Where are all of the workers coming from?

In 2019, payroll employment rose by slightly over 2.1 million. That’s actually the slowest growth since 2011.

And yet it is still pretty impressive, given the low unemployment rate and the slow growth in the prime age population. So where are all these workers coming from? Why were my predictions from a few years back too pessimistic?

I’ve already discussed several factors:

1. The unemployment rate declined by more than I expected.
2. Boomers kept working longer than I expected. (Five years ago, I thought that I’d be retired by now.)
3. Illegal immigration increased by more than I expected.
4. Deportations are occurring at a lower rate than under President Obama.

And now The Economist points to another factor.  Guest workers have increased by nearly 200,000 in just the past three years:

You might object that my payroll numbers are for non-farm workers, and most of the guest workers are in agriculture.  But these two sectors are probably closely linked.  I doubt the actual amount of farm work has increased that sharply in recent years, rather guest farmworkers are doing non-farm work or they are displacing other non-guest farmworkers.  Those might be American farmworkers, but more likely they are illegal immigrants.  The displaced workers may then get jobs in the non-farm sector.

In any case, this surge in immigration helps to explain why employment and GDP growth has held up better than I expected.  It also tells us something about the actual priorities of the Trump administration:

Corporate tax cuts, deregulation, more guest workers, more illegal immigration and fewer deportations, bigger trade deficits, no infrastructure plan, obsessing about IP theft in China.

Does this look like an administration committed to helping downtrodden blue collar workers, or an administration committed to helping billionaires?

I like the corporate tax cuts and the guest workers and the lack of an infrastructure plan.  But then I’m an evil cosmopolitan neoliberal.  And even I would favor a more pro-manufacturing set of policies than Trump, notably a reduction in the fiscal deficit, which would tend to reduce our trade deficit.  Removing the steel and aluminum tariffs would also help our manufacturers.



45 Responses to “Where are all of the workers coming from?”

  1. Gravatar of Thaomas Thaomas
    23. January 2020 at 12:32

    On the main point, maybe we are getting closer to the Fed under-stimulating the economy. The price level is drifting away from target at a slower rate than earlier in the recovery.

  2. Gravatar of Thaomas Thaomas
    23. January 2020 at 12:40

    [I how this not a repetition]

    As another neo liberal, I too would like the tax cut except that a) the reduction in deduction for SLG taxes moves the base away from taxing consumption, b) it created a higher structural deficit which reduces saving, investment and growth, and c) it was regressive.

    Although more guest workers is a really good thing, before we give too much credit for fewer deportations we ought to consider fewer refugees admitted and H1B visas granted. I have not seen an analysis, but it would not be hard for the trade wars to be regressive, too.

    Did anyone ever believe (as oppose to say) that the Administration was interested in the welfare of lower and middle income folks?

  3. Gravatar of David R. Henderson David R. Henderson
    23. January 2020 at 12:58

    You ask:
    Does this look like an administration committed to helping downtrodden blue collar workers, or an administration committed to helping billionaires?

    The answer is yes. It looks like both. As I’m sure you know, the tax cuts substantially reduced the cost of capital and that increases capital formation, thus making workers more productive and increasing real wages. So billionaires AND blue-collar workers gain.

  4. Gravatar of Gene Frenkle Gene Frenkle
    23. January 2020 at 13:46

    From BLS here is civilian labor force participation rate by age. So in 1998 for the 55 and older cohort it was 31.3% and then in 2018 it was 40%.


  5. Gravatar of B King B King
    23. January 2020 at 14:07

    Do you have a source for the comment about increased illegal immigration? Not disputing, just curious where the claim comes from.

    23. January 2020 at 15:17

    Scott, you are so full of sh*t, jesus:



    Obama Admin BLS juked stats in 2009 to make it look like Obama wasn’t a total loser and get him re-elected..

    We do not ASK WORKERS is they are looking for work…


    And Obama then DOES THE TRUMP STUFF, Scott

    And maybe Trump doesn’t get re-elected.

    China has clearly ruined you Scott… they will be beaten until their people rise up and toss out PRC. Sorry.

    It bums me out.

    23. January 2020 at 15:21

    Sorry, I meant if Fed FORCED OBAMA to DO TRUMP STUFF IN 2010 to get re-elected, Trump might not have gotten elected.

