Economists and Merkel’s migrants

Someone polled a number of prominent economists whether the influx of refugees into Germany beginning in 2015 will generate net economic benefits for German citizens over the succeeding decade.

About  half said yes, a little less than than half were unsure.  2% disagreed.

As of late 2017, the job status was as following:

~20% had any job.

~largely those were low-skilled jobs

Now you have to understand that Germany is a fairly plush welfare state,  one that spends a lot of money on its inhabitants. School, medical care, housing, the whole ball of wax.  In order to be a net contributor, you have to have a pretty high income.  Even higher, if we’re thinking of someone being a net contributor over a lifetime – you have to consider retirement and old-age costs.  The occasional gaudy acts of terrorism hardly help:  protection is costly.  Maybe it boosts GDP like an epidemic of broken windows?

Next, your typical Syrian or Afghani immigrant doesn’t speak German and doesn’t have a lot of human capital:  he isn’t a fresh graduate of a German technical high school. If typical of his home country, he has an IQ in the 80s. He  finds both beer and blood sausage abhorrent – fitting in is difficult.

The birth rates are  very low in Germany and the big companies would like more skilled labor. But after a year,  out of a million-some refugees, less than 100 got jobs in those big German companies.

So.. On this not-terribly-difficult, not-terribly rare kind of problem, economists are worse than useless.  I could put it more strongly !

 

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116 Responses to Economists and Merkel’s migrants

  1. Maciano says:

    I’ve always been mystified by this nonsense, too, but whenever you ask economist like Caplan, Hanson, Cowen, Tabarrok, Easterly, etc, etc. They always come up w/ econometric papers proving immigration to be a net benefit. Anyone at Cato, Reason, Bloomberg. They all think alike. Depressingly to me, I think they are not lying; they rly believe it….

    Even IQ realist economist Garrett Jones argues for more immigration. I once read that even Charles Murray believes immigration, whatever kind, is always a good thing.

    Economist youngsters like Ben Southwood and Sam Bowman, who are HBD realists, also believe “free labour movements” are a net plus to GDP. Not just Poles and Chinese, Somalis and Syrians too. They will gladly show you papers by open border economists “proving” lowskilled to be a net benefit to GDP.

    I never needed immigration-benefits-GDP papers or even IQ research, I can just visit my old neighbourhood and see its sorry state today…

    • Probably those papers show how bad indicator GDP is. Broken window style…, not any real improvement for net tax paying people.

    • Michael Daxhammer says:

      German media and politicians suffered from diversity hysteria called Willkommenskultur. All news paperes and journals fantasized about Syrian refugees solving Germany’s demographic, economic and work force problems. Although one look into the pre-war TIMSS math tests of 2007 and 2011 could have provided clarity (50-60 percent of all students don’t reach the lowest basic bench mark), they wrote about Syrians as some kind of Arab economic and educational elite population, enriching Germany with no furthered detailed number of doctors, surgeons, physicists and engineers.

    • The Z Blog says:

      All of these guys accept the Von Mises argument as an axiom. That is, unless a society has reached maximum population size, more labor makes everyone richer. It’s a basic libertarian argument, that like most of libertarianism, only works in imagination land.

      • The Big Red Scary says:

        “maximum population size”

        I’m not familiar with this argument. Does “maximum population” really mean the ceiling of of the logistic function?

      • Philip Neal says:

        According to von Mises it was a meaningless question whether immigration benefits the receiving population because he quite explicitly assumes that there is no real difference between populations:

        But anthropology reveals the fact that the German nation is a mixture of the descendants of various races, subraces, and strains and not a homogeneous stock descended from a common ancestry. (Human Action p. 166).

        Anthropology here means physical anthropology (‘Nordic’, ‘dolichocephalic’ etc): he was born in 1881 and his views were formed before population genetics entered the public consciousness.

      • Toolkien says:

        Like everything else zed man says about libertarianism and Mises, this is false.

        “These considerations are not a plea for opening America and the British Dominions to German, Italian, and Japanese immigrants. Under present conditions America and Australia would simply commit suicide by admitting Nazis, Fascists, and Japanese. They could as well directly surrender to the Führer and to the Mikado. Immigrants from the totalitarian countries are today the vanguard of their armies, a fifth column whose invasion would render all measures of defense useless. America and Australia can preserve their freedom, their civilizations, and their economic institutions only by rigidly barring access to the subjects of the dictators. But these conditions are the outcome of etatism. In the liberal past the immigrants came not as pacemakers of conquest but as loyal citizens of their new country.” Omnipotent Govermnet, 1944

        Z man has also claimed on several occasions that libertarians deify homo economicus, which is orthogonal to the truth. Even a cursory reading of Mises’s thought shows that he held the classical economists’ concept of “economizing man” in contempt; man was always an actor in Misesian thought, not an economizer. This was the chief insight of praxeological thought, which in spite of its vagueness at least is not prone to the massive damage done by neoclassical & Keynesian voodoo Krugman krap.

