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Food for Thought – US Population, Employment, Debt, NIRP, Monetization

Food for Thought – US Population, Employment, Debt, NIRP, Monetization

In 2019, US population growth fell to +1.55m or +0.5%…this was due to a trifecta of declining births, lower immigration, and higher deaths than anticipated.  However, as with everything “2020”, all three trends are only intensifying to blow away 2019.  Births are falling faster and further, deaths moving higher with Corona-virus and drug related overdoses, and immigration nearly non-existent.  Thus, US population growth will likely dip below 1 million or +0.3% this year.  And while I anticipate (or think it feasible) that immigration could return to 2019 levels eventually, births will almost surely continue falling and deaths rising more than anticipated.  The simple outcome of this is an ongoing collapse in US population growth which is far larger in scope than the current Corona-virus pandemic.Census Population Estimates…Wildly Overstating GrowthThe chart below shows the 2008, 2014, and 2017 Census US total population projections through 2050.  Some quick math shows that in 9 years time from ’08 to ’17, the Census downgraded US population growth through 2050 by 50 million persons.  But due to the factors mentioned above, the 2020 Census projection through 2050 will need another massive downgrade…I’d suggest something on the order of another 29 million person downgrade.

The most significant contributor to decelerating population growth is declining births.  This is true among the native population and true among immigrants.  On average, they are all having significantly fewer children than anticipated.  As the Census estimates from ’00, ’08, ’12, ’14, and ’17 show…the Census models just can’t fathom the fast declining births taking place in the US.  But each Census estimate is still far too high, and perhaps in ’20 the Census will “fix” their models and portray reality (ok, not likely)…but I offer a more realistic picture below.

However, the downgrades in population are specifically among the younger populations.  Obviously, declining births and immigration means declining young.  The about face from ’08 to ’20 is stunning in the suggestion that the US truly is far more Japanese than immune to depopulation.

…click on the above link to read the rest of the article…

New Zealand Deprioritizes Growth, Improves Health and Wellbeing

New Zealand Deprioritizes Growth, Improves Health and Wellbeing

Last May, New Zealand Prime Minister Jacinda Ardern released a budget to improve the “wellbeing” of its citizens rather than focusing on productivity and GDP growth. And not so coincidentally, New Zealand has one of the best coronavirus outcomes of any democracy in the world. Perhaps this provides a model for the world to make economic health cohere with health for all life.

To improve wellbeing, Ardern emphasized goals that focus on care for people and planet. Goals included community and cultural connection as well as intergenerational equity. Under the policy, new spending had to focus on one of five priorities: improving mental health, reducing child poverty, addressing inequalities of Indigenous peoples, thriving in a digital age, and transitioning to a low-emission economy.

While New Zealand isn’t the only country to float the idea of wellbeing over income, it is the first country to make it a reality. Guided by this philosophy, New Zealand is not in a rush to open its economy even as headlines swirl decrying a “stock market crash,” or a “recession worse than 2008-09.” Is Ardern’s example wise? Can we build upon it to further improve life after COVID?

Jacinda Ardern

New Zealand’s Prime Minister, Jacinda Ardern, has deprioritized “growth” as an economic goal in favour of improving wellbeing. Her compatriots seem to like it: her personal approval rating is 65%. Source: Wikimedia Commons.

Health and the economy

In the postwar capitalist framework, economic “health” became equated to income growth, price stability and full employment. There are increasingly serious pitfalls to thinking of “health” as a capitalist metaphor rather than a desirable end goal. Using GDP and stock market values as measures of overall economic health made sense in the postwar era, when growth was necessary to improve human wellbeing by raising material living standards.

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False Solutions to Climate Change: Real Solutions

False Solutions to Climate Change: Real Solutions

Editorial Note: This is Part 6 of Mary Wildfire’s series on false solutions to climate change. You can read Part 1 on Electricity here, Part 2 on Transportation here, Part 3 on Agriculture here, Part 4 on Buildings here. and Part 5 on Geoengineering here.

It’s become increasingly clear that climate change is not only real but beginning to bite. Now that much of the population is finally feeling the urgency—and during a time when COVID19  has much of our frenetic commerce on hold, giving us a space for thinking and discussion–what can we do to protect the only planet we’ve got? Unfortunately a good many of the solutions on offer seem designed to quiet the increasing concern, the impetus to do something, without challenging the status quo.

