Common, Uncommon Markets and Demographics

Part of Winning at Global Trade

The Economist:?In 1993 Shimon Peres,?

then Israel's foreign minister, wrote a book called?The New Middle East?arguing that trade would pacify the region. ‘Ultimately, the Middle East will unite in a common market, ′ he stated. ‘And the very existence of this common market will foster vital international trade.’

My Comment: Demographics and Leapfrogging Regional Economic Integration?

Because of demographics, Africa,?Southeast Asia and South America will provide most of the opportunities for the expansion and global scaling of American, European and South American enterprises in the future.?

Africa will have to depend on its organic resources, its regional economic integration, the World Bank, other multilateral agencies as well as the U.S.? Dept. of Energy as well as the U.S Eximbank to leapfrog its economic transformation and job creation.

Demographics?

Contrary to Shimon Pères, the Malthusian and Chinese models, developed nations anticipate a shortage of workers. All developed economies are spending billions to encourage what?The Economist?declared with?Cash for Kids: As birth rates plunge,?many politicians want to pour money into policies that might lead women to have mor babies. Donald Trump has vowed to dish out bonuses if he returns to the White House. In France, where the state already spends 3.5-4% of GDP on family policies each year, Emmanuel Macron wants to "demographically rearm" his country. South Korea is contemplating handouts worth a staggering $70,000 for each baby. Yet all these attempts are likely to fail, because they are built on a misapprehension.

The Economist?continues with: Government concern is understandable. Fertility rates are falling nearly everywhere, and the rich world faces a severe shortage of babies. At prevailing birth rates, the average woman in a high-income country today will have just 1.6 children over her lifetime. Every rich country except Israel has a fertility rate beneath the replacement level of 2.1, at which a population is stable without immigration. The decline over the past decade has been faster than demographers expected.

Doomsayers such as Elon Musk warn that these shifts threaten civilisation itself. That is ridiculous, but they will bring profound social and economic changes. A fertility rate of 1.6 means that,?without immigration,?each generation will be a quarter smaller than the one before it. In 2000 rich countries had 26 over-65-year-olds for every 100 people aged 25-64. By 2050 that is likely to have doubled. The worst-affected places will see even more dramatic change. In South Korea, where the fertility rate is 0.7, the population is projected to fall by 60% by the end of the century.

The decision to have children is a personal one and should stay that way. But governments need to pay heed to rapid demographic shifts. Ageing and shrinking societies will probably lose dynamism and military might. They will certainly face a budgetary nightmare, as taxpayers struggle to finance the pensions and health care of legions of oldies.?

My Comment: Because of its one-child policy, China will experience a shortage of 200 million workers by 2030, the equivalent f the entire U.S. workforce.

The Main Story

One common assumption is that falling fertility rates stem from professional women putting off having children. The notion that they run out of time to have as many babies as they wish before their childbearing years draw to a close explains why policies tend to focus on offering tax breaks and subsidised child care. That way, it is argued, women do not have to choose between their family and their career.

That is not the main story.?

University-educated women are indeed having children later in life, but only a little. In America their average age at the birth of their first child has risen from 28 in 2000 to 30 now. These women are having roughly the same number of children as their peers did a generation ago.

This is a little below what they say is their ideal family size, but the gap is no different from what it used to be.

Instead, the bulk of the decline in the fertility rate in rich countries is among younger, poorer women who are delaying when they start to have children, and who therefore have fewer overall (see Finance & economics section). More than half the drop in America's total fertility rate since 1990 is caused by a collapse in births among women under 19. That is partly because more of them are going to college. But even those who leave education after high school are having children later. In 1994 the average age of a first-time mother without a university degree was 20. Today, about two-thirds of women without degrees in their 20s are yet to have their first child.

Some politicians may seize on this to aim baby-boosting policies at very young women. They may be tempted, too, by evidence that poorer women respond more to financial incentives. But focusing on young and poor women as a group would be bad for them and for society. Teenage pregnancies are linked to poverty and ill health for both mother and child.

Targeted incentives would roll back decades of efforts to curb unwanted teenage pregnancy and encourage women into study and work. Those efforts, along with programmes to enhance gender equality, rank among the greatest public-policy triumphs of the postwar era.

