Death of the working class... and of Capitalism, as we knew it?

How fighting one pandemic can deepen another Review of “Deaths of Despair and the Future of Capitalism” by Anne Case and Angus Deaton

By Carlos Lozada, Book critic
May 1, 2020 at 5:00 a.m. PDT
DEATHS OF DESPAIR AND THE FUTURE OF CAPITALISM
By Anne Case and Angus Deaton.
Princeton University Press. 312 pp. $27.95

Even before the coronavirus struck, America was suffering an eviscerating epidemic. Its cause was not a virus; its spread could not be blamed on foreign travelers or college kids on spring break. No masks or gloves could slow its contagion, no vaccine could prevent new cases. Its toll is clear in the rising deaths of white Americans in their mid-40s to mid-50s over the past two decades, particularly in states such as Arkansas, Kentucky, Mississippi and West Virginia.

Princeton University economists Anne Case and Angus Deaton call these “deaths of despair” — the deaths from suicide, drug overdoses and alcoholic liver disease ravaging swaths of the country. The victims, overwhelmingly, are less-educated Americans whose loss of life was preceded by a loss of jobs, community and dignity, and whose deaths, the authors argue, are inextricable from the policies and politics transforming the U.S. economy into an engine of inequality and suffering. “The American economy has shifted away from serving ordinary people and toward serving businesses, their managers, and their owners,” Case and Deaton write in their new work, “Deaths of Despair and the Future of Capitalism.”

Although the authors completed this book before the onset of the coronavirus pandemic — it was published four days after President Trump declared a national emergency — their diagnosis is still painfully relevant. Mass unemployment and mass infection, occurring simultaneously in a nation where health insurance often depends on employment, threaten to both prove and aggravate the conditions Case and Deaton describe. The debate over how quickly to ease social distancing restrictions and get the economy moving again forces a reckoning: How do we balance the risk of increased coronavirus infections if we reopen the economy too soon against the risk of more deaths of despair if we do so too late? “Jobs are not just the source of money; they are the basis for the rituals, customs, and routines of working-class life,” Case and Deaton write. “Destroy work and, in the end, working-class life cannot survive.”

Reading this book during a pandemic, I found myself bracing for more death — from the virus or from despair, and, more likely, from both.

Many memoirs, histories and investigations have been written on America’s white working class in recent years, probably too many, but fewer purely economic studies. Case and Deaton are world-renowned practitioners of the dismal science (Case is a top expert on the links between economic and health status, while Deaton snagged a Nobel in 2015 for his work on household poverty and welfare), and their lens on the subject makes for stark reading. They estimate the magnitude of the deaths of despair in the United States by comparing the improving trend lines of recent decades — i.e., if mortality rates had continued falling as before — with what actually came to pass.

“When we add up those numbers from 1999, the critical point where the turnaround began, to 2017,” the authors report, “we get a very large total: 600,000 deaths of midlife Americans who would be alive if progress had gone on as expected.” Case and Deaton liken that number to “what we might see during the ravages of an infectious disease, like the Great Influenza Pandemic of 1918.” They also compare it to the roughly 675,000 deaths of HIV/AIDS in the United States since the early 1980s.

Case and Deaton are largely dismissive of arguments that stress the supposed individual or cultural failings of the white working class, and they focus instead on systemic shortcomings that lead to deaths of despair. Manufacturing towns and cities have seen their factories boarded up, they write, and “in the wreckage, the temptations of alcohol and drugs lured many to their deaths.” Education is another consideration, the authors argue, with “almost all” of the increase in deaths due to suicide, alcoholism and drug overdoses found among people who lack bachelor’s degrees. Deteriorating health matters as well. “Many people are experiencing pain, serious mental distress, and difficulty going about their day-to-day lives,” Case and Deaton write. These conditions make it harder for them to work, which reduces income and undercuts work as a source of “satisfaction and meaning” in their lives.