Can we get real solutions and still maintain economic growth, population growth, and the growth of inequality? Are we entitled to an ever-rising standard of living? I believe the answer is no; we need some profound transformations if we are to leave our grandchildren a planet that resembles the one we grew up on, rather than a dystopian Hell world.  This is the basic theme of the controversial Michael Moore produced film Planet of the Humans. I see that film as seriously flawed, but agree with its basic message—that it’s time for humanity to grow up and accept limits, get over what I call human exceptionalism, or androtheism—the notion that man is God.

A veritable cornucopia of false solutions is being pushed these days, not only by corporations and think tanks but by the UN’s IPCC, the international body responsible for research and action on climate.  We could have made a gentle transition if we had begun when we first became aware of this problem decades ago, but for various reasons we did not.

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The most accurate model-based prediction of all times

The most accurate model-based prediction of all times

The “base case” scenario from the 1972 edition of “The Limits to Growth.” This scenario described the trajectory of the world’s economy on the basis of the data and assumptions that were judged to be the most reliable ones. This run might turn out to have been amazingly accurate some fifty years after it was proposed.

One of the most remarkable features of the story of the “Limits to Growth” study of 1972 is how effectively it was possible to convince almost everyone that it was completely wrong. Amazingly, though, the most vituperated model-based prediction in history may turn out to have been perhaps the most accurate one.

Note how the scenario above, the “base case” scenario, saw the start of the decline around 2010 and the start of the collapse maybe a decade afterward, that is now. If the oil collapse generated by the coronavirus takes the whole economy with it, as it may well happen, then this scenario turns out to have been unbelievably accurate. And that for a prediction made 50 years ago. Truly amazing!

Now, of course, this story has to be taken with some caution, predictions can be right even by mere chance. But, in this case, there is a certain logic in this result: the base case scenario had been already noted by Graham Turner to have been following the real-world data. But that was true for the growth side of the diagram: even standard economic models had been predicting economic growth. The crucial test for the model was to be the sharp change in slope expected to take place around 2010-2020.

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The Recent History of GDP Growth, CO2 Emissions, and Climate Policy Paralysis, All in One Table-Runner

The Recent History of GDP Growth, CO2 Emissions, and Climate Policy Paralysis, All in One Table-Runner

Note: I began designing this table-runner just before the COVID-19 pandemic blew up in the United States. In the time I have been embroidering it, rates of death and misery have soared while wealth generation and carbon emissions (the two subjects of this work) have ended their decades-long rise and have plummeted. A deadly virus is a terrible means of slowing greenhouse warming. Whenever we come out the other side of the pandemic, we must pursue a rapid, humane, ecologically sound, and guaranteed-effective course of action to drive greenhouse emissions down to zero. Here’s how— P.G.C.

tablerunner

The color of money is the color of calamity

This table-runner illustrates, from left to right, the increase in atmospheric carbon dioxide concentration from 1946 to the present. Each year is represented by two adjacent stripes: one in gradually deepening shades of green representing that year’s U.S. gross domestic product (adjusted for inflation) and one in increasingly intense shades of yellow-orange-red, representing CO2 concentration.

There are nine shades for GDP and eleven for CO2, with shades indicating roughly equal intervals of increase in each. The shades of both types of stripes darken as the years go by, in accordance with the increases that occurred in both GDP and CO2. (For hi-res, zoomed-in images of the table-runner, see here.)

The shades of yellow-orange-red in the table-runner darken more and more rapidly as the years pass, illustrating how emissions of CO2 accelerated as industrial output and fossil-fuel use rose more rapidly throughout the world. The concentration of COrose at an annual rate of about 0.8 ppm from 1945 to 1980; 1.5 ppm from 1980 to 1995; and 2.1 ppm from 1995 to 2019. (The United States accounted for almost 20 percent of the rise in atmospheric CO2 during those years.)

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Pandenomics: a story of life versus growth

Pandenomics: a story of life versus growth

The clash between business-as-usual economics and the pandemic shows what we really need from our economy.

Pandemonium by John Martin | Wikimedia Commons

I’ve been thinking a lot about breathing, recently: how our organisms take life-supporting oxygen from Earth’s clement atmosphere, and exhale waste carbon dioxide back out. I’ve been thinking about how pleasant and normal each breath is, and about the victims of COVID-19, now dying at the rate of thousands every day, their lungs destroyed, gasping desperately for their share of breath. Breath denied.

My research is on the social science side of climate change: trying to understand how we can live better lives using less energy and natural resources. How to protect ourselves and our life support systems at the same time – and what kind of economics would allow us to do this. There are many lessons that translate to the current pandemic-induced economic crisis. Welcome to my crash course in pandenomics: the economics we need in a time of pandemic. Rather fortunately, the lessons also apply to our larger time of climate crisis – this is a revolution we must win now, but from which we will reap benefits far into the future.