Some illiberal governments, such as those of Hungary and Russia, may choose to ignore this progress. Yet they face a practical problem, because government incentives do not seem to bring lots of extra babies even as spending mounts. Sweden offers an extraordinarily generous child-care programme, but its total fertility rate is still only 1.7. Vast amounts of money are needed to encourage each extra baby. And handouts tend to go to all babies, including those who would have been born anyway. As a result, schemes in Poland and France cost $1m-2m per extra birth. Only a tiny number of citizens are productive enough to generate fiscal benefits to offset that kind of money.?

My Comment: thanks to Putin's stupidity, 1300 Russian youths are being killed or wounded daily on the Ukraine battlefront. The youthful BrainTrust of Russia has fled to the U.S, Turkey, or other countries. The U.S estimates that 350,000 Russians have died during this "special operation.' The UK puts the toll at 500,000.

America

Due to low social mobility only 8% of American children born to parents without bachelor's degrees end up getting such a degree themselves.

Older, but wiser

What, then, can governments do? High-skilled immigration can plug fiscal gaps, but not indefinitely, given that fertility is falling globally. Most economies will therefore have to adapt to social change, and it falls to governments to smooth the way. Welfare states will need rethinking: older people will have to work later in life, for instance, to cut the burden on the public purse. The invention and adoption of new technologies will need to be encouraged. These could make the demographic transition easier by unleashing economy-wide productivity growth or helping care for the old. New household technologies may help parents, rather as dishwashers and washing machines did in the mid-20th century. Baby-boosting policies, by comparison, are a costly and socially retrograde mistake.

My Comment: Political and Economic Stability and Jobs?

Recent political events compel me to consider the advancement of sustainable development and humanity’s evolution.?

Mexico

Mexico has just elected Claudia Scheinbaum, a climate scientist, energy engineer and mayor of Mexico City, one of the largest in the world.

The development of Mexico is critical to that of the U.S. for several reasons. Mexico has been responsible for the 40% slowdown in immigration across its borders to the U.S.?

As Mexico develops rapidly, it will provide the jobs whereby immigrants initially intending to cross its borders, can be employed within the country.?

The gainfully employed can send remittances (through bodegas, the informal banking system, just as they do in the U.S, to support their families in the lesser developed economies back home. Unlike the derogatory and demeaning comments made by Trump during the recent debate, immigrants that succeed in the U.S, return to the more pleasant weather of their original countries where they can live comfortably and not endure the abuse as such as Agent Orange, and?will not have to resort to drug smuggling to meet the insatiable demand of the U.S. drug consumer market.?

America

Robert Reich: A few days ago, I was talking with a young conservative who admitted that Trump was an “odious thug,” in his words, but argued that America and the world had become such a mess that we need an odious thug as president.

“Think of Putin, Xi, Kim, Ali Khamenei, Netanyahu — they’re all odious thugs,” he said. “We need our own odious thug to stand up to them.”

I said that direct confrontation could lead to more bloodshed, even nuclear war.

He continued: “We need an odious thug to shake up Washington, stir up all the ossified bureaucracies now destroying America, do all the things no one has had the balls to do.” I winced. He charged: “We need someone to take control!”

As soon as he uttered those last words, he and I both knew the conversation was over. He had spilled the beans. He was impatient with the messiness and slowness of democracy. He wanted a dictator.

I’m not sure how many Americans attracted to Trump feel this way. It’s consistent with the strength-versus-weakness framework Trump is deploying. Trump may be loathsome, they tell themselves, but at least he’s strong, and we need strength over weakness.

I was born 78 years ago today. At that time, the world had just experienced what can occur when a loathsome person who exudes “strength” takes over a major nation and threatens the world. A number of distant relatives died fighting Nazis or perished in Nazi concentration camps. I can’t help but wonder if the young conservative I spoke with would feel differently were he 78.

Disclaimer: I have intercalated images, titles, subtitles and highlights when and where appropriate in order to more effectively deliver this message. Attribution is made for the Art, literature, film, lyrics, photography, cartoons, music and footnoted?for the ideas of others - whenever possible and appropriate. Otherwise, the intuitions and disciplined inspirations - are mine.