This is the script for my Demographic Doom podcast episode #49 recorded on 20 November 2020 (released on 21 November 2020). It may differ slightly from the final broadcast. This episode is available on major podcast platforms, including Podbean, Apple Podcasts and a video version on YouTube. See the description on the YouTube version for extensive annotations, links and corrections. You can also comment on this episode there. The main website for this project is DemographicDoom.com
I’m Glenn Campbell. I call myself a demographic philosopher. I’m looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, as aliens would see us from space.
Today is November 21, 2020. It's about 18 days since the presidential election in the United States and about 14 days since media outlets announced the winner, Joe Biden, and the loser, Donald Trump. Whew! That was a nailbiter! Those four days between the election and the announcement of the winner were among the scariest of my life, and I'm including my two brushes with cancer. It would have been truly terrible if Trump had won, and he very nearly did. 47% voted for him, or very nearly half of the electorate. Given his brutish, incompetent and autocratic style, openly demonstrated for four years, he should have been stamped out in a landslide, but he wasn't. It was essentially a routine election, as if both candidates were normal politicians. It's frightening to me how close it came.
Now this is not a political podcast. I'm concerned with predictable long-term trends, not the politics of the moment, but this election was such a momentous one that I can't help but vent just a little. At least, I can make some predictions about the next four years based on what demographics and macroeconomics are telling us.
I have no idea what is going to happen in American in the next week or even the next year. I don't have that kind of crystal ball. Demographics and macroeconomics yield predictions over a longer term. I feel more comfortable making forecasts over the next 4 to 8 years, or the term of the new President. Spoiler alert: That future looks bleak. The systemic disintegration continues, regardless of who is President, but it might be progressing just a little slower now.
I guess I should be grateful to Donald Trump in one way. He was responsible for my Demographic Doom project and ultimately this podcast. My passion for demography was born four years ago, on November 9, 2016, or the day after Trump was elected. Like many others on this planet, I was shell-shocked. I asked myself, "How can could so many people be so stupid?" This launched me into the study of populations and what could be happening to them. Demography seemed natural because elections are, by definition, masses of people doing things. Once I got into it, I found that the problem was far bigger than Trump. He was more a symptom of dysfunction than a cause. The real issue was the progressive deterioration of the economic systems that we all depend on. Voters were hurting, so they lashed out in the only way they had: They voted for the protest candidate that all the experts told them not to vote for.
You might want to check out the video I recorded two days after the 2016 election, which tells you what I was thinking at the time. The link is found in the video version of this episode, or you can search YouTube for "Demographic Doom Glenn Campbell Trump", in that order. That video, recorded in Florida, marked the birth of my demographic project, although it took me a while to achieve its current formulation.
After I started inquiring into demography, the first surprising thing I learned was that the "population explosion", treated as gospel by my generation, was in fact a lie. Most countries of the world are on the brink of a population implosion, and this reversal of growth is having a lot of devastating economic effects. It means, for one thing, that there will be a ton of old people in the world and very few active workers to support them. This is ultimately expressed by debt, whether it is explicit debt on the books right now, or implied debts called "unfunded liabilities" which are debts we know are coming down the road.
For example, we know a certain number of people will be filing for Social Security in coming years, even though they haven't done it yet. Demographic problems inevitably turn into macroeconomic problems, where we are looking at the state of whole monetary systems. The state of our current monetary system is dire, and it was dire even before Covid, because there are clearly more debts in the world than can possibly be paid back.
Nearly all forms of debt are problematic these days, be it government debt, corporate debt, consumer debt or student loan debt. There's no magic wand you can wave to make all these debts go away. There are magic wands that seem to make debt go away, but they're really just kicking the can down the road and making the problem worse. The Federal Reserve can print money and hold interest rates at zero. Maybe the incoming President can wave a magic wand and make student loans disappear, but as you might suspect, all these magic solutions come at a cost. Eventually the magic runs out and backfires on you.
The bottom line is that without unrealistic economic growth, based largely on population, most of the debts of the world are simply unpayable and are destined to fail. If you look at government debt alone, it's just astounding how much there is and how much new debt governments have accumulated in the wake of the pandemic. This year, in 2020, the US government will spend roughly twice as much money as it is received in taxes, and the shortfall is ultimately being covered through money printing and interest rate suppression. These are slight-of-hand tricks that can't go on forever. Sooner or later, the system has to fail catastrophically, and I'm betting it's going to start during the Biden administration.
