bad is if you think either that people undervalue their own gains from education or if you think education confers significant social benefits over and above the private benefits it offers.

    The undervaluing story may be valid, but you’d then need to show that the extent to which people undervalue education also increases with a reduction in the return to education, which would seem somewhat self-contradictory and hard to show.

    I’m not opposed to the idea of significant social benefits to education (though my personal view is that it’s more than canceled by signaling, but let’s set that aside for now). However, if these significant social benefits exist in the form of positive spillovers, it seems prima facie plausible that educated guest workers would generate very similar positive spillovers, so this fails to be an additional argument against guest worker programs, even from a citizenist perspective.

UPDATE: Here’s a somewhat more forceful response from Alex Nowrasteh, that critiques some of the numerical and empirical claims made by Eisenbrey. Alex’s critique is largely complementary to mine (in that it covers a different set of points, with minor overlap).

Barry Goldwater’s vision of open borders

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Goldwater is a name synonymous with the rebirth of American conservative, right-wing politics. But it is also a name that should be synonymous with open borders. In 1962, Barry Goldwater jotted down some thoughts on where his beloved Arizona would be in 50 years. On immigration and Mexico, he said:

Our ties with Mexico will be much more firmly established in 2012 because, sometime within the next 50 years, the Mexican border will become as the Canadian border, a free one, with the formalities and red tape of ingress and egress cut to a minimum so that the residents of both countries can travel back and forth across the line as if it were not there.

To a certain degree, his vision came true ahead of time. Stories of lively cross-border interactions pre-9/11 abound. After the post-9/11 crackdown on border movement, it became much harder to cross the Mexican border with the US without enduring much lengthier delays than existed before. Goldwater’s vision plainly does not exist today.

Of course, to some degree, one can argue that Goldwater wasn’t really arguing for true open borders (though I find it interesting that Goldwater pointedly refers to the “residents of both countries,” as opposed to just citizens). Canadians themselves face a fair number of immigration restrictions in the US. The popular television show How I Met Your Mother has made fun of this by depicting a Canadian character’s issues with her work visa forcing her to consider a sham marriage with a friend. This theme is fairly popular in the media, actually; Ryan Reynolds and Sandra Bullock starred in The Proposal, a film based on a very similar storyline, also about a Canadian woman forced into a sham marriage to hold down her job in the US.

These pop media depictions have a basis in reality. My current employer used to hire non-US residents frequently. It stopped doing this a few years ago not just because of the cost, but because of the immense uncertainty about whether a work visa would actually come through. It’s no use hiring someone only to have to bid goodbye to your tens of thousands of investment in that person’s training thanks to immigration enforcement. Canadians at my firm were no exception to this; I met someone who transferred to my office from our Toronto office very shortly before we stopped sponsoring work visas; he told me he actually decided to work for us in Toronto because he wanted to work in the US in the first place.

So no open borders for Canadians. But looking at Goldwater’s statement, I don’t think he would have expected the kinds of restrictions my Canadian colleagues put up with. One can hardly describe a convoluted work visa process as an immigration law that cuts the formalities of ingress and egress to a minimum. One can hardly say that Canadians can cross the US border as if it were not there! Maybe Goldwater was only imagining open borders for tourists, but that doesn’t sound like the sort of thing someone dreaming about the next 50 years of progress would be focused on.

Modern US conservatives would do well to hark back to Goldwater (and Ronald Reagan, for that matter, considering his willingness to embrace “amnesty”). The nature of North American trade and physical borders means closed North American borders are legislating against economic and geographic reality. Instead of trying to build an expensive and unrealistic wall, the sensible thing to do is to allow those acting in good faith to come and go — and monitor these legal movements carefully to filter out those with ill intent. In fact, this is a lesson from another famous US conservative’s Operation Wetback. Reflecting on Dwight Eisenhower’s policy, Alex Nowrasteh writes:

By the early 1950s many unauthorized migrants were entering alongside Braceros to work, mainly in Texas. The government responded with the now infamous Operation Wetback that removed almost 2 million unauthorized Mexicans in 1953 and 1954. Unlike today’s removals and deportations, the migrants were only required to step over the border into Mexico and could then step back in and lawfully sign up for the Bracero program. As a result, the number of removals in 1955 was barely 3 percent of the previous year’s numbers and those who previously would have entered unlawfully instead signed up to become Braceros, which was the intended purpose of Operate Wetback. The government did not tolerate unlawful entry but made it very easy for migrants to get a guest worker visa and used Border Patrol to funnel unauthorized migrants and potential unauthorized migrants into the legal system.