        I stopped reading the Z-blog after a couple rounds of this Hillary-level bullshit convinced me that the rest of his blog is likely to be just as lazy & dishonest and that the Gell-Mann Effect is as much a feature of pop blogs as pop newspapers.

        Mises was wrong about plenty of things–he was born in the 19th century and didn’t even have the benefit of engaging the behaviorists until he was an old man–but if Z-man can’t even get the broad strokes of Misesian philosophy correct, he should try keeping his mouth shut. As a bonus, he’ll attract fewer flies.

    • Little spoon says:

      Economists just cherry pick data to make generalizations that suit their cause. For example, they claim studies looking at refugees who have been resettled for the lob-term show they are net contributors over their lifetimes. In truth, there was one is study which looked at refugees who had been in the us for more than 20 years and yes, they were net contributors. Because many of them were Russian Jews, educated people fleeing the Yugoslavian civil war etc. the fact that they are net contributors in the us, which doesn’t have that fantastic of a safety net for non-blacks, tells us nothing about how Somalis would fare in Sweden. Yet economists pretend the existing research points to the conclusion that refugees are a net benefit.

      And they harp on how immigration is a net benefit. Well, many immigrants are highly skilled and from cultures with intact families. Apparently, their positive impact outweighs the negative impact of low skilled migrants. This doesn’t mean low skilled migrants are beneficial.

      And they generalize studies from the us to the Europe, which is wrong. The us already has more than a 10th of the population as blacks. Our low skilled immigrants are Central American peasants. It’s certainly possible that we benefit from replacing the jobs we would have given to blacks with jobs for Central Americans. But Europe has no large permanent underclass to replace in the job market. And their low skilled migrants are much worse than ours. But economists just pretend all low-skilled is the same and all refugees are the same and that all immigration is the same.

      • gcochran9 says:

        “It’s certainly possible that we benefit” – obviously not. We’re adding one population with lower-than-average human capital – not replacing anyone.

        • Little spoon says:

          But Central Americans are better and the option to hire them allows for better outputs for the kinds of companies that hire them. My own family, which is typical of middle class families, shows this. My mom normally hired Hispanics to do lawn care and cleaning. They did a good job. When she hired blacks, they stole, rioted on the lawn when they didn’t get paid for work they didn’t do etc. So the option of hiring Hispanics for a low cost meaningfully improved our lives, even if it means we have to support more blacks on welfare because of the jobs they lost. Most middle class people and firms seeking low skilled laborers hire in the same way. They prefer Hispanics because they are good workers for that kind of work. The work is done quicker and better.

          In a libertarian world, there is no expansive welfare program to support those who cannot make ends meet. In that model, such people can’t sustain themselves in a developed economy and have to leave. We don’t have this mode of course, which would at least allow a country with an existing lower than average pop to replace then with a less lower than average pop. But we can at least replace them in the workforce, which has advantages in terms of lived experience.

          • Greying Wanderer says:

            “But Central Americans are better and the option to hire them allows for better outputs for the kinds of companies that hire them.”

            if every time a native worker was replaced with a more productive immigrant the native worker and their family was taken out and shot then the GDP per capita would increase

            but otherwise the “replaced” workers are still there living on welfare so the per capita change is negative.

          • gcochran9 says:

            I suspect (and have suspected for a long time) that a lot of people are thinking something similar. You’re wrong, they’re wrong. Add a new population with lower-than-average human capital – considerably lower than average, although not as low as blacks. They too are a net drain on resources, in a welfare state. They go to school, get benefits, incur medical costs, get old-age pensions: if the average member is a net tax consumer, you can’t make it up with volume.

            “advantages in terms of lived experience” is a combination of someone else paying the price and inaccurate accounting. No country can solve its problems by importing an extra underclass.

            • poster says:

              The other problem with this type of argument is that it pretends Hispanics don’t have kids. So sure, the 1st generation may be unusually hard working and work low skilled jobs that the non-immigrant population allegedly don’t want to do. But in the second generation, you get something like regression to the mean, which means less hard work, more crime, more time playing video games than the White population.