Who lives, who dies, who decides: How the virus makes us weigh the value of one life

More than 30 million Americans have sought unemployment aid since mid-March, a level of dislocation not seen since the Great Depression. In this context, the impulse to return to work is understandable. Yet the loss of earnings, Case and Deaton contend, is just part of the challenge. “Much more important for despair is the decline of family, community, and religion,” they write, a decline they regard as related to falling wages and disappearing jobs, but distinct from them. Other authors have tackled this problem recently — see, for instance, Timothy P. Carney’s insightful 2019 book, “Alienated America” — and collectively, their conclusion is clear: Long before we began social distancing, Americans had already grown far too distant from one another.

Case and Deaton focus on the white working class because it is undergoing a particularly harrowing shift, not because they believe this demographic matters more than others (they don’t) or because it is worse off in absolute terms than others (it isn’t). Black mortality rates remain persistently higher than white ones, the authors point out, even considering the increased deaths of despair among white Americans. But black mortality rates are falling faster than white rates — and the deaths of despair among white citizens are the difference. “The main reason why death rates of blacks fell more rapidly than death rates of whites at the beginning of the twenty-first century is that blacks were not suffering the epidemic of overdoses, suicide, and alcoholism,” Case and Deaton explain. [...]

It's worth reading the whole thing. While I don't consider myself an anti-capitalist at all, there have been changes in the economy, locally an globally, that have been eliminating working class jobs and incomes. It's a reality.

When Obamacare tried to force small businesses to provide health care for full time employees, the employment industry responded by making all employees part time. I worked as a tax preparer, dealing with all their W-2 forms, and was astounded at how many families were raising children, with two parents working at an assortment of part-time jobs, to pay their bills and keep thier families alive.

This article touches on many causes, and asks many questions we need to face, as it's only going to continue to get worse for the majority of people, if viable solutions are not found.

Many of these people are Trump supporters. And they will vote for Trump, no matter what anyone says, because they feel that the Democrats don't care wether they live or die, so they will vote for anyone who opposes the Democrats. You can argue about wether that perception is right or wrong. But it won't change the fact that they percieve it that way. If the Democrats are serious about winning more votes, they should be addressing this, instead of only attacking Trump non-stop. They have been doing that for the past four years, and it hasn't worked. Isn't it about time they try something that does?

I have Democrat friends who believe that all Trump supporters are racists, bigots and morons. And that if they keep repeating that mantra, it's going to win them the elections. But I think they have forgotten, what every election is about: it's the economy, stupid. Duh. It affects the most people. And the majority will vote for whoever they think, whoever they perceive, will do the better job of that.

     

"Democrats cannot capture the presidency or either branch of Congress by lurching leftward"

Here is some well considered advice for the Democrat party. It explains how Donald Trump got elected, and why, if the Democrats don't change course, Trump stands a good chance of being re-elected for another term:

Commentary: The perils of mythmaking

[...] Democrats cannot capture the presidency or either branch of Congress by lurching leftward. A candidate in the AOC/BS mold would be a hero in New York, California and Massachusetts — and a disaster in states like Michigan, Pennsylvania and Wisconsin, which handed Trump the presidency in 2016 and will be critical again next year.

Ed Rendell, the former governor of Pennsylvania, stressed this point to The New York Times: “The more we have presidential candidates or newly elected congresspeople talking about the Green New Deal, talking about ‘Medicare-for-all,’ talking about socialism, the more that plays into the Trump campaign’s hands.”

Christopher Borick, a political scientist at Muhlenberg College in Allentown, Pennsylvania, added: “If you want to lock up Pennsylvania for a Democrat, the more moderate Democrats are the key.”

The numbers support them. A Gallup poll in January reported that 35 percent of Americans call themselves conservatives, the same number that identify as moderates. Only 26 percent are self-described liberals, the same portion who chose that label in 2016 exit polls.

