David Foot was squirrelled away in a corner of the University of Toronto economics department when journalist Daniel Stoffman called him up to do a story on a Canadian real estate bubble that, at the time, had only recently popped.
The housing crash of 1989 caused chaos and plummeting prices, and left a bunch of homeowners wondering why they had paid so much, what had gone wrong and why they didn’t see it coming.
But Foot saw the end coming plain as day. Demographics, he theorized, provided the explanation. The population bulge born between 1947 and 1964 — the baby boomers, as they’re now known — bought their first cars before buying their first houses. Due to the sheer magnitude of their numbers, home prices were driven up. That is, until the boomers all had houses and stopped buying them, demand dropped off and pop went the housing bubble.
Demographics, particularly as it related to the boomers as they tracked through life, held the key to interpreting the economic past and predicting the future of housing, health care, pensions, insurance, education, banking, consumer goods, leisurely pursuits, urban planning and, well, you name it.
It all seemed rather obvious, but Foot was the only person it seemed rather obvious to, which is why Stoffman, a freelancer assigned to interview him about housing for the Globe and Mail, met with the professor at a coffee shop near campus.
Foot blocked off 30 minutes as he had classes to prepare, research to do — he was a busy guy. Three hours later, the academic and the writer were still talking, and Stoffman’s tape recorder was still rolling.
“Meeting Danny was serendipitous,” Foot said. “Danny got it; Danny understood everything.”
Stoffman, who subsequently co-wrote Boom, Bust & Echo: How to profit from the coming demographic shift with Foot, died in a Vancouver hospital in July, leaving his wife Judy and two children behind. He was 78.
Published in 1996, Boom, Bust & Echo was a boom unto itself, selling a whopping 300,000 copies in a country where 5,000 rates as a bestseller. It also brought demographics out of the backwaters of a university economics department and into the boardrooms of the nation. Senior executives, middle managers, budding entrepreneurs, finance ministers and ordinary citizens snapped it up.
Thirty years later, the idea that thinking about population growth as a means to predict future trends in the economy — and to profit from those trends by, for example, pouring money into pharmaceutical research to help ease aging boomers’ aches and pains — seems so obvious that it can be hard to remember a time when this wasn’t always so.
Tony Frost remembers. The professor and former program director at Ivey Business School at the University of Western Ontario has a copy of Foot and Stoffman’s creation on his bookshelf.
“I remember initially reading the book and thinking, ‘Is this something we should be thinking about here?’ And I know companies everywhere were thinking the same thing,” he said.
In his role as a business school’s program director, Frost ensured Boom, Bust & Echo was required reading for students. For about five years beginning in the late 1990s, he brought Foot to campus each fall to lecture the latest incoming class of aspiring tycoons.
“Demographics is this big, dumb variable, and the boomer cohort is like a freighter — you can see it coming — and it has an impact on many things,” Frost said. “I just felt that our MBA students graduating as future business leaders needed to have this variable in their tool kit.”
Business schools weren’t the only ones that felt this way. Foot was talking to banks, insurers, health-care companies, government policymakers and others when he wasn’t giving lectures to his students. As one former senior executive put it, the book might not have been read cover to cover by those in the boardrooms of corporate Canada, but every person in those boardrooms had at least read the summary.
Frost said the life insurance industry is one example of a fusty old business that reinvented itself by embracing the transformative, profit-yielding potential of demographics — and aging boomers. Selling life insurance used to lead to, well, a dead end for companies, marked either by a client’s passing or more commonly by policyholders achieving an age when the kids were grown, they had a few bucks in the bank and didn’t need life insurance anymore.
Insurance companies today offer annuities, dental insurance — because boomers need dentists, too — sell mutual funds and manage assets.
“Insurance companies and banks in general have had to adapt to the demographic silver tsunami of the boomers by shifting their focus into wealth management,” Frost said.
One recent banking case in point would be Royal Bank of Canada’s $2.4-billion acquisition of Brewin Dolphin Holdings PLC, United Kingdom-based wealth-management firm, in September 2022.
It is impossible to quantify the exact impact of a book, but what stands as an indisputable truth, Foot said, is that without Stoffman — who wrote other books and had a long career as a journalist — there would be no Boom, Bust & Echo.
Foot was a lecturer, award-winning teacher and researcher with a ton of graphs related to demographics and the economy. In other words, he could talk the talk. Stoffman could write it.
The writer lived near the University of Toronto, and every Tuesday, for about 12 weeks, Foot would walk over to his house and deliver the lecture of the day. It might be on pensions and demographics; it might be on demographic investing. But the deal was that the professor talked, the journalist listened, and after a break, Stoffman would grill Foot on any ideas he wasn’t sold on. Some ideas were tossed, while others grew into book chapters.
“Danny made my material accessible in written form,” Foot said.
It was an arrangement that paid off for both, as Foot and Stoffman were 50/50 partners in the project. Stoffman just missed out on being lumped in with the boomer cohort, having been born in 1945, but he was firmly into middle age at the time of the book’s release and suddenly flush with cash.
He could have blown the windfall on a mid-life-crisis splurge, such as a sports car, but he did the responsible, demographically predictable thing and bought a trusty Toyota minivan with ample room to ferry his wife and kids to the cottage.
Foot, meanwhile, did something he never imagined he would do: he scaled back on his teaching duties at the university to keep up with the demand for his services as the foremost global expert on the economics of demographics.
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“I didn’t really know what a bestseller list was, and I had no idea the book was going to do what it did, but I think Danny had an idea,” Foot said. “Danny was a good friend, a brilliant writer and I learned so much just watching him craft paragraphs. It was wonderful.”
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