    Scott, you AGREE with me deep down, here’s a reminder back when you admitted NGDPLT would be the Fed forcing Dems to be TRUMP LIKE:


  8. Gravatar of Benjamin Cole Benjamin Cole
    23. January 2020 at 16:28

    “In any case,this surge in immigration helps to explain why employment and GDP growth has held up better than I expected.”—Scott Sumner

    This could be. The estimates on the number of illegal immigrants in the US are all over the board,from 11 million (Pew) to 22 million (MIT).

    The flip side of that is whether such large numbers of people seeking employment has produced wage stagnation.

    In addition, the US no longer builds infrastructure or housing anywhere near in the amount needed, due to clumsy government and property zoning.

    The prospects in Japan or for rising real wages and declining housing costs. Plus, their government appears able to build infrastructure.

    My guess is the prospects for the US are… well, not diametrically opposed…but

  9. Gravatar of MIO MIO
    23. January 2020 at 19:16

    I agree. Scott in the other thread said that bigger countries tend to be poorer in per capita income, yet is saying here that a growing population helps the economy?
    I thought the importance was on per-capita GDP not aggregate. I mean, the Chinese example of sharply raising per capita GDP and reducing population is alot better than America sharply raising population with stagnant per capita GDP, but I emphasize I do not really know.

    With Japan, I am not really sure what is going on there. Are the Japanese having less kids because they think a smaller population is better, or is this a sort of market failure aspect where a larger population is better, but for some reason, the individuals aren’t having kids?

  10. Gravatar of Benjamin Cole Benjamin Cole
    23. January 2020 at 20:00

    Here is a paragraph from an article in the National Interest, which presented the usual, neoliberal view that Japan must accept more immigrants to remain a vital and powerful nation on the world stage, commercially, diplomatically and militarily.

    But late in the story comes this—

    “On the other hand, not all trends are negative. Unemployment should be minimal throughout the period, and wage gains should be solid. Real estate should be falling in value year after year, increasing the purchasing power of those with jobs. Moreover, older societies—and by 2050, the average Japanese will be well over fifty years of age—are less amenable to revolutionary promises. The fervor of impressionable, unemployed youth will be lacking, and this may stabilize Japan’s society and protect it from various forms of domestic extremism and foreign meddling.”


    Oh? “Solid” wage gains and falling housing costs? That is the dread future in Japan?

    But remember, they will not be as important a nation as before…and that is what is important.


  11. Gravatar of ssumner ssumner
    24. January 2020 at 01:20

    Thaomas and David, Back in 2016 there were scores of pundits claiming that Trump was a different type of Republican, one interested in helping blue collar workers. You can certainly argue that the corporate tax cut helps the working class, but this sort of policy was standard GOP dogma in recent years.

    Gene, I’ve made a similar point.

    B. King, I rely on the same data as the Trump administration—border apprehensions at the southwest border. The rate over the past three years has been higher than the previous three years. You can argue that this data is flawed (and I’d agree), but it’s the data used by the administration, and many other experts.

    Morgan, China has ruined me? How? By throwing off my prediction of labor force participation rates?

  12. Gravatar of rayward rayward
    24. January 2020 at 04:56

    “Treasury Secretary Steven Mnuchin said on Thursday that Mr. Trump had asked him to begin developing a plan for more middle-class tax cuts to further stimulate the economy.” Is this an acknowledgment that the corporate tax cut failed to achieve what was promised, namely a big boost in investment in productive capital (that would increase worker productivity and wages), and that consumer spending, stimulated in large part by rising asset prices (the wealth effect), is pushing the economy forward? Of course, what goes up can come crashing down: if asset prices fall, consumer spending and the economy will follow. Will Trump’s pro-cyclical fiscal policy and Trump’s badgering the Fed to maintain a pro-cyclical monetary policy maintain rising asset prices, consumer spending, and a growing economy? My view is that reliance on rising asset prices for prosperity can’t end well. Of course, for Trump’s re-election prospects, the end only needs to be postponed until after November. Will the stars stay in alignment?

  13. Gravatar of Brian Donohue Brian Donohue
    24. January 2020 at 07:11

    Since 2012, median wages and income has grown faster than average and are now at their highest levels ever. This has to be good news for the little guy, no?