It’s true that within the Democrats’ ranks, the percentage of liberals is rising, hitting 51 percent this year according to Gallup. But pragmatists still dominate the party. Fifty-four percent of Democrats and Democratic-leaning independents want the party to “move closer to the center” while 41 percent “would rather it shift further left.”

The same tension between purists and pragmatists is playing out in the House, where the AOC types are calling for the rapid impeachment of the president. But Democratic leaders are taking a much slower approach, with Rep. Jerrold Nadler, chairman of the Judiciary Committee, insisting that impeachment must meet a “very high bar.”

“If you’re serious about removing a president from office, what you’re really doing is overturning the result of the last election,” Nadler told Roll Call in November. “You don’t want to have a situation where you tear this country apart, and for the next 30 years half the country’s saying, ‘We won the election; you stole it.’”

That’s why Democrats should be focusing on the next election, not impeachment. No president has ever been removed through impeachment (although Richard Nixon probably would have been the first, had he not resigned). The bar is and should be “very high.” [...]

Read the whole thing. It explains so much. Good advice, and like much good advice, will probably be ignored. Elections are about demographics, and numbers. If Democrats insist on letting the most leftist and shrill among them lead their party, they will lose again.

Also see:

How can Republicans defend Trump? Because of the Clintons

     

States people are migrating to...

And of course, those they are leaving...


The states people really want to move to — and those they don’t

When the U.S. economy slowed during the recession, so did one of the major demographic shifts of the last several decades. For a brief respite, the Northeast and Midwest stopped shedding quite so many residents to the burgeoning Sun Belt. That trend, though — which has big consequences for politics, among other things — has been picking back up.

New census data shows the trend accelerating back to its pre-recession pace. Florida, which actually lost more domestic movers than it gained right after the housing bubble burst, picked up about 200,000 net new movers between 2014 and 2015 (this number includes people who move between states, not immigration into the United States from abroad). Illinois, meanwhile, had a net loss of about 105,000 residents, its largest one-year population leak in the 21st century.

The District of Columbia, perched between the North and South, has been a winner, too.

The other big gains over the past year were Texas (170,000 new migrants), Colorado (54,00o), and Arizona and South Carolina (both with more than 45,000 each). Not a single state in the Northeast or Midwest gained domestic movers over the last year. [...]

I think much of it can be explained as people retiring and looking for a comfortable, affordable place to retire to. Younger people are likely going where the jobs are, and where there is affordable housing. Read the whole thing for more details, lots of embedded links, and more graphs showing stats for the regions of the US, and more.

   

Death rates rise for middle aged white Americans

Death Rates Rising for Middle-Aged White Americans, Study Finds

[...] The mortality rate for whites 45 to 54 years old with no more than a high school education increased by 134 deaths per 100,000 people from 1999 to 2014.

“It is difficult to find modern settings with survival losses of this magnitude,” wrote two Dartmouth economists, Ellen Meara and Jonathan S. Skinner, in a commentary to the Deaton-Case analysis to be published in Proceedings of the National Academy of Sciences.

“Wow,” said Samuel Preston, a professor of sociology at the University of Pennsylvania and an expert on mortality trends and the health of populations, who was not involved in the research. “This is a vivid indication that something is awry in these American households.”

Dr. Deaton had but one parallel. “Only H.I.V./AIDS in contemporary times has done anything like this,” he said.

In contrast, the death rate for middle-aged blacks and Hispanics continued to decline during the same period, as did death rates for younger and older people of all races and ethnic groups.

Middle-aged blacks still have a higher mortality rate than whites — 581 per 100,000, compared with 415 for whites — but the gap is closing, and the rate for middle-aged Hispanics is far lower than for middle-aged whites at 262 per 100,000.

David M. Cutler, a Harvard health care economist, said that although it was known that people were dying from causes like opioid addiction, the thought was that those deaths were just blips in the health care statistics and that over all everyone’s health was improving. The new paper, he said, “shows those blips are more like incoming missiles.”

Dr. Deaton and Dr. Case (who are husband and wife) say they stumbled on their finding by accident, looking at a variety of national data sets on mortality rates and federal surveys that asked people about their levels of pain, disability and general ill health.

