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Wednesday, April 4,2001

Deflating the overpopulation myth

Recession and population trends go hand-in-hand, even though few consumers understand it or believe it. Although recent population explosion headlines alarmed Americans-with Colorado's Front Range growing faster than most other regions-too little population growth is central to our nation's latest economic downturn.

Novice investors like to blame the looming recession on Federal Reserve Chairman Alan Greenspan. They say he should have reduced the cost of borrowing money with more aggressive interest rate cuts. They sound like children begging for cash after blowing their allowance on candy.

Greenspan's reluctance to pump more cash into the economy has everything to do with population trends. Greenspan fears inflation, linked to a labor shortage he warned about that occurred in the mid and late '90s. Last spring, Greenspan asked Congress to increase the annual immigration quota by 130,000 in order to fill growing labor gaps. Congress increased visas for high-tech workers, but not by nearly the number industry needed.

Nixonian contraception

The labor shortage Greenspan tried to curtail was in part created by policy decisions made three decades ago by the Nixon administration. John D. Rockefeller, as chairman of the Commission on Population Growth and the American Future, urged Nixon to curb the US population growth rate. Congress responded with the Family Planning Services Act, which authorized $382 million for family planning programs, and Nixon signed it into law. It was the impetus for the onslaught of public education campaigns about family planning and government support for contraception and abortion.

By 1977, Nixon's population control plan had worked so well that America's birth rate dropped below the replacement rate. "It is interesting to note that the 1977 shortfall in births was approximately 130,000, the number Greenspan noted we now need," said Steve W. Mosher, president of the Population Research Institute, a few days after Greenspan asked for more immigration last spring. "Had the birth rate remained at replacement, we would each year have 130,000 more young Americans in the work force or completing college, beginning graduate school or in the military, forming families and buying homes and cars. America's current labor shortage would have been partially-or completely-offset."

To understand Greenspan's reluctance to bail out the economy with sharp interest cuts, one must understand the possible economic consequences of a labor shortage.

Let's suppose that the ABC Widgetboard Corporation is struggling to find all the circuit engineers and assemblers it needs to meet the high demand for its product. Across town, the XYZ Widgetboard Corporation finds itself in the same position.

So the XYZ company calls up Joe Widgetmaker, a top engineer at the ABC factory, and offers him a better paying job. Joe tells his friends, who begin offering their services to the XYZ company. The ABC company, in response, begins upping wages. XYZ Co. one-ups the latest ABC pay increase, and the companies go back and forth with pay raises trying to recruit and keep employees who are essential to meeting market demand.

To pay for these higher wages-financed with low-interest money borrowed on Wall Street-ABC and XYZ pass on the higher overhead by inflating the price of widgetboards. The widgetboards go in computers that are used by a variety of businesses that provide goods and services to consumers. Because the widgetboards cost more, the cost of computers goes up. To pay for the higher priced computers, various providers of goods and services pass on the costs to consumers by upping the prices of goods and services.

The inflated prices decrease the buying power of the dollar. Middle and working-class consumers, unable to pay the higher costs, reduce consumption. Slow consumer activity results in expensive inventory surpluses and cash flow problems throughout the economy. Recession ensues, halting productivity and innovation.

The inflationary nature of slowed population growth, as seen right now in developed countries all over the world, points to a greater truth: The human mind is the only natural resource with any intrinsic value. What is an economy, after all, but a system of trust, agreements and accounting in which human intellect works to improve the human condition. People are the economy. It's our cars, houses, food, clothing, health care, recreation and amenities that comprise the economy. So how, pray tell, can anyone say growth doesn't pay its own way?

It's what people do with their heads, hearts and hands that makes an economy and forms social identity. Steel has no intrinsic value in a world that has no cans or cars or horseshoes. Oil, just more than a century ago, had no value at all. So imagine the "junk" on our blue rock that might be tomorrow's treasured commodity. Will a noxious weed cure AIDS? Possibly, but only by way of human economy-AKA innovation and productivity.

We are nature

People are the world's greatest natural resource. Every invention, production line and human transaction is a natural occurrence. Yet mainstream environmentalists sounded an alarm when the world's six billionth baby was born last year. Why are they frightened? Humans are better off than ever in recorded history? Socially and morally, the vast majority of humans are better off in a world of economies that have nearly eliminated evils such as legalized slavery, child labor and deadly work conditions.

Wildlife and Mother Earth are better off today-in industrialized nations-than a century ago. That's because in modern economies we have the luxury of saving not just ourselves, but wood ducks, spotted owls and scenic vistas-something no other species has ever done.

It's indisputable that more vegetation grows on the planet today than at any time in recorded history. Beyond question, more people are fed, healthy and living well today than at any other time. So it's fair to surmise that human productivity and innovation-fueled by population growth-are generally more constructive than destructive.

Money is green

Humans have a right to inhabit and use Planet Earth. Only in primitive Third World regions can one argue that the environment and the human condition are in a downward spiral. In his book Through Green-Colored Glasses, Wilfred Beckerman-an Oxford Emeritus Fellow and former member of the Royal Commission on Environmental Pollution-points out that Third World ecological problems are a direct result of poor economic development. He says primitive cultures simply have not produced the technology necessary for environmental protection, nor have they accumulated the wealth to buy it from abroad. To do either, they must industrialize and grow, he argues, writing: "The best-and no doubt only-route by which these countries can overcome their appalling environmental problems is to become richer."

Which means industrialized nations, such as the United States, must help them. To do so, we'll need growing and thriving economies, which result from growing popultions filled with innovative minds and constructive hands.

A growing population has tamed and improved our planet. It's a trend that should continue until we figure out how to leave the planet or an asteroid crashes to Earth and kills us all. Send letters to the editor to: letters@boulderweekly.com. Fax: 303-494-2585. Snail mail: Boulder Weekly Letters, 690 S. Lashley Lane, Boulder, CO 80305. Contact Wayne Laugesen at Wayne@Laugesen.com.

Wayne Laugesen can be reached at Wayne@Laugesen.com or 303-312-0921. Send letters to the editor to: Boulder Weekly Letters, 690 S. Lashley Lane, Boulder, CO 80303; e-mail to letters@boulderweekly.com; fax 303-494-2585.

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