Quotulatiousness

September 16, 2015

The African migrants are not driven by demographic change

Filed under: Africa, Europe — Tags: , , , , , — Nicholas @ 03:00

Matt Ridley explains that demography does not explain the sudden influx of refugees from Africa to the European Union:

Even the most compassionate of European liberals must wonder at times whether this year’s migration crisis is just the beginning of a 21st-century surge of poor people that will overwhelm the rich countries of our continent. With African populations growing fastest, are we glimpsing a future in which the scenes we saw on the Macedonian border, or on Kos or in the seas around Sicily last week will seem tame?

I don’t think so. The current migration crisis is being driven by war and oppression, not demography. Almost two thirds of the migrants reaching Europe by boat this year are from three small countries: Syria, Afghanistan and Eritrea. These are not even densely populated countries: their combined populations come to less than England’s, let alone Britain’s, and none of them is in the top 20 for population growth rates.

Well then, perhaps that is even more ominous. If these three relatively small countries can cause such turmoil, imagine what would happen if say the more populous countries in Africa fell into similar chaos. Today Africa’s population (north and sub-Saharan) is about 50 per cent larger than Europe’s (East and West). By 2050, when — according to United Nations estimates — Africa’s population will have more than doubled from 1.1 billion to about 2.4 billion people and Europe’s will have shrunk from 740 million to about 709 million, there will be more than three Africans for every European.

Actually, demography is a poor predictor of migration. Nowhere in the world are people leaving countries specifically because of population growth or density. The population density of Germany is five times as high as that of Afghanistan or Eritrea: unlike water, people often move up population gradients. Tiny Eritrea, with only five million people, is a hell-hole for purely political reasons. It has a totalitarian government that tries to make North Korea and the old East Germany look tame: it conscripts every 17-year-old into lifelong and total service of the state. No wonder 3 per cent of its people have already left.

May 22, 2015

Reconstructing history – a population explosion in ancient Greece?

Filed under: Europe, Greece, History — Tags: , — Nicholas @ 04:00

Anton Howes deserves what he gets for a blog post he titled “Highway to Hellas: avoiding the Malthusian trap in Ancient Greece”:

There’s a fantastic post by Pseudoerasmus examining the supposed ‘efflorescence’ of economic growth in Ancient Greece, and some of the causal hypotheses put forward by Josiah Ober in an upcoming book (which I’m very much looking forward to reading in full). Suffice to say, the data estimates used by Ober raise more questions than they answer.

If the constructed data is correct, then not only did Greek population grow by an extraordinary amount during the Archaic Period roughly 800-500 BC, but Greek consumption per capita grew by 50-100% from 800-300 BC. As Pseudoerasmus points out, this would imply a massive productivity gain of some 450-1000%, or 0.3-0.46% growth per annum.

This seems quite implausible to me. Indeed, the population estimates imply that the Ancient Greek population would have been substantially larger than that of Greece in the 1890s AD, along with higher agricultural productivity! This is all the more puzzling as there appears to have been no major technological change to support so many more mouths to feed, let alone feed them better than before.

But assuming the data are correct, what would have to give? Pseudoerasmus explores a number of different possibilities, such as the gains from integrating trade across the Eastern Mediterranean and Black Sea; or that the Greeks might have shifted agricultural production to cash crops like wine and oil and imported grain instead. None of these quite seem good enough for such a massive and prolonged escape from the Malthusian pressures of population outstripping the productivity of agriculture (although I hope the so-far unavailable chapters from Ober’s book might shed some more light on this).

A remaining explanation offered by Pseudoerasmus may, however, be the winner: that Greeks weren’t using land more intensively as Ober seems to suggest, but rather expanding the land that they brought under cultivation by colonising new areas.

January 30, 2015

The last stand of the WEIRD

Filed under: Europe, Media, USA — Tags: , , , , , — Nicholas @ 02:00

Mark Collins linked to this post at The XX Committee:

The WEIRD demographic, as I’ve explained before, standing for Western, Educated, Industrialized, Rich, and Democratic, is wholly dominant among our media elites that play a huge role in forming opinions and judging the acceptability of the same. Over the last half-century the WEIRD vanguard has taken over the academy, the media, and the entertainment world; one of its better-known members is in the White House right now. Obama’s castigation in 2008 of “bitter” Americans who cling to guns and religion was a perfect one-sentence explanation of how WEIRDos view less educated and enlightened fellow citizens, which is no doubt why his opponents will cite it forever.

