Thursday, October 22, 2020

46. The Post-Nuclear Family: An Introduction (Demographic Doom Podcast)

This is the script for my Demographic Doom podcast episode (#46) recorded on 22 October 2020 (released on 23 October 2020). It may differ slightly from the final broadcast. This episode is available on major podcast platforms, including PodbeanApple Podcasts and a video version on YouTube. See the description on the YouTube version for extensive annotations, links and corrections. You can also comment on this episode there. (If you leave comments on this blog post, I might not see them.) The main website for this project is DemographicDoom.com



I’m Glenn Campbell. I call myself a demographic philosopher. I’m looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, as aliens would see us from space.

Today is Oct 23, 2020, and I'd like to return to the core of my Demographic Doom project, which is designing a new family structure. It is evident to me that the traditional nuclear family isn't producing enough babies to sustain modern society and that it never will. Couples today might have one or two kids, but then they quit, because it's so damn expensive, and these one or two offspring don't make up for the many adults who have no children at all. 

So what do we replace the nuclear family with? I've been talking about this for over a year now on this podcast and my earlier videos, but I've come up with a new name for my proposal, so I'm going to start over from scratch. I used to call this idea the "modular family". Now I simply call it the “post-nuclear family”. It's what happens after the nuclear family, and the nuclear family is what we are comparing it to. Certain aspects of traditional families are being retained, while others are being rewritten, but the nuclear family is our starting point. Humans being humans, we can't except them to accept a radical restructuring of the families they have known for generations. Instead, I propose making a lot of incremental changes that might eventually lead to something radical, but that aren't so radical in themselves.

Although I've said a lot about this family structure in previous podcasts and videos, under the "modular family" name, but I'd like to forget about all that and start over, perhaps explaining it a little better. I'm still going to keep all those past episodes and videos for historical interest, but I'm going to restart my narrative as though you have never heard of my system before—which maybe you haven't. I'll then build upon this idea in future podcast episodes and in the big document I'm working on.

Before I describe my family structure, let me quickly describe the problem that prompted it. Modern civilization has a child production crisis in regards to both quantity and quality. The quantity issue is that developed countries are simply not producing enough babies to sustain their societies. You may have been taught in school that there's a population explosion on Earth, but that's a lie. It may have been true 60 years ago but not today. Today, only the poorest countries in Africa are still exploding in population. Nearly all the others are facing the prospect of a population implosion. Sure, the population of the planet is still growing, but the growth has slowed dramatically, and it will top out soon at something like 9 billion souls, from the 7.7 billion we have today. At that point, the world population is going to start heading down, and that decline has already started for dozens of countries.

This may sound like a good thing from an environmental standpoint. Fewer people ought to mean less pollution, right? But it is absolutely devastating from an economic standpoint. Countries that have gone deeply into debt can't possibly pay those debts off if their number of taxpayers fall. Furthermore, their populations are aging, with more ailing elderly people and not enough workers to support them. This is going to lead to a massive worldwide economic collapse which I've discussed at length in other podcasts. The trigger for the collapse appears to be the coronavirus, but it could have been anything. This crisis has been a long time coming, and it won't go away anytime soon. Furthermore, Mother Earth isn't going to be helped if governments collapse. It there is no powerful authority to enforce environmental regulations, and desperate people are going to go back to burning down forests and polluting rivers again.

There is also the second, more subtle problem of population quality. Children today are inconsistently raised, and they are often relegated to the least capable parents. Due to a phenomenon called the "demographic-economic paradox", fertility tends to be inversely related to wealth. Rich people have fewer babies. There is also a "demographic-education paradox", where the people with the most education have the fewest babies. The net effect is that the least qualified and most stressed members of society are doing most of the heavy work of producing the next generation. This has to have an effect on the quality of your citizenry over time.

