VP Vance has been speaking out today about the success of the budget bill working its was through Congress. His most striking talking point, if media reports are conveying his thoughts correctly, is that the key triumph of the legislation is not the continuation of tax breaks for the ultra-wealthy but rather the large increase in funding for ICE and its (Gestapo-like) tactics used to deport immigrants.

Until I put pencil to paper a short time ago, I’d been thinking–and framing my portfolio construction strategy around the idea–that the imposition of tariffs would ultimately trigger a (presumably short, mild) domestic recession. Therefore, it would be best to avoid purely domestic companies, especially in the Consumer Discretionary category, as this negative tide rolled over us and to try to concentrate my portfolio on smaller, newer, innovative companies as well as multinationals and purely foreign firms. Not earthshaking thoughts, but they’ve worked out surprisingly well so far this year.

As a human being and as an American, I’m shocked at the passivity of Congress in permitting ICE activities to go unchecked. As an investor, though, what jumps out to me is this: the major economic consequence of unleashing ICE is to shrink the domestic workforce, as immigrant workers–and apparently some non-immigrants, as well–are imprisoned and deported. That’s because immigrants make up almost 20% of the workforce.

The arithmetic is simple (which is par for the course in the equity market). The overall workforce in the US is growing at something like 0.4% yearly. Subtract, say, 1% through incarceration and deportation, and it will take consistent, substantial improvements in productivity just to avoid a perpetual domestic recession. Not transitory… not good. Arguably not the base case, but thoughts that stand to negatively affect Wall Street, progressively more strongly, until policy is reversed.

…and that’s not considering the brain drain and capital flight that these measures may accelerate.

Ouch.