Our time of need

The clash between business-as-usual economics and the pandemic demonstrates what we really need from our economy. As businesses and leisure activities grind to a halt, specific categories of jobs are protected. Work and workers we once took for granted now appear clearly as the titans underpinning our daily lives: nurses, doctors, healthcare workers in general, hospital cleaners, grocery store cashiers, stackers and delivery drivers. Somehow, stockbrokers and airline magnates failed to make the list.

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Now is the time to end the climate emergency

Now is the time to end the climate emergency

Reading “The Green New Deal and beyond” in the middle of a global crisis

In The Green New Deal and Beyond: Ending the Climate Emergency While We Still Can, Stan Cox has a message for all who were counting on the Green New Deal to help save us from ecological and economic collapse: this legislation will not go far enough. Cox’s book comes at a sobering time, when the only two U.S. presidential candidates he mentions as being in favor of the Green New Deal—Bernie Sanders and Elizabeth Warren—have fallen behind a ‘more electable’ candidate who has not expressed such enthusiastic support for GND policies. In light of such developments, and in light of the global health crisis now facing the world, a manuscript devoted to many of the GND’s shortcomings might seem untimely. Yet Cox provides important insights into how our intersecting crises—ecological, economic, and epidemiological—could lead to a positive restructuring of the economy, if we can push such legislation to meet them. To do so, Cox argues, requires expanding the GND’s restorative approach to environmental justice, a willingness to reinvent the economy at a scale not seen since World War II, and the prioritizing of people and the planet above economic growth.

There are a few assumptions of the Green New Deal with which Cox takes issue, given how far we have advanced on the climate clock. These include the legislation’s vision to build up ‘green’ energy capacity and its promise to maintain and even accelerate economic growth. First, Cox addresses the common assumption that clean energy will push out old, dirty energy, by showing that there is so far no evidence to support that this will happen.

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Let’s Be Less Productive

HAS the pursuit of labor productivity reached its limit?

Productivity — the amount of output delivered per hour of work in the economy — is often viewed as the engine of progress in modern capitalist economies. Output is everything. Time is money. The quest for increased productivity occupies reams of academic literature and haunts the waking hours of C.E.O.’s and finance ministers. Perhaps forgivably so: our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth.

But the relentless drive for productivity may also have some natural limits. Ever-increasing productivity means that if our economies don’t continue to expand, we risk putting people out of work. If more is possible each passing year with each working hour, then either output has to increase or else there is less work to go around. Like it or not, we find ourselves hooked on growth.

What, then, should happen when, for one reason or another, growth just isn’t to be had anymore? Maybe it’s a financial crisis. Or rising prices for resources like oil. Or the need to rein in growth for the damage it’s inflicting on the planet: climate change, deforestation, the loss of biodiversity. Maybe it’s any of the reasons growth can no longer be safely and easily assumed in any of today’s economies. The result is the same. Increasing productivity threatens full employment.

One solution would be to accept the productivity increases, shorten the workweek and share the available work. Such proposals — familiar since the 1930s — are now enjoying something of a revival in the face of continuing recession. The New Economics Foundation, a British think tank, proposes a 21-hour workweek. It may not be the workaholic’s choice. But it’s certainly a strategy worth thinking about.

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Between a Rock and a Hard Place: Pandemic and Growth

Between a Rock and a Hard Place: Pandemic and Growth

There is no way authorities can limit the coronavirus and restore global growth and debt expansion to December 2019 levels. 

Authorities around the world are between a rock and a hard place: they need policies that both limit the spread of the coronavirus and allow their economies to “open for business.” The two demands are inherently incompatible, and so neither one can be fulfilled.

The problem is the intrinsic natures of the virus and the global economy. This virus is highly contagious during its asymptomatic phase, which is long (5 to 20 days), and therefore impossible to control with the conventional tools of identifying people with symptoms and isolating them, and tracking their contacts with others.

While there is much we do not know for certainty about Covid-19, what’s clear (and not well-reported) is that its lethality is not exactly like a normal flu. The number of otherwise healthy people under the age of 60 who die of a regular flu is near-zero. The number of otherwise healthy people under the age of 60 who die of Covid-19 is not large as a percentage of cases but it is worryingly above zero. A great many otherwise healthy people under the age of 60 have died of Covid-19.

Yes, the vast majority of those who die are elderly and suffering from chronic health issues, but the number of younger, healthier people who are dying makes this virus consequentially different from a typical flu.

