From The Economist again - a review of The Pinch: How the Baby Boomers Took Their Children's Future - And Why They Should Give it Back
. If you thought they would think of others as they get older - think again. In the coming decade they will suck every last bit of blood out of younger generations so someone, anyone, but themselves will have to make hard decisions. Their parents did the hard work to make their life easy when they were young - so their children and grandchildren will have to do the same when the blessed Boomers are older. Of course it works that way - they are the Baby Boomers, don't you know? Hard work is for others. What is important is that they feel good about themselves and get as much as they can for as little work as possible. See the 2011 budget as a reference if needed.
Half the population are under 40 years old but they hold only about 15% of all financial assets. People under 44 own, again, just 15% of owner-occupied housing. Comparing the financial and housing wealth of different age groups in 1995 and 2005 the Bank of England found that those aged 25 to 34 had seen their wealth fall, whereas those aged 55 to 64 had seen theirs triple. It helped that inflation was galloping when the older group was borrowing to buy homes, but slowed thereafter.Not content with the generational warfare they had with those who gave them everything - they have nicely set up things for generational warfare with those they desire to take from.
If pensions are counted, the situation is even more skewed. Lushly funded final- salary schemes are now broadly closed to new members, in the private sector at least. Baby-boomers can chuck the day job at 60 or 65 and head off into the perma-tanned sunset (they will probably prove freakishly long-lived), borrowing against the inflated value of their houses as they do so. Their children must slog on towards an infinitely receding retirement age, squirrelling away money for their meagre defined-contribution pensions as a growing proportion of state spending is devoted to the needs of a massive generation of the elderly.
Young people have little chance of building up similar wealth. They are struggling to get on the housing ladder, though close to a fifth of people between 50 and 59 years old own a second home. Jobs for the young were getting scarcer even before the crash. Yet more and more older people are working and earning more, relative to young workers, than before.
On top of this, older baby-boomers have dodged two speeding bullets, leaving their descendants squarely in the line of fire. The first is the bill for bailing out the financial sector; the second, the effect of climate change on the cost of energy, water, flood-prevention and the like. Other countries have ageing populations, but the problem in Britain is especially acute. British baby-boomers tended to believe their houses were all the piggy bank they needed. They neglected to make other comparable savings or they borrowed against property to finance their old age.
There is an unvoiced contract that binds the generations. Parents look after their children, with a view to helping them do at least as well as they themselves have done, and grown-up children look after their parents, in the hope that their children will do the same for them one day. But there is now “a breakdown in the balance between the generations”, thanks to the colossal size of one of them. And it has brought social consequences as well as economic ones, including the disappearance of trust between unrelated adults and children and a long, messy transition to independence for young people today.
The second reason to read this well-written book is the wealth of social detail that Mr Willetts, with his wonderful magpie mind, spreads before the reader. He looks, for example, to England’s historically smallish, nuclear families for an explanation of the country’s early adoption of markets and the rule of law. Weaving together birth rates and immigration policy, he has an ingenious explanation for why workers from Lodz flock to London, where housing costs are higher than almost anywhere else in the world, whereas workers from Liverpool on the whole do not. As society becomes more segregated by age, he points out, some council estates now have ratios of adults to hormone-heavy adolescent males more typical of violent Yemen or Somalia than of developed Western countries. He turns up statistics showing that most women, employed or not, spend more time caring for their young children now than they used to, and suggests that most people have become better parents (doing more for their own children) but worse citizens (doing less for others). The end notes alone are a feast.
...In the end we are left with a question. Are the baby-boomers a lucky generation or a selfish one? Mr Willetts, born in 1956, is too prudent to answer categorically, but his arguments suggest that if nothing else they are certainly a careless one. Prolonged economic growth tends to make people assume that future generations too will grow richer, and hence to make less provision for them. Yet the Victorians built railways and city halls for their descendants in what was one of Britain’s most optimistic eras. And the boomers’ descendants may have more cash but they are also likely to face far higher costs. Mr Willetts cites, approvingly, the way some American Indian tribal councils used to take decisions in the light of how they would affect the next seven generations.
On our side of the pond, Robert J. Samuelson is seeing the same thing.
The "generation gap" endures as a staple of American political and social analysis. The notion that the special circumstances and experiences of each succeeding cohort imbue it with different perceptions, beliefs and values seems intuitively reasonable and appealing. It's also flattering. In a mass-market culture, belonging to a distinct subgroup, even if it numbers many millions, contributes to a sense of identity. In a 1969 Gallup poll, 74 percent of Americans believed in the generation gap. A poll last year found that 79 percent now do.I'm more with Robert - the kids are alright - it's the older generation that is the problem.
Between then and now, of course, generations have shifted. Then, it was baby boomers (those now 46-64) arrayed against the World War II and Depression generations. Now it's "Millennials" (those 29 or younger) and Gen Xers (30 to 45) vying with boomers and Americans 65 and over. The precise generational boundaries are somewhat arbitrary, and other individual differences (income, religion, education, geography) usually count for more. Still, generational contrasts help plot change and continuity in America.
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Writing in the Atlantic, Don Peck argues that many Millennials, overindulged as children and harboring a sense of entitlement, are ill-prepared for a "harsh economic environment." They lack the persistence and imagination to cope well. That indictment may be unfair. My own experience is that Millennial co-workers are diligent, disciplined and determined in the face of frustration.
Regardless, more bad news may lie ahead. As baby boomers retire, higher federal spending on Social Security, Medicare and Medicaid may boost Millennials' taxes and squeeze other government programs. It will be harder to start and raise families.
Millennials could become the chump generation. They could suffer for their elders' economic sins, particularly the failure to confront the predictable costs of baby boomers' retirement. This poses a question. In 2008, Millennials voted 2 to 1 for Barack Obama; in surveys, they say they're more disposed than older Americans to big and activist government. Their ardor for Obama is already cooling. Will higher taxes dim their enthusiasm for government?
As for their voting patterns - that will change too. Hey, I used to toy with revolutionary leftists. Time grows wisdom.