There is no tyranny as offensive as a cultural tyranny, of course, and just as affluent, educated post-moderns view their lessers with undisguised contempt, the guns-and-bibles brigade returns that contempt with interest. This goes some way to explaining why American politics has become so bitter in recent years: both sides simply hate each other and bother less and less to mask it.

The WEIRD contingent has had an impressive string of victories since the 1960’s, especially in America. Their record of wins, fast, may have no precedent in history, since culture tends to shift slowly, sometimes glacially. The culture war has been won, and the victory for the WEIRD side is essentially total. In the last fifty years, racial relations have been so dramatically transformed by government and culture, hand in hand, that racism, once casual among many whites, is totally unacceptable in anything resembling polite society. It speaks volumes that Jeffrey Dahmer, who murdered, dismembered and ate seventeen young men, many of them black and Hispanic, was at pains to make clear that, though he was a cannibalistic serial killer, he wasn’t racist: that fact he deemed important.

Even more transformational have been shifts in gender relations since the 1960’s, with American young women today being better educated than their male counterparts, with access to opportunities personal, professional, and sexual that their grandmothers could only have dreamed of. Some feminists now ask what good men are actually for, not in jest. Young men have noticed this seismic shift and numbers of them are dropping out of the race — professional and sexual — in a way their dads and granddads could not possibly comprehend. In Japan, this has become an official problem, and has a good deal to do with Japan’s staggering demographic crisis. As with race, feminism has triumphed so totally in just a couple generations that we have NGOs plus governmental bureaucracies hunting for evidence of racism or sexism, however fragmentary, to prove the need for more transformation. When young men lose interest in sex, as has occurred in Japan and is spreading in the West, something big is happening.

While race is of interest to the WEIRD demographic, sex is more central to their worldview. Catfights among progressives about determining who has more sexual privilege are fun to watch yet challenging for normals to comprehend. Here the LGBT issue has played a major role. Simply put, less than twenty-five years ago, gay issues were peripheral politically, confined to America’s far-Left fringe, while topics like gay marriage were never discussed by mainstream figures. Thanks to media and government action, now LGBT issues are given a place of importance in all discussions of social issues, while soon the Supreme Court will take up gay marriage, which may prove its most hot-button case since Roe v. Wade.

Regardless of what the Supreme Court decides, LGBT issues are another area where the culture war has turned out to be one-sided in the end. Opposition to gay marriage is fading fast, while it barely exists among younger Americans. However, just as with race and gender issues, LGBT advocates are showing minimal magnanimity in victory, preferring to double-down on public dissenters. Even the powerful are being driven from jobs and public life over their opposition, even when quiet, to gay marriage. There is more than a whiff of the Social Justice Warrior (SJW) mob about all this, and the idea of live-and-let live does not seem to be in fashion among the Cultural Marxist Left. It’s difficult to see how America avoids a serious clash between progressives and tradition-minded religious groups over all this.

October 21, 2014

QotD: Hipster economics

Filed under: Economics, Humour, Quotations — Tags: , , — Nicholas @ 00:01

Hipster economics are standard economics because hipsters are everything the US economy has ever wished for in one convenient package. It’s a group consisting largely of young, upper-middle class people with very little conviction, who will spend large amounts of money to maintain their own comfort and the appearance of diversity and rebellion. They are activists as long as it’s easy, poor as long as it doesn’t involve dirt or hunger, and selfless as long as they don’t stand to lose anything. They represent the sanitizing of national issues so that they can be discussed without being addressed. And all you have to do to control them is use some reverse psychology. They’re not rebels, they’re not even malicious, because they’re not anything except a bunch of kids playing pretend. They’ll eventually grow up and become bankers, lawyers and politicians, just like their parents…

“Robert” commenting on “The peril of hipster economics: When urban decay becomes a set piece to be remodelled or romanticised“, by Sarah Kendzior, 2014-05-28.

