Japan's Baby Bust

Here at The New World, we've covered the baby bust and the baby boom.  Whether one happens, or another, seems to depend on how much control the population has on the complex process of reproduction.  Less control - for instance, less access to family planning - can cause an increase in births.  Populations - mostly in developed (non-poor) countries - with more control tend to opt out of parenthood - because they can - in times of economic uncertainty.

In Japan, most births take place within marriages, so fewer marriages will mean fewer babies.  In the three months leading up to June of this year, marriages in Japan fell 36.9% from the same period in 2019.  Births fell 11.4% in the same period.

It's not surprising to see the numbers of weddings diminish in times like these.  Hard to commit to a future that is over the horizon.  But Japan's response to COVID has, overall, resulted in less health, mortality and economic damage than in other industrialized countries.  Their recovery has been quicker.  This makes a reduction in weddings of over one-third a significant response.

Add to that the fact that, like most developed countries, Japan's birth rate has been declining (by 5.8% in 2019), and average age has been rising.  In Japan, the average age is 45.9 - the highest in the world. 

Policymakers are scrambling to address the crisis, covering fertility treatment with health insurance and doubling the upper limit of a one-off government allowance for newlyweds to 600,000 yen ($5,726).

So COVID has made a disturbing situation much worse in Japan.  And since confidence in the future will probably wait, not until economies and virus protection actually improve, but when we think they have improved (much later), it may take years for Japan's birth rate to return to pre-COVID levels - when it was declining.  

Japan is going to be different in the new world.  Government ministers are predicting disasters in a variety of systems, from social security to pediatrics.  Will a sudden dip in the birthrates of other developed nations - which are not far behind Japan in their steady decline - have similar impacts?  Demographic shifts can result in profound changes in society.  Japan's salaryman culture may be responsible for its "leadership" in this area, but the rest of us are not far behind. 

Give or Take

I don't know if it's because the US election is only a week away, but I'm thinking about dysfunction and dystopia, and terrible outcomes.  So I started reading about the effects of the virus on global poverty rates.  Isn't that what you do to allay anxiety?

Here it is, from the IMF, reported by the Brookings Institute:

In 2019, the IMF was predicting a slow decline in global poverty over the next ten years.  Just one year later, that has changed to a rapid growth in the near term, followed by a decline.  Roughly speaking, it will take nine years to return to the level of poverty predicted for this year.

This suggests that the IMF feels that the forces which have been reducing poverty over the last few years will eventually resume their work, and poverty rates will begin coming down again - from a much higher level than expected, due to the economic devastation wrought by the virus.  Even in 2030 - ten years from now - poverty will still be seven tenths of a percent higher than predicted in 2019.  If that doesn't seem like much, let's do some math.

The Google says that the world now contains 7.8 billion people, and that population growth is declining.  Extrapolation from some of these graphs suggests that we can use 0.7%, on average, as the growth rate over the next ten years or so.

Roughly speaking, then, we add 0.7% of 7.8 billion, which is 54,600,000, to the population of the world each year for ten years.  That's 7.8 billion plus 546 million.  Still with me?  We're almost done.

So - again, roughly speaking - we will have around 8,346,000,000 (8.346 billion) people in the world in 2030.  The IMF prediction is that seven percent of us - 584,220,000 - will be poor.  However, according to our graph, without COVID, only 6.3% of us -525,798,000 - would have been poor.

The difference is 58,422,000.  Just under sixty million.  That is people who will be living in the circumstances of poverty ten years from now, just because we let a pandemic get out of control.

These are people who would be making ends meet but will not be, long after the pandemic is gone.  The human cost is staggering - each number is a person without enough to eat, or nowhere to get out of the rain, or nowhere to find a job, or attend a school, or see a doctor, or enjoy a long healthy life. 

And the new world will, starting now, be coping with this increase of poverty every day for more than ten years.  Fifty eight million people.  Give or take.  Unevenly distributed, no doubt.  Again, we're thinking of tipping points.  That's a long time for an emerging economy to address the needs of more people in poverty than they ever expected.  

We know this is going to happen.  It's happening now, and won't stop for a long time.  Will we respond quickly, effectively, compassionately?  

Hard to tell. We're an uncertain people, give or take.

