Reloaded

Tea Party Waltz

"They really need to realize that the rhetoric ... we're on Sarah Palin's targeted list, but the thing is, that the way that she has it depicted has the crosshairs of a gunsight over our district. When people do that, you gotta realize there's consequences to that action." - Gabrielle Giffords.

"3.49 pm Various Palin sites are frantically removing various incendiary materials - which is both gratifying, but also, it seems to me, an acknowledgment of previous rhetorical excess....Palin's Facebook page simply cannot cope with the number of commenters blasting her" - Andrew Sullivan

An online comment:

I am standing in the aisle at Costco when I found out my Congresswomen, Gabrielle Giffords, has been shot dead up on the north side.

While I’m scrambling with my phone, two couples in front of me are talking about it and suddenly I hear one of the women say, “Well, that’s to be expected when you’re so liberal.”And the other woman says, “Ohh, so we get to appoint a Republican?”

I did not trust myself to speak. I’m a Soldier. Please remind me what country I am fighting for? At least seven people are dead. She happens to be the only member of Congress married to an active duty military.

An eyewitness:

Dr. Steven Rayle, a former emergency room doctor who now works in a hospice, said that he had witnessed the shootings. He said the congresswoman was standing behind a table outside the Safeway greeting passersby when the gunman approached her from behind, held a gun about a foot from her head and began firing.

“He must have got off 20 rounds,” he said. Ms. Giffords slumped to the ground and staff members immediately rushed to her aid, Dr. Rayle said.

Dr. Rayle said he performed CPR on some of the victims. He said one of the victims was a young child and appeared to be in critical condition with a gunshot wound.

Pima County Sheriff Clarence Dupnik said Giffords was among at least 18 people wounded in the melee that killed six people, including Arizona's chief federal judge, a 9-year-old girl and an aide for the Democratic lawmaker. He said the rampage ended only after two people tackled the assailant.

The sheriff pointed to the vitriolic political rhetoric that has consumed the country as he denounced the shooting that claimed several of his friends as victims, including U.S. District Judge John Roll. The judge attended Mass on Saturday morning like he does every day before stopping by to say hello to his good friend Giffords.

"When you look at unbalanced people, how they respond to the vitriol that comes out of certain mouths about tearing down the government. The anger, the hatred, the bigotry that goes on in this country is getting to be outrageous," the sheriff said. "And unfortunately, Arizona I think has become the capital. We have become the mecca for prejudice and bigotry."

Spencer Giffords, 75, was rushing to the hospital when asked if his 40-year-old daughter had any enemies. "Yeah," he told The New York Post. "The whole tea party."

The price of Tea

Sleeper sell

See Jared Loughner's YouTube clip here.

Tea license

Not qualified to lead

A certified radiologic technologist is an important healthcare occupation. The Bureau of Labor Statistics reports 212,490 CRTs employed nationwide in 2009. Median earnings in 2009 were $43,539 with the 75pct point on the occupation's national pay scale averaging $53,137. You may have met a few CRTs; they are employed mostly by hospitals and imaging centers. Preparatory education programs have trended towards bachelor's degrees in recent years but many CRTs have Associates degrees or non-degree certification, such as the Governor of Arizona, Jan Brewer.

This makes Ms. Brewer the only Governor who lacks a college degree. CRT (and similar) training programs develop valuable technical skills (and Ms. Brewer may have been the best CRT in the history of medical imaging) but the critical thinking skills needed for effective political leadership are born only in rigorous degree programs offered by accredited institutions.

Ms. Brewer recently signed into law anti-immigration legislation that humiliated intelligent Arizonans and embarrassed the United States. She broadly fits the white-hate demographic - 62 years old, lacking higher education attainment. Is it any wonder that she was so easily manipulated by right-wing extremists to legalize racial profiling? The law was authored by Russell Pearce, a former sheriff's deputy with links to hate groups.

Pearce's checkered past includes an accusation of domestic violence and later dismissal from a state government post. Pearce attributed half of Arizona's homicides to illegal immigrants to prod public fear into support of his execrable law. Since law enforcement crime statistics do not include perpetrator immigration status, it's obvious the Pearce was lying through his teeth. Pearce's hatred of brown people extends to babies. Given his druthers, the criminalization of babies will scare most undocumented expectant mothers away from prenatal care. By voting in a bill written by Pearce, Arizona's political leadership has embraced baby cruelty as state policy. Needless to say, Pearce is also uneducated. Is it any wonder he pals around with Nazis like JT Ready?

