I have a favorite joke, and it’s been my favorite joke ever since writer David Foster Wallace told it 13 years ago.
“There are these two young fish swimming along, and they happen to meet an older fish swimming the other way, who nods at them and says ‘Morning, boys. How’s the water?’ And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes, ‘What the hell is water?’”
The point is that we tend to focus on the details of life in front of us but miss the big picture that’s all around us. Actually, my synopsis doesn’t do the parable justice, which is why it’s so brilliant. You can read or listen to the entire address online.
The truth is that humans are hard-wired to display the behavior described in Wallace’s joke. When we look at a scene, whether it’s a sunset, a baseball field, or a crosswalk, it’s change and movement that catch our attention. This makes sense because our ancestors needed to notice the subtle signs of predators as well as prey.
It holds true even in the modern world. If you take the time to survey your surroundings, you may appreciate the landscape or architecture, but a rustle in nearby foliage will pull you immediately back to a state of vigilance. To survive, humans learned to filter out the background and react to immediate changes. This trait is programmed into our genomes.
Herein lies the danger. Sometimes, slow, almost imperceptible changes present the biggest dangers (and the biggest opportunities), but they’re difficult to see. This is true of many species, but cats are master exploiters of this characteristic.
We Are Blind to Subtle Macroeconomic Changes
If you’ve ever watched cats hunting, you’ve seen them move openly to the very edge of their prey’s comfort zone. Then they stop and wait without moving until, in the prey’s eyes, they have completely blended into the background.
Source: https://commons.wikimedia.org/wiki/File:Catstalkprey.jpg (Jennifer Barnard)
This is true for all feline species, from house cats to the biggest African and Asian cats. Initially, the prey will be on guard but confident that escape is possible. Eventually, though, the quarry relaxes and the predator pounces. If the target reacts in time to the sudden movement, it survives. If it doesn’t—well, it’s the circle of life.
Humans are similarly wired, which is the only explanation I have for the societal blindness regarding the biggest macroeconomic events of our era: the global debt and population crises.
Years ago, I used to be much more focused on fiscal issues and the debt problem. I switched gears because, as a policy economist and writer, I couldn’t seem to convince anybody that we can’t forever kick the fiscal can down the road.
Very few people are willing to hear the TANSTAAFL message that the bill ultimately comes due. I leave that thankless task to el jefe John Mauldin, who is much better at it. And he really delivers it in his last Thoughts from the Frontline, titled, “Train Crash Preview.”
If you haven’t read the column, you should do it now. Go ahead, I’ll save your place.
Government spending has grown so inexorably, though slowly, over the last decades, it has become part of the water around us. There is no more pressing issue, but I won’t try to convince you. That’s John’s job.
Rising Debt + Falling Birthrates = A Recipe for Disaster
Ironically, our debt crisis would have been manageable if it had happened a generation ago when birthrates were high. In fact, the United States did manage a similar level of debt, accrued during the Second World War—but in the post-war years, the US economy and GDP benefited from the growing labor and talent pool of the Baby Boom generation.
Today, the situation is reversed. The global and US debt loads are just as bad, mostly due to the combination of unprecedented growth of the older population and age-related diseases (also known as the “Gray Tsunami”) and falling birthrates in the developed world far below replacement rates. We keep sending our medical bills to our children, and they can’t afford to pay them.
How did this happen?
I think it’s largely because the debt and the demographic deficit have grown so slowly. They’re the water we swim in.
Most people, particularly those in politics and the media, seem to believe that the situation will get better if we continue to ignore it. Unfortunately, it’s getting worse.
A new report by the CDC’s National Center for Health Statistics states that the fertility decline from 2016 to 2017 is the largest single-year drop since the Great Recession. Back then, low birthrates could be explained by hard economic times. Conditions have significantly improved since then.
I’ll cite just two of the dozens of stories about the CDC report.
Here’s a Los Angeles Times story titled, “The U.S. birthrate hits another record low. Even women in their 30s are having fewer babies.”
U.S. Fertility Rate Fell to a Record Low, for a Second Straight Year.”
By the way, only a few years ago, both publications were warning of the dangers of overpopulation.
According to the NYT article, many observers incorrectly assumed that birthrates had been suppressed by the global economic downturn and would therefore return to higher levels after the crisis:
“Every year I look at data and expect it will be the year that birthrates start to tick up, and every year we hit another all-time low,” said Kenneth M. Johnson, a demographer at the University of New Hampshire. “It’s one of the big demographic mysteries of recent times.”
I agree that it is somewhat of a mystery. We don’t understand all the forces driving down birthrates. Some are obvious, but I think there’s more to it than we know. It’s clear, though, that birthrates have always fallen as standards of living and lifespans increase.
Expensive government programs in Europe, Japan, and Scandinavia have only marginally slowed depopulation trends. They won’t prevent the failure of programs that depend on transfers of wealth from younger to older cohorts, the biggest component of all developed nations’ budgets.
I realize that almost nobody wants to hear this, so I’m happy that John Mauldin is doing the unpleasant work of delivering tough love to the fish who don’t know what water is. I find it a lot more fun to focus on scientific solutions that can shrink the costs of age-related diseases to a fraction of their current budget-busting size.
I also take comfort in the fact that the “train crash” John is describing will force the adoption of next-generation anti-aging biotechnologies. Those who know it’s coming are in an excellent position to hedge that crash. They can do so by financially supporting the companies and scientists working to give us the health needed to be productive far, far longer than ever before.
John and I both agree that new technologies will enable a “reset” that will usher in a new age of abundance. Unfortunately, it doesn’t seem likely that we’re going to get there until the gales of creative destruction clear out the obstacles to its arrival.
So, how's the water?
Editor, Transformational Technology Alert
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