September 28, 2014

This is why you rarely see “Made in India” on manufactured goods

Filed under: Bureaucracy, Economics, India — Tags: , , , , — Nicholas @ 11:13

At The Diplomat, Mohamed Zeeshan talks about India’s self-imposed disadvantages in manufacturing both for domestic and export consumption:

Indian Prime Minister Narendra Modi’s maiden Independence Day speech was laced with inspiring rhetoric. But of the many things he said, the one slogan that inevitably caught public attention was this: “Come, make in India!” With those words, Modi was trying to make the case for turning India into the world’s next great manufacturing hub. Understandably, the Indian populace was thrilled.

India is one of the world’s ten largest economies (and is third largest on a purchasing power parity basis), with a total annual output of nearly $2 trillion. As much as 57 percent of this output is produced by a service sector that employs just 28 percent of the population, largely concentrated in urban parts of the country. That is no surprise, because most Indians lack the skills and education to join the more knowledge-intensive service sector. What they need is what successful developing nations all over the world have had ever since the Industrial Revolution: a robust and productive manufacturing sector.

Yet India’s manufacturing sector contributes just 16 percent to the total GDP pie (China’s, by contrast, accounts for almost half of its total economic output). Victor Mallet, writing in the McKinsey book Reimagining India, recently offered an anecdote that was illuminating. “One of India’s largest carmakers recently boasted that it was selling more vehicles than ever and that it was hiring an extra eight hundred workers for its factory,” he wrote, “But the plant employing those workers belongs to the Jaguar Land Rover subsidiary of Tata Motors and is in the English Midlands, not in job-hungry India.”

Mallet goes on to make a point that has been made frequently by Indian economists: The world doesn’t want to “make in India,” because it is simply too painful. There’s bureaucratic red tape, a difficult land acquisition act, troublesome environmental legislation, a shortage of electricity, and a lack of water resources. The only thing India doesn’t seem to lack is labor, but that merely adds to the problem. As Mallet points out in the same essay, aptly titled “Demographic dividend – or disaster?”, “India’s population grew by 181 million in the decade to 2011 – and (despite falling fertility rates) a rise of nearly 50% in the total number of inhabitants is unavoidable.” But the number of jobs being added to feed that population is inadequate.

However, the labor dividend is still important. India doesn’t need to reduce the number of hands on deck. It needs to weed out the challenges that stop them from being productive.

September 3, 2014

QotD: The relative size of the Chinese economy, historically speaking

Filed under: China, Economics, History, Quotations — Tags: , , — Nicholas @ 00:01

People seem to want to get freaked out about China passing the US in terms of the size of its economy. But in the history of Civilization there have probably been barely 200 years in the last 4000 that China hasn’t been the largest economy in the world. It probably only lost that title in the early 19th century and is just now getting it back. We are in some senses ending an unusual period, not starting one.

Warren Meyer, “It is Historically Unusual for China NOT to be the Largest Economy on Earth”, Coyote Blog, 2014-08-30.

August 12, 2014

The very different American and British baby booms

Filed under: Books, Britain, History, Media, USA — Tags: , , — Nicholas @ 00:02

In sp!ked, Jennie Bristow reviews P.J. O’Rourke’s latest book, The Baby Boom: How It Got That Way (And It Wasn’t My Fault) (And I’ll Never Do It Again).

For the British ‘Baby Boom’ was very different to its American sibling, in both respects of the word. Demographically, Britain – like many other Western countries immediately after the Second World War – experienced a spike in the birthrate, but this dropped back quickly until the mid-1950s, when there was a less dramatic, but more sustained, bulge over the next 10 years.

[…]

Size isn’t everything, however, and the other aspect of the Baby Boom label is the period of prosperity and growth that followed the war in the US. O’Rourke’s introduction to the UK edition of The Baby Boom points out another fact that tends to be ignored in the slating of the British Baby Boomers – that ‘postwar experience in America was very different from postwar experience in a place where war, in fact, occurred. That is, we had the “post-” and you had the war.’

[…]

Throughout the book, O’Rourke’s fond accounts of growing up during the Fifties, which are generally amusing and often stylistically annoying, hammer home the space, freedom, affluence and indulgence enjoyed by the American Baby Boomers as children. In Britain, accounts of the so-called ‘Golden Age’ of the Fifties tend to extend to children playing by the river and neighbours leaving their front doors unlocked, glossing over the more drab reality that kids did not have anything to play with inside, and that most homes were not worth burgling.

