Greetings from the middle of nowhere

I am 12 days into 19-day trip to New Zealand. Everything here is upside down. They drive on the left and celebrate Christmas on a hot summer day. Even the moon is upside down, with the brighter portion at the top. (Orion’s sword hangs upward.)

I don’t have much to say about the NZ economy, other than that everything seems fine. This country doesn’t seem to have any serious problems, at least that are apparent to tourists. (I imagine that the locals would find plenty to complain about.)

Astronomers tell us that no one place is the center of the universe, or perhaps that each place is equally in the center. That’s not true of Earth, where London is near the center and New Zealand is in the middle of nowhere. It might help to examine the “land hemisphere” and the “water hemisphere”, defined as the hemispheres that contain the most and least amount of land:

Notice that New Zealand is near the center of the water hemisphere. Its closest significant neighbors are Australia, which has fewer people than metro Tokyo, and Antartica, which has some penguins. North of the 38th parallel, the northern hemisphere is full of big cities like Beijing, Rome, London and New York. South of the 38th in the southern hemisphere you have Wellington and Christchurch. That’s it. It’s lonely down here.

Some random observations:

1. Prices seem lower here (compared to the US), except for gasoline. Houses are also expensive. Living standards seem a bit lower, but there are many intangibles in favor of New Zealand (weather, informal culture, trust, lack of congestion, personal freedom, etc.)

2. There seem to be more cows and fewer sheep than during my previous trip (in 1991).

3. Auckland seems like a smaller Sydney. It has a new district along the waterfront that is similar to San Francisco’s SoMa and Boston’s South Seaport. There is good art deco architecture throughout New Zealand.

4. Domestic flights are convenient and very cheap.

5. Wellington seems like a small big city. The national capital area is utterly unpretentious, with a child’s playground right in front of the Parliament building, and an ordinary suburban residential area right behind it. I wish America behaved more like New Zealand.

6. Lots of stuff is free (museums, national parks, etc.) Much less security than in the US, and much, much, much less than in China. In many ways, New Zealand seems almost the exact opposite of China. BTW, New Zealand is about 5% Chinese and 5% Indian, much higher percentages than in the US.

7. The drinking age is 18, and smoking is allowed in more places than in the US. Prostitution is legal. There are far fewer frivolous lawsuits and hence people are freer to do fun things that are risky. There are fewer walls than in the US, and much, much much fewer than in China. You can pretty much roam around wherever you wish. It is number 3 in both the Fraser and Heritage Economic Freedom Indices, and when you add in politics it may well be the freest country on Earth.

8. Pound for pound, it might be the most scenic country in the world, at least the developed world. There is an enormous variety of interesting scenery. It’s also very easy to get around. The roads are not crowded (outside a few cities) and parking is not an issue. Unfortunately, the glaciers are receding fast.

9. They have the sort of agricultural productivity that was very valuable throughout most of human history. Unfortunately, it’s Australia that has the resources that are valuable today (iron, coal, gas, etc.) This is one reason why Australia is richer. They also lack economies of scale. Americans wrongly think the rest of the world is hurting us with unfair trade practices, but New Zealand really is hurt badly by the unfair trade practices of others (which protect farmers in rich countries.)

10. They have fewer than 5 million people in a country 10% bigger than the UK and 30% smaller than Japan. (Physically speaking, New Zealand is a bit like Japan.) Their population has recently been growing at 2%, which is perhaps the fastest rate for any developed country? Their bigger cities seem to have the same restrictive zoning problem as in Australia and Canada, keeping house prices high.

People often think of paradise in terms of tropical islands in the South Pacific, such as Tahiti and Bora Bora. Perhaps temperate New Zealand is the the real paradise.



70 Responses to “Greetings from the middle of nowhere”

  1. Gravatar of A Throwaway A Throwaway
    18. January 2020 at 14:50

    I dunno how well NZ is doing with their Asian population. According to wikipedia, Chinese New Zealanders only have half the median wage of the national median for all New Zealanders. They clearly aren’t doing to well with immigration
    So they may not be like China, but they clearly are’t improving much either.

  2. Gravatar of Michael Rulle Michael Rulle
    18. January 2020 at 18:28

    Your travelogues are really what makes this blog go😇. Having said that, what a nice summary. Only 5 mil people. Like northern NJ. One of my favorite little ruminations—once something is a “country” it becomes famous and notable seemingly way beyond its size (relevance?). But, being a country IS important. Re walls: funny. Pacific Ocean is it’s own wall. In fact, my guess is all those nice interesting cultural tidbits you mention are in part a function on their “wall”. Sounds great. Continue having fun.

  3. Gravatar of Rajat Rajat
    18. January 2020 at 19:08

    Yes, NZ is a great country to live in many ways. Some of the pluses you didn’t explicitly mention are great food, wine and coffee – and not just for its size. Also, at least Auckland has very good flight connections. You can fly in one hop to most large cities in Australia and Asia, plus LA, San Fran, Vancouver, New York, Houston and Buenos Aires. It’s probably the smallest city (1.6 million) with that level of connectivity. The weather is generally temperate, although only the top of the North Island has what one could call a warm summer. That suits Eric Crampton though, who I believe thinks anything over 22C is oppressive. The main downside to NZ is that it is very small and, being relatively close to Australia, there is a much stronger brain drain of young people to Oz, the UK and the US than I see here in Melbourne.

