What Did Baby Boomers Do to the Economy
Did the infant boomer generation destroy the economy for millennials?
Joseph Sternberg, a columnist at the Wall Street Periodical and himself a millennial, argues that they did in his new book, The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future. According to Sternberg, millennials have found themselves saddled with a broken economy and a combustible job market place thanks to the careless choices of infant boomer politicians.
I've interviewed anti-baby boomer authors before, but what makes Sternberg's book stand out from the residual is his unique diagnosis of the problem. Rather than focus on market excesses, financial malfeasance, or corporate greed, Sternberg believes the problem is that Republicans and Democrats have continually sought a "third way" between state intervention and market freedom. The effect, he writes, is a dysfunctional organisation that encourages corruption and rigs the game in favor of Large Concern.
I had some objections to Sternberg's argument, so I reached out to him and asked him to make his instance.
A lightly edited transcript of our chat follows.
Sean Illing
What practise yous hateful when you lot say the baby boomers stole the millennials' economic future?
Joseph Sternberg
I guess the mode to respond that is to have a step back and recollect about the large question I was trying to respond when I sat downwardly to write the book. And that question was, do millennials have a point?
We're saying, "We're having trouble finding our feet in the job market. We're struggling to deal with our student debt trouble. We're struggling to climb onto the holding ladder." And the boomers are looking at u.s. and they're saying, "Life has never been equally good for anyone as it is for you lot. You guys can't mutter about not beingness able to climb onto the property marketplace when you're paying $4 for a Starbucks coffee, $viii for avocado on toast for brunch."
So I was really trying to effigy out which side of that argument is correct, and I retrieve the millennials are right. Nosotros take really suffered from the aftereffects of the fiscal panic and the Cracking Recession a decade ago, in a manner fifty-fifty previous generations that graduated during recessions haven't.
For example, I talk almost how we discovered that we were hitting the job market place for the first time right when the unemployment situation from the Great Recession was the worst, and how ever since then, it took a long time for the unemployment rate to drift down. That meant that we were having to compete with older workers in the labor market during the stage when we were actually trying to discover our way. That has a lot of implications for the economic instability that a lot of millennials nevertheless feel because information technology turns out to be really hard to recover from that.
We suffered from the educational debt phenomenon considering when nosotros couldn't find jobs, a lot of the states went to college. Or nosotros got graduate degrees. Our boomer parents encouraged us to fund a lot of that with debt, on the premise that it would eventually pay off in the job marketplace.
But that was clearly incorrect, and we're paying the price for information technology.
Sean Illing
We agree about all that, so the question is really, how did this happen? What are the policies or the decisions most responsible for this state of affairs?
Joseph Sternberg
I think it's less about specific policies and more about an mental attitude that led to the policies. The boomers did face their ain challenges. They're saying, "Well hey, hang on a second. We graduated into the stagflation in the tardily '70s, and the economic system in the early on '80s was a mess, and we recovered from that."
Merely the trouble is the boomers extracted from that certain attitudes about the fashion policies should work. A big problem was this kind of economical centrism that developed on both the left and right in various means.
Sean Illing
Can you clarify what you mean by "economical centrism"?
Joseph Sternberg
What the boomers were really trying to do throughout most of their political careers was to have both the protective power of the state merely also harness the productive power of the market place. And that produced many policies during the '90s that tried to steer a lot of investment into particular corners of the economy, like the tech economic system.
It showed up in things like the ownership society that we heard a lot about in the George W. Bush-league administration, where policymakers tried to use the long arm of the regime and institutions like Fannie Mae and Freddie Mac to try to boost ownership for boomers who had been worrying that they were getting left behind in the housing market.
However, that actually created a lot of instability in the economy, which produced this lingering crisis for millennials.
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Sean Illing
I want to push button you lot a little on this because, frankly, I was frustrated by what seemed like a determined effort to excuse some of the excesses of commercialism in your book. Yous're comfortable blaming "economic centrism" for a lot of failed one-half-measures, just you lot get out of your way to defend corporate greed and the fiscal industry. Why is that?