Given the divergence in experience between the British and American Baby Boomers, one might wonder how the American debate, about the problems of the Boomers’ size, wealth and health (which, many grumble, means they will live ‘too long’, robbing younger generations of their fair share of pensions and healthcare resources), became plonked on to Little Britain with scant regard for the differences.

The answer lies partly in what the US Boomers did share with their counterparts in the UK, and in parts of Europe, too. This was the experience of growing up in the tumultuous Sixties, when youth appeared to be in the vanguard of a cultural revolution that swept aside established norms and values, rejecting the authority of tradition and, above all, of adults.

Swiftly demolishing another great myth about the Sixties, O’Rourke points out that, in reality, ‘the Baby Boom was the tailgate party, not the team on the field’: ‘There was a lot of “talkin’ ‘bout my generation” (Pete Townshend, born 1945), but it wasn’t my generation that was causing “What’s Going On” (Marvin Gaye, born 1939) during the “Youthquake” (a coinage from Punch, edited by people born when mastodons roamed the earth).’

January 7, 2014

“Boomer Classic” and “Boomer Reboot”

Filed under: History, Media, USA — Tags: , , , , — Nicholas @ 09:45

Chronologically speaking, I’m a late Baby Boomer, but I’ve never felt I was a Boomer culturally. In the New York Times, Richard Pérez-Peña helps to explain why this is:

This year the youngest of the baby boomers — the youngest, mind you — turn 50. I hit that milestone a few months back. But we aren’t what people usually have in mind when they talk about boomers. They mean the early boomers, the postwar cohort, most of them now in their 60s — not us later boomers, labeled “Generation Jones” by the writer Jonathan Pontell.

The boom generation really has two distinct halves, which in my mind I call Boomer Classic and Boomer Reboot. (Take this quiz to see where you stand.) The differences between them have to do, not surprisingly, with sex, drugs and rock ‘n’ roll — and economics and war. For a wide-ranging set of attitudes and cultural references, it matters whether you were a child in the 1940s and ‘50s, or in the 1960s and ‘70s. And it probably matters even more whether you reached adulthood before or after the early ‘70s, a time of head-spinning changes with long-term consequences for families, careers and even survival.

[…]

Late boomers like me had none of that — no war, no draft, no defining political cause, and most of our fathers were too young for World War II. I remember, as a teenager, seeing old footage of the riots outside the 1968 Democratic convention in Chicago, and thinking, “People my age don’t feel that strongly about anything.”

People raised in the immediate postwar years had more faith in their government, and an idealistic view of America that curdled in the ‘60s and ‘70s. My childhood memories of the evening news, on the other hand, include the war, protests, Watergate and the dour faces of Johnson and Nixon, not the grins of Truman, Eisenhower and Kennedy.

In this way, I think we late boomers have more in common with the jaded Generation X that followed: we had less idealism to spoil. No, I don’t remember where I was when Kennedy was killed and innocence died (I was an infant), but I sure remember where I was when Nixon resigned and cynicism reigned. Older boomers may have wanted to change the world; most of my peers just wanted to change the channel.

H/T to Kathy Shaidle for the link.

December 14, 2013

Literacy and demographics

Filed under: Economics, Education — Tags: , — Nicholas @ 11:37

David Warren invites a lot of knee-jerk reaction with this passage in a recent essay:

Whether in West or East, however, the mechanism of societal disintegration is the same. It could be described in one phrase as “the liberation of women.” The modern economy lures women away from home and family with (ludicrously false) promises of wealth, pleasure, and freedom. Industry required a more docile labour force, the State required revenues from double-income taxation. At a level more fundamental than economics, the times have offered atomizing ideologies — the promise of “democracy” in which everyone will be treated the same, whether man, woman, or some other thing. As Goldman has rather plainly shown (and Roberts showed long before him), we must cherchez la femme.

For women are, as they have always been, the bedrock of both family and religion. Men have, and will be by nature (whether this is recognized or not) the hunters and gatherers and bread winners. There is no point in debating this, for either one gets it or one is wilfully obtuse. A certain minority of talented women have always flourished outside the home, and perhaps a like proportion of men not flourished in the absence of any marketable skills — but the case is straightforward in the main. What we have been enduring, for a century now, is an attempt to change the order of the world by social and sometimes genetic engineering; with results clearly visible all around us, to say nothing of the grief and loneliness and self-pity that each of us is carrying inside.