  4. Gravatar of Rajat Rajat
    18. January 2020 at 19:17

    Also, one silly quibble – there is more of Melbourne’s population below 38 degrees south (about half a million people) than live in either Wellington or Christchurch! You could have said 40 degrees for the same effect.

  5. Gravatar of Benjamin Cole Benjamin Cole
    18. January 2020 at 19:53

    I envy Scott Sumner his recent itineraries. Soon, he will be comparing notes with Tyler Cowen.

    The Kiwis are trading real estate for imports.

    As long as the Kiwis maintain property zoning, this to some large extent results in residential renters financing current-account trade deficits—-through higher rents.

    Interesting times.

  6. Gravatar of ssumner ssumner
    18. January 2020 at 23:59

    Throwaway, Long time readers of my blog understand that average income data is meaningless, unless you hold constant factors like age. The Chinese will be fine.

    Michael, Note that NZ has very high rates of immigration (and emigration.) It’s a very dynamic place, always changing.

    Rajat, Thanks for that info.

    Make it 39 degrees. If I use 40 I think I have to exclude Beijing and NYC.

  7. Gravatar of A Throwaway A Throwaway
    19. January 2020 at 07:35

    Good thing that I used median! income data instead of average, and the ages of the Whites and the Chinese aren’t too far apart anyways to begin with. So your critique doesn’t make any sense to begin with.

    I never, and will never, understand why you promote mass immigration than just boosting birthrates.

    Why make perfectly good, first world, peaceful countries, have depressed wages from mass immigration and lower IQs from Indian, and Muslim, and African immigration? Even the Chinese have middling socioeconomics here.

    I get the distinct sense that your views are overwhelmingly based on feelings and not facts on this case. Like most racial liberals, I bet you don’t live in a very diverse neighborhood, and probably spent most your life in a very White cities.

    Honestly, if you have the time, could you write an article outlining why you think immigration is good for America? Like some factual reasons that you have picked up over the years. Because I do not get how importing people with half your median wage make your society any better off than it was before. Much less the far worse socioeconomics of the other immigrant groups in New Zealand.

    I mean I get importing people who are smarter than you, and do better than you, but how does importing people who do worse than you improve anything?
    I would very much like to be convinced otherwise.

  8. Gravatar of A Throwaway A Throwaway
    19. January 2020 at 07:37

    Correction: I meant New Zealand not America here, I think Asians have more self selection in America, and do somewhat better than Whites, but New Zealand, they certainly do worse.

  9. Gravatar of Sunday assorted links – Marginal REVOLUTION Sunday assorted links - Marginal REVOLUTION
    19. January 2020 at 09:54

    […] 6. Scott Sumner reports from New Zealand. […]

  10. Gravatar of Mike Sproul Mike Sproul
    19. January 2020 at 10:16

    You forgot snakes.
    New Zealand has no snakes.

  11. Gravatar of ChrisA ChrisA
    19. January 2020 at 10:41

    NZ is one of my favourites, but as you mentioned Scott the challenge is the distance to everywhere else. I did consider living there for a while, but realised that you can have the same lifestyle in a more convenient location. Places that come to mind include Vancouver, Scotland and Northern Spain.

  12. Gravatar of sfw sfw
    19. January 2020 at 11:55

    The glaciers are receding, however they have been receding since they were first discovered. If you look at the Franz Josef there are signs (or there used to be) showing where the glacier was in the past. It has both receded and advanced, the last advance ended in 2008. During the little ice age the glacier extended many kilometres and receded rapidly afterwards. Don’t worry about it, it’s just nature and nothing to do with CO2.

  13. Gravatar of anon/portly anon/portly
    19. January 2020 at 12:10

    I’d forgotten you were going to NZ, and it’s probably too late now, but if you’re going North to South you should send me an e-mail, and I will send you the names and whereabouts/info of two personages that you might enjoy getting in touch with.

    You are probably thinking, based on the general mediocrity of my blog comments, that this is not that interesting of an idea or suggestion, but in this case, I can actually guarantee that you would be wrong – I’m not talking 100%, I’m talking 110%. It’s possible spending an hour or a few hours with either one of these people would enrich your trip experience vastly. (Of course you may have met some very interesting people via other sources, but however interesting those people were, these two are better).

  14. Gravatar of Ryan Ryan
    19. January 2020 at 16:21

    Interesting observations. As a visitor you probably miss the biggest complaint for locals; house prices, or at least you miss the long and painful anecdotes that describe how disruptive they are. Eric Crampton and Michael Reddell are two kiwi bloggers who’ve done an excellent job documenting how painful this is and how far it goes.

    Also, if you think domestic flights in NZ are cheap, I wonder about your benchmark group. NZ domestic flights are a solid duopoly with a dominant local player (Air NZ), which only recently became more dominant after its major competitor (Jetstar) dropped a series of routes last year.