          • caethan says:

            I’m gonna go out on a limb here and guess that part of the “low cost” of paying for Central Americans to be your personal servants is that you didn’t bother to pay employment taxes.

          • AppSocRes says:

            You are shifting most of the costs of your preference for Hispanic workers onto the tax payers who wind up paying not just the welfare benefits of the Negroes you choose not to employ but also all the welfare benefits that your preferred Hispanic immigrant workers will get to offset the low wages you are paying them and the welfare benefits they and their children will get just by being present on American soil. I for one am not happy to subsidize your cheap yard workers, nannies, maids, butlers, and whatever..

            • gcochran9 says:

              Most people aren’t reflexive accountants. Clumsy sleight-of-hand can persuade the people paying the most that a negative-sum policy benefits them..

              • Woof says:

                Basically concentrated benefit vs. diffused cost. I save a $100 on yard work while everyone else loses a nickel in increased welfare costs. No one protests over a lost 5 cents but most will put in some effort to get $100

          • Hippopotamusdrome says:

            In a libertarian world, there is no expansive welfare program

            In a libertarian world there are tens of millions of Hispanic voters insuring a Democrat run government.

          • TWS says:

            There never has and never will be a libertarian world. It is the sole social/economic system that has only one advantage over all the other utopian plans. It has never even been tried and failed.

            Worse failure is baked into the cake. No way humans ever adopt the system.

        • Who cares. In 5 years we will have embryo selection for IQ, and in 20 years we fix low IQ with CRISPR.

          What I find quite sickening is that the humanitarian aspect is not mentioned at all. Syria and Afghanistan have brutal civil wars. One third of the arriving Syrians are said to be traumatized. That must surely also lower their contribution to GDP. But contribution to GDP is not the reason why they should be let in.

          • Craken says:

            The MSM has been sufficiently thorough in covering the humanitarian aspect–everyone knows about it. But, strangely, they’ve been much less thorough in pointing out their own lies.
            As to “the reason why they should be let in”: it seems there is no end to reasons that can be dreamed up to justify mass immigration. 45% of Indian children are malnourished; shouldn’t they be let in too? What about the hundreds of millions of Africans at risk of malaria? It’s far more cost effective in almost every case to bring aid to these people locally, rather than inviting a deluge of low functioning, culturally unassimilable migrants into currently high functioning nations. Or is virtue signalling more important than efficacy?

          • BB753 says:

            What if additionally a third of the “refugees” were former soldiers of the anti-Assad coalition, the ones doing the “traumatizing”? You know the ones chopping heads off, killing and enslaving Yazidis, shooting civilians, etc.

          • Maciano says:

            you are an idiot, and people like you will be our ruin.

          • Neither is upheaval in every third world country reason to let them all in. Germany alone is taking in so many refugees that soon we will be overrun. And guess what? They will bring their problems with them. Already see it. Terrorist attacks, rise in rape, violent crime, etc, etc. Muslim extremism gets exported in this way as well. Do these people need help? Sure, but not by opening our doors and inviting them all in. That will only break down our own societies and then we are in no position to help anyone, because we can’t even help ourselves. Instead, hold the crooked governments of our western nations accountable for their crimes and for the extortion and manipulation of other lands, end the wars or else get in and do what needs to be done and get out. Get control of corporate greed and balance the scales so that there won’t be as much extreme poverty. Just as a start.

          • DataExplorer says:

            “Syria and Afghanistan have brutal civil wars. One third of the arriving Syrians are said to be traumatized.”

            When the children of those Syrians and Afghanis flunk out of school, can’t get a job, and can’t get laid, they will inevitably hate the host country. Some will turn to crime whilst others will turn to radical Islam. The civil war will be on your own doorstep.

          • Ilya says:

            They should be let in into YOUR own house only, with YOU providing all food and cover cost of all the social services for them.

            Also, if they commit any crime, you and your family members will all be liable for that. For example, anyone of them murdering anyone, will be punishable by death of either you or your family household member.

            Under those conditions, maybe we can experiment with your idea.

      • DataExplorer says:

        Without being able to pay for an illegal Hispanic nanny to take care of the kids at below minimum wage, how many successful white families will bother to have that third kid?

        • Woof says:

          Give up the second Mercedes, take only two vacations a year and forgo the annual donations to NPR, Planned Parenthood and the DNC. You can then have your third kid.

        • Maciano says:

          It’s not that hard to have a third kid. you get 2 in 2 years and then you have another one. There, that’s how I solved the problem.