US immigration policy consciously makes it difficult for Canadian white-collar professionals to work in the US, and essentially impossible for Mexican blue-collar professionals to work. Is it any surprise that the white-collar professionals of the world would rather go elsewhere, while the blue-collar professionals sneak in to work?

Restrictionists and those critical of open borders contend that Operation Wetback “succeeded” in the sense that it deported millions of people, and most of them did not come back. Calls for Operation Wetback II or variants of it are not uncommon; they appear on FOX News and on stage at presidential debates. But US law then, unlike now, was not prejudiced against previous deportation victims. You could still re-enter as a Bracero legally right after you were deported; the whole point of deportation was to encourage you to re-enter legally, not to erect further barriers to your entry. After all, if you were able to get in unlawfully before, you could certainly try again!

Conservatives need to recognise physical and economic realities, and use the legal system to work within them, instead of trying to pretend there’s some perfect form of “border security” that doesn’t involve doing battle with the fundamental realities of the North American map. Modern border enforcement proposals take for granted that it’s possible to control in totalitarian fashion large swathes of border territory. That may be so, but only if the state assumes a totalitarian form itself. As the American Civil Liberties Union would put it, to enforce the border, you’d need to erect a Constitution-free zone.

The photograph featured in the header of this post is of Americans and Mexicans playing volleyball over the border, circa 1979. Via RealClear.

Open borders is a radical proposal

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After poring through some of the data on the foreign-born proportions in the US during my spare time this past weekend, I came to the conclusion that other than radical open borders advocates and restrictionists, most people don’t really have an idea of just how radical open borders would be. Many pro-immigration people are quick to point to the US’s experience with open borders in the 19th century. But there’s a lot of difference between then and now. On a variety of numerical metrics, the US as it stands today comes fairly close to where it was when borders were most open. This table goes up to 1990, but the 2010 census data puts the total population at 310 million and the foreign-born population at 40 million, so the 1970-1990 trend is geometrically continued in the 1990-2010 period.

  • The foreign-born population as a fraction of the total US population as per the 2010 census is about 13%. This is quite close to the 1910 historical high of about 15%.
  • The foreign-born population in the 1970-2010 period has been roughly doubling every two decades in absolute terms (it went up from about 10 million in 1970 to 20 million in 1990, then again to 40 million in 2010). Compare that to the US’s heyday of open borders: the 19th century. The foreign-born population from 1850 to 1890 grew at a comparable rate: up from 2.2 million in 1850 to 5.6 million in 1870, and then again to 9.2 million in 1890. Note that the Chinese Exclusion Act and related restrictions started kicking in the last quarter of the 19th century. It’s true that the period from 1920 to 1960 saw little growth in the foreign-born population, due to closed borders.

If the foreign-born population in the US continues to grow at roughly the same geometric rate as for the last 40 years, it will be about 55 million in 2020 and about 80 million in 2030. Possibly by 2020 and definitely by 2030, this would mean that the foreign-born share of the population would be well past the 1910 peak.

What would happen under an open borders policy today that mimicked the pre-1875 immigration policy of the United States? I think it’s safe to say that the growth rate will be notably higher than under today’s business as usual scenario. Even people friendly to open borders worry about getting swamped, which is why many propose a gradual opening of the borders. On the upper end of the estimates is David Henderson’s speculation that up to 300 million people could migrate to the United States in the first two years after open borders. But even a moderate view would involve about 10 million people migrating (many of them temporarily) to the United States in the first year following radical open borders. Since the exact smoothing of the flow will depend on the precise policy contours, I’d say that an increase in the foreign-born population of the United States by about 50-100 million in the first decade following open borders (or something close to open borders, such as DRITI) is a fairly conservative, low-end estimate. If you applied the lowest end estimate of this range, 50 million, assuming that the borders opened in 2010, then in 2020, the foreign-born population of the United States would be at about 85-90 million (give or take a few existing foreign-born people dying), which would make the foreign-born proportion in the United States between 20% and 25% — way higher than at any time in US history. If you took the higher end of the (still conservative) estimate of 100 million more foreign-born people in the United States after a decade of open borders starting 2010, that’d be about 135-140 million foreign-born in 2020, out of a total population of somewhere between 400 and 450 million, which would be 30% or more of the population. (Note also that, for comparison, according to polling data on migration, about 135 million people claim they would move to the US in the near future if the US allowed them to do so legally, and this is approximately in line with the above estimates).

[I’m starting 2010 because that’s the last year for which census data is available, though of course one cannot travel back in the past to open the borders].

