The following two tweets caught my eye:
On one level, these are both sort of “gotcha” tweets, implicitly arguing that JD Vance has accidentally made the case for more immigration. But I’m more interested in something else—what motivated Vance to make this claim?
Political statements can be evaluated in many different ways. One might view them as expressing the opinion of the politician. But it’s also worth thinking about why the statement was made. Politicians have many different views—but what determines which views get expressed in a political campaign?
It seems plausible that successful politicians tend to express views that they believe will be persuasive to voters. Note that I am not commenting on the sincerity of the politician. Regardless of whether they believe “X is true”, or do not believe X is true, they would not be inclined to campaign on “X is true” unless they thought the message was effective.
In this particular case, I’m not particularly interested in what Vance believes. But I am very interested in what Vance believes that the public believes. The fact that Vance is advancing this argument in a campaign suggests that he believes the public does not see America as being among the world’s richest countries.
It would be interesting for a pollster to ask the public whether the US or China is the richer country. I suspect that a significant share of respondents would say “China” (albeit not a majority.) Of course, the US is many times richer.
Here’s another good question. “Does the US adhere to international trade laws while other countries cheat?” Again, I’d expect many wrong answers. (Yes, we often cheat.)
It seems to me that when the public is optimistic about the state of the country, the ideology of nationalism has less appeal. If you go back to a period when the US was clearly number one, say 1965, the mood of the public was pretty supportive of global institutions. When the public believes that other countries are getting ahead of the US, especially if they believe other countries are cheating to get ahead, then the public is likely to become much more nationalistic.
A few months ago, I did a post pointing to the odd fact that the US was the country that had accepted the most immigrants and was also the richest country. Taken literally, Vance’s statement could be viewed as essentially identical to my post. Despite using the term “if”, however, it is the clear implication of his statement that the US is not the richest country. But at least Vance and I agree on one thing—one fact implies the other. We agree that the correlation between America’s high rate of immigration and America’s position on the world’s richest country list is probably causal.
Now we just need to figure out if America is indeed a very rich country, or not.
READER COMMENTS
Robert EV
Sep 17 2024 at 2:45am
Sorry, I’ll kind of ignore your point and ask a question about these charts.
When speaking of medical care, are these “social transfers in kind” truly at PPP?
And how is it that median equivalized disposable income (USD) greater than median person income for the US? https://fred.stlouisfed.org/series/MEPAINUSA646N Or is this supposed to be per household? In which case I would like to see what’s included in the PPP equivalence tables. Would traveling by train throughout Europe be considered equivalent to flying within the US? What’s the US pricing of the length of a typical European paid vacation? And is the fact that hundreds of millions of vacation days per year go unused in the US used to discount the value of vacation days in the PPP adjustment (since obviously we people here in the US don’t value our vacation days that much)?
Craig
Sep 17 2024 at 8:41am
Keyword: disposable so this is some kind of post-tax income. Of course taxes in the US have a greater emphasis on producing the world’s finest kill machine whereas taxes in Europe have a greater emphasis on such ridiculous things as health care. Indeed, TN has a lower life expectancy than Bangladesh. Of course Americans still spend on health care, naturally more comes from ‘disposable’ income, but naturally such a chart might lead one to believe the US is better off than the Netherlands and/or Switzerland. Its not and honestly its not even close to the point where if these charts are used for such comparative purposes, they should be dismissed as, at best, misleading methodology and, at worst, propaganda.
Robert EV
Sep 18 2024 at 1:14am
Disposable income should always be less than total personal income. This is why I was confused. Though if the disposable income is per household and not per person then it makes sense that it would be greater than personal income.
Craig
Sep 18 2024 at 8:11am
Perhaps if we note the chart on the right the word ‘equalivised’ obviously suggests that the author is writing British English and the USD chart might have been pounds and then converted on an exchange rate that changed?
Robert EV
Sep 18 2024 at 1:35pm
I feel stupid. Right chart is median, left chart is mean. They also don’t give the date for the right chart. These look like Wikipedia charts, though.
Yes, they are: https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income
The left chart is gross “disposable income per capita”, including transfers (as stated). While the right chart is not even a real median income, but:
Robert EV
Sep 18 2024 at 1:35pm
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BC
Sep 17 2024 at 3:14am
Trump does like to claim that things were great when he was president, so maybe MAGA World thinks the US was the most prosperous country between 2017 and 2020 but somehow fell off a cliff in 2020 and also rose rapidly in 2017? But, then again, the total number of immigrants *in the country* didn’t really change that much even if immigration policies tightened under Trump. That’s especially true because, when MAGA World talks about immigrants destroying the country, that includes the many immigrants, and even descendants of immigrants of certain ethnicities, that have lived here for many years and decades, i.e., they were here before 2017 and are still here now. So, maybe, there’s just no coherent story at all about what MAGA believes regarding US prosperity and immigration.
I am curious, though, as to which countries MAGA World thinks are the most prosperous. Germany? Hungary? Russia?
