If I didn't know any better, I might have thought, based on an Associated Press report tonight by business writer Bernard Condon prepared with the help of four others, that governments everywhere had reinstituted child labor for those as young as six years old.
That's the only way to support the claims Condon made about how the birth dearth in the developed world driven by the 2008 financial crisis is responsible for the current worldwide economic malaise. This desperate grasping at straws is apparently necessarily because the press will never blame the ineffectiveness of Keynesian fiscal policies and national banks' interventions in the developed world's economies, which are really the culprits. Excerpts from Condon's calamity follow the jump (bolds are mine):
FEAR OF ECONOMIC BLOW AS BIRTHS DROP AROUND WORLD
... The 2008 financial crisis did more than wipe out billions in wealth and millions of jobs. It also sent birth rates tumbling around the world as couples found themselves too short of money or too fearful about their finances to have children. Six years later, birth rates haven't bounced back.
For those who fear an overcrowded planet, this is good news. For the economy, not so good.
We tend to think economic growth comes from working harder and smarter. But economists attribute up to a third of it to more people joining the workforce each year than leaving it. The result is more producing, earning and spending.
Now this secret fuel of the economy, rarely missing and little noticed, is running out.
Bernard, old buddy old pal: This "secret fuel" of the economy during the past six years has depended on the number of college grads born between roughly 1986-1992, and on high school grads entering the workforce and kids earning money while in college born between roughly 1991-1997, who have entered or not entered the workforce. The "secret fuel" has nothing to do with those born between 2008 and now.
Continuing Condon's craziness, showing that he isn't concerned about what the post-financial crisis birth dearth will do the economy in the future. No, he says it's having a big impact now (numbered tags are mine):
... The drop in birth rates is rooted in the 1960s, when many women entered the workforce for the first time and couples decided to have smaller families. Births did begin rising in many countries in the new millennium. But then the financial crisis struck. Stocks and home values plummeted, blowing a hole in household finances, and tens of millions of people lost jobs. Many couples delayed having children or decided to have none at all.
... The effects on economies, personal wealth and living standards are far reaching:
- A return to "normal" growth is unlikely: Economic growth of 3 percent a year in developed countries, the average over four decades, had been considered a natural rate of expansion, sure to return once damage from the global downturn faded. But many economists argue that that pace can't be sustained without a surge of new workers. The Congressional Budget Office has estimated that the U.S. economy will grow 3 percent or so in each of the next three years, then slow to an average 2.3 percent for next eight years. [1] The main reason: Not enough new workers.
- Reduced pay and lifestyles: Slower economic growth will limit wage gains and make it difficult for middle-class families to raise their living standards, and for those in poverty to escape it. One measure of living standards is already signaling trouble: Gross domestic product per capita - the value of goods and services a country produces per person - fell 1 percent in the five biggest developed countries from the start of 2008 through 2012, according to the World Bank. [2]
Notes:
[1] — The post-financial crisis birth dearth, while it promises to have a long-term impact, cannot possibly have an effect on whether or not there are enough workers until 2025 or 2026, which is entirely after the time frame about which Condon is concerned (the "next three years" are 2014-2016, and the "next eight years" after that are 2017-2024). Misguided fiscal and monetary policies, which in the U.S. have been accompanied by vast misallocations of capital traceable to a dramatic increase in cronyism, explain why there has been no return to historically normal growth is
[2] — It's really hard to handle this level of illiteracy. If there are fewer children and a gradually growing workforce in a decently expanding economy, per capita GDP should go up. The problem is that adults — not six year-olds, Bernard, adults —are either not entering the workforce or are dropping out, while economic growth remains tepid in the U.S. and elsewhere. Per capita GDP didn't return to its late-2007 peak until the second quarter of 2013 in the U.S. This was by far the longest time it took for that to happen since World War II.
Condon could have pointed out that the birth dearth is causing lower purchases of goods and services parents buy for children, and that it's holding back the housing sector because there are fewer households with children looking to move into single-family homes. But he didn't even try to make that argument, instead acting as if it is toddlers who are failing to join the workforce who are causing an "economic blow."
The fact that this got past the AP's alleged layers of editors would seem to prove that there really are no layers of fact-checkers — or that they are as dense as Condon was, at least in regards to this report. Heaven help us all.
Cross-posted at BizzyBlog.com.