When we dumped Trump for Biden, we gained only momentary relief—in that the President of the United States of America is no longer actively trying destroy the United States of America. I think everyone on the planet can breathe a sigh of relief for that, but I'm not inclined to celebrate in the street. The demographic crisis, the debt crisis and the money printing crisis are still with us. The Titanic has already struck the iceberg, and there's nothing even the most organized and well-intentioned government can do about it.
Before I go on, let me do a little analysis of the the four-year Trump administration and how it might have changed our demographics. Demography is concerned with the big picture: What are whole populations doing? To begin with, Trump actively killed a fair number of Americans. As of today, roughly 250,000 Americans have died from the Coronavirus. There is little doubt that a more organized Federal response would have reduced that number. Let's say only 100,000 would have died if America had been on top of this from Day One, which leaves 150,000 deaths that Trump might be blamed for.
That's certainly a devastating toll for the people and families involved, but from a demographic standpoint, it's a drop in the bucket. There are about 328 million people in the United States, so even if we have a million Covid deaths, it won't significantly impact our population profile. I'm not trying to minimize the suffering and societal costs involved. I'm only saying that Covid deaths alone don't change our long-term population trajectory.
I guess if you want to congratulate Trump for something, he saved America some elder-care costs. Among the casualties of Trump's incompetence, the majority seem to be older Americans, retirement age and above, who you can cynically argue weren't producing much for America anyway. If someone is killed at age 70 instead of living to age 85, the U.S. has saved 15 years of Social Security, Medicare costs and pension disbursements for them. So congratulations, President Trump! I guess that's a silver lining if you want to look at it that way, and you do hear a lot of this reasoning in the right-wing media: These people were going die anyway, and the virus just killed them off a little sooner.
I'm a little sensitive about that personally, because I'm starting to be labeled as "older" and I don't think my days of productivity are over. I'm not eager to be a part of the culling of the herd. I'd rather not be killed by Covid or bad government policy, but that's just me. Rather than getting sucked into this debate, I just want to point out that the cost savings in Covid deaths is still statistically insignificant. Killing off, say, 100,000 retirees won't rescue Social Security or Medicare. The long-term numbers are still terrible. There are still too many people retiring with not enough workers to support them.
Demographically, I think Covid deaths are a lot less significant than damage to US immigration. Trump has poisoned the well by making immigration to the U.S. much more odious. He hasn't just restricted immigration at the border. He has made America much less appealing to potential immigrants overseas who haven't even applied. The Trump Administration has essentially been a 4-year worldwide television ad for the dysfunction and xenophobia of America. Like every other developed country, America is in desperate need of high-quality immigrants to make up for their own lack of births, and Trump has decimated our marketing effort.
Immigrants, especially skilled ones, are a winning proposition for the receiving country because they usually go to work immediately and start paying taxes immediately without that country having to pay for their upbringing and education. It's a losing proposition for the country the immigrants come from, but it is mostly positive for any country fortunate enough to be able to attract talented immigrants. Sadly, Trump has made the U.S. a lot less attractive to skilled workers. If you were a trained professional from, say, Asia, and you had your choice of emigrating to the U.S. or Germany, the U.S. has really lost its sheen. I can't quantify this yet, but it will eventually show up in immigration statistics. I predict that the cost to the country of lost immigrant appeal will be far greater than the money saved by killing off 100,000 seniors.
So what's my overall assessment of Trump? Well, not good. I don't need to belabor the point, but he did not, in fact, Make America Great Again. He made America a pariah that no talented foreign professional would want to move to.
In this podcast, I am attracted to things that are predictable. Demographics are predictable, in that you know for a fact that you're not going to have more tax-paying workers 20 years from now than you have children today—unless, of course, you import them. Macroeconomics is also predictable, mainly in one critical assumption: In the long run, you can't spend more money than you make. I know some people are going to argue with that. Since the government runs the printing press, it can print as much money as it wants, but this experiment always ends badly. Always. Unrestrained money creation has ended badly in the past and it will end badly in the future, even if the effects are delayed. I can't tell you how and when it will end, but it will end, and if I had to place a bet on when the bad ending will get rolling, I'd say it will happen within the next 4 to 8 years.