Pearce claimed ignorance of Ready's Nazism after above photo was made public. Ready's unabashed racial invective has drawn attention from the Southern Poverty Law Center. According to the SPLC, Ready marched with neo-Nazi's in 2007 (above). This led Republican leaders to demand his ouster as Maricopa County GOP precinct committeeman. Ready's own final solution to immigration called for land mines along the border. Considering that Pearce has 35 years experience in law enforcement, his feigned ignorance of Ready's Neo-Nazism is ridiculous.

The SPLC reports that Ready has also maintained racist views in an online profile:

"Sporting his trademark star-spangled necktie, Jason "J.T." Ready is familiar to Phoenix, Ariz., residents, law enforcement officers and journalists as a City Council gadfly and oft-quoted member of the anti-immigration Minuteman Civil Defense Corps.

Online, though, Ready is better known to the nearly 2,000 registered users of New Saxon, a newly popular white-supremacist social networking website, as "Viking Son." His self-created New Saxon profile displays photographs of Ready wearing a kilt, donning a bulletproof vest, and scouring the desert for "illegals" through a pair of binoculars. Ready lists his "turn-ons" as "a woman who loves our Race, Kultur, Heritage, History and Future," identifies the racist fantasy novel The Turner Diaries as his favorite book, and describes himself as a big fan of neo-Nazi teen pop duo Prussian Blue."

The SPLC provides additional background on Ready in profiles of 20 racist/extremists. Ready's includes this motto: "The Purity of the Aryan Race is the most precious resource Nature has to offer All of Humankind." The New Saxon website is an active tool of the National Socialist Movement (NSM). It's intentions remain undisguised.

The Columbia, Missouri Police Department prepared an insightful briefing on NSM before a "protest rally" at the University of Missouri. This excerpted page explains why NSM adherents make frequent reference to "88".

This post has only scratched the surface of a hate network beneath Arizona's new law. Ms. Brewer may or may not be an overt racist but her lack of education has enabled willful ignorance of legislative ties to groups that worship Hitler. Arizona's immigration law is founded on un-American principles. Her actions make it plainly obvious that Ms. Brewer is not qualified to lead.

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UPDATE Aug, 5, 2010: Utah gets a clue. Click here for an insightful analysis by The Economist.

Destiny

The Euro has been in the news lately and media attention has, as usual, focused on one factor in a multivariate situation. Greek sovereign debt is an issue but the Greek economy is so small that if it vanished tomorrow, Europe would forget, in macro-economic terms, by this weekend. The media uses European sovereign debt to explain the Euro crisis.

Hand-wringing now extends to Spain and Portugal. If sovereign debt itself were the core problem, Japan would have imploded decades ago. High sovereign debt is generally a self-solving problem so long as national economies continue on a reasonable growth trajectory (e.g., Japan, to-date). Therefore, the real issue is investor expectations regarding Europe's future growth.

Why are investors concerned?

Because demographics is destiny.
 
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UPDATE: You can download the tool used to prepare charts in this post. The tool is stored on Docstoc, download it here. Zero Excel skills are needed. The tool is operated only with a mouse. Use it with Excel2007 or Excel2010. Do not attempt use with Excel2003. There's also a brief, illustrated walkthrough, a PDF document which can be downloaded here.
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Using historic and projected population data from the UN, we begin with a look at world population trends between 1950 and 2050.

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The UN data covers 196 countries. Between now and 2050, the UN Population Division projects that:

* Average life expectancy will increase 10%, from 69 to 76 years
* Global population will increase one-third, from 7.0 to 9.5 billion people
* Median age will increase one-third, from 29 to 39 years
* Fertility will fall 20%, 2.5 to 2.0 births per woman
* The ratio of persons aged 15-64 years old to total population, the broadly-defined productive population ratio, will fall from 64% to 61%.

Except for exacerbation of climate change caused by a one-third increase in human population and continued, out-sized growth in the global middle-class, this global picture is fairly benign. It should be noted that increasing life expectancy, not birth rate, now drives population growth. Current macro-economic concerns are driven by how the global picture breaks down between regions and countries.