The View from the FT

Martin Wolf is the associate editor and chief economics commentator at the "Financial Times", a staid old (est. 1888) British financial and economic journal.  He's also been awarded the CBE by the Queen, so never let it be said that I don't drop names.

Anyway, in an embedded video in this FT article*, Wolf has some things to say about the post-COVID world.  He presents them pretty confidently, so I thought I'd pass them on.

Wolf has the good grace to begin by saying that "the most important answer is that we really don't know what's going to happen.  It is a completely novel experience."  Well, yes.  

Except - we do know that we will emerge with a lot more debt than we're used to, certainly in the public sector, but also in the private sector.  There will be an unprecedented number of defaults, mostly in the private sector and mostly in emerging economies.  "These are sources of great fragility," he warns.

They certainly are.  The damage caused to emerging economies (read:  poorer countries) may be the big story as we drift further into this Sargasso Sea of pandemic.  Whole cultures destroyed?  A breakdown of the civil structure in multiple countries in the same region (Latin America, perhaps?).  This is the route that we could take to dystopia, if that were to be the outcome.

Wolf moves on to the good news - in which he is less confident.  The debt will be manageable; interest rates will remain low, as will inflation.  But taxes will rise (even I could figure this out) and, he adds, taxes on the well-off will rise, too.  Interesting that "taxes" are not necessarily about the "well-off" unless that is specified.  A little peek into the tax-free world of the ultra-rich.  In fact, he goes on to say that "we are not going to be able to repeat... the austerity measures that followed the last crisis."  The "austerity measures" of the last crisis were, we need to understand, imposed on the many to prevent the inconvenience of the few.  Not this time.  We're done with austerity.  The few may even need to start paying a small percentage of their fair share.  This, in Wolf's world, is something to take note of.  He has the gall to add, 

"This will be a new social contract, if you like. (Oh, I like it.  A lot).  It might be as profound as what happened after the Second World War, which is a period of relatively high equality."  

Imagine that.

Then he moves on to effects which are possible but not certain.  He notes that "the virus and the response to it is dividing the world, even though it is a common experience."  Trade relationships are fracturing, especially between the US and China, but among EU countries as well (not to mention Brexit, which will be a meteor smashing into whatever chaos the virus has wrought).  "There is serious discussion of ending the World Trade Organization or ending trade globalization."  Nationalism and protectionism are on the rise.  These forces will result in "massive shifts in business and the way business works."  

Well.  That can't be good.  Especially the part about the rise of nationalism and the fracturing of global alliances and trading networks.  Sounds familiar...

Wolf goes on to predict the permanence of WFH, with resulting changes in commuting and, therefore, in real estate and urban planning and how cities work.  He doesn't go into details.  We can deduce what the details of the new landscape will be, and I suspect that much will be written about this as time goes on.  He also notes that there will be losers in this new urban environment - the smaller and smaller proportion of us who cannot work from home, and the businesses we work for.  If urban planning in general, and commuting infrastructure specifically, moves down the priority list because fewer workers are commuting, those who must commute lose out.  But we already knew this.

"I think it is reasonable to suppose," Wolf says in summary, "that the world we will emerge into... will be really quite different from the world we were in before the pandemic hit us."

As always:  Stay tuned.

 * - By the way - the article, with the video, was published in mid-September, before caseloads shot up in so many developed nations.  So - pay attention, and extrapolate.

Leadership

I've been thinking about yesterday's post-apocalyptic post a lot since I clicked "Publish."  I think I may have been a bit too offhand.  It's not a joke.

For all that thought, I don't actually have a lot to say.  Years ago, my son gave me a copy of Malcom Gladwell's "The Tipping Point."  It's stuck with me, on a number of levels.  I've had a career as a social scientist, and I'm very interested in learning about the behavior of groups of human beings.  

And I don't see any reason why, after the entire world spends a whole year or more in fear and isolation, emerges from it broke and destitute, the whole world wouldn't want some justice.  Things get worse and worse, and then someone - or many someones - with the right combination of characteristics show up at the right moment - and the point tips.

If this is the direction we are going to go in, then leadership is more important in 2020 than it has been, perhaps, in the entire history of human civilization.  With good leadership, the virus can be contained and vaccinations facilitated.  With good leadership, this still-wealthy world can stretch itself to provide everyone with what they need until most of us are back on our feet.  Without good leadership... 

