Drugs & Demographics - National Tragedy, But Where From?

Authored by Jeffrey Snider via Alhambra Investment Partners,

In 1928, the fertility rate of American females (aged 15 to 44) was 93.8 per 100,000. By 1931, the first year of full Great Depression and collapse, the rate had declined to 84.6. It would bottom out, unsurprisingly, around 1933 and 1935 and the end of the contraction part of the depression. But what made that economic event “great” wasn’t just that one forward piece. It was instead the fact that it lingered on and on for more than a full decade.

As such, fertility rates in America would remain subdued until the later years of WWII. It was one reason economist Alvin Hansen conjured his (incorrect) secular stagnation thesis. Without the demographic tailwind, he surmised, growth would be exceedingly difficult as a baseline matter.

But what if it was the other way around? What if growth came first and then came the babies, as they did following WWII and the restoration of economic function after sixteen years of pent up demand and persisting unwanted pessimism (plus more than a little stabilization to the global monetary system).

Fertility rates during the Baby Boomer years, defined as 1946 through 1964, were an impressive and wholly unexpected 113.4.

There are always grave social and political consequences to prolonged stagnation or depression. It goes way beyond mere statistics of output and labor utilization. The US came out of the Great Depression in many ways nothing like how it went into it. People accepted a very different form of political arrangement (New Deal, to put it simply) because the old way clearly didn’t work – even if nobody could agree what it was, exactly, that constituted the old way.

We have, of course, experienced already these social symptoms during our lost decade. The economy starting in August 2007 shrank, and never recovered. For Americans, the cost in terms of labor has been huge, some 15 or 16 million who don’t fit in the official definitions for the labor force, not because of their choice but because they linger in the slack the mainstream narrative wants to omit. Economists attempt to ignore them for their huge blot on the official record.

As a society, of course, we increasingly cannot overlook what has become perhaps the first major social disruption of the Lost Decade; the opioid crisis. As Alvin Hansen in the thirties, economists today have it backward, trying to fit the drug problem as the cause instead of the effect. They desperately want to do so because that would legitimize the unemployment rate which doesn’t include those 15 or 16 million, and therefore would explain the Lost Decade as a non-economic or non-monetary factor.

Today, President Trump announced that he was declaring it a National Emergency. By “it” I don’t mean the economy, unfortunately, but rather the symptom drug epidemic. I can’t help but wonder if this is the wrong approach:

I don’t mean to make light of the situation because this is serious business and a national tragedy. But we are looking, as we so often do, in the wrong place for blame and therefore solution. The answer to such despair that might engender so much escapism is the satisfying hope that only economic opportunity can afford.

I firmly believe that someday there will be such growth again. I also believe that there is lingering at the contours of all this another Baby Boom should (when) it happen(s). It’s been so long that I feel it practically inevitable, an entire generation of Americans, bordering on two, who have come of age under some level of atrocious economic conditions (not quite 1930’s, but not that far off, either, as time progresses). How might they respond to what we all once took for granted?

The variables are how long it might be before we see it happen, and in what form the transformation takes. I think we all would prefer to skip repeating the first half of the 1940’s to get on with what followed (including the monetary stabilization piece). Time, however, isn’t a charitable factor when stretched out for so long. The clock, for good and bad, is ticking. There is nothing secular about that long ago stagnation, just as there isn’t about this one.


Croesus Joe Davola Fri, 08/11/2017 - 13:53 Permalink

Legal or not, people who want to get messed-up will find a way...always have, always will.

The "Opiod Crisis", imo, is the direct result of the "Economic Crisis", and the huge swath of people that the so-called 'Recovery' left behind. If these people felt that they had a future, they probably wouldn't want to spend their time screwed-up on stuff.

Despair, depression, and feeling hopeless? Go get stoned...or so the thinking goes.

In reply to by Joe Davola

GUS100CORRINA homiegot Fri, 08/11/2017 - 13:52 Permalink

Drugs & Demographics - National Tragedy, But Where From?My response: The question was asked: Where is this coming from? Ladies and gentlemen of ZH and the community in general. Many of you are probably NOT going to like or agree with my comment on this article, but I will present it regardless because the data supports it.This all began when America kicked GOD out of the public square in many places and threw Jesus Christ under the bus. We removed the Bible, prayer and the 10 commandments out of the schools. Below is a video from a young David Barton (1962-63) with charts and graphs included that show the fruit of these decisions. And yes, the fruit is ROTTEN to the CORE with dramatic increases in violent crime, divorce rates, drugs, abortion and sexually transmitted diseases.The Devastating Effects When Prayer Was Removed From School in America in 1962-63 - David Bartonhttps://youtu.be/1No--GpdqCY   (Video about 8 minutes)With NO MORAL ABSOLUTES, all HELL is breaking loose in American cities and other places.The charts and data in the video speak for themselves.2 Corinthians 3:17 (ESV)Now the Lord is the Spirit, and where the Spirit of the Lord is, there is liberty and freedom.