MarkW
Sep 17 2024 at 9:53am
The coherent story is that high inflation and interest rates have made life much more expensive for many (and I understand that inflation measures do not capture the effects of high interest rates on the cost of home mortgages and loans for cars and other big ticket purchases). The incoherent story would be that this is somehow the fault of immigration.
steve
Sep 17 2024 at 11:12am
If by coherent you mean that they were trying to explain what really happened I think the story would be that the US, like every other first world country, had inflation after covid which was harmful for many people but its now largely under control and that the US is handling this better than most countries. However, in terms of overall prosperity the US is doing very well both in comparison to other countries and in our own numbers looking at stuff like employment, GDP, business investment and start-ups.
However, what the MAGA folks are trying to sell is that our economy has been destroyed. Just watch the TV ads. (Of note, I live in PA where advertising by the GOP and Dems is the highest). To be fair both parties are saying the world will end if the other party is elected but the MAGA claims that our economy is awful is pretty bizarre I think, but I am a numbers guy.
Steve
MarkW
Sep 17 2024 at 8:21am
At this point, pretty much all political claims probably need to be evaluated on the basis of their expected effect on the small number of voters who haven’t yet made up their minds or might be persuaded to change them. I’m sure the campaigns have a very detailed understanding of who these folks are, but the general idea seems to be that they are non-ideological, ‘low-information’ voters. And folks like that probably never read tweets with tables of PPP adjusted discretionary income. I suspect that Vance is making the claim because he believes (probably correctly) that these contested voters believe that the economy is worse now than it was during Trump’s presidency (or at least worse for them). And to the extent that these folks are either renters who’ve had to renew a lease, or first-time home-buyers (or who have family or friends in these categories), they reasonably do feel worse off, as inflation and high-interest rates have had pretty dramatic negative impacts on housing costs for those not already comfortably ensconced in a house with a low-rate, long-term mortgage.
Scott H.
Sep 17 2024 at 1:53pm
Let’s take it as a given that the US is better off with current immigration as opposed to a counterfactual where there is no immigration.
Nevertheless, I think we can all agree that there is some smaller portion of Americans that would still be better off in this counter factual world. Maybe a large portion of those Americans currently vote Democrat. Given the import of economic matters, those disgruntled Democrats may be willing to change their vote to Trump on the basis of moving towards the counter factual.
Most folks already committed to voting for Trump’s probably remember that his past record on immigration showed little actual effect.
Scott H.
Sep 17 2024 at 1:57pm
Sorry Mark, I thought this went in as a general comment.
Scott H.
Sep 17 2024 at 1:56pm
Also, insofar as causation, it seems like it runs both ways. Immigration helps per capita GDP, and immigration is increased by a large relative GDP.
I could go through the arguments, but probably the causation is strongest from higher GDP per capita causes increased immigration more so than stronger immigration causes higher GDP per capita.
Matthias
Sep 23 2024 at 9:04pm
There might also be common factors that cause both.
Scott Sumner
Sep 17 2024 at 2:15pm
Everyone, To be clear, I’m not saying the US quality of life is higher than in Europe or Canada or Japan. But in crude material terms were are somewhat richer, at least compared to any country with more than 10 million people. Vance seemed to be referring to economic metrics, not other issues like crime, drug use, obesity, etc.
Robert EV
Sep 18 2024 at 1:39pm
This is where things like Gini really come in to play, and the fact that what people see in the media and from tourists biases understanding of the situation in other countries.
But yes, as a “country”, we are indeed the most prosperous one.
Warren Platts
Sep 18 2024 at 2:47pm
There’s nothing magical about the Gini index because a multitude of different distributions can go to the same number. E.g., the U.S. has about the same Gini coefficient (after transfers) as Burkina Faso and Sri Lanka.
Robert EV
Sep 19 2024 at 12:14am
Yes. My “things like” was doing a lot of heavy lifting. Regional and situational COLAs also factor in. I’d like to see a breakdown of US disposable income after taxes and housing payments (rent, mortgage) per decile, for instance.
Phil H
Sep 19 2024 at 2:21am
“what motivated Vance to make this claim?”
This Trump campaign seems to have really doubled down on the narrative that America is doing very badly. In the debate I was shocked when Trump said: “We’re a failing country.” But that’s the narrative they’ve chosen, and Vance’s claim just fits in with it.
I have been surprised that the Democrats can’t seem to get any purchase on this. Usually they say you have to be relentlessly upbeat to reach people, don’t they? The fact that Trump still has fairly solid support seems to mean that it’s at least possible to run a highly negative national campaign and do well.
Matthias
Sep 23 2024 at 9:03pm
The tables you quoted (indirectly) from Wikipedia only have some countries. Eg notoriously rich Singapore is missing. (I don’t know where they would place in the table. Because of forced saving schemes our _disposable_ income is relatively low despite low taxes.)
The US is still very rich, but I wouldn’t necessarily depend on the rankings in the table.
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