Asia, North America and Latin America do not materially deviate from global averages. However, comparison between Africa and Europe helps to define Europe's emerging demographic crisis. Europe and Africa have been headed in opposite demographic directions for decades. We begin with Africa:

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 Africa forecast:

* Average life expectancy will increase 21%, from 56 to 68 years
* Population will double, from 1.0 to 2.0 billion people (in only two generations!)
* Median age will increase 45%, from 20 to 29 years
* Fertility will fall by half, from  4.7 to 2.4 births per woman
* The productive population ratio will leap from 56% to 65%.

Developed economies have enjoyed productive population ratios that cluster around 65% since 1950. Japan had the highest ratio in 1970 (69%) and peaked 20 years later at 70%. Japan's productive population ratio is now 64%. The U.S. is a model of consistency, compared to other nations. Our ratio remains in a fairly tight  61% to 67% range over 1950-2050.

History suggests that the productive population ratio dividing line between growing vs. stagnant economies is about 60%. The Africa forecast suggests that with establishment of genuine governance and rule of law, Africa's improving demographics could finally propel it out of poverty.

We now look at Europe:

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Europe forecast:

* Average life expectancy will increase 8%, from 76 to 82 years
* Population remains stuck at 760 million
* Median age will increase 18%, from 40 to 47 years
* Fertility will rise, from  1.5 to 1.8 births per woman
* The productive population ratio will drop from 66% to 53%.


In 1950, Europe accounted for 20% of global population while Africa comprised 8%. By 2050, these positions will be reversed. Europe's fertility has been below replacement rate since 1980 and is forecast to remain below replacement rate up to 2050. Europe's current life expectancy exceeds Africa's forecast improvement, 40 years hence, by 10%.

Europe faces an epic demographic crisis. Its productive population ratio is forecast to fall one-fifth over the next 40 years. With the exception of the UK, European countries lack immigration policies rooted in demographic reality. By retaining the Pound instead of adopting the Euro the UK effectively monetized its (comparatively) progressive immigration policy. Brilliant!

Let's look at where the European demographic forecast is most adverse, the 12 countries in UN's definition of "Southern Europe":

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Southern Europe forecast:

* Average life expectancy will increase 5%, from 80 to 84 years
* Population will slightly increase, to 170 million
* Median age will increase 20%, from 41 to 49 years
* Fertility will rise, from  1.4 to 1.8 births per woman
* The productive population ratio will plummet, from 64% to 49% (a 23% decline in ratio)

Compared European averages, Southern Europe is already older, living longer, with lower birth rate and proportionately less productive population. The forecast calls for these demographic differences to get worse. Southern Europe includes Greece, Portugal and Spain. The region also includes Italy, whose demographic crisis has sparked fertility incentives from a few local governments. Southern Europe's productive population ratio is forecast to fall by almost one-quarter.

Why will a steep drop in productive population ratio kill growth in developed nations? Won't technological advances improve productivity in the remaining workforce? While the answer to the 2nd question is "most likely" the answer to the first is "because you must also consider life expectancy". The short answer to the first question is "because taxes will rise".

The flip-side of Southern Europe's 23% fall in productive population ratio is that the unproductive population ratio will jump 42%. Compare this to Africa, where the unproductive population ratio will decline by 20%.  In a macroeconomic context, demographics is truly a two-edged sword. European governments, particularly in Southern Europe, will raise taxes in future to support an exploding old-age population. An average life expectancy of 84 translates to a minimum of 20 unproductive years for each healthy person.

By missing the bigger issue the media has also missed the most likely next big debt crisis. The only developed country in worse demographic shape than Europe is the 2nd largest economy on the planet. Japan's productive population ratio is forecast to fall to 51% by 2050 as its already-stellar life expectancy climbs to 87 years. Deflation already casts a pall over expectations for the Japanese economy.

This analysis also explains why a seeming turnaround in attitude regarding the dollar is really no surprise. The U.S. will get older, its productive population ratio will fall and taxes will rise but the real issue is the relative magnitude of these trends. Total U.S. population will increase one-third over the next 40 years and the productive population ratio will remain above 60%. It turns out that being a nation of immigrants is both a moral cause and a saving grace.

(All analysis by TheRaven).