  15. Gravatar of ssumner ssumner
    20. January 2020 at 00:04

    Throwaway, The wages of immigrants don’t matter, what matters is how their children do. And I suspect that native born Chinese tend to be much younger than native born whites, as the Chinese came relatively recently. The Chinese will do fine, as they do in other countries.

    America has accepted more immigrants than any other country, and last time I looked our per capita GDP was nearly the highest in the world. I see no evidence that immigration hurts a place. Would the USA be better off if our population was merely equivalent to Australia or Canada?

    Mike, Yes, and until humans came all they had was bats and birds.

    Chris, Yes, the distance is a negative, unless a plague or nuclear war hits the “land hemisphere.”

    Anon, I am mostly here for the scenery; I don’t know any local people. I’ve been working my way south, and am now in the “Southland” area.

  16. Gravatar of Ged Parker Ged Parker
    20. January 2020 at 02:44

    As a Brit visiting New Zealand for the first time 3 months ago my perspective was very different. It felt very familiar- roads, cars, brands, countryside, place names- but different; distances, vernacular architecture, and hardly any dereliction. Also the population was considerably younger. I found prices higher with very little discounting, but housing was cheap; apart from Auckland. I didn’t take to the CBD of Auckland; the land of the car and tarmac and noise. I found New Zealanders to be internationalists, possibly because any outbound journey is hundreds or thousands of kilometres. I sensed they’ve changed very rapidly from an outpost of Britain to an Asian Pacific country. They are uncovering pre-colonial history but there few hard artefacts or structures so it based more on folklore. They have hang-ups about Australia; pinching their young and skilled, and enjoying higher wages and lower costs, and increasingly being treated as foreigners. Following recent earthquakes many places have a sense of insecurity.

    I must return to experience more of the wilderness.

  17. Gravatar of David David
    20. January 2020 at 03:56

    “The national capital area is utterly unpretentious, with a child’s playground right in front of the Parliament building, and an ordinary suburban residential area right behind it. I wish America behaved more like New Zealand.”

    If America were a country of five million, largely isolated from the rest of the world by geography, and with a demographically uniform population, it probably would. Indeed, that’s a pretty good description of the first fifty years or so of the Republic–but America was that way until well into the 20th century.

    As Michael Barone observed in one of his books (I am paraphrasing from memory here), “…As late as 1928–the last year of the Coolidge Administration–it was possible for the vast majority of Americans to spend their entire lives without a single encounter with the Federal government–except for its largest and most pervasive agency, the Post Office.”

  18. Gravatar of Mark Mark
    20. January 2020 at 07:31

    Throwaway, racial liberalism is most prevalent in the most racially diverse areas of the country, like California and other major metro areas. Queens, NY is the most racially diverse large county in the US and people there are far more racially liberal than the median American. It’s the whitest areas of the country like Appalachia that tend to be racially conservative. You see the same things within cities. The most racially liberal neighborhoods in my city are the 60-80% white ones where younger people like to live; the 90%+ white neighborhoods are racially conservative.

    Also, why would the incomes of other groups matter to you? If I’m in a bar and some poor people walk in, the median income of the people in the bar is lower but that doesn’t affect any particular person’s income.

  19. Gravatar of A Throwaway A Throwaway
    20. January 2020 at 09:27

    The only countries that have mass immigration the same way like America are all majority-White countries, so it is not suprising that they are successful. You are being confused by framing effects. America is not rich because improvished fruit pickers enter here, it’s because White Americans have the highest wages of anyone on the planet. America would be poor if it was as economically performing as the most non-White areas. In fairness, Latinos and Asians in America have some socioeconomic mobility, but the Muslims and Africans have absolutely none.
    Demographics matter, just look at the China. That country has been growing faster than anyone else for the last 40 years, and unless you want to say it is because of the CCP’s performance, then it is due to their demographics. Should China become 13% Black? Or have millions of criminally inclined Muslims enter?
    Should China begin having Rotherham like rape gangs?

    Whites vote based on the Black population around them. That is why the South, which is 30% Black has the most racialist voting White population. California and NY have bigger Hispanic populations than Black populations, with California’s black population begin less than 5% of the states population. Essentially, view California as Vermont, and their voting patters make perfect sense.
    Anyways, even in both states Whites vote like 48% conservative and 52% White, so it really doesn’t matter that much. Whites aren’t liberal in the US by much, unless you count Twitter people as an electorate.

  20. Gravatar of Martaban Martaban
    20. January 2020 at 09:55

    Penetration of the NZ political system by China is a major problem, and none of the politicians dare to talk about it.

  21. Gravatar of anon/portly anon/portly
    20. January 2020 at 14:27

    “Anon, I am mostly here for the scenery; I don’t know any local people. I’ve been working my way south, and am now in the “Southland” area.”

    Well, you mentioned awhile back you’d be going to NZ, and I was going to suggest the names of a couple of people I think someone like yourself would genuinely enjoying meeting. They’re within 100 miles of Invercargill, certainly.

    But it sounds like your trip is almost over. You’ve probably discovered by now that you should have spent maybe half a day on the North Island and just visited the Mainland.

