Category Archives: Demography

The migration of peoples and changes in fertility and lifespans — one of the most powerful forces shaping our world.

Why New Home Construction Is Slow, And Will Remain So For A Long Time

Summary: September housing starts were weak, as they have been since the crash. Their failure to recover has been a surprising and large drag on this economic cycle. Demographic change and slow GDP prevent a housing recovery. On the other hand, housing busts create recessions; this slow expansion (without a boom) is more sustainable — and might run unusually long.

Slow growth of housing

September housing starts were weak, -15% YoY NSA (year-over-year, not seasonally adjusted) and -9.0% MoM SA. The weakness in this key industry is one facet of secular stagnation. How weak is it, compared to past expansions? See this graph of annual housing starts per 1000 people. After 7 years of economic expansion, starts run at less than half of the previous peak (Jan 2006), and two-thirds of the average during the previous two expansions. They rose to the 1963-2007 lows – and stalled.

Annual housing starts per 1000 people

See the rest of the article at Seeking Alpha!


Good news from the IMF about feeding the world’s people

Summary: Doomsters dominate the news, as they terrify us for fun and profit. Here’s good news from the IMF about global food production. See it here; you probably won’t see it in the news. Let’s not become complacent; the IMF warns of the large challenges that lie ahead.

“If current trends continue by the year 2000 the United Kingdom will simply be a small group of impoverished islands, inhabited by some 70 million hungry people, of little or no concern to the other 5-7 billion inhabitants of a sick world. …If I were a gambler, I would take even money that England will not exist in the year 2000.”

— Paul R. Ehrlich speaking in London at the Institute of Biology in Autumn 1969. From “In Praise of Prophets”, Bernard Dixon (Editor) in the New Scientist, 16 September 1971.

Doomsters have been predicting famine from overpopulation from Thomas Malthus in An Essay on the Principle of Population (1798) to Paul Ehrlich in The population bomb (1968). Population has risen as expected, but food production has increased even faster. It is one of the great success stories of modern technology.

The IMF’s “October 2016 World Economic Outlook” updates that good news. Food production has continued to increase rapidly as population growth has slowed. You probably won’t read about this in the news, but this excerpt from that report is worth reading (citations omitted). They look at good news of the past and challenges of the future. Past wins don’t guarantee future wins.

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Doomsters warned of End Times from overpopulation. Now *fewer* people are disasterous.

Summary: Population change remains a favorite topic for doomsters, providing clicks for the news media and thrills for news consumers. For 5 decades we have heard about the standing room only days coming soon for Earth. That’s become a tired story, so they’ve devised a new one…


The rapid rise in population has not yet produced the collapse long predicted by doomsters from Thomas Malthus in An Essay on the Principle of Population (1798) to Paul Ehrlich in The population bomb (1968). Now doomsters reverse the story. The coming population decline will produce horrific consequences, even a collapse.

Their first claim was false. Their new claim about falling population is even more bogus. Consider Japan. Japan’s government has worried about its overpopulation since the Meiji Restoration (1868). Their solution then was to encourage emigration to Korea; it did not help.

Japan’s population then was aprox. 3 million. Now they have 127 million people crowded into an urban belt along the coast. At Japan’s current level of fertility, by 2060 their population will fall to 86 million, back to the level of 1950 — and by 2100 to 50 million, the level of 1910. {See details here and here.) That would be wonderful.

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Nassim Nicholas Taleb warns us about climate change

Summary:  This is the second post looking at statistician Nassim Nicholas Taleb’s insights about “ruin” risks, and what they tell us about climate change. Here we look at his warning about climate change and two factors he ignores: the duration of the climate risk window and the odds of a climate disaster. The danger is real but the stories that we face certain doom are wild exaggerations, which make rational preparation more difficult. The previous post was Nassim Nicholas Taleb looks at the risks threatening humanity.

Cover of "Turning the Tide On Climate Change" by Robert Kandel

Cover of “Turning the Tide On Climate Change” by Robert Kandel (2009).

Yesterday’s post examined a methodology developed by a team including Nassim Nicholas Taleb for identifying “ruin” risks, where the result is non-recoverable for global civilization — or even the biosphere (described in “Mathematical Foundations for the Precautionary Principle“).

They wrote a note applying their method to one of the major risk debates of our time: “Climate models and precautionary measures” in Science and Technology, in press. The authors are brilliant, and it states with unusual clarity common arguments for radical and immediate action to fight climate change. Here’s the core of their analysis (it’s worth reading in full).

“Those who contend that models make accurate predictions argue for specific policies to stem the foreseen damaging effects; those who doubt their accuracy cite a lack of reliable evidence of harm to warrant policy action. These two alternatives are not exhaustive. One can sidestep the “skepticism” of those who question existing climate-models, by framing risk in the most straight-forward possible terms, at the global scale. That is, we should ask ‘what would the correct policy be if we had no reliable models?’

“We have only one planet. This fact radically constrains the kinds of risks that are appropriate to take at a large-scale. Even a risk with a very low probability becomes unacceptable when it affects all of us –– there is no reversing mistakes of that magnitude.