  14. Gravatar of Brian Donohue Brian Donohue
    24. January 2020 at 07:42

    OT- long-term interest rates again flirting with record lows, Fed has been unable to hit 2% PCE target since 2012, obvious move is to cut 0.25% in January but Jerome appears determined to continue to lag slightly behind events.

  15. Gravatar of Michael Rulle Michael Rulle
    24. January 2020 at 07:59

    Re: older workers. It was highly predictable people would work longer. The “fiscal” reason is, one way or the other, debt has to be repaid. The various methods include 1) repay debt by decreasing deficits; 2) decrease payments to retirees; 3) inflate; 4) work more years. Like Japan, it appears we rather work more years. The non-fiscal reasons are that older people are still productive—-hence they want to work.

    Regarding deficits, I wish Scott had made the point that the best way is by reducing spending.

    Further—-have said this before but who cares. A long term plan (50-100 years) to gradually reduce debt is possible. It is a true cost to repay debt—-but it has to be done and will be done by shear economic reality one way or the other. If we had a constitutional amendment (har har hardy har har) like the 1914 tax amendment——the commitment would create great optimism and growth—

    -this would be done in conjunction with getting rid of Medicare and SS (more laughter) and replaced with 401k and medical savings style accounts. Look to the East—Singapore—-for some guidance.

    Long term committed plan—-more laughter—-must get back to the important issues—-like impeachment.

  16. Gravatar of Michael Rulle Michael Rulle
    24. January 2020 at 08:13

    Re: immigration. I trust your numbers, although I have seen different ones. I am for immigration because I am pro America and I think it makes America more powerful. Plus, it is our (have said this too many times) best —-or one of our best——comparative advantages. America, even as it changes, still stays (or generally does) true to its nature even as many specifics change. I do not believe immigration “lowers wages”—-although in certain areas at certain times it might—-but it increases wages because it adds more “value added”. Further, I definitely am not pro immigration to keep the “ponzi scheme” going——although, the reality is that may be what it does. However, if we can do the right things fiscally we will grow wealthier faster.

  17. Gravatar of Mike Sandifer Mike Sandifer
    24. January 2020 at 08:33


    Just to be clear, are you completely ruling out a statistically significant role for unrecognized tight money in wide-spread underestimation of the low sustainable employment rate? While the factors you mention all seem plausible, they don’t seem to explain all of the difference, even if all of them apply.

  18. Gravatar of rayward rayward
    24. January 2020 at 09:47

    Median wages have been rising in large part due to increases in the minimum wage adopted by states and local governments. https://www.nytimes.com/2020/01/03/upshot/minimum-wage-boost-bottom-earners.html

    24. January 2020 at 10:16


    I showed you with a chart from st Louis fed where the employment is coming from.

    There is a TRUMP BUMP.

    And as you already admitted in 2014, NGDPLT would have FORCED Dems / Obama to do trump style stuff (dereg, cut taxes etc)

    Trump tax cuts were just OK

    the real thing is the deregulation. Every business owner I know, including myself, is psyched about how much easier it is to get stuff done.

    China is bending knee Scott. You shouldn’t feel threatened by us bringing them to heel.

  20. Gravatar of Anonymous Anonymous
    24. January 2020 at 10:20

    So Scott, if the election is between Warren and Trump, who would you vote for? If Trump is pursuing your policy goals?

  21. Gravatar of ChrisA ChrisA
    24. January 2020 at 10:21

    Scott, this working longer into retirement is the interesting thing to me. I have just agreed to another new job, even though financially I don’t need to work (savings, investment returns are part of it, but low material demands are probably the main thing). If you had asked 25 year old me, he would have been amazed. So what has changed? I think part of it that work quality, at least at the professional level, has improved immensely over the years. This comes back to wage stagnation issues, if we don’t measure work quality, we are ignoring an important part of real growth. Coming back to our debate on happiness and set points, of course younger people don’t appreciate this as much as us older types, but I do think part of the lack of traction of the people urging revolution due to this wage stagnation is that most people actually don’t hate their particular job.