Dr. Deaton was looking at statistics on suicide and happiness, skeptical about whether states with a high happiness level have a low suicide rate. (They do not, he discovered; in fact, the opposite is true.) Dr. Case was interested in poor health, including chronic pain because she has suffered for 12 years from disabling and untreatable lower back pain.

Dr. Deaton noticed in national data sets that middle-aged whites were committing suicide at an unprecedented rate and that the all-cause mortality in this group was rising. But suicides alone, he and Dr. Case realized, were not enough to push up overall death rates, so they began looking at other causes of death. That led them to the discovery that deaths from drug and alcohol poisoning also increased in this group.

They concluded that taken together, suicides, drugs and alcohol explained the overall increase in deaths. The effect was largely confined to people with a high school education or less. In that group, death rates rose by 22 percent while they actually fell for those with a college education.

It is not clear why only middle-aged whites had such a rise in their mortality rates. Dr. Meara and Dr. Skinner, in their commentary, considered a variety of explanations — including a pronounced racial difference in the prescription of opioid drugs and their misuse, and a more pessimistic outlook among whites about their financial futures — but say they cannot fully account for the effect. [...]

Read the whole thing for more details, embedded links and more.

I think key to this is the fact that it's affecting whites with only a high school education or less. The job market is particularly tough for them, and their coping skills are likely less resilient. They are more likely to abuse drugs and alcohol. The article goes on to talk about physical pain issues rising in this demographic, also. The combined health and financial problems, with a pessimistic attitude and substance abuse issues, may be proving lethal.

Of course there are those who are quick to say it's merely the Death of White Privledge; Whitey is finding out what it's like to be poor, and can't cope. That authors' agenda isn't mine, I prefer a bit more scientific objectivity. I include the link merely because it's a narrative we are going to hear more and more, as everything continues to get more and more racialized and radicalized.

I think the article about Dr. Deaton and Dr. Case that I've excerpted from here is more objective, and therefor more balanced.

Here is a link to readers comments about the study:
Readers React to Rising Death Rates of Middle-Aged White Americans.

Since the same demographic in other industrialized countries is NOT dying at such an increased rate, I would suggest that the difference is, that many other countries have a permanent unemployed class, that receives better, permanent unemployment benefits and health care. The same demographic here does not, which explains why they gravitate to Bernie Sanders: They want the government to take care of them, European style. Is that the same as the "End of White Privledge"? You decide.

This will be a growing issue as the automation of job tasks continues and jobs continue to disappear. What is to be done with the growing pool of unemployed people, not just here, but globally? It's one of the major challenges we face in the coming Brave New Word.
     

"Demographics tend to be political destiny"

Republicans’ 2016 math problem, explained in two charts

It's easy to overthink elections. I do it all the time. But at its most basic level, demographics tend to be political destiny. And that's why Dan Balz's column over the weekend, which details the difficult demographic realities facing the Republican Party in 2016 (and beyond), is so important. [...]

Read the whole thing for the two charts, embedded links and more. I think it explains a lot.

     

Is the nearly extinct Northeast species of Republicans being brought back from the brink?

I once did a post about the demise of New England Republicans. It seemed like they were gone for good. But could it be they are making a comeback?

Return of the Northeastern Republican

[...] Republican political operatives say the gains the GOP is set to make are due to a convergence of causes. There is the fact that in the wave election year that 2014 seems poised to become, the party could win in even the most unexpected of places. There is the fact that in many of these states Democratic legislatures are entrenched, and voters are looking for a counterweight.

And finally, there is the fact that most of the culture wars have reached a stalemate. In Massachusetts, for example, Baker is running as a pro-choice, pro same-sex marriage Republican nominee. Other Republicans are similarly downplaying these hot-button issues of old, and pollsters say most voters see them now as settled matters. And so if two candidates are a wash on matters of civil rights, why not go for the guy who is going to cut your taxes?

