The End of the World

The End of the World

In case you hadn’t noticed, I like bold headlines. All writers become aware that their readers decide in the first paragraph of their stories whether this among many stories available to all readers at all times will interest them and be worth reading in its entirety. Sometimes, when a thought for a story strikes me, I sit and ponder a title or headline before I organize and commit to writing my thoughts. Usually I reach for a witty turn of phrase, but many times a song comes to mind. Today, a misty Saturday morning, I just read my full morning news array that dedicates itself to what our fearlessly fearful leader has been up to and how the world markets have reacted to his and all other flailing. My mind is clearest in the light of morning, so I also run down many updating paths in the areas of my greatest interest. You will notice that one of the categories I have defined for my stories is Retirement. Your initial thought that I am being introspective about my settling in to my aging skin is not incorrect, but I have also been a student of Retirement as a discipline for the last thirty-five years. Sometimes our passions define our work and sometimes our work defines our passions. My obsession with Retirement is a case of the latter. In 1985 I was thrust into a place that required me to get my arms around an investment in a set of businesses focused on providing future retirement benefits to a nation of people working hard to make their country a just and modern society. The country was Chile and when I first became aware of Chile in college, it was to study its struggle with social equality and economic prosperity, two concepts which should be universally conjoined, but which were being juxtaposed between the Marxist Salvador Allende administration and its despotic overthrow by General Augusto Pinochet. There are few social programs more driven by a sense of equality than pensions and it was a Chilean pension investment a decade after the Pinochet coup d’etat that changed my view of the world.

Today I read that the net impact of the Coronavirus on the worldwide pension funding shortfall is highlighted by the Dutch pension systems funding level going from 105% to 70%. Few countries have been more frugal and have spent more time aligning their social structure to insure adequate pension funding than the Netherlands. Few could ever claim overfunding and yet the generally accepted danger zone threshold of underfunding is 70%. There are only a few centers of excellence in the study of pensions and perhaps the most prominent is at the University of Pennsylvania Wharton School. A report from them now highlights that the demographic changes of most note (declining birth rate and increased longevity) are persistent enough (even more so post-COVID) to make dramatic changes to the global retirement landscape both inevitable and urgent.

This set of noteworthy facts weighs very heavily on me. When I wrote my book Global Pension Crisis in 2013, I tried hard not to be too alarmist despite the numbers that were screaming at me. We have generally seen great risks to mankind find resolution through the ingenuity of man. One of the deep thinkers on the topic of pension sufficiency is Laurence Kotlikoff of Boston University. While I said there was a big problem we needed to address to balance the retirement needs of the aging people of the world and the growth needs of the younger generations, Kotlikoff said there was a one in three chance that the crisis was so severe that it meant “game over” for the global economy. I would imagine that Professor Kotlikoff is recalculating his odds right now and that the “game over” scenario has now risen above 50/50. I have emailed Kotlikoff and asked him for his updated views, and he tells me that the wildcard is the new Federal Reserve policy of bailing out everything in sight and a willingness to risk inflation to stay clear of deflation. That will not be good for holders of financial assets and will favor real assets, but so be it. He nevertheless ended his message to me with “Otherwise, we have a major problem — bigger by far than ever.”

We all spend our lives under the shadow of finality. I remember clearly the moment in 1985 while I was wrestling with Chilean pensions when my oldest son was in the car with me when we saw a dead deer by the side of the road. Believing in honest communication, I explained to him as we drove that all living things eventually die. His mind processed this information and asked me if his grandmother, who was quite close to him, would die. I explained that she would, but not for some time. He then asked if I would die and I told him I would and that it would likely not be for many many years. He then got to the nub of the issue and asked if he would die. There you have it, all cerebral beings must come to grips with their own mortality and hopefully find faith and meaning in the continuity of the species and the natural world at large. Life does go on. The frailty of mankind is bundled in religious meaning that tells us that there is life after death and that the soul is such a unique and transcendent entity that it goes on and on forever in one form or another. It’s a nice and comforting thought, whether its true or not.

So here I sit on a Saturday morning that began misty and is now quite sunny. That is the metaphor of life. Wait and the sun will come out eventually. The news flash that the world will come to an end is not news at all. It was always coming to an end and we must reassure ourselves that the way of the world is that we just keep hoping that it ends far enough into the future that we don’t have to wrap our minds around it too much and that it doesn’t impact any of our descendants that we can see and know during our lives. It takes a very special person to worry too much about that in the future which he or she cannot see and cannot even truly imagine. I assure you that the D.H. Lawrence poem that goes…”I never saw a wild thing sorry for itself. A small bird will drop frozen dead from a bough without ever having felt sorry for itself.” does not assume that nature cares much about the future beyond the hardwired imperative that it procreate. I suppose that is what we are supposed to do as well, but it seems so inadequate and selfish. It can make one wonder why we bother and what its all about. And then the humming bird finds its way to the cactus flower and I watch it from my air conditioned study as I type on my wireless and totally mobile iPad and I am emboldened to suggest that the world will never end because it is too beautiful and there is an infinite array of wonders still to come and yet to marvel. Now I can stomach the next chapter of the Trump saga.