No matter how you slice it, human civilization is heading for some bad times that are certain to last for decades. I can't offer any short-term solutions because I don't think there are any. Even if a country were to magically produce a lot of babies today—along the lines of the Baby Boom of the 1950s—it wouldn't do anything to address your country's economic woes for at least two decades. Furthermore, if the people you entice into parenthood are the poorest and weakest in your society, you're not going to be producing optimal citizens.

My solution is a very long-term one that might take 50 years or more to have an economic effect. Furthermore, I'm not pushing it as a solution to the problems of broad society. Instead it is a solution to the problems of your community. You probably can't do anything to save your country, but you might be able to save your community. What is a community? Well, it could be a religious group or your kinship clan or some other group who you associate with. A community can form around shared values, whatever they may be. Maybe you look at your community and realize, "We are going to become extinct if we don't produce some children to carry on our ways." If you come to that realization, and it fills you with panic, then we can talk. Maybe I have a solution for you.

I call my proposed structure the "post-nuclear family". You might call it the nuclear family on steroids. It's bigger, stronger and hopefully longer-lasting than the traditional nuclear family. The starting premise of the post-nuclear family is pretty simple: Instead of one or two adults raising one or two kids in a single household, let's have a large number of children raised in a single household supported by multiple adults. How many children? I'm thinking between 9 and 18 kids raised under one roof. They are evenly spaced every one or two years from birth to age 18 and beyond. This is certainly a departure from today's families of 1 to 3 kids, but 9 kids was not unusual in humanity's agricultural era. This was your typical farm family, where your children were your labor force.

The advantage of a big family is economy of scale—you can buy the industrial size of everything and don't have to duplicated fixed assets like washing machines. You need only one adult on duty at any one time to care for 9 to 18 kids instead of the current ratio of roughly one to one. You've also got a captive labor force. We don't work children in the fields like we use to, but it is entirely reasonable to have older children care for younger ones. You don't need to be an adult with a PhD to change diapers or talk baby-talk to a baby. Any 10- or 12-year old can do that. Any family needs adult supervision, but the idea is to turn the family into a cooperative enterprise where everyone cares for everyone else in a structured environment that everyone understands, thereby minimizing the need for adult care and intervention.

How does the post-nuclear family begin? It can start quite simply without violating too many norms. Several pair-bonded couples, who either have children or plan to have them, decide to join forces and raise all of their children in a single household. The mothers coordinate their births so that the children are evenly spaced—that is, a new baby born every year or every other year. In a few years, you've got a full household of 9 to 18 kids. Now you've got the all the economies of scale I just mentioned. Only one adult needs to be on duty at any one time, so you've solved your daycare problem. This frees up all the other adults for conventional work or to pursue their own private interests.

This sounds like a good idea—doesn't it?—but of course it raises questions, like why hasn't this been tried before, and my job is to resolve all these questions based on my theories and calculations. I feel like an engineer designing a bridge. The basic idea is simple: we want to span this river, and we've chosen a way to to it: maybe a suspension bridge. Now the challenge is dealing with all the complications and details that might get in the way, including working with real materials and real humans.

For example, how do the parents divide up their duties and resolve their disputes. It is hard enough to get two adults to cooperate on parenting; how do we get 6 or 8 people to work together? And how do you support this whole operation financially? Every question you answer just opens up more questions, so I can see that as the Master Designer of this plan, I've got my work cut out for me. History is filled with failed utopias, and I don't want my idea to end up in that trash heap, so I've got to work out the problems in advance. I admit that I might never live to see this plan in operation, but I can still publish a blueprint that others can work with. It's just like designing a bridge. I can make calculations based on my knowledge of the materials—that is, my understanding of human nature—but it is up to others to implement the plan and to modify it for the real world.

I will no doubt record many future episodes trying to run down some of the complex issues of this family system, but in this episode I just want to describe it. What will this family look like after it has been established for a few years, and how will it operate? 