Beyond that broad framework, specific predictions for how things will fail are very difficult. Over the past 4½ years, a lot of things happened that I never would have guessed. Who could have predicted in 2015 that Donald Trump would become President? No one could have predicted the appearance of the coronavirus, at least in its timing and and origin—although plenty of scientists have warned the something like this was destined to happen.
The most stunning surprise to me is how the devastating economics of the pandemic has led to a rise in stock markets. It may no longer be true by the time you listen to this, but right now some markets are at all-time highs, in spite of the horrible state of the economy. Furthermore, I would never have predicted that the government would print so much money without triggering massive consumer inflation. By all rights, we should be in Zimbabwe territory by now, but we're not.
If I tried to make specific predictions about any of these things, I would have been wrong, but I'm still confident of my broader macroeconomic and demographic predictions, as expressed in earlier podcasts. In my Podcast #22 on December 13, 2019—that is, before the coronavirus—I predicted the 2020s would be a horrible, devastating decade for the world economy. I and others speculated that an unknown Black Swan would trigger a collapse, but we couldn't have known what that bird would be. That's how demographics and macroeconomics work: You can predict rising tensions that have to be resolved, but you can't say exactly how and when the reckoning will happen. You know that a lot of dynamite has accumulated, but you don't know what spark will set it off.
Compared to the Trump Administration, we know that the Biden Administration is going to be relatively competent, filled with smart, capable people who genuinely care about the country, but I have doubts about how much competence can accomplish on a sinking ship. If you change the management of the Titanic after it has already struck the iceberg, you might be able to reduce the loss of life through, say, more organized use of lifeboats, but all the competence in the world can't stop the ship from sinking.
Our demographic ship started sinking in the 1960s with the invention of reliable birth control, and our macroeconomic ship started sinking in the last Global Financial Crisis around 2009, or maybe decades earlier depending how you look at it. You can't put those genies back in their bottles. What we are destined to have during the Biden Administration is a ton of things falling apart in rapid succession. I can't tell you what will fall apart and in what order, but conceptually, the ship has struck the iceberg and has already taken in enough water to sink it. It's just taking the ship a while to figure that out.
So many systems are falling apart that it's hard to know where to begin, but there are a couple of pending collapses that should be obvious to anyone looking at things from afar. One crisis is overvalued assets, like stocks, bonds and real estate. These pigs can't continue to fly while the real economy is in the pits. There has to be a reckoning sooner or later.
Another obvious crisis is that no government can keep printing money forever. Something has to break, even though I don't know what that something is. A government, like an individual, can't consistently spend more money than it makes. The government's income is called "taxes" which are based on economic activity. If economic activity falls, as it has during the pandemic, then taxes will fall, too, even as the government is spending more than it ever has before. You can keep the Ponzi scheme afloat as long your economy is growing, but ours isn't growing and never again will, because we don't have enough workers and consumers. This pyramid scheme is going to fall the way they always do: with the sudden realization that there's not nearly as much value in the system as everyone thought there was.
Imagine what it would take for the US government to balance its books. In the current environment, it would either have to double taxes or cut its spending in half, both of which are politically and practically impossible. The third option is incredible economic growth, which just ain't gonna happen, even if the pandemic is resolved. The Federal Reserve is locked into a self-reinforcing regime of money printing and artificially low interest rates, which are eroding the foundations of the financial system, and there's literally no way out. There is no coherent theory anyone can offer for how this ends gracefully. The end can only be compared to the Fall of Rome but a whole lot faster.
Joe Biden comes into office with a mission to fix the country, but he can't. The main crisis isn't the virus but the economic collapse that was destined to happen anyway. Any relief from the virus or the economic pain involves spending still more money that the government doesn't have. For example, Biden can try to enact another stimulus program to send free money to citizens, but that's only temporary relief that creates as many problems as it solves. It's not going to repair anything, only delay the inevitable.
Nothing Biden can do will stop Baby Boomers from retiring en masse, or at least reaching retirement age, where they get less productive and a whole lot more expensive. That time bomb has been ticking since the 1960s, and no government policy is going to defuse it.