It's anybody's guess.

Anniversary

 Darn.  I missed the 100th post which, as it turns out, was a cartoon.  Time sure does fly.

But I didn't miss the anniversary.  I wrote the first post about the new world exactly six months ago today.  And no, I would not have guessed that, six months on, there would still be no sight of land.

Come the Apocalypse

I'm a big fan of post-apocalyptic science fiction stories.*  They are about a new world, where everything has been thrown up in the air and has come down differently.

I was reading an article this morning, about unrest in Ecuador, Chile and Columbia, and suddenly it occurred to me that our new world, the post-COVID world I've been speculating about for six months, could actually turn out to be a post-apocalyptic world.  

The unrest in Latin America - some of it violent - preceded COVID and was about "inequality, corruption and government austerity policies."  The article - a short one - was about how COVID could just make all these things worse.  Do you think?  "Coming out of the pandemic, we will have a level of economic activity and employment that will be much lower than before, a level of poverty and income distribution that is worse," noted Alejandro Werner, the IMF's director for the Western Hemisphere.

Widespread economic devastation, with the added factor of widespread anger at governments perceived to have mishandled the pandemic and made things worse.  Desperation reaches an unbearable level, and things get out of hand.  Post-apocalyptic worlds have been created from less.

So, there's that to consider.  I suggest you choose from the wide variety of novels available, many of them about a worldwide, apocalyptic pandemic similar to our own.  And if it doesn't happen, at least you've read a good book.

 * - As always, I'm only a fan of the well-written ones, and, for the most part, not of the movie or TV variety, although the movie version of "The Road" wasn't bad (it helped that the Cormac McCarthy novel of the same name won the Pulitzer)(it also helped that I'm a huge fan of Cormac McCarthy).

Ephemeral, or Not

 Here at “The New World,” we are committed to bringing you the newest and most compelling news about the post-COVID world.

Doesn’t that sound great?  What it means is that I spend a lot of time reading articles and Googling “post-COVID future.”  Sometimes it’s even fun!

I don’t know a lot about CNBC (we’ve never had cable TV) but it’s apparently a real thing, and they have apparently hired a somewhat bizarre ranter named Jim Cramer who says he wants to make me some money.  Well, not me specifically, but you get the idea.

So Jim Cramer, who shouts and emotes and gestures as if his market analysis has driven him to the brink of a breakdown, recently laid out what he thinks is the market’s predictions for the post-COVID future.  After reminding us of the second law of the stock market* - “The market’s a forecasting machine, which reflects expectations about the future, much more than facts about the present… We don’t care where stocks have been; we care where they’re going.”

That said, here is his list of “permanent” and “ephemeral” trends for the future according to the performance of relevant stocks.

Permanent:
Peleton -  This upscale exercycle company was struggling a year ago, and then suddenly no one could go to the gym – at the beginning because the gym was closed, but more recently because the gym chain you used to go to is bankrupt.  Home exercise – and the machines we use at home – will be a permanent fixture of the new world.  Apparently, if you spend that much for an exercise machine, there’s little motivation to abandon it and pay even more for a gym membership.
Wayfair – Here’s a company that was about to lay off 550 employees in February – and then suddenly everyone was working from home.  And needed office furniture, and a comfortable place to work.   Wayfair’s stock went from 21 to over 300.    Cramer says it’s here to stay, and so is RH,** which has been around a very long time but has had a “magnificent run” in the COVID market.  

Ephemeral:
Cooking at home – Packaged foods are still selling well, but their stocks are not – suggesting that the market thinks we’ll all go back to eating out four to five meals a week, on average, when this is all over.  Remember restaurants?
Boating – Brunswick, a big maker of recreational boats, is “out of boats, with giant backorders,” but the market does not see this continuing indefinitely.  For what it’s worth, Cramer thinks they’re wrong.
Used cars – Carvana is a used-car company with a contactless business model that essentially offers “vending machines for used cars – you don’t have to talk to anybody.”  This model was in place before COVID, and for obvious reasons it’s hot now.  The market says it’s here to stay.  Who wouldn’t want to buy a used car without dealing with a used car dealer?