    (Wikipedia: “The South Island of New Zealand is sometimes jokingly called the Mainland or the main island, especially by South Islanders themselves. Though it has a far smaller population, it is larger than the North Island.”)

  22. Gravatar of ssumner ssumner
    21. January 2020 at 00:31

    sfw, You said:

    “Don’t worry about it, it’s just nature and nothing to do with CO2.”

    Let me guess, you majored in logic. If glaciers are already melting, then global warming can’t possibly cause them to melt any faster.

    Ged, Good comment.

    David, I agree that if America were more like New Zealand then it would most likely behave more like New Zealand.

    Throwaway, I’m afraid that you are not well informed. Many recent Muslim and African immigrants to the US have done very well.

    I don’t view white people as some sort of master race.

    You said:

    “Demographics matter, just look at the China. That country has been growing faster than anyone else for the last 40 years, and unless you want to say it is because of the CCP’s performance, then it is due to their demographics. Should China become 13% Black?”

    So do their “demographics” explain why 30 million Chinese starved to death in 1959-61, or why Chinese incomes are comparable to Mexican incomes? Thanks, but I’ll take America with its diverse population and free market economy.

    Anon, Thanks for the offer. You can certainly send their email addresses to my Bentley email, but it’s unlikely I’d be able to meet them.

  23. Gravatar of Daniel M Daniel M
    21. January 2020 at 09:32

    When I was there several years ago I thought the prices at restaurants were significantly higher than the US even accounting for tipping culture. And the food was not that great even if the raw ingredients were often outstanding. My only real complaint from the trip.

    Totally agree about everything else–New Zealand was such an amazing place to visit and the culture is just *pleasant* without being dull.

    I was most struck by the sheer diversity of the scenery. An hour-long drive can take you through multiple places that look like a completely different part of the earth.

  24. Gravatar of Rob Rob
    21. January 2020 at 10:23

    I’d highly recommend reading dan davies old post on new zealand back from when he lived there for a few months. Really one of the best example of travel/culture/econ blogging out there

  25. Gravatar of ssumner ssumner
    21. January 2020 at 15:55

    Daniel, Perhaps their currency was stronger when you visited. When I see $7 for a glass of wine on a menu, I think in terms of $3.50 US, which is less that a typical, American restaurant would charge for wine.

    We found a very good Japanese restaurant in Auckland, but most of the food is just OK, like the USA outside NYC and LA.

    Another example is airline tickets. It costs $40 (US$) to fly Auckland to Wellington.

    Thanks Rob, I’ll take a look.

  26. Gravatar of ssumner ssumner
    21. January 2020 at 16:27

    Rob, That was great.

  27. Gravatar of A Throwaway A Throwaway
    21. January 2020 at 17:26

    What are you talking about? The CCP is what caused China’s initial failures, but when they stopped the extreme opression, then China rocketed up to Mexican income, while still having an opressive government. The Chinese have had the fastest socioeconomic rise of anybody on the planet, and they will in another 50 years catch up to American levels of income, if the government keeps relaxing their foot that is against the Chinese peoples throat.

    Second, I am not a White Nationalist. I want immigrant groups that do better than the native born, not worse. I agree with your points on Hispanic immigrants and Asian ones in America, since they do as good as Whites.

    Once again, it is important to avoid silly ancedotes and go into data. According to the CDC African Americans have 10x the homicide rate of White Europeans, a homicide rate higher than Afghanistan(!):
    Imagine if African Americans were 90% of the population due to mass immigration, and America’s crime rate was 20 instead of 4 like is today. Wouldn’t that make the people poorer? How would America having a higher homicide rate than Afghanistan make us richer?

    I think it is simply easier to have a high-IQ, low crime population, whatever race it is, and have an easy time growing like the Chinese, then to have bad demographics and suffer like all of those African countries. I guess you don’t mind if America stagnates like all those bitterly improvished African countries that can never grow properly, while China easily charts 6% growth rates.

  28. Gravatar of ssumner ssumner
    21. January 2020 at 20:04

    Throwaway, You are not well informed on immigration. African immigrants to the US do quite well.

    I don’t know why you expect China to become as rich as the US. That seems very unlikely to me, and to most informed observers. Japan leveled off at 75% of US per capita income. Why will China do better than Japan?

  29. Gravatar of Michael Rulle Michael Rulle
    22. January 2020 at 07:46

    Scott—-I am off topic here—-already said I very much enjoyed this travelogue.

    But not really off topic! I believe I have mentioned, that I think your ideas on Fed Policy are truly radical. By radical I mean, not off the wall or any such thing, but a paradigm changer in macroeconomics——and certainly in monetary policy. Assuming I am correct—-even as it is a continuation from Friedman——then it is necessary that 1) you accept this is true, and 2) act accordingly

    It is not enough to do this blog. You need to write a serious book explaining what this is, how it works, why it is correct, and how it differs from what has come before. I still believe you leave “holes” in your theory—-some have commented (like me, but others)—-that it sometimes seems circular or tautological, that your methods (e.g., futures markets) are not fully flushed out, and how to determine why this should lead to less recessions——and what that means for prosperity—-are not fully explained.