“Republicans have just been putting together a more coherent message of change in New England,” said Will Ritter, a Republican political operative who worked on a number of statewide races in Massachusetts. “The Democrats’ message is what—‘Hey, it is not so bad?’ People look to candidates who have a business background, or at least have conservative underpinnings, when it looks like budgets are going off the rails.”

The major question for the Republican Party going forward is what all these Yankee newcomers will mean for its direction. The GOP has been at odds with itself as it tries to decide how to appeal to a diverse and changing electorate, and some Republicans think a handful of new voices from states not necessarily of the reddest hue could help the eventual 2016 presidential nominee.

“It takes a lot of Democrats to elect a Republican in one of these places,” said John McLaughlin, a Republican pollster. “You can’t win otherwise. You broaden your base, you broaden your message, it shows that you really want to get things done. And we need do to that, not just racially but demographically.”

But will the Republican party welcome these blue-state Republicans, or will they shoot themselves in the foot (again!) by declaring them to be RHINOs and try to drum them out of the party with social issues litmus tests, insuring that the Republican Party remains small, with only limited appeal to a small minority of the vast demographic of voters? You can be sure that the latter is what the Democrats are hoping and praying for.
     

GOP must "Get Beyond Deportation"

Kentucky Sen. Rand Paul Says GOP Must Appeal To Hispanics, Get ‘Beyond Deportation’

[...] This certainly was not the first time that Paul, since being elected to the Senate in 2010, has attempted to connect with Hispanics and other minorities.

However, Republicans’ interest in his policy vision and his vision for broadening the party base continues to grow as he ascends in the very, very early 2016 polls and travels the country. Recent stops have included those in Democrat-heavy Detroit and at the University of California, Berkeley.

Paul said Tuesday that Republicans need to focus on such issues as reforming the country’s work visa system and improving educational and employment opportunities for minorities.

However, the GOP must first make clear it is not “just the party of deportation,” he argued.

“The bottom line is that the Hispanic community … is not going to hear us until we get beyond that issue,” Paul told attendees at a symposium sponsored by the conservative Media Research Center and the American Principles Project. “They’re not going to care whether we go to the same church or have the same values or believe in the same kind of future of the country until we get beyond that. … We’ve got to get beyond deportation to get to the rest of the issues.” [...]

It's been pretty obvious for quite some time. But there is a segment of the GOP that has been too slow to wake up to the reality of changing demographics. Not to mention, popular opinion. Two realities that decide elections.
   

Immigration Reform and the GOP

The reality of demographics:

Rand Paul to GOP: Change your tune, or Texas goes Democratic

Sen. Rand Paul, R-Ky., delivered a stark demographic warning to his party on Saturday, predicting that Texas – a sizable electoral prize that Republicans cannot afford to lose in national elections – may tilt Democratic within 10 years if the GOP doesn’t broaden its appeal.

“What I do believe is Texas is going to be a Democrat state within 10 years if we don’t change,” Paul told the Harris County Republican Party on Saturday, according to Politico. “That means we evolve, it doesn’t mean we give up on what we believe in, but it means we have to be a welcoming party.”

Paul’s pitch to Texas Republicans focused largely on the party’s appeal among Hispanic Americans, who have trended strongly Democratic in recent elections. He acknowledged that immigration reform, a top priority for many Hispanic political leaders, is a “touchy” subject for Republicans. But he counseled the GOP not to shy away from the debate, though it may expose intra-party divisions.

“We won’t all agree on it,” he said. “But I’ll tell you, what I will say and what I’ll continue to say, and it’s not an exact policy prescription … but if you want to work and you want a job and you want to be part of America, we’ll find a place for you.”

“Doesn’t mean I don’t believe in securing the border first, doesn’t mean I don’t believe it’s important we have a secure country,” he added. “But it does mean we have to have a different attitude.”

The response from the activists and party officials in the room was “kind of tepid,” Paul remarked. [...]

