After the 1994 election, the one that saw the Republicans take Congress after decades of Democratic dominance, the New York Times published a “portrait of the electorate” based on exit polls. It showed that the 1960s generation was the one most likely to vote Republican that year. “Those hypocrites” I thought. They were “liberals” in their youth when they wanted to get out of serving in Vietnam, and now they are “small government” “conservatives” when they are at their earnings peak and they don’t want to pay taxes, but I’ll bet they’ll be “liberals” again when its time to collect on federal old age benefits. But they surprised me by being even worse than I thought. They still want even more tax cuts for themselves, and even more old age benefits for themselves, such as the Medicare prescription drug benefit. They want to borrow to pay for it. And to ensure our foreign creditors that the money will be paid back by someone else, they also want deep cuts in public services that younger generations need now, and drastic reductions old age benefits — not for themselves but for those to follow them – effective in the future.
With their aging, stagnant populations, the Downstate Suburbs and Upstate New York are now disproportionately occupied by, and almost exclusively represented by, members of Generation Greed. And back in the 1990s I had similar thoughts about their possible upcoming hypocrisy with regard to Medicaid funding, and specifically the local taxpayer share of it. But once again I’ve been surprised, because once again my cynicism was insufficient. They are even worse people than I thought. And it’s past time from them to be called to account for it.
After a three-decade party, with some folks getting to party a lot more than others, there is suddenly no way to avoid the reality other than drifting into closed-eyed fantasy. The generations I have identified as Generation Greed, the richest in American history, are leaving the generations to follow are much worse off in many ways. And, in many cases, those at the back end of Generation Greed are facing old age much worse off then they themselves had been, forced by their prior excess consumption, debts and prior lack of savings to downsize a material lifestyle that for many of them had been the whole project of their lives. As I most recently noted in detail in my previous post.
The consequence of this realization has not been an increase in empathy or an attempt to change the worst aspects of a collective legacy while there is still time. There is still no willingness to make any personal sacrifices in the present for the collective future. The fact that the non-greedy minority of Generation Greed hasn’t stepped up to face the facts and battle for their own offspring is one final disappointment. The desperate desire of some of its rich to insulate their own children from the consequences of a diminished society — by repealing the estate tax — is the only effective example of concern by today’s seniors with what they will leave behind. Rather, the media they dominate remains filled with demands for scapegoats and rationalizations, and one more round of “what about my needs!” Needs that are somehow supposed to be met by latter born generations that are poorer, and yet are having large economic burdens shifted to them that will diminish their entire future.
But if one uses the right search terms, one can find some examples over the past year of younger generations beginning to resent the country they have inherited, albeit not enough to get off the couch and do something about it.
“The problem with socialism is that you eventually run out of other people’s money” – Margret Thatcher in 1976
“The problem with capitalism is that given enough inequality, eventually businesses trying to sell things run out of other people’s money” — Larry Littlefield, 2016
For 35 years, generations of Americans born after 1957 or so have been paid less but sold more, with the difference covered first by more household members in the workforce, then by inadequate requirement savings, and then by soaring public and private debt. The richest and most entitled generations in U.S. history worked hard and were very creative, but they over-consumed what even they were able to produce and expected too many years in retirement with too little in savings, at the expense of the poorer generations that have followed them. With some members of those generations grabbing far more than the others. With too much money in too few hands, the whole world economy has become dependent on Americans spending more than they had. And since America finally started to go broke with millions retiring into poverty, the world economy has faced a global crisis of demand.
When you put all the trends together, as I have below, it adds to a shocking picture that puts every current debate in context. Today’s young adults paid less than Generation Greed was paid at the same age in 1975, and forced by government policy to pay more for housing. Life expectancy falling. Personal and federal debts once again soaring, all the mistakes of the 2000s being repeated. Topping it off, we now have Donald Trump as President. Does this mean that the U.S. is finally prepared to admit, face and tackle its problems? Or does it mean that the most over-privileged and entitled members of the most over-privileged and entitled generations in U.S. history are just grabbing more, in one last economy orgy before the final collapse?
Who will you be voting against this November? That’s really what it comes down to, doesn’t it? The fact is, however, that this poor choice has been a long time coming. All you have to do is look down a level, or two levels, or three levels in politics to see that there is no there there, and the rot has now reached the top of the ticket. You see the same rot at the state and local level, in business, in the non-profit sector. It is the rot of a self-serving generation or two, now running the show in its own interest. And the United States is facing a Presidential campaign that will likely be a rehash of the social issues of Generation Greed’s youth, rather than an honest discussion of the diminished realities it is leaving to those coming after. In public policy, in the economy, even in many families. Scapegoating is likely to be the only discussion of this reality anyone hears about. The candidates will likely prefer to talk about something, anything else otherwise.
For decades my rule of thumb has been don’t vote for any Republicans at the federal level, on generational equity grounds, as since 1980 the Republican Party has been waging a financial war on everyone born after 1957. Don’t vote for any Democrats at the local level, because they are controlled by the producers of public services – the public employee unions and contractors – whom they have continually enriched at the expense of increasingly less well off consumers of public services. And don’t vote any incumbents of either party holding office in the State of New York, which is the worst of the worst. Is there any reason to change?
Here is food for thought. In 1978 I earned the minimum wage: $2.65 per hour. Adjusted for inflation that is $9.68. The current minimum wage of $7.25 is therefore about 25 percent lower. So have those earning the minimum wage become that much worse off relative to most Americans? After thinking about it, perhaps not. Perhaps that 25 percent decrease is just about typical. In fact, it suddenly hit me that I had seen something like a 25 percent decrease in well being elsewhere, in other contexts.
and I downloaded it and updated my spreadsheet to see if there has been any progress in getting this country and its inhabitants out of the financial hole.
There has not. Excluding the debts financial companies owe to each other, total U.S. debts varied between 128 and 142 percent of GDP from 1952 to 1981, a time of much greater equality in the U.S. than today. But by 2008 total non-financial debts had increased to 237 percent of GDP. To the extent there has been a recovery from the Great Recession, it is because this figure increased to about 252 percent of GDP in 2015. And the U.S. economy, and the global economy, remain at the point where, in the cartoon, Wile E Coyote has run off the cliff, is hanging in the air, and realizes that gravity is about to take him down.