    I think this theory is a big deal—and Market Monetarism is now a known concept (because it is in wikipedia :-)).It is a big deal and someone needs to go all in on it—presumably you. Your blog back in 2010 on influential texts was terrific.

    I just bought Nunes and Cole.

    Arrogant of me to suggest this perhaps——or—-because I believe it is needed.

  30. Gravatar of A Throwaway A Throwaway
    22. January 2020 at 12:23

    Understand your point via China, thank you for that.

    You do know what Regression to the Mean is right? African immigrants don’t even do that well, they just do as well as Whites in America, hardly an achievement for a self selected group.

    Here is the UK’s data on arrests by race. The UK has merit based immigration, and you have to meet a income threshold to get in:
    Even merit based African immigrants have three times the crime rate of Whites in the UK, and who knows what will happen when regression to the mean kicks in.

    If you don’t believe me, just use your own economic principles. Housing prices reflect social capital, and people’s professed views mean nothing compared to what they actually value, which is reflected in those prices.

    Look Scott, you live in Orange County, which is only 2% Black, and previously lived in Newton, which is also only 2% Black. You spent probably $500000+ to live in such exclusive neighborhoods, with Newton median housing prices in the millions. Mission Viejo has a median home value of $735000. Meanwhile, Detriot is 85% Black, and its median home price is a mere $35000, a city that started the automobile industry. Other cities are the same way. No matter how much people like you say that growth in the African population is good, the market has spoken, these changes are bad for America.

  31. Gravatar of A Throwaway A Throwaway
    22. January 2020 at 14:33

    Here is an interesting comparison with housing prices. Santa Ana, which is close to your Mission Viejo has a population of 350000, with 15% considered illegal, and 80% considered Latino. Its median home price is $568,996. Detroit has 600k people, 85% Black, and has a median home price of just $35000(!!!). Detroit is the birthplace of the automobile industry, while Santa Ana has no significant historical economic importance. IF Demographics do not matter as you infer, then why does the market price the median homes in both areas so differently?

    This also applies to your personal life.

    Whether or not you have realized it, you paid substantial sums to live and retire in very non-Black communities, yet say that America should better reflect those same communities that you paid a premium to escape. How do you square that?

  32. Gravatar of Tom Brown Tom Brown
    22. January 2020 at 15:05

    Interesting. What’s the quality of the prostitutes there? Are they a good value? Asking for a friend.

  33. Gravatar of ssumner ssumner
    23. January 2020 at 02:04

    Michael, I’ve already written a book–that’s the easy part. Now to get it published. . . .

    Throwaway, I’d prefer to live in LA, if I could afford a house like mine in that highly diverse community. I used to live in the south side of Chicago, not that it matters.

    You say that African immigrants are only doing about as well as whites, and that means much better than Hispanic immigrants. And from this you infer that Hispanic immigrants are successful and African immigrants are not? Whatever.

    And when did I say demographics do not matter?

  34. Gravatar of Benjamin Cole Benjamin Cole
    23. January 2020 at 03:30

    Dimon should know a lot…yet…is he saying central banks will and have been be so easy that they will drive down interest rates?

    Like, the way global central banks have been so easy since 1980 we have dead inflation and interest rates near 0%?

  35. Gravatar of Christian List Christian List
    23. January 2020 at 05:13

    Kind of OT:
    These remarks by Timothy Taylor about the FED and its policies sound very interesting. It is the first time someone explains it in such detail and in such a comprehensible way. Examples:

    When the Federal Reserve conducts monetary policy, it announces a target for the “federal funds” interest rate.

    The main lenders in the federal funds market, as McGowan and Nosal explain, are the Federal Home Loan Banks. These banks have accounts at the Federal Reserve, but do not receive interest payments from the Fed on funds held in these accounts.

    The main borrowers in the federal funds market are foreign banking organizations.

    In the old days before 2007, the Federal Reserve conducted monetary policy by influencing the market for banks that were lending or borrowing their own reserves. Now, the primary tool for conducting monetary policy is the interest rate that the Federal Reserve pays for excess reserves. That interest rate will shape the desire of Federal Home Loan Banks to lend funds and the desire of foreign banking organizations to borrow them–and thus affect the federal funds interest rate.

    Phrased this way, the mechanics of Federal Reserve monetary policy that focuses on the federal funds interest rate sound rather indirect and complex! Take a moment to pity the teacher of introductory economics. Explaining how the old-style monetary policy tools affected the federal funds interest rate had its challenges, but at least you didn’t need to start dragging your intro class into the details of Federal Home Loan Banks, foreign banking organizations, the overnight reverse repurchase facility, and so on.

    Or in other words: Dear Fed, cut that indirect and complex crap, and do market monetarism / NGDP level targeting already.

    And another question: why interest on reserves in the first place?

  36. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 08:08

    You are being obtuse to how bell curves work. If you take the top fraction of a country’s population/ or a continent’s population, then you should have fairly good socioeconomic measures. However, every scientist who studies these phenomenon believe in Regression to the Mean, in where the next generation does not do as well as that highly selective group.

