PJ Media

The underground economy

I read with interest a href=”http://www.newgeography.com/content/00428-in-ethnic-enclaves-the-us-economy-thrives”an article entitled,/a emIn Ethnic Enclaves, The U.S. Economy Thrives /em(Hat tip: a href=”http://nalert.blogspot.com/2008/11/in-ethnic-enclaves-us-economy-thrives.html”Newsalert/a):br /br /blockquoteDr. Alethea Hsu has a strange-seeming prescription for terrible times: She is opening a new shopping center on Saturday. In addition, more amazingly, the 114,000 square foot Irvine, Calif., retail complex, the third for the Taiwan native’s Diamond Development Group, is just about fully leased.br /br /How can this be in the midst of a consumer crack-up, with credit card defaults and big players like General Growth struggling for their existence? The answer is simple: Hsu’s mostly Asian customers – Korean, Chinese, Taiwanese, Japanese – still have cash. “These are people who have savings and money to spend,” she explains. “Asians in Orange County are mostly professionals and don’t have the subprime business….”br /br /The center, reconstructed from a failing old mainstream mall purchased in 2005, is now roughly 90% occupied. “We are doing so well that we are expanding the mercado,” Legaspi says, referring to the thriving centers dominated by very small businesses run from attached stalls that are a popular feature of many Latino-themed centers. “It’s all cash economy. They pay their bills with cash. The banks and credit card companies are not involved. It’s true capitalism, and it works.”br /br /Latino shoppers, he suggests, also have been less impacted by the stock market collapse than other consumers. After all, relatively few, particularly immigrants, have large investments on Wall Street. In addition, even if they have lost their jobs, particularly in construction, Legaspi adds, strongthey tend to pick up other employment, even at lower wages, often in the underground economy. “They get paid in cash, and they pay in cash” /strong [my emphasis]. /blockquote br /br /My initial thought about the article was that I like that the “ethnic enclaves” are said to be “true capitalism” that works but when I got to the part about Latino immigrants going into an all cash economy as a result of the “underground economy,” I must say, I was a bit puzzled. Afterall, this would imply that they are paying no taxes–not even payroll taxes–and not filling out income tax forms like the rest of us. Isn’t this illegal, hence the name “underground economy?” They play by one set of rules, the rest of us another? br /br /Mike Huckabee, in a href=”http://www.pjtv.com/?cmd=videovideo-id=824video-title=C2.0_What_does_Huckabee_really_think_about_Libertarians_%3F_series-name=1_Pajamas_TV”our interview with him for PJTV /adiscussed how a href=”http://www.amazon.com/gp/product/0060875496?ie=UTF8tag=wwwviolentkicomlinkCode=as2camp=1789creative=9325creativeASIN=0060875496″the fair tax/aimg src=”http://www.assoc-amazon.com/e/ir?t=wwwviolentkicoml=as2o=1a=0060875496″ width=”1″ height=”1″ border=”0″ alt=”” style=”border:none !important; margin:0px !important;” / would be more fair since those in the underground economy would pay taxes on what they bought. This seems like a good idea to me. I wonder how big the underground economy is? I thought about this the other day after overhearing a conversation at the hair salon. br /br /One of the customers having her hair done was talking about how flush in cash she was because of her new job. “I’m making a lot,” she stated to the hair sylist, “it’s all under the table, of course.” “That’s the best way,” replied the sylist. Is this really fair to the other Americans who pay their fair share of taxes? I don’t think so, do you?