So the starting element is several couples deciding to raise their children together, but I want to add something else: The family never dies. Decade after decade, it will always have the same number of children: 9 to 18. As one child ages out of the core household, another baby is born into it.

In the traditional nuclear family, childrearing ends when the one mother loses her fertility, usually in her 40s. Although there may be 9 children at some point in the family's history, that's only a peak, not a sustained number. Children eventually age out of the family and are not replaced. The household dwindles to zero again as the parents retire and eventually die. The problem with this system that their parenting experience is lost. After you've raised 9 kids, you've probably learned a thing or two about how to do it well, but then you quit, and that experience goes to the grave with you. The families of today are fleeting, which means they have little in the way of institutional memory. 

The aim in keeping the family going is to preserve its internal culture. By "culture" I mean the software that the family runs on—that is, all of its procedures, policies and mythologies. If you have a system the gets a large number of children to work together smoothly, that's a great accomplishment, and you don't want to lose it. You want to keep the childrearing unit going indefinitely to allow the culture to be passed from child to child.

For example, a central part of family life is the preparation of meals. I think kids should be doing this, not adults. Adults provide the raw food and maybe some training, but the kids should do all the work, and be organized in such a way that they're not killing each other. Once you have a system for meal preparation in place, it becomes part of the family's culture. It's like, "This is the way we do things." and it's something that older kids can pass to younger kids without much adult intervention. If the family expires, you lose all those habits and procedures. You could try to put all this wisdom in a book, but it's not the same as building non-verbal habits over time.

Culture applies to everything the family does. You could see it as the family's most valuable asset. That's what you're trying to do when you raise children: You're trying to instill a culture into them, which consist of values, language and a way of doing things. It's a culture of morality, a culture of cooperation. And the best way to teach this culture is through practical lessons from the child's earliest age. Preparing meals and caring for your younger siblings aren't just chores; they are essential exercises in socialization, and once you get this whole system working, you don't want to just throw it all away, which is what happens in the nuclear family. That's why I see the post-nuclear family as a permanent institution that goes on forever: always 9 to 18 kids for as long as the Earth remains habitable.

A permanent family with a stable number of children begs the question: "Where do the babies come from?" Initially, the founding mothers provide them, but what happens when their fertility runs out in twenty years. That's a complex issue I'll tackle in a separate podcast. For now, I'll only say that the stork brings them. You know: a big bird that lives on roofs, carries babies in a little sack and drops it down the chimney. Hey, that's where I came from, so it's good enough for now.

Why do I choose that family size: 9 to 18 kids? I choose it because it allows for optimal age spacing between the children. It maximizes efficiency while giving each child his or her own special place in the family. If you are 8 years old, and your next oldest sibling is 10 years old and your next younger sibling is 6 years old, you have a unique position in the family where no one is directly competing with you. There is also a clear hierarchy. Your 10-year-old sibling has more authority and responsibility than you do, because their skills and maturity are generally more advanced. It is okay if older kids get more privileges owing to their age, because you know you'll get the same privileges yourself someday.

It would be different if there were three 8-year-olds in one family. Then they would all be competing with each other, and the most charismatic of the three could end up monopolizing all the family's attention. With even spacing between kids, everyone knows their place; everyone is special and hopefully no one gets left behind.

A family of 18 kids implies one child born every year, with only a year's spacing between children. To me, this is a practical maximum. Beyond it, the family turns into an industrial farm. If you crowd the children together, there is too much competition among same-age children, and each child loses his or her special place. 

I actually think that the optimal spacing for any family—nuclear or post-nuclear—is a child every two years, or 9 kids under the age of 18. The only reason you would want to make the spacing narrower is if your were planning to split the family at a later date. The post-nuclear family divides in a process I call mitosis—like the splitting of a single-celled organism. This is a way to expand the number of families while still retaining the family's hard-won internal culture. During mitosis, you split the family down the middle like a zipper. Half of the kids stay in the original household and half move into another house, not far away. Your next older and next younger siblings turn into your cousins, who you may still be close to but you're not directly living with them anymore. Mitosis may sound traumatic at first, but the reward for it is all the extra space you get. Instead of one family of 18 kids, there are now two families of 9 kids, each of whom now gets more space, freedom and specialness within the family.