Likewise, nothing Biden can do will neutralize the massive debts the government and private sector have accumulated—debts that can't possibly be repaid. By definition, debts that keep growing without reprieve must eventually end in some form of default, which wipes out the wealth of everyone who holds that debt. "Debt forgiveness" sounds like a good idea until you realize that somebody has to lose, and it isn't always fat-cat capitalists. Retirees lose their homes when their pension funds fail because they invested in risky bonds. When debts don't get paid, wealth simply vanishes. It magically goes away, and suddenly people who thought they were well-off find they are poor.
That's one of the things I'm predicting in the next 4 to 8 years: a massive evaporation of wealth. People who thought they were wealthy will find out it was an illusion. There are two ways this can happen: the price of assets can crash, or inflation can erode the value of those assets.
For example, if you own a home valued at a million dollars, you might think you are rich, but that valuation can change quickly. Your home's perceived value is based on recent sales of comparable homes in your neighborhood. There is no guarantee that you will actually get a million dollars when you come to sell. We saw that happen in 2008 and 2009. People who thought they had million dollar homes found they could only sell for, say, half a million, if anyone wanted to buy it at all. In that case, the half-million more that you thought you simply vanished—or more properly, it never really existed to begin with.
Inflation works differently, but the net result is the same. Let's say you manage to sell your house for a million dollars but the buying power of a million dollars has eroded due to inflation. You still have a million in the bank, but it might buy only what a half million bought a few years ago. What really matters is the purchasing power of the money, not the money itself.
And 50% is roughly the magnitude I'm predicting. In the next 4 to 8 years, I predict that most assets will fall in value by at least half, either through price crashes or inflation. I'm talking about nearly all assets: stocks, bonds, real estate, fine art... anything an investor might put their money into to try to preserve or increase their wealth. The only exemption I might grudgingly make is gold. I really don't understand gold, so I don't know whether it will go up or down. Gold is something without much practical value that is worth whatever investors think it is, so it is speculative like every other asset. The only assets that aren't speculative are things that people actually use to stay alive, like grain.
I had a podcast about grain. It was Episode #7, about the fall of the Western Roman Empire. The Roman empire ran on grain. That's what powered all of its operations. Farmers produced grain, which was taxed by the empire and used to pay soldiers and bureaucrats and build all those monuments. The empire got in trouble when it started spending more grain than it produced. In the minds of some scholars, that's what really caused the Fall of Rome: deficit spending. The empire had more obligations than it could make good on based on its grain production. You can't tax the farmers too much, because you end up killing the farmers. That same idea applies to our society: There is a core production of taxable activity, which is taxed to pay for government operations, and for years, the US government has been spending far more than that. The government can't raise taxes too high, or it kills production, so it's stuck with a finite income and infinitely growing debts. You can't spend more than you make, because ultimately you got to produce the grain to pay all these debts or the whole house of cards collapses.
Similar insanity applies to stocks. A stock is a slice of the future profits of a company. You buy a company like Tesla not because it is profitable now, but because you think it will be profitable in the future, but those profits would have to be truly massive to justify current stock prices. As of today, the Tesla stock price is close to $500 a share today compared to $86 a share at the beginning of the year, before the pandemic. That's a 6-fold increase in price in spite of the pandemic, which will almost certainly hurt car sales.
I don't want to get into a debate about the merits of Tesla. My point is, the entire stock market in the U.S. is vastly overvalued in relation to the future profits that are likely to be generated. You can argue about specific companies and their prospects, but the overvaluation of the whole market is measurable. You judge it by the "market capitalization to GDP" ratio, or the "Buffett Indicator". If you add up all the values of all the stocks on all the US stock markets, you get the total "book value" of all those stocks. You then compare that number to the total GDP of the country and you get a percentage.
Traditionally, if market capitalization is between 75% and 90% of GDP, the market is said to be fairly valued. Today's ratio is something like 175%, which suggests the total market is overvalued by a factor of two. To make markets rational again, stocks would have to fall by about 50%, which is what I thought would happen in March. Instead, we got an insane boom in stock prices, at least in the US—literally all-time highs in the Dow and S&P in the last few days. There are a lot of explanations for this, including the announcement of two potential coronavirus vaccines, but it's still insane no matter how you slice it. Even if they distribute a vaccine tomorrow, a lot of damage has been done to the economy that won't go away anytime soon.