Curiously enough, Goldman homes in on a statistical fact that Roberts elided. It is that a sharply increasing female literacy rate is a more or less infallible predictor of demographic collapse, in all non-Western countries. Or as I mischievously put it, on Twitter only last night, “statistically and objectively, the quickest way to destroy a nation is to teach their women to read.”

This remark would invite several gallant qualifications. The modern emancipation of women began in the West, where Christian teaching had always accorded women the greatest respect. The social changes were therefore slower and easier to assimilate, here. It is when what happened more gradually in the West, happens more suddenly in the East, that the transformation becomes catastrophic. The whole ancestral order of society comes down, in one generation rather than four or five. And they haven’t seen the worst of it yet, for the West had accumulated reserves of wealth, with which to pay some pensions and geriatric bills. The East will face a more dramatically ageing population, without the reserves.

October 30, 2013

Fertility and denial – East Asia’s demographic shift

Filed under: Asia, Japan — Tags: , , , , — Nicholas @ 07:57

In sp!ked, Stuart Derbyshire looks at the unprecedented drop in total fertility rate in most of East Asia:

Fertility rates in East Asia have fallen catastrophically since the early 1970s and are now the lowest in the world. In all parts of Asia, the total fertility rate (TFR) has fallen by half or more in the past 35 years. In Japan, South Korea, Hong Kong, Taiwan and Singapore, the TFR hovers between 1.0-1.3. For a population to replace itself, the TFR needs to be above 2.1. Thus, if these trends in fertility are not substantially reversed, the population of Asia will rapidly shrink as the continent heads into extinction. How did this happen?

Most commentators are inclined to blame the falling rate of TFR on the influence of modernity on women. Speaking in 1983, for example, Singapore’s then prime minister, Lee Kuan Yew, infamously remarked that educating women and bringing them into the workforce had undermined their more traditional role as mothers: ‘It is too late for us to reverse our policies… Our women will not stand for it. And anyway, they have already become too important a factor in the economy.’

[…]

Falling fertility in Asia involves not just the rejection of motherhood but a broader rejection of intimacy and responsibility of many kinds. About two fifths to one third of women in Singapore, Hong Kong, South Korea and Japan are choosing not to marry. Increasing numbers are not even bothering to date. When I ask my students why this is, they shrug and talk about the hassle and expense, as was highlighted in a recent article. Children are expensive and they are also demanding, intrusive and may not turn out how you desire. Similarly, relationships are messy and difficult, with the ever-present possibility of disappointment. It is easier to live at home, hang out with friends and avoid intimate contact.

The problem in Asia is not modernity but rather the postmodern self-conscious denial of human agency and subjectivity. Young Asian men and women deny that they can be independent and deny that they can forge meaningful intimate personal relationships and so, instead, they accept the relative comforts of living with parents and the relative ease of being single. This denial of independence, intimacy and responsibility is a problem across the world and is bound up in a disregard for human agency typical of mainstream commentary on the environment, terrorism, economics and most other scientific and social issues. The impact in Asia may be more devastating because of the relatively sudden displacement of traditional Asian values without any broader narrative of what modern Asia is. Unlike America and Europe, Asia does not have a clear continental story, no obvious heroic past, unifying welfare state or pan-Asian vision that might blunt a turn towards the denial of the self.

October 24, 2013

Explaining Japanese culture – “Freud would have a field day”

Filed under: Japan, Media — Tags: , , , , , — Nicholas @ 09:08

It’s commonplace to say “Japan is weird” (I’ve said it myself many times), but even with the constant repetition, I didn’t realize just how weird Japan has become (somewhat NSFW … better not watch this at the office):

Published on 22 Oct 2013

Japan is a country that is dying — literally. Japan has more people over the age of 65 and the smallest number of people under the age of 15 in the world. It has the fastest negative population growth in the world, and that’s because hardly anyone is having babies. In these difficult times, the Japanese are putting marriage and families on the back burner and seeking recreational love and affection as a form of cheap escape with no strings attached. We sent Ryan Duffy to investigate this phenomenon, which led him to Tokyo’s cuddle cafes and Yakuza-sponsored prostitution rings.