Joseph Sternberg
The reason I tried to veer away from the role of finance and corporate greed in all this is that I think it's a potential trap for us. Greed is manifestly a factor hither, and I retrieve conservatives are oftentimes also dismissive of that. I get that argument.
But I also recollect that nosotros need to think a little bit bigger about some of these issues. And what I worry about is that if you focus solely on the financial greed or some particular attribute of some item manufacture, there's a adept take chances we'll end up making the distortions a lot worse.
For instance, I point to a problem that nosotros've adult correct now in the financial system, where if you are a large company that tin tap the bond market place, this has been a terrific decade for you. Simply if you're a modest visitor that needs a bank loan in order to hire that 4th employee, who's probably going to be a millennial, you're really suffering.
And that'southward what can happen if you try to focus besides much on trying to clamp down on specific behaviors within the financial system, inside the banking manufacture or the like, and you lose sight of the bigger discussion that we need to be having nigh how these distortions were created in the first place and how trying to lean on specific levers of economical policy or push specific regulatory buttons merely creates more distortions.
Sean Illing
I think you're trying to wall off criticism of the marketplace organisation itself, only let's try to get at this another way. You write that the real problem is that political leaders "take gotten in the style of the best parts of our financial web."
But I think you lot brand a serious error by inserting a barrier between the incentives governing Wall Street and the incentives guiding politicians. Because our political system runs on private money, the incentives of Wall Street go the incentives of politicians. It's the corporate lobbyists who write the laws, who shape the policy, who set the agenda.
I think your assay deliberately obscures this role of the story.
Joseph Sternberg
I won't contend with you lot about the extent of lobbying that goes on, and I think that this was actually a characteristic of boomer governance, that you would take these revolving doors on both sides of the alley between industry and government. I totally concord about that.
I'd recast the problem a picayune bit, though, and say that it'due south about the lobbying opportunities that pop up the more than the government tries to regulate that kind of activity. And I call up that this is a kind of conversation that millennials actually need to have, and it's also something that we actually need to proceed in mind if we are going to go downward the path that politicians like Elizabeth Warren or Bernie Sanders are advocating, where they are arguing for more activist regulation of some of these parts of the economy.
This kind of regulation inevitably creates winners and losers, and the winners are generally the people who are inside the system and have the wherewithal to lobby for a particular outcome that they want. The losers are the niggling guys on the outside of that.
I remember that actually at present the thing that we need to be careful about is suggesting that the regulation always benefits the trivial guy. I think the regulation normally benefits the big guy.
Sean Illing
Well, perhaps the trouble is the centrism you lot noted a infinitesimal agone. Maybe a more sweeping overhaul, of the sort Elizabeth Warren or Bernie Sanders suggests, is necessary.
Aside from that, you too pivot a lot of blame on individual politicians for making the wrong sorts of investments in the country or the economy. But if at that place'due south been a change in the sorts of investments political leaders are willing to make, it'due south not because the voters forced those changes, and it's not because the politicians decided on their own to abandon public infrastructure and invest in labor replacement, for example. It's because the special interests that prop upwards Washington pushed them in that direction.
My sense is that you ascribe as well much bureau to political leaders and don't focus enough on the forces shaping their decisions in the showtime place.
Joseph Sternbert
I can definitely see that kind of statement, and information technology'south an important conversation to have about how these things came to be. The consequence of how much agency to ascribe to politicians, how much of information technology is driven by the lobbying action, I guess that's partly unknowable, and information technology'south particularly difficult to become to the bottom of it while the policymaking is actually happening.
But I'll be honest and say this is probably where my bias is equally a free-market place conservative, although not necessarily as a Republican. My instinct is to think less about a more activist government and instead focus on cut off the opportunities for the lobbying and the hire-seeking earlier they even ascend, rather than trying to manage the effects afterwards.
Sean Illing
Right, and I recall it's that bias that frustrated me a little fleck, and to be honest I take my own biases here. But your book reads to me similar a defense of conservative economic orthodoxy, but information technology'due south masked in this millennial-friendly packet. Simply as far as I can tell, it recapitulates the same arguments I've heard from libertarian conservatives for years.