Here is another wrinkle I'd like to introduce: Although the post-nuclear family is managed by multiple adults, I propose that none of them actually live in the main house with the kids. The parents live however they choose in their own homes or apartments, much as they do today, coming to the main house only for specific duties. This isn't a commune, where all adults share everything, or some kind of kinky group marriage. Adult members of the family are permitted to live their own independent lives, pursuing their own interests and careers, not much different than how they would live without the family. The only restriction is that they have to live close enough to the main household to perform their parental duties, which are usually scheduled well in advance.

I want to keep the adults at a distance, because don't want too many chefs in the kitchen. Each parent is officially on duty in the household for a certain scheduled period. This helps avoid conflicts between parents and keeps them from stepping on each other's toes. You may think that having a constant turnover of parents would be traumatic to the children. Don't they need secure bonds with parents they see every day? Yes, they do, but their strongest "parental" bonds are with the older children who raised them. All other adults play more of a grandparent or aunt or uncle role, giving the children special attention but not seeing them every day. 

The only adult family members would might live in the same household as the kids are the sick or elderly who need ongoing care. I picture them living in a wing off the main house, where they can be cared for both by children and other adults.

And this gets into the other functions of a family. A family is not merely a childrearing system. It is a lifelong support structure. It is a mutual aid society. If you get in trouble, you know your family will help, usually without payment. This is especially true when you enter the final phase of your life when your physical systems start failing. No one ever truly "retires" in the post-nuclear family. If you stop working in a conventional job, you are still expected to continue your "grandparent" role of caring for other family members. When your own faculties fade, you know that you yourself will be cared for if necessary—so long as you have been loyal to the family all your life and paid your family taxes.

That's another thing: family taxes. Every adult is expected to pay them in one way or another, in accordance with some kind of formula. Perhaps it is a percent of your income, as shown on your government tax return. Perhaps you pay your dues through your labor on behalf of the family, such as bearing children for them, but when you are out in the world making a living, you are expected to pay a portion of your income to the family. This is the main way that the family supports itself financially. Family taxes apply both to the founding parents and to the children who graduate from the family. Family taxes are voluntary, in the sense that no one can force you to pay, but if you don't pay you risk losing family services and the respect of the people you grew up with.

So that's probably enough for now. In this episode, I have introduced eight elements of the post-nuclear family system, which are these:
  1. The family has between 9 and 18 kids raised under the same roof by a consortium of adults.
  2. Children are evenly spaced in age, from infancy to adulthood.
  3. Most of the routine internal labor of the household is provided by the children themselves.
  4. The number of children is held constant over time. As one child ages out of the family, a new child is born into it.
  5. The adults who manage the household do not live there themselves. They live as they choose in their own separate lodging.
  6. Most adult parental duties are scheduled in advance. The rest of the time, each adult can live as they wish.
  7. Elderly, sick or disabled members of the family are cared for in a location close to the children.
  8. Every adult family member must pay their family taxes throughout their working life.
  9. The number of families can be increased through a system of mitosis, which divides one family of 18 kids into two families of 9 while preserving the family's culture.
Clearly I have a lot more to talk about, because each of these points raises new issues. For example, I failed to answer the question of where the babies come from. I'd much rather talk about this hypothetical family structure than about the current economic, demographic and health crisis, because I can't do much about that right now. The only thing I can really say about the current crisis is that the sky is falling, so you better get out of the way. I want to focus more on this post-nuclear family, because it might eventually have some impact on the world. 

πŸ„πŸŽ™

Subscribe to this podcast for more ruminations from a demographic philosopher and more discussions of this theoretical family structure. I encourage your input. If you have anything to say, you can email me or post a comment to the YouTube version of this episode.