  22. Gravatar of msgkings msgkings
    24. January 2020 at 11:37

    @Brian D:

    Trump isn’t helping with his jawboning…Powell may be less likely to cut and look like he’s Trump’s poodle.

  23. Gravatar of Christian List Christian List
    24. January 2020 at 12:51

    So Scott, if the election is between Warren and Trump, who would you vote for? If Trump is pursuing your policy goals?

    Good question. Not that it matters much because he lives in California (where the result is fixed already) but still.

    He’ll say the same things he always does: his strange sense of “morality”. And China of course, all the money from the CPC being so nice and all.

    And then at some point he will start to muse again why authoritarianism/nationalism is on the rise worldwide. Has someone seen an elephant in the room?

  24. Gravatar of A Throwaway A Throwaway
    24. January 2020 at 13:51

    Scott is weird that way. He once said that America shouldn’t start a trade war over lost IP for two reasons. 1. It will hurt the Chinese and cause needless damage to the world economy, endangering Americans. 2 American IP laws are bad so it is good(in efficiency terms) for our IP to get stolen.

    Then he says, a Trade War might be acceptable if it was on behalf of the Uighyers(which is a truly horrid situation), but his logic is insane. America should not take action in its own interest over its own stolen IP to the tune of trillions of dollars, since it would needlessly antagonize China, but we should antagonize China over their own internal doings, like we did in Iraq against Saddam? That’s even stupider than a Trade War over IP.

    He, like so many American pundits, think in utilitarian terms to an unreasonable extent, in that they see America(and Anglosphere countries) as a piggy bank to enrich the more deserving “poors” of the world, and gets shocked when people think his ideology is retarded.

  25. Gravatar of Carl Carl
    24. January 2020 at 13:59

    How do charts that end 8 months before Trump took office and 6 months before he was elected show a Trump Bump?

  26. Gravatar of ssumner ssumner
    24. January 2020 at 16:15

    Brian, Yes, it’s good for everyone.

    Mike, I think that’s unlikely, as monetary policy was more expansionary in 1989 and 2006 than today, and yet unemployment was higher.

    Rayward, How do minimum wages impact median wages?

    Anonymous, Obviously it would be Warren.

    ChrisA, Good points.

  27. Gravatar of Benjamin Cole Benjamin Cole
    24. January 2020 at 16:32


    In developed nations, the employee class no longer reproduces itself. In South Korea, the average woman has less than one baby. In Hong Kong that picture is much the same. This evidently arises from urbanization and housing costs.

    This reality of shrinking labor pools has led to elites sacralizing immigration, but that route is not open in such countries with strong national identity, such as Japan, China and Korea.

    The demographics are playing out in a global economic order in which labor shares of national incomes are decreasing. Michael Pettit says this is how exporting nations compete, that is they reduce labor share of income, and he cites Germany as the foremost example. This process is aided by multinationals sourcing for cheaper labor, and (not nefariously by design, but effectively), pitting labor populations against each other.

    For the general population of the nations aforementioned, probably the only solution is to limit immigration and hope that labor scarcity manages to maintain living standards for the average Joe, perhaps assisted by lower housing costs. Managing trade may be more important to maintaining living standards than accepted by orthodox macroeconomists. (Free trade has been sacralized to the point where it is free trade theology).

    The Federal Reserve Bank of St. Louis just issued a study that even in India wages went down when domestic markets were opened up to foreign competition.

    I don’t think I will live long enough to see how this vast social and macroeconomic experiment in Japan plays out, and whether they will stabilize population growth at some point in the future as housing costs continue to go down in large swaths of the country.

    My guess is that in 40 years Japan will still be a much nicer place to live than the United States, and probably even more so.

    By the way, the IMF recommends that the US compete on the global stage by “reducing labor costs.”

    Oh nice!

    24. January 2020 at 17:35

    Carl, the Fed chart shows that the LFP stats were jukes by BLS to make it so Obama didn’t have 12% U in 2012.

    The link to the NGDPLT post by Sumner, that was when he realized NGDPLT overnight puts 100% of who is responsible for inflation on politics.

    He admits if GOP understood NGDPLT – they’d invite us al to CPAC.

    So logically:

    1. Sumner supports a system that does BY RULE what Greenspan did to Clinton in Jan 1993: force Dems to deliver RGDP instead of inflation.