Everyone looking at total deaths (currently much lower than the fatalities in a typical flu season) is missing the semi-random lethality of Covid-19 in younger, healthier people, or at least certain strains of the virus in certain conditions (air pollution, viral load, etc.) and in not yet fully understood sub-populations.

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What the Sunrise Will Show

What the Sunrise Will Show

A storm blew in late last night, dropping trees and powerlines and sweeping the porch of all chairs, bowls, and benches. At 5 a.m. I took a short walk to take stock of the yard and barnyard areas before returning to my desk to type this post. Now, waiting for sunup to take full inventory of the damage seems to echo the world at large: we are all waiting with apprehension for what lies in the wake of the storms.

It is not often that this blog can be accused of prescience, but on February 1st I wrote this:

This past week, off the farm for work, I chanced into a conversation with a computer scientist experienced in modeling disease outbreaks. For a couple of hours, we parsed the data of the coronavirus, looked at his modeling of the numbers, discussed the true fragility of a global economy. He had, with the exception of his current trip, canceled all work-related travel for the next eight weeks. The system will be overloaded during that period, he predicted. 

I found myself wondering if it was wrong to find a kernel of hope in the prospect of a global slowdown built on the bones of a possible pandemic. Ten years after the great recession brought housing expansion in our valley to a halt, the maw of our species is being stuffed once again as wooded lots are bulldozed and foundations laid. This frenzy too may end only with the close of the day. The sun sets on everything, eventually.

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Toxic Loans Around the World Weigh on Global Growth

Toxic Loans Around the World Weigh on Global Growth

Preface.  Obviously endless growth on a finite planet is impossible.  Clearly the main “benefit” of debt is being able to rape and pillage the planet immediately.  The accumulating debt can never be paid off, because energy is required to grow GDP (they’re locked in a death embrace) and death begins when oil declines, so will GDP, and most debts won’t be repayable.  All of this debt allows us to extract resources NOW at the expense of future generations.

Here’s a recent article about debt, though not as good as it could be, since as usual, it’s energy and resource blind, but it’s probably clear to most people who read it that this can’t end well: December 2019 The Way Out for a World Economy Hooked On Debt? Yet More Debt (Bloomberg).

February 5, 2016 The Chart of Doom: When Private Credit Stops Expanding

***

Eavis, P. February 3, 2016. Toxic Loans Around the World Weigh on Global Growth. New York Times.

Beneath the surface of the global financial system lurks a multi-trillion-dollar problem that could sap the strength of large economies for years to come.

The problem is the giant, stagnant pool of loans that companies and people around the world are struggling to pay back. Bad debts have been a drag on economic activity ever since the financial crisis of 2008, but in recent months, the threat posed by an overhang of bad loans appears to be rising.

China is the biggest source of worry. Some analysts estimate that China’s troubled credit could exceed $5 trillion, a staggering number that is equivalent to half the size of the country’s annual economic output.

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Next Economic Downturn May Last Forever And A Day

Next Economic Downturn May Last Forever And A Day

Market Manipulation Has Created Big Problems

Based on how Japan has fared over the last several decades it is difficult to see the green shoots of a global economic spring forth as a result of lower interest rates. In fact, the next economic downturn will likely envelope the planet and may last forever and a day. This is because central bank intervention and manipulation often carries with it negative unintended consequences. People often forget how lucky Japan has been during its trying times to be located next to China. Because of China’s years of booming growth, Japan has been able to mitigate much of the pain that occurred when its economic bubble burst in 1992.

In the decades since, Japan’s stock market has never again come near the lofty peak it hit back then. During the years after Japan’s fall from grace, it was able to soften the impact of its economic problems by strengthening ties with rapidly growing China which needed help in developing its export-driven economy. Today many people feel the global economy is in a bubble eerily similar to the one experienced by Japan before its implosion. The question is not whether the market and economy are about to undergo a massive reset but when. Concern is also growing as to how deep, painful, and long the next downturn will last.

A huge factor in the world trudging forward following 2008 is the massive growth in the money supply and debt over the last several decades. This growth in debt and credit has exploded making the financial sector a far bigger part of our economy than it should be. The economy has become more about asset values than solid growth in production, this has added to inequality and this does not create a healthy environment for investors.

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World Stocks At Key Support As Pandemic Fears Could Lead To Next Crash

World Stocks At Key Support As Pandemic Fears Could Lead To Next Crash

The MSCI World Index captures large and mid-cap stocks in 23 developed markets, with about 1,644 constituents covering about 85% of the free float-adjusted market capitalization in each country. 