How does this compare to other countries? Here’s a chart of the foreign-born shares of OECD countries (it’s a few years old, unfortunately). The only countries that have a ~20% or higher population share are Luxembourg, Chile, Australia, New Zealand, and Canada. Luxembourg is extremely small, and is part of the EU, so its anomalously high value may be worth discarding. With the exception of Luxembourg, none of the foreign born shares crosses 25% (though this might have changed since 2006, for which the data was available). Chile’s inclusion in the OECD is misleading for the purposes of this comparison, since its per capita GDP is less than $20,000, so less than half that of the United States. Canada, Australia, and New Zealand have extremely low population densities overall. According to Wikipedia’s summary, the US ranks 76th in population density with a density of 34 people/square kilometer. Canada (4 per square kilometer), Australia (3 per square kilometer), and New Zealand (16 per square kilometer) fail to make it to the top 200 in the list. If you exclude all of these, you’re left with basically no country.

But even if you keep Canada, Australia, and New Zealand in, the most ultra-conservative estimate for the foreign-born share in the United States under an open borders type policy is comparable to the highest foreign-born currently seen in the OECD, and more realistic estimates of what would happen in the US under open borders with respect to the foreign-born population place us literally in uncharted territory.

All these data are of course well known to most people in the migration debate. Restrictionists often embrace statistics and factoids of just the sort described here to paint open borders as truly lunatic. And in a sense, they’re right. Open borders is a truly radical, unprecedented proposal. Historical analogies can get us this far, but they simply don’t cut it quantitatively when describing the potential effects (good or bad) of open borders today.

Note that the reason I focused on the United States is simply because I’ve been looking at US-related data in the recent past. However, the case for open borders is universal, so one might wonder if there are other countries for which open borders would be less unprecedented. I don’t know an answer offhand, but it’s also true that many other countries are much smaller (in area and population) compared to the US, so their enacting open borders wouldn’t quite mean the same thing as the US doing so. However, I don’t see how the stats would look less dramatic for most other countries. If Canada announced open borders, then given that the population of Canada is about 1/10 that of the US, a much smaller migrant inflow would have a much larger impact on the foreign born proportion. In fairness, though, it may be argued that since Canada has a much lower population density, some of the overpopulation-related arguments touted by restrictionists have far less force in Canada.

What I think this points to is that when open borders advocates rely on historical precedent regarding open borders, they need to determine the appropriate adjustment factors for a reasonable comparison between the past and present, and justify what these adjustment factors should be. A naive copy-and-paste of population growth rates between the past and present suggests that the current immigration policy of the United States (and possibly of many other countries) already produces results similar to the heyday of open borders. This also raises the question of why we intuitively expect far larger migration flows today, in both absolute and proportional terms, compared to 19th century open borders. Falling transportation and communication costs are the obvious culprits that come to mind, but other technological and social changes might also be involved (for instance, a society that’s far more welcoming of different races and cultures may reduce the perceived and real costs of migrating for people from these different races and cultures — independent of the role of government policy). The next question would be whether all aspects of society have become faster at equal rates, or whether some aspects (people’s ability to physically migrate) have become much faster compared to others (the ability to form new industries and residential areas to accommodate large population influxes), along with the implications of these different degrees of speeding up for the effects of open borders.

Michael Clemens on the “path to citizenship”

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Michael Clemens, who heads the migration-related initiatives at the Center for Global Development, recently wrote a blog post titled Care About Unauthorized Immigration? The ‘Path to Citizenship’ Is What Matters Least. Like my co-blogger Chris, Clemens is critical of overemphasis on the path to citizenship. Clemens:

I am not saying that the status of unauthorized immigrants isn’t important. I’m saying that the policy step of a path-to-citizenship is unlikely to be an important determinant of the unauthorized immigrant population, even in the short term.

This is clear from U.S. history. In 1986, President Ronald Reagan created a path to citizenship for most of the 3 million unauthorized immigrants then living in America when he signed the Simpson-Mazzoli Act. Watch what happened to the unauthorized immigrant population. By 1990, just four years later, you couldn’t even tell that anything had happened: [view graph at original link]

Later in the same post:

If you’re concerned about the phenomenon of unauthorized immigration or the plight of unauthorized immigrants, pay less attention to the path-to-citizenship. Keep one question foremost in your mind as you read the forthcoming details of the Senators’ and president’s proposals: What are they offering U.S. farmers to get the labor they need without going under? What are they offering U.S. parents to get the childcare they need without breaking the bank? These are the provisions that will shape unauthorized immigration for tomorrow’s America.

