Sunday, April 10, 2011

Demographic Winter I

Over Thanksgiving I watched the documentary Demographic Winter.  Here is their website:
I recommend around the first 20 minutes or so, if you get a chance.  That’s the part where they actually support their idea that we are headed for a huge population decline in the next several decades.  The remainder is kinda worthless, in my opinion – pointless speculation about the decline of the modern family and the whys and wherefores.  Don’t get me wrong – they have the data to say, in no uncertain terms, what has been happening to the family; but that’s where the facts end and the speculation begins.  From there they take the what (which the data supports), add some traditional values-inspired speculation, and they arrive at a completely unsupportable why, as well as a completely unsupportable what it all means.
One brilliant gentleman, Harry Dent, points out that when you take a graph of birth rates, and a graph of stock market levels, shift the birth rate graph to fifty years later and superimpose it over the stock market graph, you get a pretty good match of activity trends.  We can only guess why this is, but his explanation does make sense – the idea that when people reach ~50, they prepare for retirement and essentially take their money out of the economy.  Then, consider that virtually every country has a birth rate below replacement.  A + B = future population and economic decline.
Well, that was enough for me – any economic theory presupposes the existence of agents to act in that economy.  No agents, no economy.  Decline in economic agents = certain economic decline.  I was convinced!  They could have, and should have, ended it right there.  But no, they had to keep going.

(Continued in part II)

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