MSCI World has plunged 7.4% in nine sessions as investors dump stocks across all markets after the rapid spread of Covid-19 outside China spooks fears about growth and corporate earnings. 

Goldman Sachs notes Thur that “US companies will generate no earnings growth in 2020. We have updated our earnings model to incorporate the likelihood that the virus becomes widespread. Our revised baseline EPS estimates are $165 in 2020 (previously $174) and $175 in 2021 (previously $183), representing 0% and 6% growth. Our reduced forecasts reflect the severe decline in Chinese economic activity in 1Q, lower end-demand for US exporters, supply chain disruption, a slowdown in US economic activity, and elevated uncertainty. Consensus forecasts imply EPS will climb 7% in 2020 and 11% in 2021.” 

And if earnings growth is stagnating in the US, it’s likely the same everywhere else as supply and demand shocks from China are expected to depress global trade growth for the year, and lead to a reset in valuations for global stocks. 

As for MSCI World, nearing key support of 2,237, or the 200-day moving average (DMA). It’s at this time where headlines from governments or central banks need to come in or risk a more systematic unwind. 

Weekly MSCI World suggests the selling has only begun. 

The global selloff is confirming what former Morgan Stanley Asia chairman Stephen Roach warned last month about a massive imminent shock that would hit the global economy. 

I’ve seriously tried to believe capitalism and the planet can coexist, but I’ve lost faith

I’ve seriously tried to believe capitalism and the planet can coexist, but I’ve lost faith


As the Productivity Commission confirmed this week, Australia’s economy has enjoyed uninterrupted growth for 28 years straight. Specifically, our output of goods and services last financial year grew by 2%. Economists obviously see the growth of a national economy as good news – but what is it doing to the Earth?

Capitalism demands limitless economic growth, yet research shows that trajectory is incompatible with a finite planet.

If capitalism is still the dominant economic system in 2050, current trendssuggest our planetary ecosystems will be, at best, on the brink of collapse. Bushfires will become more monstrous and wildlife will continue to be annihilated.

As my research has sought to demonstrate, an adequate response to climate change, and the broader environmental crisis, will require creating a post-capitalist society which operates within Earth’s ecological limits.

This won’t will be easy – it will be the hardest thing our species has tried to do. I’m not saying capitalism hasn’t produced benefits for society (although those benefits are distributed very unequally within and between nations). 

And of course, some people will think even talking about the prospect is naive, or ludicrous. But it’s time to have the conversation.

Pigs feed at a landfill site in front of a power station in Macedonia. GEORGI LICOVSKI/EPA

What is growth?

Economic growth generally refers to gross domestic product (GDP) – the monetary value of goods and services produced in an economy. Historically, and across the globe, GDP and environmental impact has been closely linked.

Capitalism needs growth. Businesses must pursue profits to stay viable and governments want growth because a larger tax base means more capacity for funding public services.

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The urban drivers of economic growth

The urban drivers of economic growth

In the 1980s, cities were defined as the ‘growth machines’ of the economy (Molotch, 1976). Today, urban economists epitomize them as economic ‘triumphs’ (Glaeser, 2011). Cities, intended as dense and mixed forms of urban living organized in agglomerations of economic activities, are presented as the solution to many of contemporary socio-ecological problems. They are viewed as the location of the so called ‘energy transition’, ‘social innovation’ or the ‘clean economy of knowledge’.

Cities have been a central topic in degrowth scholarship, although never put at the forefront of the debate. Latouche (2014) portraits the ‘degrowth city’ looking at the Mediterranean way of life of small towns. He called for a regional economy of sufficiency. Many degrowers explicitly advocate the need for changing the mobility infrastructure in order to reach some kind of slow mobility, and they promote the collectivization of public and housing spaces to be used as forms of commoning. Practices of repair, energy sufficiency, food coops, urban gardening and many more are properly ‘urban’ practices, because they interrupt the fast and productive use of city space.

Why then it is so hard to make those practices multiply and enable a more systemic transition to a degrowth society? Planning scholars have for years studied and criticized the mechanisms of urban land transformation that drive national economic growth. Urbanization is not the consequence of economic growth but the actual driver of it. The enlargement of cities, their number of jobs, estates and infrastructures, is a driving force behind growth. Already in the early 90s, after the fall of the Fordist economic system, it has become clear – for national governments as much as multinational corporations – that cities were becoming a new market where to invest surplus capital (primarily industrial capital) and gain rich returns.

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Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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