    Take Korean Americans for instance, they used to do far better than Whites, and were overepresented in the top fields of science and engineering, with far higher incomes than Whites. After two generations passed by, then Koreans regressed to the mean and fell to below most Whites in income and fell dramatically in academic acheivement relative to other Asian groups. Whites now are equally represented on the NMS as the Koreans.

    Now, the same applies for African Americans and African Immigrants. African immigrants will regress to the mean, and will approach the socioeconomics as African Americans. I’m sure that the top 1% of African Americans(non-immigrants) does as well as the median White. But the median Black has 11(!) times the crime rate and only half the income.

    If the best of Africa can only do as well as the median white, then what will happen after regression to the mean. Hispanic immigrants are different, since over 1/3rd of Mexico’s population and 1/2 of Central America’s population now reside in the US, no self selection there, but you already knew that and are just being dishonest.

    So how are the children of African Immigrants going to do?

  37. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 08:23

    You judge the immigrant in that single generation, does he/she do good or bad. But that immigrant will have children, and how those children do matter, since they are what is going to matter in the long run. So you should judge the whole group, not the immigrant slice, since they will only matter for one generation. That is why you and I have totally different views on immigration.

    Immigration is not successful if you only judge it in one generation, but you must judge it over many generations. I know that you are a time-oriented individual, and look at things not in the present, but over an extended duration of time. So it is baffling why you judge immigrants in one generation, but not how their decendents do over multiple.

    That is why you judge the overall mean, since that is, on average, what the immigrants are going to assimilate too. East Asians are said to have the a slightly higher IQ as Whites, and after Regression to the Mean, Koreans do worse than Whites, Chinese and Japanese do slightly better in median household income. When they came here, all did far better than Whites, that is regression to the mean. Black immigrants will regress to the African American population mean, so over a long time period, there is no benefit to importing them.

    BTW, you can stop virtue signaling. Houses like in Mission Viejo in LA are in heavily expensive, 95% White neighborhoods, non population-dense areas like Beverly Hills. Not in the “diverse” elements. But in your fairness, Hispancis are pleasant people to live with, I fully concede that point.

    You said you think demographics matter, I know you believe in regression to the mean in immigrant groups, and you fully admit that Black cities are not even a fraction as functional as non-Black cities as reflected in home values, so what do you honestly disagree with me with? You are just judging over one generation, while I am looking at multiple generations.

  38. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 08:26

    Since you keep on virtue signaling, I will tell you this.

    California is the least black state in America, and LA has the smallest Black population of all the major metro areas. So what you say means doesn’t change the fact that you paid extraordinary sums to live in areas that are not Black…

  39. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 08:35

    I want to do a correction, I checked Wikipedia and the only African immigrant group that does as well as Whites are the Ghanians, whose numbers are 160k.
    All the others do far worse, with Somalis, who have equal numbers to the Ghanians have the lowest income of any group. So it is false to say that African immigrants do remotely as well as Whites…

  40. Gravatar of Michael Rulle Michael Rulle
    23. January 2020 at 08:45

    Can’t get it published?

    I did read your “woe is me–maybe I’m a crank because I am at Bentley” essay (“what is my core message”)at Of course, you do not believe that, your irritation comes out firing too often—but your slight insecurity is likely at least part of why you cannot get it published.

    I just refuse to accept this. I do not know how one gets books published. Is evidence that other published people really like your thoughts part of it? The Milken Institute has been open to MM. Bruce Bartlett is published and has been supportive of MM.Plus Bernanke himself.

    Also, writers who support the concepts that markets provide the best information—–any “efficent market” person—who tend only to look at equities for some reason—-might also be interesting.

    I don’t know—Midas was priced too high—so it did not sell well.

    Plus the idiotic Wikipedia entry needs to be changed—you and Tyler are expert enough to qualify (Wong’s absurd comment on “lesser schools” and Lars Christensen’s “born in the Blogosphere” (sing to Springsteen) has to go. Passive aggressive, defensive, insecure and dismissive.

    Even your absurd comments on the brilliance of Krugman are bothersome. Maybe his ability to manipulate complex constructs easier than most, does not make him brilliant. You consider it realistic to accept his great intelligence. That is insecurity

    Be more like Richard Feynman—-who bragged about his IQ test score of 125—-because it was so low (95th percentile!–low compared to Einstein I guess).Many assume he got 190 in math and 70 in verbal—exaggerating of course–because they think IQ matters

    Look, I know nothing about publishing—-I am thinking out loud and will continue too. Maybe make a deal with the devils (yours, not mine)—go to right wing publishers :-).

    Seriously, this needs to be solved—George Mason won’t help!?

    just throwing random ideas–and will try to think of more that might actually be relevant.

  41. Gravatar of msgkings msgkings
    23. January 2020 at 09:30

    Look at all the time racists think about their bullshit.

  42. Gravatar of MIO MIO
    23. January 2020 at 09:48

    I always wondered with New Zealand and Australia. Do bigger countries(population wise) have economies of scale and tend to have higher per capita GDP’s than smaller countries?

  43. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 09:57
    Msgkings: I rather America have a crime rate of 2 instead of 22, but you do you…

  44. Gravatar of msgkings msgkings
    23. January 2020 at 11:13


    How do you propose that it be made to drop from ’22 to 2′?