When the bubble bursts, it won't just be wealthy investors that lose. When wealth vanishes, everybody loses, including people who own no stocks but lose their jobs when rich people stop buying things.
Politics, of course, is much harder to predict. Who in 2015 could have predicted Trump's election? It was just so outlandish. What is not outlandish, however, are the economic instabilities that give rise to this kind of anarchy. You can't predict specific incidents, like who will rise to power or which act of terrorism will come next, but you can predict that the conditions remain ripe for extremism. As the economy deteriorates for ordinary voters, the conditions are optimal for another Trump-like character to arise.
What are these conditions? In a word: misery. Misery is real among the electorate, and it is measurable. It mainly has to do with wealth inequality. In recent decades, the rich have been getting richer while everyone else gets poorer. The dim-witted voter doesn't know what has gone wrong. All he knows is that he's a lot less comfortable in life than he used to be. This change in circumstances leads to rage, which is often directed at the wrong targets.
One other thing I never would predicted was race riots in the middle of a pandemic, but in retrospect it makes sense. The riots were triggered by black people dying in police custody. Whether things like this are ignored or trigger an explosion depends on how much social dynamite has already been stored up, and evidently there's a lot of it. I wouldn't say that race is the key issue. I think income inequality is the key issue, because White Trump supporters are feeling the same thing. Everyone has the sense that "My life is pretty miserable right now," but different groups pick different targets for their rage. Rage can be expressed by burning down Kenosha, Wisconsin or by voting for an obvious psychopath. If the economic misery becomes too great, the rage becomes unstoppable, and a lot more than Kanosha, Wisconsin gets burned down.
The election of Joe Biden may have bought America a brief reprieve, but the core economic misery hasn't been relieved, and I don't think it can be. When the economy collapses even further and people are even more miserable than they are now, there will be more unrest and more rage directed at convenient targets. The most convenient target of all is the current government, which will inevitably be blamed for economic problems that have been incubating for decades.
When more bad things happen and Biden gets blamed, it is likely that another Trump-like character will arise to channel voter rage. You can't predict who that will be or how he will take power. The only thing I dare predict is that it will be a "he" not a "she" and he will be a whole lot smarter and more Machiavellian than Trump was.
As an American and a world citizen, I'm relieved that we're finally rid of Trump—that is, if he actually relinquishes the position in January—but I'm still deeply worried. The 2016 vote could be seen as a fluke vote for a protest candidate, but 2020 proved that it's not a fluke. After four years of hell, 47% percent of voters wanted the hell to continue. Especially the White Christians! In 2016, 81% of White Evangelicals voted for Trump, and it looks like the number hasn't changed much in 2020 (See Pew). I just can't fathom this. Here is the most un-Christian man on the planet, who in my mind embodies pure Biblical evil, and Christians are willing to set aside all their professed beliefs to vote for him. Some of them think he is the second coming of Christ, quite literally.
Over the past four years, Trump made every political blunder imaginable, and it didn't sink in with these voters. Trump was opposed by vast juggernaut of celebrities, comedians, respected past leaders and experts of all stripes, and it made no difference. Roughly half of America is willing to vote for a craven, self-serving autocrat, and we shouldn't feel comforted that less than half actually made it to the polls. If Trump had been only slightly more clever or the opposition slightly less effective, the election would have gone to a despot again. This can only happen a few more times before America becomes an 1984-style autocracy.
And all those conditions are still in place. 47% of Americans stand ready to vote for the would-be dictator, and they need only 3%, or even less, to make it happen. Even if Trump is gone, the infrastructure for autocracy is already in place. It is called the Republican Party. Like White Evangelicals, they have abandoned all pretext of principles in favor of the naked pursuit of power. In my mind, Democrats have a lot of kooky ideas, but Republicans, or at least those elected to power, seem to have none, but still 47% of the electorate will support them no matter what. All they need is that extra 3%, which can easily be delivered to them by the growing economic misery I am predicting.
Trump's saving grace was his stupidity. He wanted to become a dictator in the same way that Dr. Evil really, really wants to rule the world, but he was just too egotistical and self-destructive to pull it off. Every time he tried to implement a nefarious scheme, he himself would sabotage it.
The next would-be autocrat might not be so dumb.
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Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there. See here for all my podcast scripts on this blog.