And if the response continues to be tepid, it will be an ongoing case of "too little, too late", as the GOP fades into obscurity.


Also see:

Rand Paul warns Texas Republicans, 'Your state could turn blue'

     

The State of Religion In America Today

It ain't what it used to be:

Religion in America’s states and counties, in 6 maps

[...] With what is arguably the most widely observed holiday of the nation’s most popular religion right around the corner, now seems as good a time as any to look at the state of religion in America’s states and counties. All six of the maps and data below—which depict religious popularity, diversity and adherents—come from the “2010 U.S. Religion Census: Religious Congregations & Membership Study,” an every-decade research effort sponsored by the Association of Statisticians of American Religious Bodies, which gathers statistics for religious groups or scholars interested in such. [...]

Fascinating maps, of interesting categories.

The Telegraph newspaper examines some of the data in detail:

Lots of atheists, more Muslims, fewer Christians and Jews: this is the new America

[...] Did you know there are – possibly – now more religious Muslims than religious Jews in Florida? I know, it seems incredible. Miami Beach has had 15 Jewish mayors, there are getting on for 200 synagogues in South Florida – and, of course, it was the hunting ground of the despicable Bernie Madoff.

[...]

There are still more Jews than Muslims in Florida, loosely defined; these figures measure Judaism as a religion. That said, even to compare the two 20 years ago would have seemed ridiculous. Florida has a small but vibrant, growing Muslim community, half of it from India, followed by Pakistanis – only 150,000 registered voters to date. As you'd expect, 80 per cent voted for Obama in the last two elections; but in other elections they're swing voters, and in Florida you ignore those at your peril. As for the Jewish community, the retirement communities are reflecting the national picture. [...]

Read the whole thing for more interesting facts, figures and maps. And guess what is the most popular non-Christian religion in the American West? No wonder I love living out here. I can feel it.
     

Jesus saves... the economy?

Yep. It's the DEMOGRAHICS that count. Here's an article that spells it out:

How will babies named Jesus save the economy?

[...] The currency of the future is babies, because babies grow up to be taxpaying workers. Let's do Demography 101, which is basically the study of baby-making. Demographers have a fancy term called "total fertility rate," which measures the average number of babies a woman has over her childbearing years.

The magic number you need to remember is 2.1. This is the average number of babies a country needs to remain at equilibrium. It makes sense, too. When a mother and father die, they need to be replaced by two babies, or else the population declines. A rich powerful country needs lots of babies to project geopolitical power and increase its productivity. If you won't multiply, who will fight your wars? Who will pay Social Security to support grandpa? Who do you think will start the next Facebook, Amazon or Google?

The U.S. total fertility rate is at 2.09, and at that level we just replace our population. That's not good. But wait a minute, why do we keep growing? Simple: immigration.

Our favorable immigration policy and liberal treatment of the millions of people working without legal documents means our population will grow from 312 million today to 439 million in 2050. Hispanic babies, 83 million of them, will account for 65% of that growth. This is where the total fertility rate comes into play again, 2.84 for Hispanics, but only 1.84 and trending much lower for non-Hispanic whites who will only add 4 million babies to the melting pot. Keep in mind that those Hispanic babies born here to Mitt Romney's "self-deportation" candidates are all red-blooded American citizens -- our future Navy SEALs, entrepreneurs, middle-class working Americans and maybe even a president.

Demography will shape the geopolitics of the two largest economies of the 21st century: the United States and the European Union. They will maintain their status as world powers principally through immigration. [...]

And the demographics don't only apply to economics, but to politics and elections as well. The demographics of the electorate is changing. Any political party that wants to remain relevant needs to recognize that.
     

Aligning conservatism with our modern world

GOP'S WINNING TEAM: FACEBOOK/TWITTER IN '12

Republicans have been quick to recognize the practical benefits of technology, but slow to grasp its political implications.

[...]