    2. 2008-TODAY: we are still using the terribly shitty LFP survey to measure U – which is why we keep having these: WHERS IS ALL THIS LABOR SUPPLY coming from??

    3. IF we had measured LFP and U correctly, Obama would have had to do Trump-style Economy and Trump wouldn’t have gotten elected.

    REREAD THAT SCOTT – under NGDPLT – OR – under a fed that acts like Greenspan bitch-slapping Clinton) SAME THING – SAME OUTCOME – Scott wouldn’t have Trump shitting on him (but sorry Scott, China would still be getting the high hard one)

    See where I get Trump Bump from Carl? If it helps, think of it as the DELETE OBAMA BUMP

  29. Gravatar of Michael Sandifer Michael Sandifer
    24. January 2020 at 18:28


    What makes you think monetary policy was more expansionary in 1989 and 2006 than today? In both years, the Fed Funds rate hit an apex and then NGDP began slides that led to recessions.


  30. Gravatar of Benjamin Cole Benjamin Cole
    24. January 2020 at 20:28

    Re “free trade”:

    This is from the hardcore, right-wing, freshwater guys at the St Louis Fed:

    “A previous post discussed the recent decrease in the labor share and increase in the capital share in GDP for many nations. Reasons for this decline in payments to labor include capital-augmenting technology growth, globalization, and changing skill composition of the labor force. In this post, we focus solely on India’s story.

    In the 1990s, India began to implement a series of economic reforms that, among other things, helped open up the economy to trade and foreign investment. These policy changes reduced import tariffs and regulations, with the aim of making the economy more market-oriented. As a result, the labor share of India’s income decreased significantly.

    The graph above shows that India’s trade openness, measured as the ratio of the sum of India’s exports and imports to India’s GDP, increased by nearly 124% between 1980 and 2017. (In comparison, U.S. trade openness increased by only 19% over the same period.) India’s labor share of income fell by 30%, with a 24% fall from 1990 to 2017.

    So, how are trade openness and labor shares related? Trade openness often goes hand-in-hand with reforms that allow greater international mobility of capital but not labor. If higher wages would lead capital to relocate abroad, domestic labor’s bargaining power and wage increases may be limited. Also, domestic firms may face greater foreign competition and respond accordingly. If they increase the use of labor-saving technologies, that can dampen domestic wages.”


    “India’s labor share of income fell by 30%, with a 24% fall from 1990 to 2017.” Ouch (do you suppose this is inflaming sectarian hatreds?)

    So…can anyone really ask India, or rather the people of India, to embrace “free trade” and globalization?


  31. Gravatar of Michael Sandifer Michael Sandifer
    24. January 2020 at 20:44


    Also, the yield curve became inverted in both 1989 and 2006.


  32. Gravatar of Michael Rulle Michael Rulle
    25. January 2020 at 07:49

    Scott—-You are at least consistent. Your choice of Warren over Trump still amazes me. It cannot be “moral differences” as Warren has shown remarkable sleaziness. You must believe that Trump is so random, impulsive and ignorant——and unable to listen to anyone who does not agree with his immediate emotion—-that his left tail on causing disaster is fat and long. Yet, you have never met him, you only know him by his Twitter account, rudeness, speeches and actions. But it is amazing how wrong so many predictions have been. But ultimately, I believe, it is “faith”. You have faith he is a destructive force. I hope and also think you are wrong

  33. Gravatar of A Throwaway A Throwaway
    25. January 2020 at 08:36

    See my comment and MIO’s comment above. Scott only acts in utilitarian terms, which means that he is going to root for any candidate that acts in those terms, even if it hurts America.

    He told MIO that larger populations hurt gdp per capita, and that they tend to be poorer, and then he says shamefacedly that immigration benefits the economy. He is the kind of person that looks at aggregate GDP and not GDP per capita, which is what everyone in the world wants. He is just a utiltarian zealot who thinks it would be better if someone got richer at the expense of America.

