The boomer wealth cascade, America's local death spirals, Buchenwald's roll call & modes of injection.
Great links, images and reading from Chartbook Newsletter by Adam Tooze
Moriyama Daidō (Japanese, born 1938), From the series Memory of Dog 1982
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By 2045, around $90tn in the US alone is set to be transferred from those born before 1964 to their heirs, according to research by Cerulli Associates.
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Eric Levitz on the inflation problem of progressive macroeconomic policy
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America’s local death spirals
Cairo Illinois is on its way to becoming America’s newest ghost town. Its population, having peaked above 15,000 in the 1920s, had fallen to just 1,700 people by the 2020 census. Alexander County, Illinois, of which it is the capital, lost a third of its people in the decade to 2020, making it the fastest-shrinking place in America. Its collapse has many causes. A century ago the supplanting of river transport by railroads started the decline. In the wake of civil-rights legislation in the 1970s, white-owned businesses fled to avoid hiring black people. In the past decade the demolition of public housing displaced yet more residents. But its biggest problem now is a national demographic headwind. Between 2010 and 2020 over half of the country’s counties, home to a quarter of Americans, lost population (see map). Over the coming decades still more will, because America’s population is growing more slowly. The change will be wrenching, because of America’s demographic and administrative peculiarities.
Between 2010 and 2020 the number of people in the country grew by around 7.4%. That was the slowest decade of growth since the Great Depression (when the population grew by 7.3%). In the 1990s the growth rate was 13%. The main culprit is falling birth rates. The total fertility rate—a measure of how many children a typical woman will have in her lifetime—was steady or rising for 30 years from the mid-1970s. In 2008, however, it fell below 2.1, the level needed to keep the population stable, and has since declined to 1.67 (see chart 1). If it remains below 2.1, only immigration can keep the population growing in the long run. Yet net immigration, too, has been falling since the 1990s. … In 2021 the Census Bureau estimated that the population expanded by just 0.2%, the lowest showing in the country’s history
America’s pouplation also moves around a lot. When population is growing that is not a problem. In a slower demographic regime it becomes a zero sum game.
Between 2010 and 2020 just two states lost population: Mississippi and West Virginia. The population of Illinois was essentially unchanged. All the rest grew. But in 2021, 17 out of 50 shrank. The pandemic doubtless exacerbated the trend, but internal migration shows no sign of stopping, so these contractions are in all likelihood a sign of things to come. Shrinking is bad for many reasons. As people leave a place, once beloved businesses become less viable and close. Schools without enough pupils struggle to maintain sports teams, or bands, or to teach a wide curriculum, even if their funding per pupil remains generous. Death spirals tend to be worse in America because of the remarkable level to which the government is decentralised. Just 8% of spending on primary and secondary education comes from the federal government, for example, and less than a quarter of the spending on law enforcement. Local and regional authorities levy 48% of all tax collected in America, compared with just 20% in France and 6% in Britain (see chart 2). And even America’s federal spending typically comes in the form of grants linked to population levels. So when local tax revenues shrink, services must be cut or taxes must rise.
Research by Christopher Berry of the University of Chicago finds that, as cities lose population, the cost of providing public services tends to stay about the same. “Virtually nowhere reduces the public sector in line with the population,” he says. Exactly why that happens is unclear: it could be that servicing a given geographical area entails fixed costs, regardless of population; it could be that laying off municipal workers is politically tricky. Whatever the reason, the result is that the remaining taxpayers must pay more simply to support the same services.
When high taxes combine with deteriorating public services, people leave.
Source: Economist
Untitled, c. 1981-1985 Moriyama Daidō (Japanese, born 1938)
Admissions and Deaths in the Buchenwald concentration camp 1937-1945
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Enjoying Columbia’s 1968 occupation
Puzzled and dismayed about events on Columbia’s campus? The two things to read are
“On norm breaking” by the admin by Prof David Pozen (Law)
A blistering and brilliant editorial by @ColumbiaSpec
Modes of injection
Untitled 1982 Moriyama Daidō (Japanese, born 1938)
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