  45. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 11:41

    Msgkings: well you don’t have to import Africans and not bomb their countries, leading to a win win situation for the both places.
    Essentially on a per capita basis, Blacks have a higher homicide rate than Afghanistan, a country with a median wage of merely $1k.
    Now, no matter the white knighting that commentators like you give, you wouldn’t want to live in an area as dysfunctional as Afghanistan…

  46. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 11:45

    Msgkings: The crime rate is genetic, which is why you can’t do anything about it.
    If you want to help, advocate for community policing which made 40% Black NYC one of the safest cities in America. That might make a multiracial America work great!

  47. Gravatar of ssumner ssumner
    23. January 2020 at 12:22

    Throwaway, You said:

    “California is the least black state in America, and LA has the smallest Black population of all the major metro areas. So what you say means doesn’t change the fact that you paid extraordinary sums to live in areas that are not Black…”

    I don’t even know how to respond to commenters that are this poorly informed.

    BTW, you probably don’t want to take a vacation in Bermuda.

    Michael, Take a deep breath; I never said I couldn’t get it published, just that it’s difficult and time consuming. It will eventually be published.

    MIO, No, smaller countries are often richer. NZ’s problem is that it’s so far from its markets. It’s easier for the Swiss to integrate with German supply chains.

  48. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 12:43

    Out of all the big states, California is the least black. I know you are not going to retire in rural Wyoming, or the NorthEast.
    California’s Black population is 4.5% and LA’s black population is 9%. Out of all the biggest cities, that is far the lowest.

    Look, I know I am not going to change your mind, but how are you going to make a Black America rich when it has a crime rate higher than Afghanistan?

  49. Gravatar of A Throwaway A Throwaway
    23. January 2020 at 12:47

    Bermuda has a much higher crime rate than the US, despite being twice as rich on a per capita basis:

  50. Gravatar of Thaomas Thaomas
    23. January 2020 at 12:49

    The Internet must be a disproportionately big advantage for a physically isolated place like NZ.

  51. Gravatar of ssumner ssumner
    24. January 2020 at 01:28

    Throwaway, So exactly why is majority black Bermuda twice as rich as the US?

    I’ve been to Bermuda on vacation, and enjoyed it greatly. So much for your theory regarding my preferences.

    BTW, Phoenix, San Antonio and San Diego are among America’s 10 biggest cities. I picked southern California for its climate, not its demographics.

  52. Gravatar of Michael Rulle Michael Rulle
    24. January 2020 at 07:36

    Deep breath taken—-although it was never required—-glad to hear it. Really.

  53. Gravatar of Michael Rulle Michael Rulle
    24. January 2020 at 07:39

    Deep breath taken—-although not needed. Glad to hear it.

  54. Gravatar of A Throwaway A Throwaway
    24. January 2020 at 12:10

    Scott, cause it is a tax haven.
    Whites have more than twice the income as Blacks in Bermuda.
    Here is an interesting article that illustrates the principles of Race and Iq:
    Indians in Uganda make up 15000 people out of 43 million and make up 65% of Tax Revenue

  55. Gravatar of Willy2 Willy2
    24. January 2020 at 12:44

    – New Zealand has a housing bubble and that is in the 1st stage(s) of deflating (like in Australia).
    – People in NZ who have invested in real estate are going to have a rude awakening because over the fiscal year 2019 ( April 1, 2019 – March 31, 2020) one tax deduction (for investing in real estate) has been eliminated.

  56. Gravatar of ssumner ssumner
    24. January 2020 at 16:18

    Throwaway, So the whites in Bermuda are really suffering from living in a majority black country?

    Willy2, When is that Aussie recession going to occur? Any day now? And when will Aussie house prices return to 2006 (supposedly bubble) levels?

  57. Gravatar of A Throwaway A Throwaway
    24. January 2020 at 17:19

    Yes, if they had the whole island to themselves, holding everything else constant. Look at the Uganda article, they are so dysfunctional that 15000 Asians make more tax revenue than 42 million Blacks…

  58. Gravatar of A Throwaway A Throwaway
    24. January 2020 at 20:03

    Look Scott, this is how much demographics matter.
    15000 Indians made up 65% of the Tax Revenue, reflecting 9.1% of GDP in Uganda, a country of 43 million(!!) people. So 15k Indians beat 42985000 Ugandian Blacks…

    So I think that without Black people, Bermuda would be dramatically richer…

  59. Gravatar of G G
    24. January 2020 at 22:50

    A throwaway,

    If you start from the premise that race determines X (economic prosperity, IQ, etc), it is easy to select facts that fit. Please….. please stop commenting. It’s not just your egregious lack of awareness of your confirmation bias that compelled me to reply. It is your apparently deeply ingrained need to spew your racism in an insufferably pedantic tone. It is the fact that your most meaningful contribution to this dialogue has been to identify which cities and countries are the “blackest.” It is the fact that your entire argument is a senseless non sequitur based on whichever Wikipedia page you happened to come across mid-spew.

