Considerations

Sixth in a series of essays

Ruben Navar­rette recently crit­i­cized young Amer­i­cans who are lob­by­ing the gov­ern­ment for finan­cial help and finan­cial advice in these tough times:

Young peo­ple usu­ally don’t have mort­gages to pay off, or spouses and chil­dren to sup­port. That gives them an enor­mous amount of free­dom whether they real­ize it or not. They also have an advan­tage in the job mar­ket because they can travel the coun­try and go where the jobs are. Or they can sim­ply fol­low their pas­sions and build careers of their own designs. Instead of see­ing obsta­cles, they should see opportunities.

And yet, when young peo­ple ask gov­ern­ment to throw them a life pre­server and save them from the choppy waters of a rough econ­omy, they’ve all but given up. Even if they get the short-term eco­nomic aid they’re seek­ing, they’ll lose their self-sufficiency in the process and become depen­dent on an unre­spon­sive bureau­cracy. That’s not good. In fact, it’s dangerous.

So you have to won­der where young peo­ple picked up this dis­taste­ful and destruc­tive behav­ior. It’s obvi­ous. It was from watch­ing their elders with out­stretched palms, a sense of enti­tle­ment, and a ten­dency to see gov­ern­ment as the solu­tion to all sorts of prob­lems. And to think there are peo­ple who actu­ally believe that.

Navar­rette misses the point. As he him­self notes ear­lier in his col­umn, young Amer­i­cans are more dis­pro­por­tion­ately unem­ployed than other demo­graph­ics. I would likely not be sur­prised at the num­ber of peo­ple in Gen­er­a­tion Y who depend on bad-debt car finance, a cer­ti­fied finan­cial plan­ner, or finan­cial plan­ning soft­ware to make ends meet.

But the prob­lem is much deeper than jobs.

Just like Gen­er­a­tion X two decades ago, Gen­er­a­tion Y is increas­ingly bit­ter and frus­trated to the point of los­ing all hope that they will one day have a life at least as secure — and not even as pros­per­ous — as the Baby Boomers did in their middle-aged lives. (For the record, my birth year — 1980 — is stuck between Gen­er­a­tion X and Gen­er­a­tion Y, so I can empathize with both.) It is hard to quan­tify the pes­simism and anger that per­vades the younger gen­er­a­tion, but a writer named Squashed comes close:

The word “enti­tle­ment” has picked up a neg­a­tive con­no­ta­tion it shouldn’t have. If you go to the bank and deposit $20, you are enti­tled to get your $20 from the bank. If you ful­fill your half of a con­tract, you are enti­tled to the other party’s per­for­mance. Sure, its a prob­lem when you feel you deserve some­thing you don’t deserve—but there is noth­ing wrong with acknowl­edg­ing a legit­i­mate debt. So let’s ask why some peo­ple in their 20s might feel the older gen­er­a­tion hasn’t kept its end of the bargain…

For those who just grad­u­ated, there was no job. That’s not tech­ni­cally true. There was a job—but some­body older has it and isn’t let­ting go. It turns out the whole sys­tem is rigged. Edu­ca­tion and intel­li­gence and every­thing we were told was impor­tant turn out to be worth noth­ing next to senior­ity and experience…

Take health insur­ance. Decades of pres­sure to lower wages for new hires and cut ben­e­fits means that the employer-provided sys­tem means that even if you can find a job, it prob­a­bly won’t offer health insur­ance. Pay­ing for insur­ance out of pocket is pro­hib­i­tively expen­sive if you’re healthy and cov­er­age is entirely unavail­able if you’re not. And if you have a minimum-wage job serv­ing cof­fee, you’re still get­ting a chunk taken out of your pay­check to finance a pro­gram that won’t be sol­vent by the time you’re old enough to use it. But any effort to change this sys­tem is met with seniors scream­ing about com­mu­nists tak­ing away their medicare. And if 20-somethings back a leg­isla­tive ini­tia­tive that would help them obtain cov­er­age, they’re slack­ers liv­ing in their par­ents base­ments. And let’s not even get into the indi­vid­ual man­date in the health-reform bill that will require the healthy and young to sub­si­dize the health-care of their older and gen­er­ally wealth­ier parents.