———

Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there. See here for all my podcast scripts on this blog.

Thursday, October 8, 2020

45. Rip van Winkle Awakens... to Insane Economics (Demographic Doom Podcast)

This is the script for my Demographic Doom podcast episode (#45) recorded on 7 October 2020 (released on 8 October 2020). It may differ slightly from the final broadcast. This episode is available on major podcast platforms, including PodbeanApple Podcasts and a video version on YouTube. See the description on the YouTube version for extensive annotations, links and corrections. You can also comment on this episode there. (If you leave comments on this blog post, I might not see them.) The main website for this project is DemographicDoom.com



I’m Glenn Campbell. I call myself a demographic philosopher. I’m looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, as aliens would see us from space.

Today is Oct 8, 2020, and I'm back! After a 4-and-a-half-month hiatus, I'm reactivating this podcast to talk about what's been happening in the world and what the future may hold. You can think of me as Rip van Winkle, who went to sleep for four months and is just waking up now. What has changed in the world during this time? The short answer is: Not a lot. There has certainly been plenty of news, mainly revolving around the coronavirus and the incompetent U.S. president. But in another sense, little has changed in the long-term big picture. Most of the issues I raised in previous podcasts are still valid, which is what I intended. I want this to be a podcast for the ages, where these topics still have validity five or ten years from now. That's important since I don't have many listeners in the present. 

Four months have had a similar effect in my personal life. There has been plenty of news, but little has changed. When you last heard from me on May 23, I was just about to enter a very intense period of cancer therapy—called an "autologous stem cell transplant''—which occupied most of the month of June. I survived the procedure, and as of today, I'm once again in top health, which is a very fast recovery from this sort of treatment. In the three months since June, I went from barely able to walk to climbing mountains. For the second time since 2018, I am "in remission" from lymphoma cancer, which means that no cancer can be detected in my body. This kind of cancer has a high probability of coming back—maybe 50/50—but for the time being I'm healthier on the surface than I was before my cancer in 2018.

My 4-month podcast hiatus wasn't really due to cancer treatment. Cancer never prevented me from doing them, but I needed a break, a time for reassessment. The computer I use for editing crashed at the end of June, which I took as a sign that I needed to retreat from all my projects for a while. I needed to work on personal recovery and financial stabilization, and now that I'm solid again, it's time to get back to important stuff.

What I consider important is the whole state of the world, as defined by demographics and macroeconomics. 

You could say that politics also plays a role in the state of the world. We live in a very political time, which is represented in the United States by the doofus presidency of Donald Trump. It's easy to get incensed by him, but it's also easy to get distracted from the long-term issues. My position is that politics comes and goes. Demographics and macroeconomics are more lasting and have greater influence on our future. I see Trump more as a symptom of long-term demographic and economic decline, not a cause.

Back on September 26, 2019, in the 4th episode of this podcast, I predicted a massive worldwide recession, the worse that any of us have seen in our lifetimes. My grounds for making this prediction were the world's exploding debt and its deteriorating demographic condition—that is, the lack of babies and excess of old people. There is too much debt, and there's no way it can be paid, so there has to be widespread failure of that debt. The crisis was queued up and ready to go; we just needed a "Black Swan" event to set it off.

Four months later, the Black Swan took the form of the Covid-19 virus, which became known to the world around the end of January 2020. On February 3, in Podcast #27, before any deaths in America, I wondered whether this would be the Black Swan that finally brings down the world economy. Well, the virus certainly triggered lots of bad stuff, including huge job losses and the fastest economic downturn the world had ever seen, but the wholesale systemic collapse that I and others have been predicting hasn't really started yet.

On the national level, the coronavirus shutdowns have resulted in a dramatic increase in government spending even as tax revenues fall. The latest statistics I've heard are that the U.S. government in 2020 will spend more than twice as much money as it is collecting in taxes. All the rest is being borrowed and ultimately is being paid for by money printing by the Fed. You just can't keep doing this without something bad happening—or rather a whole galaxy of bad things happening. We just don't know when and how.

