Sunday, September 23, 2007

Demographics is Destiny

An open question... Please tell me what you see....

I am curious about what you see around you... Arizona is filled with boomers who retired and moved to the warmth, the relatively cheap housing, the golf courses etc... But they also moved away from family, friends and sociel structures. They have money and buy classic cars, hot rods, new go-fastre-mobiles... They spend a lot of time golfing and going to meetings to act like they are still vital. The wives shop, lunch and plan dinner reservations. Both men and women drink a lot. The widowers get busted for hiring hookers. The widows stay out of the newspaper... They have steady income and healthcare for life... all they face is the effort to continue breathing... at age 55 they probably ave 20-30+ years ahead... Daughter calls them "Kids who don't go to class" like she saw at college...

I like the Bay Area where there is lots of new businesses popping up. Opportunities to invest, mentor, are talk with people who are living on the edge of either bankruptcy or phenomenal wealth... The cost of living keeps everyone living the Law of the Serengeti (Everyone wakes up running. Either to catch your meal or to avoid being a meal)

North Florida has lots and lots of gated communities, resorts. Similar phenomena as Arizona with rich kids not going to class... They drive down and return to visit families up north more often. But they still wander around lost....

77 million retired boomers by 2012 is a lot of kids not going to class. My kids report that they are seeing boomers hanging on past retirement age. The problem is that 1) they clog up the promotion path for the young and 2) they quit working. They come in and read the paper. Plan lunch. Come back from lunch and doze... Some don't even turn on their computers. Office managers have taken to monitoring whether the machines are powered up. They monitor the work and examine whether it has been done or if stuff has been merely sat on for 1-2-3-4 days and returned...

I foresee problems ahead. Idle minds and idle hands get into mischief. Resentment by the young. Decline in efficiencies of the enterprise. Aged does not equate to wise. That makes them fodder for sharks, weasels, and crooks...

IOW... To me its a potential problem for all of us as a society. The new generation has a very different set of skills and abilities. They are not boomers-but-better... They are different. I find many who are incredibly naive. They are much more innocent than we were at the same age. I also find they go into rage much faster. When they think they have been cheated or had their rights have been trespassed upon they are ready for lawsuits, violence, and have a ard time controlling themselves. Women are as guilty as men. The women are a surprise, but having grown up in a world of single Moms and a steady diet of womens rights it's understandable... They also seem oblivious to effects of the casual sexual flirtation and invitations that they toss off. I know that I'm old. I also accept the world as changing.

It is a different world aborning... What does it look like where you are? Is it just me watching the parade in small towns, big cities and airports I visit-? There is much good coming but danger also lurks unchecked and unchallenged.

The WSJ Economics Blog reports with more details and specifics about the economic changes they see;
The graying of the world’s industrialized countries poses severe challenges to fiscal health, and more needs to be done to address the situation, according to a new Standard & Poor’s report.

The study, titled “What a Change a Year Makes: Standard & Poor’s 2007 Global Graying Progress Report,” says that progress has been made in the last 12 months through structural fiscal consolidation, but cautions that the net debt burden could be overpowering by 2050.

“Almost all [the nations] in the sample will face a very significant deterioration in public finances over the next half-century as a result of demographic change, unless a countervailing fiscal adjustment is put in place or social security and other age-related spending programs are reformed,” S&P credit analyst Moritz Kraemer said.

Proposing overhauls to social security programs may not be popular, but change is essential to achieve long-term stability, Mr. Kraemer said.

“What is needed is to unerringly make the case with a reluctant electorate that the road to the long-term stability of public finances, and therefore social security systems, is still steep, long, and stony,” he said. –Phil Izzo

Please read the comments... scroll down

From the research recap report on the S&P report:

Its initial gentle decline would accelerate by 2015 and continue until the mid-2030s, by which time the vast majority of countries would display fiscal characteristics that today are associated with speculative-grade sovereigns.

All hope is not lost, however. The ongoing reform debate is mildly encouraging., S&P says. Most of the action seems to be focused on reforming pension systems. This focus is politically appealing, as the sacrifices are often in the distant future and are not easily understood by the electorate. Technically, tackling social security is also relatively “easy,” compared with health care reform, which has to address more immediately felt and ethically charged issues. The value of government surpluses for the long-term sustainability of public finances is also becoming increasingly appreciated.

In the past, governments often tended to downplay the relevance of today’s deficits, which, they alleged, were needed to stimulate growth, ignoring the point that high deficits and high growth hardly ever go hand in hand. The economic outturn, however, has led all governments to at least pay lip service to the merits of short-term fiscal consolidation, S&P says.

The full report, 2007 Global Graying Progress Report, can be purchased here

Drop a line and tell me what you think and see in your part of the world.

No comments: