Tomorrow evening, I'll be giving a talk at the University of California, Berkeley: My Predictions for The Coming Decade. Here are my notes for that talk. Your comments are welcome--I will see them before my presentation and will revise as appropriate.
The Biotech Breakthrough Decade--including cancer, heart disease, depression, retardation. Global partnerships will create the breakthroughs. Longshot prediction: By 2020, it will be possible to enhance intelligence.
Virtualization Decade: meetings, supervision, companies. Longshot prediction: By 2020: virtual trips will be seen as a vacation alternative.
The Decade of The Incredible Shrinking Job: part-time, temp, automate, offshore. Longshot prediction: A tax will be imposed on a company for each job it offshores.
The End of Conservative Media: Fox News fades, talk radio shrinks. The networks cut news budgets. CNN and NY Times (which may merge) dominates. All of this would impose great cost to society's hearing diverse perspectives. Longshot prediction: By 2020, Fox News dies and then covers only business news. Talk radio becomes predominantly liberal.
The Decade of Thrift: We'll see further housing price decline until a household with $100,000 total income can comfortably afford the mortgage payment. We'll see modular mixed-use housing.
Companies will spend more on collections.
We'll more often repair, not replace. B-to-B biz opp: Buy a successful small commercial/industrial equipment repair business from a retiring boomer.
More of the middle class will be childless. That combined with the continued high birthrate among the poor will not help America's global competitiveness.
We'll see a boom in mini-cars as in Europe (e.g., SmartCar). 2020 longshot prediction: The most popular car will be a plug-in electric Toyota that will get 125 mpg and be fully chargeable in a few hours.
The E-commerce Decade. Despite the slow economy, online spending will continue to rise while and bricks-and-mortar spending will decline. Barcode-enabled smartphones (See this video) will hurt bricks-and-mortar businesses: consumers will shop at stores, bar code their item and buy it cheaper on the Net. Longshot prediction: By 2020, the number of malls will have shrunk by 80% from current levels. Many chains--e.g., Macy's, Cost Plus, Barnes & Noble, will have gone completely online.
The Declining Marriage Decade: The trend was boosted decades ago by Murphy Brown but now, media/school/college-induced disdain for males, decline in the # of women who feel parenthood is a necessary box to check in life, unemployable men, increase in gays/lesbians, increased economic viability of women (unmarried women in their 20s earn 116% of what unmarried men earn) and anti-male divorce and child custody laws will reduce marriage rates. Longshot prediction: Only 50% of people the nation's households are made up of married couples. By 2020, it will be only 33%-including gays, whom I am confident will have the right to marry in all 50 states.
The Decade of Campus Decline/Online is Fine. People won't or be able to pay for fancy campuses. The only reason this trend has been slow to accelerate is that govt. so heavily subsidizes the high tuition with financial aid. The more the govt. gives, the more the campuses raise their tuition and fees. Degree proliferation: the master's is the new bachelor's. Longshot prediction: By 2020, many universities, including major publics, will offer a completely online bachelor's degree.
The SinglePayer Decade: Businesses that, under the Obama Plan, will be required to pay not only for their workers but a share of the poor, will have programs (including cash incentives) for weight loss, blood pressure and diabetes control. But the already overtaxed health care system will collapse resulting in a single-payer approach being adopted. Truly longshot prediction (more of a hope:) a return to fee-for-service + catastrophic insurance + a safety net for the truly needy.
The Pot Decade. The slow economy combined with medical marijuana (Already, there are more legal pot dispensaries in SF than Starbucks.) will bring increased pot abuse. Longshot prediction: By 2020, pot is legalized in California but it's repealed by 2025 when pot use among teens soars.
Capitalism's Decline Decade: Ever more GDP will be transferred from the private to the public sector, and from the haves to have-nots, Higher taxes would generate too much protest from the middle class so the govt will use more subtle ways to increase net taxes received: a recent example: L.A imposing $100 fine for a barking dog. Using environmental benefit as a balming explanation, we will be subject to ever increasing tolls at bridges, tunnels, and roads (that were supposed to expire when those bridges were paid for.) The average American pays 48 cents per gallon in gasoline tax. Municipalities are replacing parking meters with kiosks that issue receipts so you'll never again be able to pull into a meter with time left on it. Cameras at traffic lights are proliferating, with $300-$500 fines for red light runners. Even a stop sign violation, where I live, costs $250. (Alas, I learned that from first-hand experience.) San Francisco has just installed hundreds of additional crosswalks, and if a driver fails to yield to a pedestrian, the fine is $500. The IRS budget and its technology will increase. Jobs should be plentiful for government employees and contractors involved in "revenue enhancement." Longshot prediction: The U.S. elects an officially Socialist president in 2020.
The Decade of War Miniaturization: suitcase nukes, cyberattacks, bioweapons. Longshot prediction: By 2020, a terrorist will have successfully detonated a suitcase nuclear bomb or poured a bioweapon into the a small city's (e.g., Peoria) water supply.
The Nuclear Decade: Nuclear energy will burgeon. Longshot prediction: By 2020, solar and wind energy will have been fads that faded when the delimiting physics will become clearer.
The Islamo-Latinization of America. Both groups have high rates of immigration and births. Increasing numbers of African-Americans are converting to Islam. Despite promises of border enforcement and a high-tech 2,000-mile wall, it will fail: the government admits it can't stop enough trucks. Our prioritization of "civil liberties," our celebration of diversity, and fear of being even unfairly called racist will preclude our seriously enforcing borders. Example: Even the modest Arizona illegal-immigrant law has, in the mainstream media--e.g., Time magazine, been called: "police state, apartheid, racist, Nazi--'Papers!')." There will be amnesty with token fine (no return to Mexico required before legally returning.). Latino USA (the name of an NPR radio program) is apt. Latino but not Islamic immigration is worrisome because it is the first large wave of immigrants that is unscreened for health or criminal records, and to immigrate, may need no more ability to plan or delay gratification than to hide in the bottom of a truck for the brief ride from Tijuana to San Diego. Also different is that many Latino and Islam advocates are insisting their people not assimilate but retain their native culture. So the U.S. will ever less have a unifying culture--Optimists call that a salad bowl in which the total is greater than the sum of its parts; pessimists call it balkanization that will lead to cross-cultural enmity, civil unrest, and terrorism. Longshot 2020 prediction: As with the Indian reservations, the U.S. will cede part of New Mexico to Mexican sovereignty. Longershot prediction: Mexico becomes America's 52nd state. (Puerto Rico will be the 51st.)
The Decade of Asia's Sunrise and America's Sunset. America does retain strengths: women and minorities have opportunity, entrepreneurial culture, freedom of speech, universities while profoundly needing reinvention still attract smart people from around the world, and the U.S. remains for now the centers for finance and for high-tech and biotech innovation. But as society gets ever more tech-centric/knowledge-centric, the majority of Americans will suffer an ever larger achievement gap compared with the average Chinese or Indian national. And our politics of so-called "redistributive justice," while well-intentioned, will make the U.S. ever less able to create a competitive workforce--Example: mixed-ability classes. Another disadvantage: China has a more balanced approach to environmentalism. Here we'll spend enormously to preserve a snail darter or spotted owl, let alone a Louisiana swamp--oops, I mean "wetland." Liberal "kindness," which redistributes from those with the greatest potential to create jobs to those with the least will ever more be fueled by a media more interested in liberal activism than fair reporting--with GoogleSearch and GoogleNews the dominant players, manifested by Obama's election--The National Journal ranked Obama the #1 most liberal senator. Longshot prediction: Over the coming decade, the investment return on China's equivalent of the Dow 30 (stock symbol FXI) will be twice that of the Dow. I've moved much of my savings from Vanguard S&P 500 fund to FXI.
Final point: Humankind has always figured out a way to make progress and will continue to do so. In balance, the world will be better in 2020 than in 2010.
13 comments:
Marty, great post. I have two points: 1)I completely agree with your point about the proliferation of traffic fines as a subtle way of increasing net taxes received ("Capitalism's Decline Decade"). In San Francisco, an astonishing number of new yellow pedestrian crossing signs have sprouted along major streets, along with increased enforcement activities (read: sting operations) to support these new signs. Just the other day, I witnessed two cars being pulled over simultaneously by two separate motorcycle officers for failing to yield to a pedestrian, as part of some sting operation; the fine is purported to be about $500. While I wholeheartedly agree that our streets need to be made safer from reckless drivers, I can't help but think stop signs or traffic lights would be more effective tools if pedestrian safety were truly the goal. It's pretty obvious that the new yellow pedestrian signs are designed to trap drivers in an effort to generate much needed revenue for the city. 2) Your decision to move much of your savings over to the Chinese market index FXI caught my attention. At this point in time, do you honestly believe the Chinese market is transparent enough to warrant that kind of trust? While I agree that in the long run, China's markets will probably offer greater returns than the Dow, I'd be fearful of putting anything more than 10% of the equity portion of my portfolio into the Chinese market. As it stands, I don't trust the U.S. market very much these days because of how big players like Goldman Sachs can "game the system." I'm inclined to think the situation is even worse in a less transparent market like China's.
In reference to the Decline of Capitalism, it's already begun: http://bit.ly/biU2lK)
Your graf on 'Islamo-Latinization' goes on to discuss almost exclusively Latinos. (I think aside from a nod to the birthrate in the Islamic community.)
I spent a lot of time 15 years ago wondering about what would make a sustainable business: that is, a business which can keep providing its product or service at a relatively constant rate without a need to increase workforce or output volume - without commandeering increasing resources.
What I realized is that the current economic model simply doesn't support that approach.
During your debate on Sunday, one of the discussion points made was that new immigrants' birthrates are increasing the population of the US above the level that current US citizens would maintain it at.
Of course, there's a lot of history and other stuff packed into that assertion, which I'm not going to go into.
But, the fundamental problem is that our current economy, in many ways, requires population growth to sustain itself. If a business does not grow productivity, billed hours, sales, whatever year on year - it is not a successful, sustainable operation, it is a failure.
If we don't have an ever-increasing pool of people to buy property, we can't keep using real estate to drive large chunks of the economy - banking, construction, transportation etc.
If we don't have an increasing pool of taxpayers, we can't fund a lot of the programs which, as a country, we've decided are important: the military, social security, medicare, now broader health reform.
I predict a backlash from boomers against bans on immigration once the reality of what it would be like to live in a society with stable population but economics predicated on growth in all things starts to sink in.
Anonymous, $500 for a crosswalk violation--best example yet re drivers.
Re FXI, I believe that lack of transparency will have little effect on the share price, especially long-term. This is especially true with FXI because that etf consists of China's 28 largest companies.
Anonymous,
Yes, thx re pointing out my not including details re Islamification. Will fix.
I believe your analysis is mainly true but it ignores the economy-building power of creating new products and services. It needn't be technological. For example, a national PR campaign to encourage people to hire a homework helper for their kids would increase consumer spending with no population increase.
But I, for one, don't care about economic GROWTH. My metric for a good society would be a quality-of-life metric. It wouldn't be Bhutan's Gross Happiness Product because I believe happiness shouldn't be life's goal--otherwise all we'd have to do is eat, have sex, and watch comedies all day. But it would be the mean rating of a person's job, out of work life, and civic involvement, broadly defined.
Marty, I understand - and believe me, empathize with - you not wanting growth to be the end-all and be-all. That was where I started - I really wanted to understand sustainability.
We don't have a model for sustainability rather than geometric increase. We just don't.
Unfortunately, all of our retirement savings, Vanguard shares, home prices, etc - all require continuing growth if we don't completely retool capitalism.
The current model has population increase as a necessary but not sufficient fundamental input for a healthy economy.
Interesting analysis! Two things I'm curious about:
1. Why do you believe that conservative talk radio will wither and die? Fox News has good ratings, and hosts like Rush Limbaugh, Glenn Beck, and Bill O'Reilly have huge audiences. The one big attempt at liberal talk radio (Air America) never caught on.
2. You said there would be more gays and lesbians. Do you believe that more people will choose to be gay, or that gay people will be more visible?
"Longshot prediction: The U.S. elects an officially Socialist president in 2020."
Won't happen. The S-word is too much of a poison pill in our culture; it's as likely we'd elect someone who called himself a "Fascist" or a "Nazi". Even most liberal Democrats I know call themselves "Liberal Capitalists", "Welfare Capitalists", or "Social Democrats" (carefully leaving off the -ist) if you ask them. It would be like the Communist Party of China out-and-out calling it's system Authoritarian Capitalism; the negative associations are just too great, whatever the reality may be.
That, and I wouldn't worry too much about losing our edge against China in the education department. I'm a teacher at a community college in Shanghai, and let me tell you- they've got nothing on us. Their system is abysmal. Students are always amazed when I tell them about my education (in a typical public school system in the American midwest). I'd rather have one good American-trained professional than 10 graduates of any non-top-ten Chinese college or university. Even their top ten aren't that great; only Peking University approaches the quality of an American institution, and that's not at the level of our best schools. India's IITs are excellent, but India is a nation of a billion people mired in a feudal anarchy with a tiny elite on top- imagine a middle-ranked European nation with a massive feudal albatross around it's neck. They can produce some innovations, but they won't be enough to drag their country out of the dark ages.
If America can solve it's looming debt crisis, reform our political system (even to the point of writing a new constitution), and build a new energy infrastructure to replace our doomed oil-based economy, we can arrest our decline and remain the world's leading power. We have all the talent we need to do it. Do we have the will?
Thanks for the insightful and very interesting article.
As for the previous comment about the growth model, there's a good article ('Nothing Grows Forever: Why Do We Keep Pretending the Economy Will?') in the current issue of Mother Jones magazine. That and a recent article in The Futurist magazine describe how job-sharing arrangements might become necessary: people will be working fewer hours but will also have lower income. Labor-intensive jobs such as organic farmer or nurse will be encouraged as part of a "Green New Deal", according to the first article mentioned.
As for your point about marriage, you might want to consider how the 'decade of the shrinking job' could motivate many people - especially women - to scramble for marriage as an additional means of survival. (I've seen that all my life, having been raised in the Rust Belt - where people, especially women, seemed anxious to marry early - and then moving to DC.) Also, more women nowadays are willing to "marry down", partly due to a (supposed) shortage of men in some large metro areas such as DC and NYC. I'm an example of that. My husband is a recent immigrant, and I make 5 times more than he does. I have two undergraduate degrees and am almost done with a master's degree; he has no degrees.
Anonymous, new Pew and Gallup polls already show an increase in the percentage of U.S. residents who have positive opinions of socialism.
I don't think the US will ever elect a Socialist as president, despite what Faux News might be scaring their viewers into believing.
Even in the Great Depression, in 1932 (with 25% unemployment), when Communist and Socialist weren't pejorative labels, the Socialist Presidential candidate Norman Thomas received 884,000 votes, compared to Franklin Roosevelt who received 22 million and Hebert Hoover who received 15 million.
I might be too late for my comment to be relevant, but I'm a little surprised that the effect of genome sequencing wasn't emphasized. I think it was eluded to when you mentioned biotech and disease.
Within probably 5 years, whole-genome sequencing will become routine. This will affect how medicine is administered, affect perhaps how people choose mates, and bring up a whole host of privacy issues. I don't think we can even imagine what is on the horizon once we have access to that level of genomic information.
This will be the decade of the genome.
Thank you for this interesting article, Dr. Nemko.
I agree that online/distance education is the future. Why spend $20,000 on a semester's load of courses when you can enroll in one of these degree programs -- http://www.londonexternal.ac.uk/prospective_students/undergraduate/goldsmiths/cis/fees.shtml -- and pay just $6k for the full degree?
How about $11k for an MBA?
http://www.londonexternal.ac.uk/prospective_students/postgraduate/soas/mba_banking/fees.shtml
Post a Comment