          Also, people always talk about affordability of kids, as if income is zero sum. You can always work more, get a better job, try something else; you will amaze yourself. Kids are a great motivator, believe me.

  2. Michael Daxhammer says:

    Due to pending asylum applications hundreds of thousands refugees don’t show up in the statistics. Even when they are granted asylum, they are first registered as work seeking, not unemployed. After just 15 months a refugee has full excess to all social benefits including health insurance like every German citizen. Official unemployment rate of foreigners (Non-citizens) is 3X the German Citizen rate (of course including all naturalized migrant groups like the Turkish Gastarbeiters). Foreigners make up for one third of all long-term unemployment payments (Hartz IV). After the mass migration from 2015 foreigners make up over 10 percent of the German population, additionally over 24 percent of German citizens have a migrant background now, increasing to 38 percent for children under 5 years.

  3. Rosenmops says:

    Somewhere I read:
    “Every time a German person with an IQ of 140 dies he is replaced by two immigrants each having an IQ of 70.”

    • Michael Daxhammer says:

      Reminds me of a psychometrically woke House MD episode:
      Dr. Cuddy: “You’ll figure something out. The two of you [House and Masters] have a combined IQ north of 300.”

      Dr. House: “That’s also true of five morons!”

    • Michael Daxhammer says:

      Maybe you read some statement or piece of Prof. Heiner Rindermann? Ostracized since he honestly and scientifically answered a question about possible race differences in intelligence in a German radio interview, he is one of a few left psychometricians in Germany. When the migrant crisis hit its peak in autumn 2015, he wrote an article for the journal Focus that formally educated African Academics and engineers most likely would have an IQ around 93 according to his best estimates and numbers. That would just equal the average cognitive ability of graduates of the German Realschule (secondary high school with diploma but no qualification for higher/tertiary studies, normally completed with 16 years). Result: Everyone offended.

  4. Coagulopath says:

    What’s frustrating about this discussion is that everyone puts all immigrants in one big bucket Obviously, some kinds of immigration helps the economy, but not others.

    Even within the “low-skilled refugee” category there’s worlds of difference. 75% of adult Syrian immigrants have a high school level education, while 50% Afghans haven’t even been to primary school.

    Refugees are accepted on a humanitarian basis, not because they help the economy. Nobody wants them to stay, and everyone assumes they’ll return to Allfuckedupistan once the bombs stop falling.

    Will this happen? Probably not. 85% of refugees say they plan on staying in Germany indefinitely, and most deportation attempts fail.

    • Maciano says:

      refugees should never be accepted, unless they’re from a direct neighbour country.

      helping refugees with money, food, medicine and shelter, of course. I believe we should have given Lebanon billions. But we should not have had any Syrians in Europe.

    • Michael Daxhammer says:

      Illegal migrants not only don’t get deported or expulsed, illegal migrants in Germany can legalize their status with wrongful behaviour: They just have to stay illegaly long enough. So you are officially deemed socially adapted and integrated and tolerated to remain or you even get the full right of residence.

    • athEIst says:

      The other 15% are lying

    • In Germany Syrian refugees don’t fare well in the work force. Hell, as an American, who mostly assimilates fairly easily in his country, I don’t have good prospects for work here. But the Syrians are not at the education level needed to perform well in the German workforce. The children will likely have a better chance, since they will attend at least part of their school years in German schools and learn the language better than those who came as adults. But that’s true for any demographic, really. The children stand the best chance. The adults are fucked, unless they have something special to offer, or are totally determined to find a way to make it as more than a low paid worker.

  5. Mike Steinberg says:

    German psychologist Heiner Rindermann pointed out the average IQ of those coming was about 82. Even those with degrees had IQ’s of 93. Of course, most of those economists wouldn’t know that.

    https://voiceofeurope.com/2018/01/even-refugees-with-a-university-degree-have-an-iq-of-only-93/

  6. Europe has not gained from immigration in terms of overall ability, and this was evident by 2013. Unlikely that the recent influx will be any better. http://www.unz.com/jthompson/migrant-competence
    There is often selective reporting, such as imagining that all immigrants will have the stellar rise of European Jews, or of the Huguenots.