In reply to by homiegot

what happened carambar Fri, 08/11/2017 - 14:27 Permalink

This also has to do with our government introducing "problems" that can be solved pharmaceutically.  In the 1990's the government decided on third of our population suffered from chronic pain, pharma followed and physicians prescribed.  This was done to the inner cities with crack cocaine decades before by the CIA.  Government is in the drug trade and profits on both ends procurement and prohibition.

In reply to by carambar

SmokeyBlonde carambar Fri, 08/11/2017 - 19:12 Permalink

Not that I disagree, but could the issue be the US was founded as essentially a Christian nation with Christian ideals, whereas Europe didn't have that foundation/burdan (depending on one's perspective)?Just wondering if the Fall of the ideals of the US is that much more pronounced because we were - rightly or wrongly, doesn't matter - seen by most as The Shining City on the Hill and our failure has a deeper impact?I honestly don't know ... I'm just a red-neck corporate peon wondering about life on a Friday night ...

In reply to by carambar

crazzziecanuck GUS100CORRINA Fri, 08/11/2017 - 15:41 Permalink

Sorry, but the problem isn't the lack of religion.  The problem is that the national leadership dutifully attends church every week as if that can wash away the sins they've accumulated that week.  Imagine them not getting photographed on the front pew?   This is how they dupe the "faithful."Our lack of leadership in all spheres of life is starting to catch up. My worry is that we end up with a fascist in a position of power.  I don't worry about Trump, I worry about the next one.  I wouldn't surprised if he/she had a flag in one hand and a Bible in the other.   As I've said before, voters do not vote for honest people so the masses will cheer on as the leader strangles dissent with one and beats people to death with the Bible.

In reply to by GUS100CORRINA

waspwench GUS100CORRINA Fri, 08/11/2017 - 16:57 Permalink

There is an agenda to destroy Western Civilization which has been in place for decades now.   The opioid crisis is one painful result of that agenda.The schools have taught a nihilistic creed to our children and the moral underpinnings of our society have been removed.    Blatant corruption in high places  has demonstrated to the entire population that crime does indeed pay and that there is nothing is to be gained by being ethical or moral.Our Society is reaping what our leaders have sown.   It is bad now and it will get a lot worse until the people realize that a society cannot function without ethics and morals and acts to restore them.

In reply to by GUS100CORRINA

hedgeless_horseman Fri, 08/11/2017 - 13:16 Permalink


"I don't understand anything," she said with decision, determined to preserve her incomprehension intact. "Nothing. Least of all," she continued in another tone "why you don't take soma when you have these dreadful ideas of yours. You'd forget all about them. And instead of feeling miserable, you'd be jolly. So jolly," https://www.huxley.net/soma/somaquote.html


4. Read, Brave New World, by Aldous Huxley

English herbsman Fri, 08/11/2017 - 13:25 Permalink

Prohibition is the problem, not the drugs. Decriminalise, Legalize and treat addiction as a medical issue. If people want to take drugs recreationally allow them, prohibition is one of the most insane ideas in human history. It only benefits both sides of the drug war (Government & Corporations and the Criminal Enterprises), everyone else suffers due to it, regardless if you take a drug or not. 

two hoots Fri, 08/11/2017 - 13:32 Permalink

Individual responsibility, an American lost idea.   We are in such a muddle...so we (Congress) will throw money at it and everything else that weighs on our image. One does not need to enter the OMG (tune of pariots) depression because they have the oldest IPhone in the group. 

Angry White Guy Fri, 08/11/2017 - 13:31 Permalink

The author has one thing right, the best anti-drug that can be given to a population is the prospect of economic and social upward mobility...and a culture that promotes normal family formation.All of which the current system has fucked up, seemingly permanently.  Hence the escapism, pessimism, and darkness hanging over society.Wonderful 'country' we've created.

ET (not verified) Fri, 08/11/2017 - 13:32 Permalink

The real national tragedy is the declining value of the dollar from its excessive issuance and the diminishing US Treasury gold per capita.