I stick by my predictions of a huge institutional collapse, along the lines of the Fall of Rome, but I could never have predicted the many absurdities of the current moment in history. The most remarkable of these is the dramatic rise in US stock markets following their initial fall. Between mid-February and mid-March, when it became clear that the virus would slam America, stock markets plummeted—which is entirely rational and understandable. Investors were slow to react, but they did. The virus was triggering massive job losses and dramatic falls in GDP, which could only lead to massive losses for most companies represented on stock exchanges, so it was natural for their prices to fall.

What I never would have predicted is that stocks would rebound so quickly, even without any improvement in the underlying economy. Certain markets like NASDAQ reached all-time highs in August, while the real economy was still in the toilet. So we had the worst economy in history accompanied by the best stock market in history, as least as measured from its low point in March. This was true as of my last podcast and it's still true today. We are falling into a terrible real-world recession that could last a very long time, yet stock investors are acting like we're in a boom. 

How could this be so? It has to do with mismanagement by central banks and the naΓ―vetΓ© of investors with nowhere else to put their money. The Federal Reserve and other central banks have committed themselves to a Doomsday Strategy of printing money and holding interest rates at near-zero to try to stave off the eventual collapse, but in the long run, it's not going to work. In essence, the Fed is trying to save us from a collapsing bubble by blowing an even bigger bubble, until, at some point, that bigger bubble has to pop. We just don't know how and when. 

Instead of dwelling on current absurdities, I prefer to focus on what is concrete and knowable about the future, which is where demography comes in. Demography gives as a couple of really powerful predictive observations: One is that all human beings eventually grow old and die. This has been true since the beginning of time, and it will continue to be true for the foreseeable future. Furthermore, humans don't just suddenly die when they reach a certain age; they invariably get sick and weak first, often for years, and these illnesses are a huge burden to society. Improvements in medical science may increase the human lifespan, but only at huge cost, and ultimately dotage and death will still win.

The other demographic observation is that there can't be more adults in the future than there are children now. Combine these two principles together and you have the absolute guarantee or a shrinking workforce and a growing proportion of ailing old people, with inadequate resources to support them.

This has all been clear to me since I started studying demography four years ago, but what part of this has Covid changed? There's one very simple but devastating effect of the epidemic: an acceleration of our birth collapse. I predict that the actual deaths caused by Covid will be dwarfed in the long run by the births that don't happen because of it. Death by disease is certainly more painful in the short term than births that never happen, but the latter has a much greater effect on society in the long run. In the long term, human suffering caused directly by Covid may pale against human suffering caused by dwindling population.

The end of 2020 and beyond is certain to be a horrible period for the worldwide birth rate. By "horrible" I mean that birth rates that were already too low in 2019 will fall through the floor starting a couple of months now. Instead of a dismal fertility rate of 1.5 babies per woman—which was roughly the rate for all of Europe in 2019—it is going to fall closer to a catastrophic fertility of 1.0 or less. In other words, for every one man and one woman in your country, only one child will be produced. If you keep doing this generation after generation, pretty soon you don't have a viable country anymore.

It's like the problem with cockroaches. If they are given unlimited food and space, two cockroaches will rapidly turn into millions. The same process works in reverse: If every two cockroaches have only one baby between them, the whole cockroach population will be reduced to nothing in relatively few generations.

Why do I think birth rates collapse? It's simple. People don't want to have babies when their lives are in turmoil or the world is in crisis. If you lose your job or fear losing your job, you're probably going to put off having a baby, and putting it off effectively means fewer babies being born overall, because women eventually run out of time.

