The math is pretty simple. In 1953 there weren’t enough 1st grade teachers. 1956 brought us the Schwinn shortage. 1964 it was college classrooms, 1968 jobs, 1978 houses, and now in 1997 we have the shortage of sure investment opportunities. Baby boomers’ fear of the future is now driving the current boom in stock market investment. Fast approaching their fifties, retirement planning is now the rage.

The problem is, even the best investments only produce money. And money is nothing. I’m not saying it isn’t important. Like motor oil is to your car engine, money is the lubricant of society. But, you don’t trade your 70 hours a week and/or your creativity for money. Rather, your hard work and good ideas are actually traded for a nice place to live, nice schools for your kids, and nice vacations. The money just makes the trade a little more efficient.

Now I know this is not what you learned in your finance classes. But, money can actually disappear – in a stock market crash or hyper-inflation, for example. Remember 1987? Or, just ask your Japanese friends about the relationship between money, stocks, and real estate. Simply stated, money isn’t stronger than demographics. That’s why in trying to understand the past and the future, cultural anthropologists focus on people, not money.

Culture’s primary impact is that it makes us all imitate our parents, the generation ahead of us. As strange as the Generation-Xers’ behavior (tattoos and cigars) looks to their parents today, the Xers will be driving minivans in the next millennium, too. And boomers’ parents are now showing us all how to party. In most cultures, throughout history, old folks have lived with and been supported by their kids. Not our folks. They’ve all had their babies paying into social security and such. And that boom crop can afford a lot. 3.5 kids can support a nice house and nice vacations for 1.5 parents pretty easily. Boomer’s parents are enjoying the biggest binge in history.

But, in 2020 it will be 1.5 kids supporting 2.0 parents. That simple ratio will be far more salient than any P/E ratio. The breakthroughs in bio-tech (info-tech will be passé) will serve to lengthen life. Cancer, AIDS, and heart disease won’t kill; bodies and minds will just wear down. And the costs of the worn down baby-boom generation of 2020 will simply not be supported by their 1990s investments in stocks, no matter how red-hot or blue-chip.

I guess I can see three ways to defeat this destined demographic demon. First, of course, culture can change. For example, think how profoundly birth control has changed our values and everyday lives. In 2020, when baby boomers are forced back into the homes and care of their kids, everyone may see it as a positive thing. Indeed, haven’t we all decried the decline in family strength? In 2020 we may see the rejoining of young and old in the household as the best kind of family reunion.

Globalism is the second way out. While we share this nationwide graying with places like Japan and Western Europe, things are much different in places like Mexico and the Mekong River Valley. The question is can we invest in the legions of young people in the latter lands fast enough now, so they will be both able and willing to return the favor in 2020.

Let’s for a moment focus on the example of our NAFTA neighbors to the south. The free trade agreement with Mexico passed in 1995 was much more that Ross Perot’s Waterloo. It was the single most important event in U.S./Mexico relations since U.S. Marines marched into the Halls of Montezuma (in Mexico City) in the 1840s. For the first time in history we have treated Mexico as an equal. Most Americans may have missed this significance, but no Mexican did.

Yes, American jobs have migrated south. But, isn’t that better than Mexican workers migrating north? Yes, the peso crash landed. But, now in 1997, the key part of the term is “landed.” Indeed, this year they repaid us the billions we loaned them, and they did it early! Yes, cocaine corruption is king in places like Tijuana. But, who’s fault is that? The trade in illicit drugs is, and always will be, demand driven. The Latin American drug lords supply, but they don’t advertise.

If we manage our Mexican marriage right, the fruits of the relationship will be a wonderful wealth for both countries in 2020. We need to focus our cross-border investments now in factories and young peoples’ brains. That will enable them to make the cars, televisions, computers, and medical equipment for us. And we’ll supply the engineering, financial, healthcare, consulting, and management services and software to them.

Immigration won’t be an issue. Economic integration will mean open borders in the 2020s like we had in the 1920s or the Europeans have now. If we can genuinely embrace globalism, the young people of Mexico and the other developing countries we support will help to abate the baby-boomer bomb of the next millennium. Indeed, this may be the best of the three approaches to the crisis of gray coming in 2020.

Finally, as I mentioned, there is a third solution, a xenophobic one. You’ve heard the story of the two hikers who ran into a grizzly bear. One hiker stopped to slip on his running shoes. The other asked, “What are you doing? You can’t outrun a grizzly.” His friend replied, “I don’t need to outrun the bear, I just need to outrun you!” Yes, a shortsighted Adam Smithian selfishness may lead to better stock market gambling than your “friends.” But, even the biggest fish, with 20-20 vision, can’t see very far in a putrid pond.

In most cultures, throughout history, old folks have lived with and been supported by their kids. Not our folks. They’ve all had their babies paying into social security and such. And that boom crop can afford a lot. 3.5 kids can support a nice house and nice vacations for 1.5 parents pretty easily . . . But, in 2020 it will be 1.5 kids supporting 2.0 parents.

Globalism is the second way out. While we share this nationwide graying with places like Japan and Western Europe, things are much different in places like Mexico and the Mekong River Valley. The question is can we invest in the legions of young people in the latter lands fast enough now, so they will be both able and willing to return the favor in 2020.