Sunday, August 12, 2012

Generation Fucked

 America's Screwed Generation (The Daily Beast):
How has this generation been screwed? Let's count the ways, starting with the economy. No generation has suffered more from the Great Recession than the young. Median net worth of people under 35, according to the U.S. Census, fell 37 percent between 2005 and 2010; those over 65 took only a 13 percent hit.

The wealth gap today between younger and older Americans now stands as the widest on record. The median net worth of households headed by someone 65 or older is $170,494, 42 percent higher than in 1984, while the median net worth for younger-age households is $3,662, down 68 percent from a quarter century ago, according to an analysis by the Pew Research Center.

The older generation, notes Pew, were "the beneficiaries of good timing" in everything from a strong economy to a long rise in housing prices. In contrast, quick prospects for improvement are dismal for the younger generation.

Overall the young suffer stubbornly high unemployment rates - and an even higher incidence of underemployment. The unemployment rate for people between 18 and 29 is 12 percent in the U.S., nearly 50 percent above the national average. That's a far cry from the fearsome 50 percent rate seen in Spain or Greece, or the 35 percent in Italy and 22 percent in France and the U.K., but well above the 8 percent rate in Germany.

The screwed generation also enters adulthood loaded down by a mountain of boomer- and senior-incurred debt - debt that spirals ever more out of control. The public debt constitutes a toxic legacy handed over to offspring who will have to pay it off in at least three ways: through higher taxes, less infrastructure and social spending, and, fatefully, the prospect of painfully slow growth for the foreseeable future.

In the United States, the boomers' bill has risen to about $50,000 a person. In Japan, the red ink for the next generation comes in at more than $95,000 a person. One nasty solution to pay for this growing debt is to tax workers and consumers. Both Germany and Japan, which appears about to double its VAT rate, have been exploring new taxes to pay for the pensions of the boomers.

The huge public-employee pensions now driving many states and cities - most recently Stockton, Calif. - toward the netherworld of bankruptcy represent an extreme case of intergenerational transfer from young to old. It's a thoroughly rigged boomer game, providing guaranteed generous benefits to older public workers while handing the financial upper echelon a "Wall Street boondoggle" (to quote analyst Walter Russell Mead).

Then there is the debt that the millennials have incurred themselves. The average student, according to Forbes, already carries $12,700 in credit-card and other kinds of debt. Student loans have grown consistently over the last few decades to an average of $27,000 each. Nationwide in the U.S., tuition debt is close to $1 trillion...
I wonder if this generation is going to fall for the big helping of Horatio Alger "pull-yourself-up-by-your-bootsraps" rhetoric that forms the backbone of the Republican campaign. See this post: Always Choose Wealthy Parents:
[Jimmy John's founder Jim] Liautaud didn't do well in school, but he was able create a profitable business because, according to Romney, his father provided him with financial resources. Liautaud had the individual initiative, the drive, the ingenuity, and the public infrastructure that allowed him to deliver his sandwiches, but he didn't have any money.

His father provided Liautaud with some seed loans and the rest his history. But what about the folks who also have the building blocks for success -- the individual initiative, the drive, the ingenuity, etc. -- but don't have parents with large amounts of disposable income?

In Romney's vision, these people are simply out of luck. Higher education isn't an option -- young people who can't afford to go to their college of their choice should "shop around" for some other institution, because a Romney administration doesn't intend to help with Pell Grants or student loans -- and entrepreneurial opportunities aren't really an option, either -- Romney believes small businesses should depend on parental aid, not governmental aid.

If you don't come from a wealthy family with tens of thousands of disposable income, well, that's a shame -- no small business for you.

To reiterate a point from April, my point isn't to mock Romney for being very wealthy or for having very wealthy parents. For that matter, I wish nothing but success for entrepreneurs who get seed money from Mom and Dad, and go on to create profitable ventures.

Rather, what matters here is that Romney is actively opposed to using public institutions to help level the playing field for everyone else -- and that's a problem voters need to consider.
This hits home to me as someone who was unable to get even a dime of help to pay for college, and whose relatives live a hand-to-mouth existence even more precarious than mine. I've also had to deal with a profession and an office where your last name is the biggest criteria for getting a job. If anyone can be said to be self-made, I can certainly make that claim. I've seen first-hand all the advantages that go to children of privilege. I've had to work twice as hard for half as much.Yet thanks to policies advocated by Romney, I constantly fear becoming homeless and unemployed. Guess what, Willard, some of us didn't get to choose to be born wealthy, and we'd love to borrow money to start a business or go back to school because we fucking can't. And God forbid socialism give us any chance of competing with your overprivileged spawn. No wonder America has the lowest class mobility of any wealthy nation. And it's going to get a lot worse.
This also raises a number of other questions:

1. We supposedly celebrate education as a cure-all, but now we're celebrating someone who was at the bottom of their class? Or is "more education" just for poor suckers?

2. Is Jimmy-Johns, a minimum-wage sandwich shop, supposed to the a shining example of the new post-industrial American economy? These guys must be getting pretty desperate.

3. Is everyone supposed to be an entrepreneur? Who will work for these entrepreneurs? Do they deserve any rights at all?

4. Classic survivorship bias - what about all the sandwich shops that didn't make it or went under for whatever reason. I know of many in my area whose food was much better than the swill served up by JJ's. Funny how you never hear about them.

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