    • J says:

      Yes, Syrian immigrants will follow the Turkish (Kurd) path of integration in Germany. The rural Kurds engaged as guest-workers 56 years and their descendants have not mutated to ethnic Germans and their academic achievements are lower, but they have learnt the language and are working and paying taxes and contributing to German economy. I don’t a reason why the current batch would not follow the same path. Moreover, thousands of those elderly German widows living alone in big houses are happy to find some immigrant to hang a picture on the wall, to repair a dripping faucet or cut the grass. Restaurant owners are happy to get some to wash the dishes and so. Of course, at this stage, while they are entitled to generous assistance, they would be crazy to declare officially that they are working. Germany tried to become an ethnically pure nation and it failed, so the current trend may be better, I don’t know, but sure Germans are intelligent enough to know what is best for them.

      • Bies Podkrakowski says:

        Ah, happy, rainbow dreams. I had them once, too.

      • gcochran9 says:

        “but sure Germans are intelligent enough to know what is best for them.”
        That’s not the problem: are they sane enough? And they’re not. This has happened before.

        • Patrick L. Boyle says:

          Poor Germans. Overpopulation is solved by killing. This is particularly true if the population rise is fast. The Germans are setting themselves up to have another genocide program. It may not happen at all if everything goes swimmingly. But it won’t take much of an economic downturn to resurrect the sour, bitter Germans of the Weimar Republic looking for decisive leadership.

          Suppose there really was something legitimate about Global Warming? Suppose that it or some other problem arose and prosperity started to slip away from Western Europe. What will the Germans do with all those obnoxious Syrian welfare recipients on welfare?

          It might not be pretty.

          • J says:

            Young men who migrated looking for jobs are not typical welfare recipients, at least not for long. The Syrian refugee problem in Germany is definitely NOT a welfare problem. It is neither an economic problem: cheap labor stimulates production and adds to the GNP. The problem is inborn tendency of xenophobia. No one trusts foreigners.

            • gcochran9 says:

              They’re looking for a higher standard of living. Who said they were looking for jobs?

              Next, they don’t have much on the ball. There’s a reason hat Afghanistan is screwed up: It’s full of Afghans.

          • My prediction: genocide will come, but this time it will be western Europeans being killed by radical Muslims and their sympathisers.

            • Eric says:

              That scenario is highly unlikely. Germany will become Balkanized. Does anyone remember what solved the Balkanization problem?

      • Greying Wanderer says:

        “but sure Germans are intelligent enough to know what is best for them.”

        clever people who don’t know a subject look to expert opinion but what if all the experts are lying for fear of being called racist by the media?

      • Lol! Intelligent enough to know what’s best for them? I wouldn’t be so sure of that!

  7. pyrrhus says:

    Economists, like almost all academics and servants of the deep state, are mainly interested in their own economic status….Which would be harmed by telling the truth about 3d world immigration….

    • Magus says:

      It’s far worse than that. Most of them actually believe it.

      We r dealing with an insane cult that runs Westrn Civilization.

      Displacing it will take a quasi-religious War probably.

  8. dearieme says:

    “economists are worse than useless”: indeed. Microeconomics works, but you probably learnt most of that at your father’s knee. Macroecononics seems to be largely junk, judging by the inability of its proponents to make successful predictions. Never mind; they get to award each other a nice counterfeit Nobel Prize.

    As for immigrants: doesn’t everything turn on (i) who they are, and (ii) their number?

    • pyrrhus says:

      Economics is really a unique profession. Its predictions are worthless, and it provides absolutely no benefit to the public…Its sole purpose seems to be providing a smoke screen for the machinations of its sponsors…
      I exempt economic historians like Greg Clark, who do some really valuable research, which is duly ignored by economists in general.

      • dearieme says:

        I discovered decades ago that economic historians have far more interesting things to say than economists. My research protocol was to engage in conversation with a few of each.

    • AbelardLindsey says:

      Microeconomics is the economics that describes how individuals and companies operate in a larger economy. Macroeconomics is an academic scam that is used to justify all kinds of financial and government policies that cannot be justified through common sense.

      It is reasonable to assume that building a business or running an existing business would teach functional lessons about how business and the real work economy works. The problem with economists is that nearly all of them have not so much as run a coffee shop. They are nearly all academics. Nearly all graduate schools of economics are leftist. The libertarian faction (Von Mises, etc.) is better. But they also are in complete denial of the realities of human capital.

  9. Master Kaen says:

    I am not sure the numbers in this post are correct. In particular, I am not sure where the 20% figure comes from. According to this OECD report (the data is from Feb 2017, so a bit older), (https://www.oecd.org/els/mig/Finding-their-Way-Germany.pdf)

    There were about 450,000 migrants who were seeking jobs, and about 177,000 of them are unemployed. If one only takes those counted as “refugees”, there are about 350,000 refugee job-seekers, and 143,000 unemployed.