“…While some amount of pollution is inevitable, high quantities of any pollutant put us at a rapidly increasing risk of destabilizing the climate, a system that is integral to the biosphere. Ergo, we should build down CO2 emissions, even regardless of what climate-models tell us.

“…This leads to the following asymmetry in climate policy. The scale of the effect must be demonstrated tube large enough to have impact. Once this is shown, and it has been, the burden of proof of absence of harm icon those who would deny it.”

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Why new home sales are slow, and will remain so for a long time

Summary: The refusal of housing construction to join the boom has baffled economists and investment experts. Demographic change explains much of this puzzle, and suggests that housing construction — a major driver of the post-WWII boom — will remain in the doldrums for several more decades.

Boom and bust of the housing market
Large file; might load slowly. Not mobile-friendly.

US Age Distribution-numbers

Numbers after 2010 are shown in red and blue bands to show the range of uncertainty. By Stephen Holzman.

This graph shows the raw force shaping the US national housing market (regional trends differ). The key buyers are those in 25-45 year rows: buying their first home, then moving to larger homes. Their numbers boomed after 1970 and stabilized after ~2006. Those older than 60 are sellers: downsizing from single-family houses to retirement homes, then into nursing homes, then into their graves. The number of oldsters began to boom after 2005 (when the first Boomers turned 60), and will stabilize at higher levels from 2050-2100.

The cresting of the Age Wave explains the failure of the US housing market to recover after the crash — and suggests that more pressure on housing construction lies ahead. For the first time since the 1930s there is a wave of net sellers to meet buyers, ending the multi-century boom of easy real estate profits for developers (many of the Founders and early Americans were real estate developers). It’s the answer to a puzzle that’s baffled many investors…

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The male pill is coming. It will change everything.

Summary: Scientists soon will start another round in the revolutions shaking society by producing a male contraceptive pill. The effects could be wonderful, improving family planning and helping reduce pollution and minimize climate change.

Prepare for the next drop in fertility
The average number of births per woman based on age-specific fertility rates.

US Fertility - December 2014

From the Population Reference Bureau.

A variety of potential contraceptives could finally offer men some real choices

By Valerie Tarico at AlterNet, 20 April 2016.

Today almost a third of American couples rely on the man to prevent ill-timed or unwanted pregnancy, but for young men who may want a child in the future, the options stink. Condoms are the best means available to prevent STIs, but in any given year one in six couples relying on condoms will end up with an unplanned pregnancy. …Vasectomy is highly effective, but since reversal may not work, it’s not an option for men who don’t already have the family they want.

By contrast, “get it and forget it” methods for women drop pregnancy risk below 1 in 500, have bonus health benefits, and return normal fertility. When it comes to people being able to manage their fertility, we are a long way from gender equality.

The good news is that the last decade has brought increased understanding of male reproductive physiology and revealed potential new methods to safeguard against an ill-timed pregnancy. No single method will ever fit for everyone, but a variety of potential contraceptives (mechanical or pharmaceutical, shorter or longer acting, reversible or permanent, some enhancing libido or sexual function and some sexually neutral) could offer men real choices that fit their age, culture and lifestyle. Some may even have bonus health benefits like increasing energy and muscle mass or preventing balding.

…In the words of Aaron Hamlin at the Male Contraception Project, “It’s been 55 years since the Pill for women came to market in the United States. The Pill for men is long overdue.”

Tarico describes several promising lines of research — at least one of which almost certainly will work — and excellent links for more information.

What effect might this have? We can only guess at how many men might use their new veto on child-making (surveys suggest that half of men are willing to use it even now).  My guess: the effect will be large, perhaps very large. The massive effect of the women’s pill was a surprise to society; the men’s will surprise as well.

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Poorly prepared Boomers retiring means hard times for them and for America

Summary: Two new reports warn us about the predictable but so far ignored consequences of so many Boomers’ retiring with low savings, no pensions (other than SS), large debts — and long expected lives ahead. Unless we act, the effects will prove painful for not just them — but also on asset prices and US economic growth.

“Demography is destiny.”
— From The Real Majority by Richard Scammon and Ben Wattenberg (1970).

“Rising mortgage debt is threatening the retirement security of millions of older Americans. In general, older consumers are carrying more debt, including mortgage, credit card, and even student loan debt, into their retirement years than in previous decades.”
— “Snapshot of older consumers and mortgage debt” by the US Consumer Finance Protection Bureau, May 2014.

Baby Boomers' Social Security card

The rise of the Boomers brought massive and largely unexpected changes to American society. The tsunami of politically active young people revitalized both parties, tilting them to their respective extremes. Their buying of home boosted real estate prices. Their increased productivity with age boosted US growth.

Now most of those trends will flip into reverse during the next few decades. Oddly, despite the intense study of the Age Wave, many important and likely trends have received too-little attention. Such as the coming bust in consumer spending and rise of bankruptcies — as large numbers of Boomers retire with little savings, small or no pensions (other than social security), and large debt levels — facing multi-decade long retirements.

I and others have warned about this (see this post from 2015), but recently major reports have begun to highlight the danger.

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