As the internet exploded into the mainstream over a decade ago, it was widely assumed that it would accelerate the fragmentation of society. Instead of watching the same television shows, attending the same movies, and patronizing the same stores, tech-savvy and self-reliant consumers would retreat into their own online spaces and express their individuality. Libertarianism would flourish.

In reality, Web 2.0 has had the opposite effect. Social networking sites, online chat and discussion forums, blogs, and peer-to-peer sharing have strengthened social bonds, not dissolved them. As never before, interconnectedness and interdependence are central facts in the lives of young people.

[...]

In this context, excessive rhetoric about individualism and personal freedom is not just inappropriate; it’s insane. It’s no coincidence that Republicans are getting slaughtered in densely populated urban and suburban areas, filled with students and young professionals who are intimately involved in their communities, offline and online. They are repelled by swaggering calls to go it alone, to sink or swim, to believe that they alone determine their own destiny.

What is true in spacious America is doubly true in crowded Britain. This is why British Conservative leader David Cameron endlessly repeats that “we’re all in this together” and “there is such a thing as society.” After the economic revolution of the Thatcher era, Tories were viewed as the wrecking crew, as uprooters of communities and enemies of social cohesion. In truth, conservatives on both sides of the Atlantic are still trying to reconcile economic liberalism with respect for tradition and continuity. Perhaps the most crucial aspect of Cameron’s modernization agenda has been the enormous effort to recast his party as champions of social responsibility. [...]

It goes on to describe how the Brits are attempting to bond conservatism with this new demographic, the "Facebook/Twitter generation", and how in the US Obama has already done so. Could it be true that American conservatives, while being savy about the technology itself, really have yet to fully understand it's implications?

It remains to be seen if what British conservatives are doing will have any success, but if it does, there may be some lessons there for American conservatives. Even if it doesn't work for the Brits, there still may be some lessons there for us. If the Grand Old Party doesn't connect with the current electorate, we may indeed need a Grand New Party.

I'm very much an individualist, but there are some things we all have to cooperate on; none of us lives in a vacuum. As technology increasingly makes our world inter-connected and interdependent, the need for cooperation becomes unavoidable, and that's not lost on the young people who are on the cutting edge in embracing these technologies.

The article goes on to offer some very conservative ideas about how this cooperation should be approached and even embraced and advanced. IMO these ideas don't diminish conservatism in any way, and are at least worth considering, as our Brave New World continues to evolve. The conservative way involves a lot more freedom and multiple choices, and I'll take that over the authoritarian big government Big Brother way any day.
     

Can the Dow Jones Industrial Average and Age Demographics foretell Economic Depression?

What do the DJIA and the demographics of people between the age of 45 and 54, and a financial depression all have in common? Quite a bit, according to Daniel A. Arnold, author of:

The Great Bust Ahead: The Greatest Depression in American and UK History is Just Several Short Years Away.
This is your Concise Reference Guide to Understanding Why and How Best to Survive It (Paperback)

Product Description
The Great Bust Ahead is a concise, straight to the point short book laying out in stark terms the case for a coming depression of historically unprecedented magnitude. It will be worse than the 1930s, beginning nominally in 2012, but perhaps as early as 2009-2010 and lasting up to thirteen years.

Centered on hard fact demographics, the book boldly claims that the data presented are so irrefutable, that the outcome predicted by the book is equally as irrefutable. The compelling proof presented accurately accounts for the detailed trend of the economy from 1920 to today (something never before accomplished), and projects out to 2030.

The book is very easy to read and understand, and requires no prior knowledge of economics. Down to earth things the average person can do to prepare for what is coming are covered. A summary of the catastrophic domestic social and international consequences is offered.

January 2009 Update:

1. First, read the 2007 Update below.

2. 2008 was the victim of a self inflicted sub-prime financial crisis. This has nothing to do with the demographics based massive depression that is yet to come, as described in the book. The sub-prime consequences are however very similar though mild so far compared to what is coming our way. The book clearly spelled out that along the way unpredictable short-term (1 to 3 years) disruptive events could happen. The sub-prime crisis is just that. It should be regarded as the warmer upper or hors d'oeuvre for the big one that is now rapidly closing in on us all.

