by Michael Krieger, Liberty Blitzkrieg:
I’m not the only one of course. The financial crisis of 2008/09 similarly shattered the worldview of tens, if not hundreds of millions of people across the globe. I believe that the old manner of doing things as far as organizing an economy and society died for good during that crisis and its aftermath. Sure it’s been shadily and undemocratically propped up ever since, and we haven’t yet transitioned to what’s next, but for all intents and purposes it’s dead. It’s dead because it has no credibility.
– From last year’s post: The Generational Wheels Are Turning
Hard work is fundamental to our continued existence and advancement as a species. I would never devalue the importance of hard work, particularly when combined with intense passion and drive, which leads to extraordinary technological progress and soaring artistic creations. Nevertheless, my ears perk up whenever I hear an older person lecture millennials about how they need to work more just to have a reasonable chance at a retirement compared to generations that came became before.
Yet that’s exactly what happened when I read an article published at Politico by 75-year old Alicia Munnell, and academic who also worked for the Federal Reserve Bank of Boston and the U.S. Treasury Department under Bill Clinton.
She seems to understand the problem. She notes:
A comparison of millennials (adults currently ages 25 to 35) with earlier cohorts (Gen-Xers and late baby boomers) when they were the same age shows that even though a higher percentage of both millennial men and women have college degrees, they are behind in almost every economic dimension.
One reason is that millennials entered the labor market during tough times. Most turned 21 between 2002 and 2012, which meant that they were graduating from college during a period that included both the bursting of the dot.com bubble and the Great Recession. This experience appears to have been particularly hard on millennial men, who have labor-force participation rates below earlier cohorts.
That’s all true, it’s her unimaginative, and quite frankly, offensive conclusion about what’s to be done that I take issue with. She writes:
My research suggests that those concerns are real, and millennials really are building wealth more slowly than the other working generations. But they are not insurmountable—as long as millennials are willing and able to work longer than their parents and grandparents did.
Let’s take a step back and dig deeper. She accurately acknowledges millennials were screwed by being born at the wrong time in history. To summarize, an entire generation graduated from college as indentured debt servants and were then thrust into a Hunger Games economy characterized by stagnant real wage growth. Worse, whenever systemic forces resulted in periodic crashes in our fundamentally unstable ponzi economy (which millennials played no role in creating), older generations responded by focusing their energy on ensuring their stock and bond portfolios were inflated back to life.
Remarkably, this basic reality that younger generations were handicapped due to the short-sighted decision making of older generations seems to have no bearing on her analysis of what’s to be done. While millennials may in fact need to work to 70, this doesn’t address the current situation, nor does it deal with the fact that the contemporary social/economic paradigm is dominated by rent-seeking activities more accurately defined as corruption and fraud, which leads to unimaginable wealth for an unscrupulous few, and scraps off the table debt serfdom for everyone else.
Older generations can’t provide solutions for the youth because that’s the sort of lazy thing they come up with: work more. Moreover, successful academics with stints in government and central banking are almost always status quo loyalists and will never concede that paradigm level change is in order. Young people must actively help shape the world they’ll be living in longest, yet when you look at Congress it looks like an assisted living facility.
This is a serious problem, because older people who’ve benefited from the status quo their entire lives will naturally support a propagation of the status quo. That’s the last thing we need right now. I don’t mean to pick on Alicia specifically, I highlight her article to demonstrate a larger point. That the policy solutions being offered for our ills are just repackaged versions of the same old stale solutions that’ve been recycled over and over again for the past 50 years. This is partly why it feels like nothing really changes no matter who you elect. It’s because those who have the power and money to influence policy tend to be comfortable, unimaginative types who strongly support the status quo.
Nevertheless, it remains a total certainly that younger generations will ultimately define the future based on their values and life experiences. Considering how poorly the current paradigm worked for them, it’s a nearly a lock that the manner by which our society and economy work will be fundamentally altered in the not too distant future. The millennial embrace of Bitcoin and crypto assets is merely a preview of the sort of earth-shattering changes coming as an entirely new generation starts to dominate culture.