    Go ahead and fuck off now,


  60. Gravatar of Willy2 Willy2
    25. January 2020 at 05:37

    – Australia is already in a recession. And has been in one since the first quarter of 2016. But then one must use Steve Keen’s formula (income + change in debt = aggregate demand).
    – When one looks at the GDP then that’s still OK. But looking at a “GDP per capita” basis (Australia has a large immigration “program”) then the good folks “Down Under” are already in a recession. And in the 3rd (!!!) recession since 1993.
    – Australian real estate prices have been falling for 3 years, especially and predominantly in Sydney & Melbourne. Although in some neigbourhoods in those 2 cities have seen a decent rebound, the majority of houses & apartments/untis/condos in those 2 cities are still becoming cheaper but at a (for the time being) a slower pace.
    – E.g. in Western Sydney landprices are already down by some 50%, real estate prices are down by some 35%. In some neighbourhoods the middle of Sydney units/condos/apartments in some neighbourhoods are already down some 30% as well.
    – How low will real estate prices go ? Depends on what happens to wages/income and the willingness of the banks to lend. In some neighbourhoods banks were willing to lend 12 times (Household) income and that’s CLEARLY a bubble. If banks restrict lending to 4 times (household) income then real estate prices in those neighbourhoods must come down by some 60%. If wages/Household income go(es) down by 50% (across the board)(as well) then prices also have to come down (by another) 50%. And it’s no secret that unemployment is rising “Down Under”.
    – The amount of forclosures in Australia has risen by some 600% (!!!). But this fact/number is already some 12 months old.

    – Still not convinced that Australia is in a recession ?

  61. Gravatar of Willy2 Willy2
    25. January 2020 at 05:48

    – There is another sign that Australia is in a recession. Australian imports are clearly shrinking (=less demand).

    – The US is also in a recession because the US Trade Deficit is shrinking, in spite of falling oil imports.

  62. Gravatar of Willy2 Willy2
    25. January 2020 at 05:55

    A nice video on the “Housing Crisis” in New Zealand. (lenght 32 minutes). There is a crisis in NZ but it’s a affordability crisis.

  63. Gravatar of A Throwaway A Throwaway
    25. January 2020 at 08:54

    Why take it from me, I am just some anonymous internet commentator with way too much time on my hands.

    However, why don’t you look at housing prices in America, which reflect people’s true values and intentions. If people find that Blacks are economically enriching and diverse, then they will move to Black areas and drive up the values of the median home price there. If the Africans are economically functional, then their median home values will rise.

    The most White large city in America is Seattle and Portland. They have median home prices of $760,000 and $449,000 respectively. The most Hispanic large city in America is Santa Ana, which is 80% Hispanic and 30% illegal, and its median home price is $568996. The most Black large city in America is Detroit, which is 85% Black and once the center of the automobile industry, and it’s median home price is $35383.

    So People value living in White big cities and Hispanic big cities 10X more than they value living in Black big cities, which is exactly what those crime rates would predict!

    Ironically, you could make the argument against the alt-right on Asian and Hispanic immigration making this argument…

    Anyways G, one simple question, if race and IQ does not correlate with prosperity, then how did the once indentured Indian servants numbering 15k gain control of some 20% of Uganda’s GDP, a country of 43 million(!)?

  64. Gravatar of Willy2 Willy2
    26. January 2020 at 00:35

    – “Australia housing among world’s most unaffordable”.

  65. Gravatar of Willy2 Willy2
    28. January 2020 at 09:21

    – Australian houses were in the early 1960s at 1.6 times Household income and were at about 4.2 times Household income in 2016.
    – When one takes into account that a Household in the 1960s had one income and that the average Household in 2016 had 2 incomes then the numbers change dramatically. Then the average australian house price rose from 1.6 times income (1960) to 8 times income in 2016.
    – One big problem “Down Under” is that now the debt-to-GDP ratio is much higher than in the late of early 1990s. That doesn’t bode well for australian real estate. That’s why I expect that australian real estate will go down much further than many people think. I wouldn’t be surprised to see real estate go down to levels seen in the early 1980s, 1970s or even the early 1960s.

  66. Gravatar of Willy2 Willy2
    30. January 2020 at 05:59

    – Another worrying statistic from the state of Western Australia (WA):

    1) Rents have fallen some 20 to 25% in the last 2 to 3 years. That means that A LOT OF landlords in e.g. Perth actually are losing money while at the same time costs of living have gone (much) higher.
    2) WA (predominantly in Perth) also had a housing bubble but that was between say 2002 and say 2012.

  67. Gravatar of Willy2 Willy2
    30. January 2020 at 06:04

    – Will I get an answer from S. Sumner ? Or is he “a bit hurt” by the fact that the information in his head is “outdated” (to put it VERY politely) ?

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    30. January 2020 at 13:01

    […] Americans wrongly think the rest of the world is hurting us with unfair trade practices, but New Zealand really is hurt badly by the unfair trade practices of others (which protect farmers in rich countries.) – Scott Sumner […]

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    1. February 2020 at 21:49

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    31. December 2020 at 10:01

    […] Americans wrongly think the rest of the world is hurting us with unfair trade practices, but New Zealand really is hurt badly by the unfair trade practices of others (which protect farmers in rich countries.) – Scott Sumner […]

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