3. The great unknown at this point is whether the sub-prime based crisis will drag on beyond 2009 and then blend into the demographics based massive decline which, per the book, could begin as early as 2009-10. Being short-term by definition, this period is totally unpredictable.

4. There is the strong possibility that we will see an interim recovery manifested as a last hurrah rally in 2009 of perhaps 30% on the Dow after a new low of around 7,000. However, this is very speculative. The only historical certainty is that in the long-term the Dow always returns to the demographic. This lends some credence to such a rally as the immutable demographic, as you can see from the chart, remains in a very strong upswing as it moves toward its 2012 peak before crashing. Also waiting in the wings ready to surge back into the markets are trillions of dollars earning very little in money market funds.

October 2007 Update: In 2002 when this book was published, in addition to the massive depression beginning around the end of the decade, it forecast:

1. The economy, as reflected by the DJIA, would resume its upwards march in late 2002 or 2003. This is exactly what happened.

2. The DJIA would have a snapback to 13,000 to 14,000 and the FTSE to 6,000 to 7,000 by 2004, but delayed possibly by wars/politics/terrorism/scandals. This is exactly what has happened. Although the full snapback has been delayed for the reasons described, the DJIA has now closed over 14,100 and the FTSE over 6,700.

3. The DJIA returns from 2003 to 2012 would average a historically long-term normal of 7% to 8%. So far, with the delayed full snapback for the reasons described, DJIA actual returns have averaged a more modest 5.8%, as would be expected.

4. Interest rates would increase from 2003 onwards. This is exactly what has happened.

From the Publisher
If there ever was a book that should be read by the entire adult population, this is it. The events described in The Great Bust Ahead will be the greatest story of the first quarter of the twenty-first century, if not the century. All of our lives are going to be dramatically affected beginning in just a few years from now.

The depression of epic proportions that is predicted has THIRTY MILLION unemployed and stock market losses of over eighteen TRILLION dollars. The book leaves you with the conviction that for the first time you understand what the economy is all about. Everything presented in the book is so factual, so unchallengeable, it is hard to know what to say other than "go read it" and then start preparing as best you can.

Well, I've had this book for a while, and last night I read the whole thing. It only took an hour and a half to read, because it's only 64 pages long, and printed in large type.

I tend to regard most of these kinds of books with a lot of skepticism. I find reading the customer comments section for such books very helpful. Often, people who have read the book already can give you a very good idea of whether or not the book is even worth bothering with. Some very sharp minds often tear these books to shreds, exposing their bias, bad research and inaccuracies, saving you the time and trouble. But this book got a higher approval rating than similar books; the comments were intriguing, and since it only cost $8.95, I decided to give it a try.

The comments on this book were varied and interesting, and even most of the author's critics didn't completely disagree with the his contention that there is a relationship between the DJIA and the most productive age demographic. The thing they most argued with were about some of the conclusions that Arnold formed based on this data.

I would also question some of those conclusions, for the same reasons others have mentioned in the comments. But the Demographic data is fascinating, and I've yet to see a really effective rebuttal to it.

It was easy to read and follow Arnold's explanation of the data, and his premise takes into account a lot of variables such as immigration, wars, etc. He also shows how there are a number of short term factors that can cause the DJIA to waver temporarily from the demographic, but it always returns to the demographic.

Fascinating stuff, but what it all means for our future financial planning isn't so clear, as the conclusions are open to interpretation, and influenced by short term variables that we can't predict. For instance, Arnold recommends putting your money in U.S. Federal bonds. But with the huge deficit spending we are experiencing now, how safe are those going to be?

He has some interesting ideas about real estate and some other options, but it's late in the game now. The book was written in 2002, and if he's right we may already be on the brink.

The author also has a website, at TheGreatBustAhead.com.


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