    He states that a Trade War with China would be so destructive and endangering that we shouldn’t do it, even though China is ripping off trillions worth of IP that we produced, our comparative advantage. Yet, he says that he would respect a Trade War that entails the same risks if it was fought on behalf of the Muslims of China. He doesn’t want us doing risky things on behalf of Americans, but he wants us to do risky things on behalf of global poors. He even says that we shouldn’t try to change the way that China handles its own internal economic policy, with respect to IP and state owned companies, by we should try to interfere to change their race policies, something that could lead the Chinese and US to an actual war! Such an unfathomably stupid policy!

    I even vaguely recall him saying that immigration would be fine in the US, but not in Japan, because he thinks their culture is so refined that immigration might ruin that, but he doesn’t see American culture being hurt by people entering with massively higher crime rates…

    So it is no shock that he supports Warren…

  34. Gravatar of A Throwaway A Throwaway
    25. January 2020 at 08:55

    I meant Michael not Michelle, my sincere apologies

  35. Gravatar of Michael Sandifer Michael Sandifer
    25. January 2020 at 13:34

    A Throwaway,

    You might want to look up the concept of comparative advantage. It applies to both international trade and immigration. Even low-skilled immigrants can increase productivity in the US by freeing up Americans to do more value-added work. The same occurs by moving lower-value-added production overaeas. This benefits every American in small ways, and hurts very, very few in larger ways.

    If an attorney is the best typist in the office, does that mean it didn’t make sense to hire staff that types more slowly? No, because they free the attorney up to practice law, which is much higher value-added.

  36. Gravatar of A Throwaway A Throwaway
    25. January 2020 at 15:06

    No one cares about low skilled immigration in the fact that they are working as fruit pickers, because we expect their kids to do much better.
    We care about the negative effects that often come with low skilled immigration, like crime and social disorder. Thankfully, most of America’s low skilled immigrants tend to be Hispanic, so that is good for the country.
    However, in Western Europe, their low skilled Muslims and African immigrants have been ravging the continent.
    Read about the Rotherham Rape Gangs:
    There is nothing comparable like this with the 66 million Hispanic population in the US.
    Demographics matter

  37. Gravatar of A Throwaway A Throwaway
    25. January 2020 at 15:25


    Those children in Rotherham were gangraped for decades, and many were killed. Up to 10% of the Muslim Male population were involved in the grooming and raping. So next time you push for low skilled immigration, think about those side effects. BTW, there are over 100 of those gangs in the UK, not just Rotherham. 73.1% of Type 1 rapes were committed by “Asians” in the United Kingdom. Overall Asians committed over 300% more rapes as Whites, and when you adjust for per capita they committed 2400%(!) times the rapes as Whites.

    So when you think of low skilled immigration, you mistakenly think of fruit pickers, and our aversion to those sorts of people. No one cares really about them, they are worried about the crime, because it can actually harm people…

    I’ve realized I am clogging up these threads so I will stop. Sorry about all of this.

  38. Gravatar of Mike Sandifer Mike Sandifer
    25. January 2020 at 17:08

    A Throwaway,

    Do you have anything other than anecdotes? You throw out an anecdote and I’m supposed to conclude that western Europe should curb low-skilled immigration? By that logic, no one should accept immigrants from the UK, since authorities there allowed this to happen. Also, should we keep out Catholic immigrants because there was a global conspiracy to cover up widespread sexual abuse of children?

    This is absurd.

  39. Gravatar of A Throwaway A Throwaway
    26. January 2020 at 07:52

    No ancedotes, this data is from the UK Channel 4 and the government.
    Asians have a *vastly* higher per capita rape rate than the Whites, and it hurts your country to import such rapists.
    Here is the breakdown according to this link:
    So Whites are 87% of the UK
    Asians are 4.9% of the UK(this problem is really a Muslim and not a Sikh or Jain or Hindu), so the stats are even worse.
    Overall Asians committed three times the rape rate of Whites,
    There are 17.5 times the number of Whites as Asians.
    So for per capita, 17.5*3= 53.265

    So Asians are 53.265x more likely to commit rapes than Whites, so how does importing more make your country safer and more peaceful?