My thoughts:

  • From a pro-open borders perspective, the path to citizenship is the least important of all issues being discussed.
  • From the political externalities perspective, the path to citizenship is very very important.
  • I think that while Clemens is correct that citizenship or the lack of it is not much of an incentive to migrate, the data offered by Clemens don’t quite support that conclusion. The graph displayed by Clemens does suggest that a path to citizenship will not reduce future unauthorized immigration. I’m not exactly sure who argues this, though it does seem like the sort of thing that somebody who hasn’t thought clearly about the issue might say. But restrictionists usually argue the opposite — that a path to citizenship for past unauthorized immigrants will incentivize increases in future unauthorized immigration. This, I suspect, is true. Clemens’ graph doesn’t extend much before 1986, but it’s easy to see that the rate of increase must have been slower before 1986, because the total number of unauthorized immigrants couldn’t have been negative. So, it does seem like the 1986 immigration reform incentivized future unauthorized immigration. What’s not clear, though, is whether citizenship specifically had that effect over and above being granted legal status. So overall, the marginal effect of citizenship seems to be unclear.
  • Even if a path to citizenship is not important for migrants or for open borders advocates, it’s very important for political parties, who are after all negotiating with their political competitors about future voters — the people who’ll decide the parties’ future fate. I don’t see eye to eye with Peter Brimelow, but he’s right that granting citizenship to migrants is about electing a new people, and political parties have a self-interest in electing people who’ll elect them. This doesn’t mean they’d always follow that self-interest — there might be other pragmatic and ethical considerations — but the issue will weigh heavily in negotiations. BK pointed out in the comments that even pro-immigration Republicans don’t expect large numbers of newly minted immigrant citizens to vote for the Republicans, hence they are more likely to support guest worker programs. Democrats do seem to have an advantage with migrant votes, and hence support a path to citizenship, but supporting guest worker programs may cost them union support, which might make them reluctant to do so, as Alex Nowrasteh pointed out:

    So why doesn’t the proposed immigration reform include a comprehensive guest-worker program? Surprisingly, the main issue is not opposition from conservative Republicans. It is unions and their supporters who do not want it.

    In the 2007 immigration reform push, an amendment that would have ended the guest-worker program after five years destroyed Republican support.

    The then-leaders of the AFL-CIO, the Laborers’ International Union of North America, the United Food and Commercial Workers International Union, the International Brotherhood of Boilermakers, the Iron Ship Builders, Blacksmiths, Forgers and Helpers and the Teamsters all wrote letters opposing guest workers and supporting the amendment.

18 years of immigration torment

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 Atanas Entchev is an immigrant to the US who is currently penning a book about what he calls “[his] family’s 18-year US immigration ordeal.” He is currently blogging excerpts from the book. Atanas’s story is a poignant reminder of the harshness of immigration restrictions and the climate of fear they create. Atanas is a recognised leader in his field of geospatial studies, one of his clients being the US government. He was legally present in the US for most of the last 20 years — but because of a legal snafu in 2011, he became eligible for deportation. He and his son were arrested and held in custody for over 2 months, facing deportation proceedings.

The Free Atanas campaign published a fairly comprehensive (if obviously sympathetic) summary of why his family was facing deportation, and why they were seeking prosecutorial discretion. Atanas and his son were detained in the autumn of 2011, making them one of millions of victims of the Obama administration’s heavyhanded immigration crackdown. Obama purports to have targeted threats to public safety and prioritised them for deportation, but as far as one can tell, there is no real reason why Atanas and his family were prioritised.

After a campaign mounted by people who knew Atanas both personally and professionally, he and his son were freed at the government’s discretion, with permission to remain for 1 year. Information on why the government did this is scarce, though it probably helped that a Congressman and Senator signed on to the petition for Atanas’s release.

I’ve written before about the absurdities of immigration enforcement, and Atanas’s case is a perfect addition to the list. Atanas and his family lived legally in the US for 2 decades. He so thoroughly integrated his family into the US that his son, despite holding Bulgarian citizenship, speaks no Bulgarian. He became eligible for deportation because his lawyer made a mistake, and immigration law offered him no way to correct that mistake. Then he was prioritised for deportation for reasons unknown, detained, and then released, also for opaque reasons. What way is this for government to make decisions that literally turn people’s lives upside down?

Atanas is currently seeking a literary agent to help him get his book published. It looks like he’s been slow to release much on his blog, so I hope he gets around to publishing. It looks like it’ll be something worth reading.