Joseph Sternberg
Well, I'grand not sure that'due south an entirely fair characterization of what I'g trying to say in the book. I think that you would struggle to find people who would say the marketplace got united states into this so let the marketplace get us out of information technology.
I think the more common refrain that you lot tend to hear on the right is that actually, the regime interference in the marketplace got united states of america into the crisis and so nosotros need to find means that nosotros can dial that back to get u.s. out of it. I hateful, that's why you tend to find conservatives who are so panicked near the issue of Fannie and Freddie, and their history before the crunch and their fate since then.
I retrieve it's important for millennials to revisit some of these arguments instead of assuming that the financial crisis has settled them. I of the problems that nosotros face politically is that a Republican was the president at the time the 2008 crisis started. And in fact, some Republican politicians might feel very invested in some of the policies, peculiarly in the housing market place that contributed to that crisis.
Whereas what'southward really interesting, from my perspective, about what'southward happening on the Democratic side, is that it seems that with the possible exception of Joe Biden, a lot of the Autonomous politicians who were more than associated with that Clinton fly have been fading, and what you have is the emergence of politicians like Elizabeth Warren or Bernie Sanders who weren't invested in that "third way" policy framework from the '90s and 2000s that dominated earlier the crisis.
Sean Illing
I have to button a fiddling flake more here because I remember y'all have a tendency to drift into a "both sides-ism" argument in the book.
You write: "The standard response from both political parties — now firmly nether boomer management — has been to double downward on economic theories and policies left over from when they were younger." That'south very misleading to me.
Yeah, the Democrats were complicit in the neoliberalization of the economy, but information technology'southward the GOP that has consistently pushed trickle-downwards economic science well subsequently information technology failed; it'southward the GOP that continues to this day to push an extremist philosophy of deregulation; it'due south the GOP that imperils our future past refusing to act on climate change. I recall yous do a disservice when yous erase this stardom, when you pretend information technology's nigh boomers and millennials rather than Republicans and Democrats.
Joseph Sternberg
No, I'chiliad not sure I would agree with that. I recall the nature of these political arguments is that where i assigns blame is, I call up, partly shaped by your ain prior opinions, and your own understanding of the way that the economy works.
You tin can also make an statement from the Republican side that there are people in the Republican Party who were arguing for more market and less authorities all along who were probably right. That perhaps if we had been more successful at taming Fannie and Freddie before the crisis, we wouldn't have found ourselves in the situation that we did come 2008.
I'm not expecting that everyone is going to concur with this book, but I recall nosotros need to not presume that a lot of these policy issues have already been settled in one direction or the other. It's of import for millennials to benefit from some of this left and right, back and forth, that the boomers experienced, fifty-fifty if nosotros're going to finish upwardly coming out in a unlike place than the boomers did.
Sean Illing
Nosotros're probably just going to proceed going in circles on some of this, then I'll enquire you this: Let's say you lot're right that the boomers take ruined the economic time to come for most millennials. What are we supposed to do at present? Is this book pure fatalism or do yous see a path forward?
Joseph Sternberg
I practice see a path forward, and you have sussed information technology out. I think most people agree that trying to find some middle fashion, in which nosotros meld the country and the market, isn't really working. So that leaves united states of america with two options: You can either have more state and less market, or yous can take more than market and less state. And I think that certainly a lot of the free energy among millennial voters seems to exist in the more state direction.
I gauge my bespeak is that in that location are dangers in that approach. If we go down that route, are nosotros actually creating more opportunities for the kind of distortion, or the rent-seeking, that actually got our parents and us into this jam in first place?
What I'one thousand really trying to do here is help open up a broader political word about millennials, to think about what nosotros need to take a much more than careful approach to making sure that we are actually making the correct decisions hither. And we shouldn't close ourselves off from the thought that actually, sometimes, the market can be an important tool for united states to solve some of these problems plaguing us right now.
Source: https://www.vox.com/2019/5/22/18617686/baby-boomers-millennials-capitalism-joseph-sternberg
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