And so forth.  The best way to travel right now?  AirBnB, as long as you book the entire house (which is often the same price as a nice hotel room, but without the other guests) and bring the sanitizing wipes.  RVs – a really safe way to travel – are selling well now, but the market seems to think that won’t last in the new world.

So, watching the stock market seems like an interesting way to start sketching the outlines of the new world.  All this, of course, depends on whether we’ll continue any of the behaviors that are necessary now, in the new world, when they’re not necessary.  And how far away we are, and what monsters lie ahead.


* - The first law of the stock market is:  “The stock market is not the economy.”

** - RH used to be Restoration Hardware; it’s where we got replacement hardware for the Victorian furnishings in the antique houses we bought and restored.  Now, apparently, it’s a (very) upscale Wayfair.

Time Flies

"Boy, time sure flies when every day is joyless and exactly the same."

                                                                       The New Yorker - 10/19/2020

New World Bauhaus

I'm watching a documentary about the Bauhaus, a school of design and architecture which was started by Walter Gropius in Weimar, Germany in 1919.  It was big on throwing out the rulebook and depending on creativity and a connection with shape, substance and color.  It is loved and hated to this day.  Many buildings that came out of the Bauhaus are with us still.

One small part of the origin story struck me.  The Bauhaus began just after the end of World War I, a terrifyingly brutal war, and at the end of the flu epidemic that killed millions worldwide. 

The artists and architects who stood in the ashes of the war and the pandemic, and looked into the future, saw a world of unlimited possibilities.  The nightmares were over, and were replaced by creativity, color, and brilliant functionality that freed them to experience and find delight in their new world.

The year 2021 will apparently bring us to the end of nightmares that have haunted us, one for a year, and one for four years.  We will see nothing but limitless opportunity.  Finally freed from the bonds of fear and despair, we will soar.

What new Bauhaus will we create?  Please forgive me my naivete and insufficient cynicism, but I can't wait.   

Correction, Sort Of

 Back in May, I wrote this:

...here in my home county, the use of plastic grocery bags was banned starting March 1. By March 20, the ban had been lifted – apparently, bringing your own bag to the grocery store helps spread the virus. Sure it does.

The ban was lifted on March 20 - that much was accurate - but not for the reason I suggested.*  According to the DEC, who should know, the single-use plastic bag ban was lifted, less than three weeks after it was instituted, due to a lawsuit brought by the Plastic Bag People - Poly-Pak Industries, Inc., et. al., in the NYS Supreme Court.  The lawsuit was settled in August (five months!) and the ban on single-use plastic bags will be reinstated in New York State this coming Monday, October 19.  The court's decision changed the original ban in an apparently (oops - there's that word again) minor way, regarding the thicknesses of the bags involved, so there will be plenty to argue about for a long time to come.

What does this have to do with the new world?  I'm not sure.  I'm not sure of anything anymore.  I'm hoping that it will contain a plastic bag ban, and any nonsense about reusable bags will be put to rest.  But probably not - we'll be telling tales, that are "apparently" true, about the virus for a long time to come.

Still no vaccine?  I'm going back to sleep. 

 * - The "reason" was something that I, like the President last night, "had heard about."  But the President was lying, and I was just being sloppy.  However, at the time, opponents of the bag ban insisted that the reusable bags that were to replace the plastic ones "can sustain viruses for months at a time if they're not regularly sanitized."  In fact, major grocery outlets banned reusable bags - completing the Plastic Bag People's bonanza wish list - for the same reason.  In July, Hannaford and Stop 'n Shop, two of the three grocery stores we use, lifted the reusable ban but insisted that customers with reusables bag their own groceries - which allowed them to remain agnostic regarding the danger of COVID contamination.  Trader Joe's, which has been overly cautious since the beginning, still does not allow customers to use reusable bags in the store.

Post-COVID Recovery Clinics

One thing the new world will have - because they're already here - is post-COVID recovery clinics.  I've never heard of a post-flu recovery clinic - you get over it and get on with your life - but COVID is different, as we have seen.

We are, unfortunately, learning a lot about the longer-term and permanent effects of the virus.  There is no doubt that these effects occur, in as many as a third to a half of cases, but we don't know how long they will persist, and we don't know, in most cases, why they occur.