Should twenty-somethings who have done every­thing asked of them their entire lives feel like some­body pulled one over on them? Probably—but bad things hap­pen. And hope­fully all those years of edu­ca­tion taught us enough empa­thy not to be vin­dic­tive. Call us gullible—but don’t call us lazy or self­ish.  If some of us push for a few reforms that could help us suc­ceed even when our par­ents have dropped the ball—back them, and be thank­ful that we’re not talk­ing out­right revolution.

In an ear­lier essay, I also described the rea­sons that peo­ple my age are — to put it bluntly — pissed off. Please take a minute to read the post and its com­ments. Now, for the spe­cific data from the Pew Research Cen­ter:

Now, what facts can be deter­mined from this data?

• The per­cent­age of work­ers who are approach­ing or older than 65 is increas­ing while that of younger peo­ple is declin­ing or remain­ing static.
• Most work­ers who remain on the job past the age of 65 do so out of desire rather than need.
• Still, some older work­ers have delayed retire­ment due to the recession.

In a nut­shell,  it is the Baby Boomers’ own fault that their chil­dren are work­ing at McDonald’s or sleep­ing in their base­ments. For the most part, the older gen­er­a­tion is refus­ing to retire sim­ply because they want to work. Those who may need to delay retire­ment because their port­fo­lios have declined either had idiots for finan­cial advis­ers, or they made bad invest­ments them­selves. (By the age of 60, almost all of your invest­ments should be in sta­ble bonds rather than volatile stocks. And don’t get me started if you flipped houses or bought prop­erty dur­ing the height of the hous­ing bubble.)

Crit­ics like Navar­rette usu­ally say that every gen­er­a­tion has had tough times and that younger peo­ple should pick them­selves up by their boot­straps. Well, here is a secret: My gen­er­a­tion has no boot­straps! The most extreme mem­bers of my gen­er­a­tion feel that there is noth­ing we can do until the Baby Boomers lit­er­ally die off. Until then, we are stuck with schemes like finan­cial spread-betting, guar­an­teed car-finance, and bad-credit car finance. Even a finance degree prob­a­bly does little.

But even that might pose a prob­lem. Read this insight­ful — and scary — arti­cle in the Atlantic Monthly on how the “longevity boom” will wreak havoc on Amer­i­can soci­ety:

In the sci­en­tists’ pro­jec­tions, the ongo­ing increase in aver­age lifes­pan is about to be joined by some­thing never before seen in human his­tory: a rise in the max­i­mum pos­si­ble age at death. Stem-cell banks, telom­erase ampli­fiers, somatic gene therapy—the list of poten­tial longevity treat­ments incu­bat­ing in lab­o­ra­to­ries is star­tling. Three years ago a multi-institutional sci­en­tific team led by Aubrey de Grey, a the­o­ret­i­cal geneti­cist at Cam­bridge Uni­ver­sity, argued in a widely noted paper that the first steps toward “engi­neered neg­li­gi­ble senescence”—a rough-and-ready ver­sion of immortality—would have “a good chance of suc­cess in mice within ten years.” The same tech­niques, De Grey says, should be ready for human beings a decade or so later. “In ten years we’ll have a pill that will give you twenty years,” says Leonard Guar­ente, a pro­fes­sor of biol­ogy at MIT. “And then there’ll be another pill after that. The first hundred-and-fifty-year-old may have already been born…” From reli­gion to real estate, from pen­sions to parent-child dynam­ics, almost every aspect of soci­ety is based on the orderly suc­ces­sion of gen­er­a­tions. Every quar­ter cen­tury or so chil­dren take over from their parents—a tran­si­tion as fun­da­men­tal to human exis­tence as the rota­tion of the planet about its axis. In tomorrow’s world, if the opti­mists are cor­rect, grand­par­ents will have liv­ing grand­par­ents; chil­dren born decades from now will ignore advice from peo­ple who watched the Bea­t­les on The Ed Sul­li­van Show. Inter­gen­er­a­tional warfare—the Anna Nicole Smith syndrome—will be but one con­se­quence. Try­ing to envi­sion such a world, sober social sci­en­tists find them­selves dis­cussing preg­nant seventy-year-olds, off­shore organ farms, pro­tracted ado­les­cence, and lifestyles policed by insur­ance com­pa­nies. Indeed, if the biol­o­gists are right, the com­ing army of cen­te­nar­i­ans will be march­ing into a future so unut­ter­ably dif­fer­ent that they may well feel nos­tal­gia for the long-ago days of three score and ten.