    It’s possible that the 20% refers to all asylum seekers admitted: there were about 1.15 million asylum seekers in 2015/16. But not all of them are eligible to be in the labor force, so this comparison might strictly not make sense.

  10. Ledford Ledford says:

    What if we declared all economists must become psychologists and vice versa? Would either discipline suffer? Would anyone notice?

  11. DataExplorer says:

    But wont it be the public sector that pays the price? Not the private sector. Until they have to start raising taxes on corporations. But that could be many years away.

    • DataExplorer says:

      The Private sector will have plenty of new customers. All of those migrants need mobile phones, clothes, food, electricity, cable tv, etc. Whether the tax payer has to subsidize it or not, the private sector will be making money.

      • Gilberto Dorneles says:

        Are you really saying that company owners benefit on having their taxes raised so that their own money is taken from them and given to them in exchange of their own property?

        Are you also saying having your long term prospects destroyed combined with violence and theft = profit?

        • DataExplorer says:

          No. But when Economists talk about short term GDP growth, they are not considering those things.

        • That only goes for small business owners. Large corporations don’t have to pay higher taxes to compensate for the increased welfare costs. Ever notice how it’s usually just the small businesses closing their doors? It always amazes me when I see a very busy business shut down over economic reasons, but it’s happening.

    • Greying Wanderer says:

      yes – employers benefit from the lower wages in proportion to how many employees they have but the extra tax needed for extra infrastructure is shared out between employers and salaried taxpayers (or more borrowing) – hence large scale employers lobbying for relaxed immigration controls.

  12. Leonard says:

    Someone polled a number of prominent economists whether the influx of refugees into Germany beginning in 2015 will generate net economic benefits for German citizens over the succeeding decade.

    Well, it’s not 2025 yet. Or maybe 10 years from when the survey (link?) happened, unclear. Either way, these economists are not wrong… yet. Of course I think they will be wrong too, but we can’t start purging the economics departments on this basis yet.

    One reason in particular that I would expect the 10 year results to be better than those in 2017 is that, as you mentioned, these migrants didn’t or don’t know German. I expect it’s rather hard to generate a lot of value to anyone when you can’t speaka da language.

    • Pangur says:

      “we can’t start purging the economics departments on this basis yet.”

      It’s never too early for a good academic purge, and 25 years ago may have been too late.

    • Greying Wanderer says:

      “Well, it’s not 2025 yet.”

      it varies from country to country but net contributors are generally around the top 40% or so of workers by income and those 40% will generally be advanced in their careers so given the age distribution of the refugees (mostly young men) even if the various immigrant populations would eventually mirror the native 40%/60% distribution the chance of it happening within 10 years is zero.

  13. Bob says:

    If only we could import Japanese immigration policy.

    • Erik Sieven says:

      then again Germany with mass migration has clearly beaten Japan in recent decades in terms of GDP / capita.

      • Greying Wanderer says:

        yes and no – Japan’s GDP per capita was something like 70% of Germany’s in 1970 and c. 90%+ in 2016 so over the total time period they caught up.

        (depending on how you calculate it and with lots of ups and downs along the way)

        • AbelardLindsey says:

          Despite anemic growth rates (around 1% annually), Japanese standard of living has increased significantly over the past 25 years, mostly in the doubling of average housing size from 1991 to 2016. Largely due to both slow deflation as well as very little land use regulations in Tokyo, the average size of housing has doubled whereas the cost has not increased at all. I don’t Germany’s situation. But I suspect the Germans cannot make the same claim of improvement. One more thing. The streets of Tokyo are safe. Young people, particularly young women, can go out and “flaunt their wares” and not be faced with the possibility of rape.

          • Garr says:

            Sexy little Chinese girl-women walk alone in fantasy-princess outfits all over Brooklyn after dark, looking into their cellphones, apparently not at all worried even about being groped let alone raped.

          • Greying Wanderer says:

            how housing costs are calculated for PPP (purchasing power parity) GDP per capita comparisons is probably a big deal.

          • Marshall Lentini says:

            Germany crawling with aggressive Muslims
            Japan crawling with giggling, semi-naked young women in animal costumes staring at their phones

            Nightmare world everywhere you look.

      • Magus says:

        The correct stat is gdp per actually labor force per capita. Technically we even need to adjust for average age as that also impacts it.

        Japanese problem is diminishing and Aging population. Per per labor force participant they’ve actually done ok past twenty years.

        Germany will have similar probs but made worse by the diversity they’ve imported.