February 28, 2013

North Korea struggling with loss of faith in the state

Filed under: Asia, China, Government — Tags: , , , , , — Nicholas @ 08:50

Strategy Page on the challenges facing the government as the younger generation grows up:

A major source of information about North Korea is obtained by South Korean intelligence experts interviewing the steady flow of refugees arriving in South Korea (via China and the South Korean embassies in neighboring countries like Thailand). For the last decade, over a thousand of these refugees have arrived each year. In the last few years China and North Korea have increased their efforts to reduce that number, which peaked at 2,900 in 2009 and was 1,500 last year. These determined and desperate people keep coming. Separate interviews are compared and checked against each other to obtain an updated and accurate first-hand view of life in the north. This also helps detect the spies North Korea tries (often with success) getting into the south via the refugee route. While the refugees detail the growing decline in living standards up north, it’s also become clear that there is a very real generational shift in loyalties in the north. The generation who grew up during the 1990s famine (that killed about ten percent of the population and starved most of the rest for years) no longer believe in the North Korean dictatorship. Many who came of age before 1990 still do, but for most everyone under 30 the state is the enemy and self-reliance, and not a benevolent dictatorship, is the only way to survive. The North Korean government has been fighting these attitudes more and more, as this generation of unbelievers grows larger each year. The more astute members of the northern leadership see this as a no-win situation. Eventually most North Koreans will be very hostile to the state and more adept at making money in spite of the government, or simply getting out of the country. Most of the leadership is still afraid of enacting Chinese style economic reforms because they believe a more affluent population would seek revenge for the decades of misrule and tyranny. The Chinese say that didn’t happen in China. The North Koreans point out that, as bad as the Chinese communists were in the 1950s and 60s (killing over 50 million people via starvation, labor camps and execution) that was not as bad (proportionately) as what the North Koreans have suffered. Moreover, the North Korean leaders point out that, historically, Koreans have been a bit more excitable and brutal when aroused by misrule. The Chinese say times have changed but the North Korean leaders are not yet willing to bet their lives on that being the case.

The refugees report that most North Koreans understand that the police state up there is strong enough to suppress any uprising now or in the foreseeable future and that the only real threat to the dictatorship is intervention (openly or via a coup) by China. Refugees also report that it’s common knowledge that hundreds of North Koreans have died of radiation poisoning or been born with birth defects because of the uranium mining and working with nuclear materials. The government has responded by offering large cash bonuses to those who will work in the uranium mines. The refugees report in detail many other ways the Kim government abuses their subjects.

February 4, 2013

Everything is cyclical — Baby Boom to Baby Bust

Filed under: Economics, USA — Tags: , , , , , — Nicholas @ 09:56

In the Wall Street Journal, Jonathan Last looks at the demographic changes on tap for the United States as the fertility rate continues to drop below replacement:

The fertility rate is the number of children an average woman bears over the course of her life. The replacement rate is 2.1. If the average woman has more children than that, population grows. Fewer, and it contracts. Today, America’s total fertility rate is 1.93, according to the latest figures from the Centers for Disease Control and Prevention; it hasn’t been above the replacement rate in a sustained way since the early 1970s.

The nation’s falling fertility rate underlies many of our most difficult problems. Once a country’s fertility rate falls consistently below replacement, its age profile begins to shift. You get more old people than young people. And eventually, as the bloated cohort of old people dies off, population begins to contract. This dual problem — a population that is disproportionately old and shrinking overall — has enormous economic, political and cultural consequences.

For two generations we’ve been lectured about the dangers of overpopulation. But the conventional wisdom on this issue is wrong, twice. First, global population growth is slowing to a halt and will begin to shrink within 60 years. Second, as the work of economists Esther Boserups and Julian Simon demonstrated, growing populations lead to increased innovation and conservation. Think about it: Since 1970, commodity prices have continued to fall and America’s environment has become much cleaner and more sustainable — even though our population has increased by more than 50%. Human ingenuity, it turns out, is the most precious resource.

Low-fertility societies don’t innovate because their incentives for consumption tilt overwhelmingly toward health care. They don’t invest aggressively because, with the average age skewing higher, capital shifts to preserving and extending life and then begins drawing down. They cannot sustain social-security programs because they don’t have enough workers to pay for the retirees. They cannot project power because they lack the money to pay for defense and the military-age manpower to serve in their armed forces.