Penn Medicine, affiliated with the University of Pennsylvania, already has a Post-COVID Recovery Clinic up and running.  You can read about it here.  There are others, and more are no doubt on their way.

As of this moment, almost 38 million cases of COVID-19 have been identified worldwide.  If only the tiniest fraction of them need help managing long-range and permanent side effects, healthcare in the new world will be very different.  But it's not going to stop at 38 million, and you know the numbers - one third to one half.  Do the math.

Anecdotal

No links, no references, no scholarly annotations.  A couple of casual conversations resulting in anecdotal support for a thesis about the new world.

It all started with a little explosion on a power pole just down from our house, in upstate NY, in early August.  Just a tiny burst; something with a long technical name failed, and the neighborhood was treated to a little power surge, which scrambled the brains of our refrigerator.  We learned (among other things) that, these days, refrigerators have brains.  Our particular refrigerator's brain cost $360. 

That didn't fix it, unfortunately, so off to the big box store, masks and all, to get a new refrigerator.  An hour later, as we were filling out the paperwork, the salesman mentioned that they were selling so many household appliances that it was hard to keep the warehouse stocked.  The reason?  "All these people from the city (NYC) moving up here and converting their cabins and second homes, and moving in."  People who were, apparently, escaping from a crowded city which was the center of a global pandemic for a while.  Escaping upstate to safer territory - for instance, our whole county of around 62,000 had 30 cases total until the college students returned in late August.  Sending their kids to schools in towns with zero cases.

The second conversation occurred recently, with real estate agent who manages summer bookings for our rental house out toward the end of Cape Cod.  She also described a sharp increase in sales, in this case, home sales, but for the same reason.  People from more urban areas, who work remotely, moving to a town with 16 cases since the beginning, again either upgrading second homes or, more frequently, selling the house in the city and moving to a place where their kids can go to school without fear.  

Now both places happen to be blessed with astounding natural beauty, and are (normally) centers of tourism.  So there's that.  On the Cape, there's a long tradition of people upgrading from part-time to full-time residency (they're called "Washashores").  And we've seen this before in NY, when refugees from NYC moved away from the fear and the death right after 9/11.

But it's happening again.  Families from the cities - most of whom are probably familiar with their rural destinations - will be establishing themselves in the country.  They'll be absorbing culture shock and adjusting to the off-season.  They'll be finding ways to get connected with the community.  And it's not a stretch to suggest that this may be happening all over the country.

Will this migration have a noticeable impact on the new world?  Will rural areas within striking distance of a big city grow and change?  For the better, or not?

Stay tuned.

Not Awake Yet

Well, awake - yes.  What is it we are doing until this is over?  What do we call it?  We are living in a dreamworld.  Not a particularly nice dream; mostly boring.  Frozen in time.  On hold.  

But not asleep, so to speak.  In fact, the recent hiatus at this blog is not the result of ennui, or illness, or wandering in the wilderness.  No one's in a coma.  Stuff has happened, actually, and mostly good stuff.

First, a week or so visit from the elder son and daughter in law and The World's Cutest Grandbaby.  We'd all been quarantining to an agreed-on intensity - we were in the same "pod," a concept that, I think, will survive the coming of the new world.  So we could hang out together.

During that time, a "pod" anchored by Abbey's sister gathered at her house, down the road from us here in Truro, MA, and we spent every day gathered on the beach or the deck, outside in the breeze.  They stayed for another week after our "pod" left.  And then Abbey and I spent a week writing postcards to voters, asking them to vote for people we knew who were running for the NYS legislature.  Fun times.

In case we've beaten the Columbus expedition of 1492 to death, as an analogy for our progress through te COVID and out into the new world, we might consider a new analogy - hibernating bears.  Is there a vaccine?  Is it time to wake up?  No.

So the new world is back, but no clearer, or nearer, than it was before.  Right now, it looks like the new world will involve a lot of hard work by competent people, digging ourselves out of  the mess we've made.  It's like the cave collapsed on us, and it's going to take a long time to dig out and find a new place.  

In the meantime, go on back to sleep.  Oh - but don't forget to vote.

Not Yet

 "Still no vaccine.  Go back to sleep."

                                                    

                                                                                                                            The New Yorker - 10/6/20