In case you weren't aware, it takes nine months to make a baby. Government statistics generally don't track pregnancies, only actual births, so it takes nine months to know for sure whether Covid has changed anyone's baby-making decisions. This is October, so a baby born this month would have been conceived in January. January was still early in the pandemic, when it seemed to affect only China, and it wouldn't have had an impact on conceptions outside of China. We can say that by early March, the whole global population outside China was in panic mode—as reflected in the drop of the stock markets. This is the time when businesses and schools started shutting down in the U.S., and stay-at-home orders were imposed. That's when couples would have started asking, "Do we really want a baby right now?"

But that's only a theory. An alternative theory is that couples would have been cooped up together in quarantine and had more sex, resulting in more babies being born nine months later—sort of like the snowstorm effect—you know, how there are supposedly more babies nine months after a snowstorm that keeps everyone inside.

I discount the second theory because I think most people in developed countries don't have babies by accident. They plan their births, and they usually take a while to deliberate on their plan. Plans to have a baby are often years in the making. When the couple is ready, they discontinue birth control with the aim of allowing a baby to happen. It may take years for a couple to decide to have a baby, but the decision to not have a baby can happen in an instant. All it takes is one member of the couple losing their job. Then all of a sudden, a baby doesn’t sound like a good idea anymore.

The Covid birth collapse is a theory for now, but by the end of the year it will be provable fact. All the babies conceived or not conceived in March are going to be reflected in worldwide birth statistics in December, and I predict those statistics are going to be terrible. We won't know how terrible until the statistics start coming in, but the basic problem is that no one with any sense wants to produce a baby during an economic crisis. Anyone with a sense of self-preservation is going to "wait and see." 

As long as vast swathes of humanity are uncertain about their future, there's going to be an immediate conception dip and a birth crisis nine months later. I predict this will get really bad going into 2021, with countries throughout the world experiencing record low births. Every country in the world with effective contraception is going to start looking like Singapore or South Korea, with barely one baby per couple. The longer the economic crisis goes on, the worse things are going to get. Remember that babies aren't a profit-making enterprise. They absorb huge resources, and no one in their right mind is going to produce one unless they themselves feel financially secure, which could be years away for most of the world's population.

This much I predicted before anyone had heard of Covid. If an economic crash is coming, it means a birth crisis is coming. Covid just made it immediate and real. How low can birth rates go? We're going to find out very quickly. Twenty years later, we'll pay the price for those low births, when those non-existent babies don't enter the workforce.

Compared to demography, which is basically just counting people, macroeconomics is less predictable. There is only one hard rule of macroeconomics: In the long run, you can't spend more money than you make. Beyond this immutable law, there's a lot of uncertainty, like the exact route the world takes to reach an inevitable collapse.

In the present, there are at least three economic effects of the Covid crisis that I couldn't have predicted when I went into my Rip van Winkle slumber. One, as I said, was the dramatic rise in the stock market in spite of the tanking economy.

Another is the strange employment paradox I see all around me. Since February, the unemployment rate has risen at the fastest pace in history, but everywhere I go in America, there are Help Wanted signs. I should know, because I drive cross-country for a living, and I see a lot of America. Every business that is open has Help Wanted signs prominently displayed. Since the pandemic began, I have never seen a fast food franchise anywhere in the country without a Help Wanted sign.

This seems to defy logic at first, just like the rising stock market. How can there be a labor shortage in the midst of a recession? You'd think that all the jobs would be snarfed up by now, but they're not. These are not high paying jobs, but low-paid service sector work, but a job's a job, and a fast food job is better than none—you would think. My best theory is that most people who have been laid off are collecting unemployment benefits, which would end if they did get a job, so you're not going to see any of those fast food jobs filled until unemployment benefits run out. It's one of the perverse incentives of the current economy: People are paid to not work, so they don't, so more small businesses must fail because they can't find the labor to operate.

