BOOM, BUST & ECHO: HOW TO PROFIT FROM THE COMING DEMOGRAPHIC SHIFT
By David K. Foot with Daniel Stoffman (Macfarlane Walter & Ross,
245 pages, $29.95)
David Foot insists that demographics, the study of human populations, “explains about two-thirds of everything.” The University of Toronto economist concedes that the notion may be difficult to swallow, but in Boom, Bust & Echo, he and his co-author, Toronto journalist Daniel Stoffman, argue that most imponderables—from real estate prices to constitutional reform to emotional needs—are shaped by the population’s age distribution.
Foot, a compelling speaker, has been preaching this gospel for years, and many of his forecasts have been right on the money: real estate developers wished they had listened to him in the late 1980s when he predicted the catastrophic slump in demand that occurred in most of Canada a few years later. The reason, he said then, was simple: most baby boomers had already entered the workforce and bought their m homes. Boom, Bust & Echo is full I of persuasive tidbits like that, o But ultimately, the book works | best as a collection of thoughtprovoking insights: there is just too much that is missing, such as the impact of science, politics and globalization, to make Boom,
Bust & Echo the one-stop guide to modern life that its tone often suggests it is.
Foot and his editors capitalize on everyday anxieties such as where interest rates are going or whether quitting a job really means stepping into an empty swimming pool. The book is divided into self-contained chunks that offer practical advice on areas such as the stock market, employment patterns and even the future of the family. Almost all that is needed to prosper in the next century, Foot argues, is to appreciate that Canadian society is divided into nine so-called cohorts, ranging from those born before the First World War, to the ubiquitous baby boomers (1947-1966) to the echo created by their children (19801995) to what he calls the “millennium kids,” infants and those yet to be born. The
needs of these groups, and their relative sizes, he says, will have a huge impact on everything from the popularity of gambling to the hourly pay of teenage babysitters.
He predicts, for instance, that baby boomers have only begun to flex their collective muscle in Canadian stock markets, and especially in equity mutual funds. The surge of 1993 is likely only a precursor of what is to come, Foot says, since all of the boomers will be over 40 by 2006, an age when people tend to invest and save rather than borrow and spend. When that happens, unprecedented amounts of capital
will surge into stocks, pushing prices sharply upward. The laws of supply and demand also mean that the era of super savers will usher in years of low interest rates. With legions of boomers becoming lenders to the much smaller group of busters, interest rates are likely to decline. Boomer affluence will also eliminate the national deficit and help repatriate the debt, Foot predicts, as Canada shifts from being a nation of young, indebted spenders to one of older, well-established investors.
Canada’s baby boom was the biggest in the industrialized world, and demographers will continue to track its influence for years to come. But Foot a pre-boomer who refuses to reveal his age, delights in spearing conventional wisdom. The much-heralded return to family values, he argues, is
nothing more than the sight of huge numbers of boomer parents grappling with unruly children. Parental emphasis on the family is nothing new, Foot points out Ditto the smaller trend among older boomers to volunteer, or to abandon careers in large corporations in favor of less lucrative but more rewarding work, such as running a charity. The boomers are not more socially conscious than other generations, says Foot It is simply that many are now heading into middle age, when people tend to become more generous.
With their much-vaunted self-absorption, boomers are also lending cachet to a raft of activities they once viewed as hopelessly sedate. Golf, gardening, walking, birdwatching, even resting, will be the top leisure activities in the next century, Foot says. Exotic travel and gambling will take off as the number of people with time and money to burn increases dramatically.
All this is fun, and perhaps even useful, but Foot is at his best when he ventures into weightier topics such as education,
health care and the future of work. To ease the problem of too many middle-aged people occupying the best jobs, he suggests, work should become more flexible. Companies could save money and refresh their workforce by allowing people to work part time: there would, he says, be no shortage of takers among the fully employed, while those in their 20s and 30s would gain the leg up they so desperately need.
Boom, Bust & Echo is a handy and readable take on what comes next in the world of profit and loss. But almost anyone concerned about the future could benefit from the refreshing—if sometimes overly narrow—approach it takes to some of Canada’s most pressing problems.
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