    This is no ancedote, but overall statistics…

  40. Gravatar of Michael Rulle Michael Rulle
    26. January 2020 at 08:49

    To @ A. Throwaway

    I like your Tag line name! Thank you for taking the time to respond to my comment. I have been consistently surprised that Scott dislikes Trump to the extent he does—although so many of my friends feel the same way—-I think I know where they are coming from—I just disagree. I was not for his nomination, but did vote for him and have been pleasantly surprised—-not merely on outcomes—-but also on many, even most, of his decisions. In my opinion, anything he does is almost automatically assumed to be emotionally driven and off the cuff and either based on bad intentions or plain stupidity and impulsiveness. I just do not see it that way.

    Generally speaking, I do not like Utilitarianism as a philosophy. It is not surprising that many economists have a utilitarian bent. Having said that, I find I agree with many things which Utilitarians propose——but —-let’s say—-for philosophical and religious reasons it is not a philosophy I will hang my life’s meaning on. I tend not to argue too much about it—-because from a policy point of view, as stated, I agree often.

    Re: immigration. My personal experience tells me immigration is good for those who are already here, and for those who come here. My own view is we should not try to cherry pick immigrants. I probably differ from many on this score—-but prefer a broader based framework—for example—-not just STEM people—-and not just from South of the border. My grandparents came to America when Wilson was trying to shut them down—-my wife came here as an 8 year old. I know many immigrants from South America, Cuba, Western Europe, Middle East, China, and Eastern Europe——all who wanted opportunity and have earned it—-.I am pro legal immigration and am against illegal—-and want the former to be increased, and the latter decreased.

    My big concern is we must maintain the American philosophy and history. I believe we can have many different subcultures—-as long as the America as conceived by the founders is the primary driver. Literally, everyone I know—-perhaps my experience is unusual—-who have come here want to be “Americans”.

    I agree with Scott on the majority of his views, but not all. Re China —-that is a tough issue. Ultimately, Xi is bad for them—and authoritarianism is bad for them. That needs to end——we will see. Scott agrees with that simple statement I believe.

  41. Gravatar of A Throwaway A Throwaway
    26. January 2020 at 10:23

    Thank you Michael,

    I promised not to spam these threads, but your very kind comment required me to respond.

    I agree with you on many issues, and perhaps I am totally wrong on immigration, but I think that the media glosses over the negatives too much, and provides a distorted image.

    But on everything else, I agree wholeheartedly.

    Again, I want to thank you for the long and detailed comment.

  42. Gravatar of ssumner ssumner
    26. January 2020 at 11:40

    Michael, You are “amazed” that I don’t support white nationalists?

  43. Gravatar of Mike Sandifer Mike Sandifer
    26. January 2020 at 17:06


    Is there any chance you’ll do a post that details how you decide whether money is loose, tight, or roughly neutral?

    Do you use an equation for the real neutral interest rate with parameters for temporal discounting and risk aversion, for example? Since you tend to de-emphasize interest rates, I’m guessing the answer is no.

    Do you use pretty standard macro, or is your model novel in some respect?

    I eschew the temporal discounting and risk aversion parameters, and end up with a simpliefied(possibly simplistic) model, in which even if those parameters matter at the micro scale, they do not at the macro scale.

    Some interpret this as meaning that marginal utility does the work that temporal discounting would otherwise do in my model, and that seems to be true. There are interesting implications for theory, but with some special conditions that no economist seems to think are realistic.

    I was deeply influenced by your arguments years ago that most cognitive biases that are well-documented on the micro scale don’t matter much, if at all at the macro scale. The exception you always point to is money illusion.

    You also convinced me to take market price signals more seriously, and I think I probably take them as seriously as anyone at this point. I take them more seriously than you do at times.

    From my relatively limited perspective, my model fits the data better, even as it seems to make much more definitive, precise predictions. But, then, I don’t know what I don’t know, and you and other economists know much more about what I don’t know, so I’m at a disadvantage.

  44. Gravatar of Anonymous Anonymous
    27. January 2020 at 11:53


    Are you saying that Trump is literally a white nationalist? Like his goal is to get rid of all other races and have an all-white nation in the U.S.?

  45. Gravatar of Scott Freelander Scott Freelander
    29. January 2020 at 15:46

    Mike Sandifer,

    I am also puzzled. Your graphs show NGDP growth falling in both years, and unemployment was rising by late ’89. 1989 seems to show tighter monetary policy for sure. I thought Dr. Sumner judged monetary policy stances by looking at NGDP growth and unemployment.

Leave a Reply