The third thing I didn't predict was the sudden reversal of a long-term trend toward urbanization. Since the Industrial Revolution, people have moved from the countryside to the city in ever-greater numbers. If you drive through farming towns through out America, you find them decimated. Downtowns are boarded up and decaying because they don't have the population to support their businesses. It's not hyperbole to say that at least a third of the buildings in rural America are abandoned, vacant or underutilized, and those tenants are not coming back. Given the choice, most people want to be in urban or suburban areas were jobs and services are better. You would think that the trend would continue until there are just a few mega-cities, but Covid has proven that this process will not go on forever.

Starting in March, when workers were sent home from most knowledge-based businesses, working from home has become the norm. The technology to support telecommuting has existed for about a decade—the main advance being the improvement internet bandwidth to support video conferencing—but it took the epidemic to shift the transition into high gear. Many of those workers who are now working from home will never return to the office, because there's no need for it. In most knowledge-based industries, Covid has proven that working in an office isn't necessary. Why should companies pay for expensive office space when employees can provide their own for free?

This is going to have a devastating effect on the cities where the offices were located, especially the premium cities where rents and taxes are high. I'm thinking of the San Francisco area, New York City, Chicago and a few other top-tier cities in the U.S. I don't know how the situation is in other countries, but in the USA, our big cities are in big trouble. The commercial real estate market for offices and retail space have taken a devastating hit, but residential rents are also beginning to drop. I read that apartment rents in the San Francisco area have already dropped by 10% since the epidemic began. I predict that things will get much, much worse, at least from the standpoint of city governments.

The reason people are moving out of the top-tier cities is obvious: the huge expense of living there. Not only are rents high; so are taxes. If you live in New York City, you are not only paying astronomical rent for a very small space, you are also paying income tax to the city. That's right, if you're a New Yorker, you're paying Federal, State and City income taxes. Move out of New York City, and you lose the tax. Move far enough away, and you'll get a much bigger living space for a lot less money.

This generates a positive feedback loop because most of these big cities are in dire economic straights. They are supporting vast government programs and huge pension obligations, and like almost every other entity in the world, they're deeply in debt. To balance the books, they will need to raise taxes, but higher taxes only drive more people to move ultimately suppressing the property values that the taxes are based on.

Some mid-size cities like Columbus, Ohio may not be affected as much because their costs and taxes remain reasonable. No one is moving back to the middle of nowhere, like rural Texas, but the top-tier cities are facing an apocalypse, to the benefit of the second-tier cities. What we may end up with in the long run is that the countryside hollowed out and the densest urban cities hollowed out while everyone lives in small cities and the periphery of big ones.

A bonus paradox is that home prices in those top-tier cities seem to have not changed much since the start of the pandemic, but that's an illusion. In these big cities where no one wants to live, housing prices are destined to plunge eventually. It's like the stock market. Prices can defy gravity for a while, but eventually gravity will win.

Although the "Black Swan" struck the world economy back in February and March, it's full effects haven't yet hit. You'll know the real crisis has begun when stock markets crash, real estate prices crash and the something bad happens to the U.S. dollar. It could be hyperinflation or something else, but no government can keep printing money indefinitely, in lieu of collecting taxes, without something breaking.

The ultimate end game is the government being unable to borrow more money so its services start collapsing. By services, I mean maintaining the interstate highway system, supporting a standing army, paying for senior health care, making social security payments or any of the other things the Federal Government does that you aren't really aware of until they stop working. State and local government are also in trouble. They can't print money like the Federal Government can, so they're probably going to default first. 

What I'm looking for now is another Black Swan to convince the world to take the first Black Swan seriously. In other words, we're primed for another triggering event that will crash the stock and bond markets. When this happens, the dominos will start falling, and the world will get much, much worse.

πŸ„πŸŽ™

Subscribe to this podcast for more ruminations from a demographic philosopher. There's plenty to ruminate on. Eventually my attention will focus again on long-term solutions to our demographic crisis—or at least the demographic crisis of your community. How will people ever have babies again? I have a plan, and I'll get back to it eventually.

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Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there.