Update: Kelly McParland on the plight of some older workers: “If they’d never worked at all, and gotten by on social assistance, they might still have a financial lifeline.”

It would be cruel (and maybe unfair) to say they made their own beds, but it remains the fact that a great deal of the trouble they face results from the refusal to brook a more prudent approach to public finances for so many years. Programs that were unaffordable were pushed through time and again, paid for by more and more borrowing. When crises developed, the borrowing increased while spending was only rarely curtailed. The curse of deficit financing is its snowball effect: annual shortfalls pile up, pushing up the carrying costs, creating a self-perpetuating ever-expanding spending crisis. When a recession inevitably arrives, there are no reserves to deal with it, and even more borrowing ensues.

After so many decades of pretending it could go on forever, without there being a reckoning, the generation that created it is discovering how wrong they were. Not only is it destroying the retirement dreams of so many near-seniors, it’s preparing a poisoned legacy to hand to the next generation, and perhaps the one after that, unless they recognize the need for greater discipline and finally accept the pain that will necessary to put the process back on a sustainable track.

Canada is fortunate that it faced up to its debt crisis 15 years ago and is still benefiting from that fact, but the public memory is short and there will always be pressure to turn a blind eye to debt, and legislate for today. No wonder people get more conservative as they get older. They understand the price that has to be paid for putting costs off to tomorrow.

November 24, 2012

Japan’s demographic time-bomb has detonated

Filed under: Economics, History, Japan — Tags: , , — Nicholas @ 11:58

Remember the Japan of the 1970s and 1980s? The world-spanning colossus of economic might? The nation that had Wall Street wetting its collective pants with every bold move?

That was then. This is now:

Less than a quarter-century ago, Japan was the economic envy of the world. In 1989, Tokyo-listed shares represented nearly half the planet’s equity value, while the land beneath the city’s royal palace was worth more than all of California. American nightly news anchors practically misted up when they had to report that Rockefeller Center was turning Japanese.

Two lost decades and massive property- and stock-bubble explosions later, Japan is a one-word cautionary tale. Caught in economic and demographic atrophy — and stewarded by countless false-start prime ministers — the country has become a hub for zombie banks, a generation of disenchanted youth, and fading brands such as Sony, Sharp, and Panasonic.

Last year, for the first time, sales of adult diapers in Japan exceeded those for babies.

October 16, 2012

Early Baby Boomers had it much easier than those who followed

Filed under: Cancon, Economics, USA — Tags: , , , , , — Nicholas @ 10:44

Depending on where you draw the demographic line, I’m either a (very) late Baby Boomer or an early arrival from the next generation. I “get” the anger that some younger folks feel about the BB’s, because I came along too late to benefit in the same way that the early boomers did:

But, have baby-boomers really enjoyed a cozy ride through life? The truly lucky were their parents, who worked in the post-Second World War “Golden Age” of low unemployment, rapidly rising real wages, rising house prices, and expanding public and private pension plans.

The postwar boom was petering out by the late 1970s and early 1980s, just as many baby boomers were entering the job market. The 1980s and 1990s were marked by two severe recessions, and by an increase in jobs which often did not provide steady wages or a decent pension.

The unemployment rate for the baby-boomers, then mainly in their early thirties (age 30-34), was more than 10 per cent from 1983 to 1985, and over 8 per cent for the boomers in their late thirties during the recession years of 1992 to 1994.

Many baby-boomers never managed to find the secure and well-paid jobs characteristic of the 1960s and 1970s that lay the basis for a decent retirement. A recent study by former Statscan assistant chief statistician Michael Wolfson found that one-in-four middle-income baby boomers face at least a 25 per cent fall in their standard of living in retirement. (He looked at persons born between 1945 and 1970, and earning between $35,000 and $80,000 per year.)

The proportion of all persons age 65 to 70 who are still working bottomed out at 11 per cent in 2000 and is now 24 per cent, and about one half of persons aged 60 to 65 are still working today.

In my entire career, I’ve worked for only one company that provided a pension plan — and I was laid off before my contributions vested anyway. I don’t expect to ever voluntarily retire: I won’t be able to afford it. And I’m far from alone in that.

« Newer Posts — Older Posts »

Powered by WordPress