“[A]lmost every aspect of soci­ety is based on the orderly suc­ces­sion of gen­er­a­tions.” This is the most impor­tant line in the Atlantic arti­cle. When an older gen­er­a­tion dies off, its wealth, jobs, and respon­si­bil­i­ties are trans­ferred, through inher­i­tance and other means, to the younger gen­er­a­tion. The next gen­er­a­tion uses this cap­i­tal to obtain jobs, get mar­ried, buy homes, raise fam­i­lies, and cre­ate more wealth. Then they will die off, and the cir­cle con­tin­ues. This is how soci­ety must function.

Now, how­ever, the cir­cle is bro­ken. Instead of the Baby Boomers trans­fer­ring their wealth to Gen­er­a­tions X and Y, they are get­ting more money by stay­ing at their jobs and spend­ing their exist­ing wealth on vaca­tions as well as life-extending med­i­cines and pro­ce­dures (see here and here) rather than pass­ing it onto their chil­dren and grand­chil­dren. (I would have added the adverb “self­ishly spend­ing,” but I am not sure the nat­ural, inher­ent desire to pro­long one’s life can fairly be described as “self­ish.”) Gen­er­a­tions X and Y have yet to have the col­lec­tive wealth, rights, and respon­si­bil­i­ties trans­ferred and assigned to them from the Baby Boomers. As a result, young peo­ple are stuck in their often-criticized state of per­pet­ual ado­les­cence because we can­not afford the trap­pings of so-called matu­rity: mar­riage, home, and fam­ily. (See here, here, and here.)

What else can we do but wait? Still, Navar­rette is cor­rect on one point: My gen­er­a­tion has more mobil­ity because most of us do not yet have good jobs, spouses, mort­gages, and fam­i­lies even though many of are push­ing the age of thirty or beyond. As a result, we may need to start look­ing else­where than the United States.

For exam­ple, I moved to Israel and found a won­der­ful job since inter­na­tional mar­ket­ing expe­ri­ence and native Eng­lish are in great demand. I am not pay­ing part of my salary into Social Secu­rity, a pro­gram whose ben­e­fits I will likely never see. The gov­ern­ment pro­vides uni­ver­sal health-care. My job pro­vides both an employer-matched pen­sion and a retire­ment fund along with dis­abil­ity and life insur­ance. (My stan­dard of liv­ing is much higher rel­a­tive to other Israelis than it was in Boston rel­a­tive to other Amer­i­cans.) I write this not to brag but to ask: How many young peo­ple in the United States have this today? It is no won­der than Gen­er­a­tions X and Y are so upset.

Related: Can­cel Stu­dent Loan Debt (to Save the Econ­omy). Hat tip: Anya Kamenetz. Next essay: On the Jewish-Girl Fetish. Else­where: Colum­nist Den­nis Prager apol­o­gizes on behalf of the Baby Boomers, though mainly for rea­sons other than eco­nomic ones.

Tags: car finance, finan­cial help, cer­ti­fied finan­cial plan­ner, finan­cial advice, busi­ness finan­cial soft­ware, legal finance, finance degree, finan­cial plan­ning soft­ware, finan­cial con­sol­i­da­tion, auto credit finance

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