        • Greying Wanderer says:

          yes – accurate comparisons are difficult for reasons like that – most accurate would probably be send some dudes to walk round the poorest parts of each country and see how many get stabbed.

  14. Greying Wanderer says:

    some are bought – stealth lobbyists for cheap labor, some believe in the multicult for ideological reasons, the rest are scared of the media calling them racist.

  15. anonymous coward says:

    A possibly partially explanatory scenario: 1970’s stagflation. 1980 Reagan elected. Massive overhaul of the economy. Massive overhaul of economic thinking and administration. To manufacture consent to the new economics a revolution in the field of economics had to take place. It wasn’t all bad, or either all good, but in the process of making the changes the field of economics became even more subject to the control of government officials who make research funding decisions than it even had before. (Or quasi-government officials, like hiring for fast-track jobs and research positions at the Fed Reserve.) Economists, especially prominent economists, were made to fall in order. Today, even economists who consider themselves free of any sort of pressure, are largely in bubble-echo-chambers on campuses speaking the government/elite ideology. (Survivorship bias.) (“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!” – Upton Sinclair.) (Now that 1980 is long past, and a new generation of economists are leading, there really is some excellent research happening in the field – but following the party line of the ideology of the Reagan Era has great persistence, which of course had as an important part the breaking of union power by minimally enforcing laws restricting any and all immigration. The Dems, in part because of AFL-CIO boss George Meany backing Nixon in 1972, had abandoned the unions as a cause which made it easy.)

  16. Little spoon says:

    Can you link to the source that indicated those stats? I am interested in seeing this in more detail.

  17. Peter Capstick says:

    Off topic Greg, but given your uncanny facility for prediction of seismic political events, when do you think Saudi Arabia is going to collapse? What will it look like?

    Thanks.

    • gcochran9 says:

      One of my secrets is saying nothing when I don’t think I know the answer.

      But Saudi Arabia has some failure modes. If they run out of oil, or if oil revenue ( over an extended period) is too low to pay for the benefits they;re used to, or if the overthrow of MBS is too messy and leads to a civil war.

  18. Ilya says:

    There is a reason why only about a dozen economists around the world anticipated the Global Financial Crisis of 2007/08, and that many of these, such as Michael Hudson and Steve Keen, are overt in stating that an education in economics is almost worthless due to many of its key premises being completely unreasonable (e.g., no role for banks/debt).

    The “Queen of the Social Sciences.” LOL!

    • The Big Red Scary says:

      “Michael Hudson”

      The situation is dire when the smartest guy in the room is a Marxist…

      • Ilya says:

        Hudson mentioned that he had to pursue a PhD in economics to be taken seriously, even though he didn’t believe any of it. And Keen’s a Keynesian.

        • The Big Red Scary says:

          “had to pursue a PhD in economics to be taken seriously, even though he didn’t believe any of it”

          Like I said, smartest guy in the room.

  19. Christopher B says:

    I listened to a youtube of Victor Davis Hanson discussing his new WWII history that sort of covers this topic, essentially why did Germany and Japan think they could take on the world and do it largely alone, since other than both declaring war on the US in December 1941 they didn’t coordinate much? As I remember his discussion it was largely because they had an inflated opinion of their own martial abilities based on their past experience and expected to deal a quick knockout blow to the US and USSR, respectively. Since their initial blows failed they were then pretty much one step behind until they were finally defeated.

  20. JoachimStrobel says:

    Do not fall into the trap believing that there are not enough skilled workers available in Germany. There are none for the small money industry pays – which they have to stay “Export World champion”. And for the little careers that the in-group offers. And “skilled” means everything above the unskilled level – so not engineers etc. It may be unclear if immigrants can fill that need. For sure is, that more money will have to be cut from the military (and other budgets) to enlarge the social net that is needed to keep that system alive.

    • Coagulopath says:

      Do not fall into the trap believing that there are not enough skilled workers available in Germany. There are none for the small money industry pays

      Yeah, often “skilled worker” shortages are actually “skilled worker willing to work for peanuts” shortages.

  21. mapman says:

    Here is what I am thinking: If one day ALL economists disappear overnight, the world would become a better place. I’d leave the “economists” who actually just do software engineering/algo development be but the rest better be gone. Maybe we should start with “A Day Without Economists” and just gradually extend it to a Week, Month, Year, Decade, etc 🙂

    • ghazisiz says:

      The sociologists and anthropologists also wish that economists would disappear. Then everyone would listen to them. Is that what you want too?

      Economists have all the problems people have mentioned here. But they are still better than the alternatives.

