The New Brownsville U-Turn
By David Henderson
I flew into the Corpus Christi airport late last night and waited in line for my rental car. Behind me was a young dark-skinned man who appeared to be from India and he was shouting in a foreign language–Hindi, I think–to another young dark-skinned man who was picking up their bags from the carousel.
I asked him what brought him to Corpus Christi. It didn’t seem like the kind of place a young foreigner who, somehow, looked professional, would visit on a weekday in November.
My hunch was right. He said that he had flown in from Charlotte, North Carolina and that he and his friend were renting a car to drive down to Brownsville, Texas. The next day (today) they would cross into Mexico and renew their visas so they could return. “H1-B?” I asked. “Yes,” he smiled. He told me that he needed to leave the United States to renew it. I wished him luck.
This is the new “Brownsville U-Turn.” What was the old one? I recall reading a Fortune magazine article from the 1960s by one of Fortune’s best economics writers: Gilbert Burck. In it, he showed how Eisenhower’s restrictions on oil imports had led to what he called in the article “The Brownsville U-Turn.” I don’t recall all the details. What I do recall is that somehow some firms with oil from some countries could get around the quota restrictions b driving from Mexico to Brownsville (or was it Brownsville to Mexico?), literally taking a u-turn, and somehow getting the oil into the United States legally. Those transport costs were a deadweight loss. So were the transport costs borne last night and today by two young Indian men.