  22. Michael says:

    A lot of news about TECH and the MILITARY recently.
    Especially with the drone assassination attempt, but cooperation between the two sectors is also being questioned more in general.
    https://newrepublic.com/article/148870/techs-military-dilemma-silicon-valley

    I would be interested in hearing Mr. Cochran’s view on this matter.

  23. JoachimStrobel says:

    Just to avoid misunderstanding: The UK lets as many foreigners in as did Germany in 2015, they just happened to come from the colonies. France is not far off and the Netherlands are also doing their share. So there is no reason to glorify Merkel from that side.

    • Cantman says:

      According to the official statistics about 2,000,000 people immigrated to Germany in 2015 while 600,000 immigrated to the UK. I suspect figures for France will be similar. The British (and possibly French) selection mechanisms, while poorer than they could have been, were also probably quite a lot better than Merkel’s transcontinental obstacle course.

  24. Ludwig Fahrbach isn't wrong says:

    I’ve been a lurker here for a while, definitely one of the more sensible blogs I read, but Ludwig Fahrbach brings up a good point that isn’t mentioned here nearly enough. Ignore the humanitarian aspect if you like, ultimately it’s redundant assuming you have any faith in embryo selection. Maybe I’m overly optimistic, but problems caused by current migration trends seem likely to be outweighed by progress in cognitive genomics and a healthy dose of capitalism. As a 20 year-old I certainly won’t be having any kids until embryo selection for IQ is a possibility, be that in 5 years or 15.

    • David Chamberlin says:

      I am as positive as anyone in thinking that embryo selection can’t come quick enough and will help tremendously but these predictions that it will happen in the west in 5 to 10 years are nuts. No way, no how. I wish that was true but it isn’t. Future predictions at this point are futile. People who make these predictions have no idea how complex the genetic underpinnings of human intelligence is and how slowly we are progressing in understanding it. That doesn’t even begin to address the shitfits the general population will have in resisting embryo selection.

  25. István Nagy says:

    Good questions…
    And here something for the debate- in 2013 a statistic was published on the lifetime costs of different ethnic immigrant groups in Norway. The original report disappeared magically, only fragments are available. Fortunately here the most important table from the report. As you see, there are huge differences between Somalis and UK immigrants:
    http://islamversuseurope.blogspot.com/2013/09/norway-third-world-immigration-economic.html

  26. Eric says:

    So how would economists respond to this proposal? “In order for our country to stay competitive in the future we need to have a viable workforce that meets the needs of our growing companies. I propose that we offer incentives for the poorest people in the country to have as many children as possible, and that we pass a law that makes it illegal for these children attend school — or to be educated by their parents. When these children are old enough to enter the workforce, they will have no skills, and will be illiterate in their own language. This huge supply of cheap, uneducated, unskilled labor will greatly benefit our economy for the future.”

    Of course, no politician will make a speech like this, but this is exactly what they’re arguing when they support mass immigration to America and Europe. If you think our economy benefits from having uneducated workers, then I don’t see why they are also so concerned about wanting to push as many students into college?

  27. donald j. tingle says:

    George Borjas wrote an interesting article on this subject in then Winter 2018 issues of the Independent Review which if i recall correctly argues immigration has a harmful effect on natives but a rather larger redistributive effect within the economy.

    Economists discussing this misleadingly gloss over the fact that in their calculation of benefits, they include the benefits to the immigrants, which a lot voters are of course likely not to care too much about, or consider anything other than a benefit if the cost comes out of their pocket. The Norman Invasion for example was a pretty good thing…for the Normans.

  28. harriettubmanagenda says:

    My theory: the libertarian prescription for almost everything, non-intervention, becomes a reflex which overwhelms evidence and reason. The non-intervention prescription (recreational drugs? Non-intervention. Prostitution? Non-intervention. Gay marriage? Non-intervention. Anti-trust? Non-intervention. Zoning? Non-intervention) works so well in most cases that it becomes a reflexive tribal response. Don Boudreaux (Café Hayek) is one of these.

  29. A Erickson says:

    I had a conversation with a relatively prominent, quite brilliant immunologist (not from/currently based in North America or Europe) a few months ago who made the argument that Europe only took in so many migrants selfishly, for the obvious economic benefits. I thought that was a crazy idea: the Swedish economy has no real need or use for illiterate goat farmers, and aside from that is extremely generous with benefits. I attributed his making such an absurd argument to simply being far removed from his expertise and out of his depth, but it turns out he’s no further out of his depth than the people who are supposed to analyze such problems for a living.

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