The Lost Generation – Millennials
In the Open Thread, I pointed to the The Millennial Disruption Index and Millennials as a cohort which will be bigger then Baby-Boomers and are also the cohort which has suffered the most since 2001 when jobs started to disappear and wages crashed. The families at 35 years of age are struggling the most with median incomes of ~$35,000. Yet neither political party is attempting to harvest the potential of this cohort and have a dislike for Wall Street and TBTF. The chart itself is worth a look as it sums up Millennial thinking.
538 Blog had this to say “Economic Inequality Continued To Rise In The U.S. After The Great Recession”:
Young people were hit especially hard. Thursday’s report provided yet more evidence that today’s young people risk becoming a “lost generation” economically. The median family headed by someone under 35 earned $35,300 in 2013, down 6 percent from 2010 and down nearly 20 percent from 2001. Those figures may understate the magnitude of the problem: Many young people are living with their parents because they can’t afford to strike out on their own; they aren’t included in the Fed’s figures because they don’t count as their own households. Young people have also become less likely to own their own homes (35.6 percent listed their primary residence as an asset in 2013, down from 40.6 percent in 2007) and much more likely to have student debt (41.7 percent in 2013, up from 33.8 percent in 2007). Whether by choice or by necessity, young people are also taking fewer financial risks, holding more of their assets in cash and less in stocks.
Add to this, the decline in home ownership going from “68.6 percent in 2007 to 65.2 percent in 2013” with those still owning homes experiencing a “decline in value to a median $170,000 from nearly $225,000 in 2007.” Americans owe less today than pre-recession due to foreclosures wiping out debt; however, they are experiencing more problems with debt. “4.2 percent of Americans reported taking out a payday loan in 2013,” a new high.
We arrived here in a series of steps. The first was Milton Friedman’s book about the advantages of free trade. Then Volcker’s (fed chairman under Carter) recommendations that permitted the avalanche of deregulation under Reagan. Greenspan’s recommendations which changed the definitions of banking rules, then Greenspan’s support of repeal of Glass Steagall. The final nail that was recommended by the Federal Reserve was NAFTA which the Clinton administration passed.
For those interested you may find the information posted by Beene in the book 13bankers or review of the book at http://13bankers.com/. The book also suggests that those policies changes are how we went from the world’s greatest creditor to the world’s greatest debtor nation.
I guess it’s telling that when I read Beene’s link, I read it as “13Banksters”, even though I have, and have read, the book! Guess you could say my opinion is deeply formed!
My daughter and son-in-law fall into the Millennials cohort. They were able to buy a house because my husband bought in as co-owner. They escaped the worst of the student loan disaster because my daughter got a full ride and her husband was able to cobble together Pell grants that saved him from borrowing huge sums. (Good thing, too, since he got two art degrees!)
He is one of those who, when the Great Recession started, got laid off immediately, but then started his own business, which, thankfully, has done well. She was able to find work right away, but not in her field of study, and NOT at a wage commiserate with her education.
Assuming I don’t live into a decrepit old age that uses up ALL the family resources, they should be left with a decent inheritance, which both have had drummed into them not to blow on a new Corvette or the like.
Still, I worry. They are luckier than many, maybe even most, of their cohort. They may never have kids, in part because of the cost. But aside from their own financial situation, I hope the world they live in won’t be as bleak as my fears lead me to believe.
Remember when you were growing up(I’m over 60) and whenever you complained about anything, the answer from your elders was always something like “you don’t know what tough is, when I was growing up..yadda, yadda, yadda.., etc.”?
These millennials will not hear this often, and certainly not from any honest people.
E:
I am afraid they will still hear such from those who made it “the old fashion way.” It will only grate harder on them.
One of the sickest lies being told by the people who hate Social Security … the people who are largely responsible for the bleak condition of the millenials… is that “the old people are robbing you.”
See, the old people still have Social Security, and because the young people don’t understand how pay as you go works, they can be fooled into thinking that they are the ones paying for all the great wealth the baby boomers have… and the best thing for them to do is to cut social security so they won’t have it when they get old.
In case you missed it., the “they” in “when they get old” is “those who are currently “the young.”
Big corporations are doing fine. CEOs of big corporations are doing fine. The wealthy continue to get wealthy. Corporations are now people with virtually unlimited ability to throw money at elections.
You can blame the politicians all you want. In fact that is what big corporations and big money want you to do. However, the fault lies with the source of political money, not the politican. They are merely paid drones. Shoot down one and there is another ready to take flight.
Coberly, the old people ARE robbing them.
Even if you believe the immoral nonsense that you have a right to what someone else earns, because someone else took what you earned, only the highest 35 years of earnings go into one’s Social Security benefit calculation. Since their retirement age is 67. So whatever they pay in before age 32 DOESN’T COUNT.
They ARE being robbed.
Like you said, it is the highest 35 years. So, if any of your highest 35 years of income occurred before you were 32, they are included.
It is a rare thing indeed when one’s highest-income years come in one’s twenties. Sports stars, I suppose, but who else?
People who have employment gaps in the last 35 years of working. That is another way unemployment hurts people. It potentially reduces their SS benefits.
could we get the old Jack back?
the new one doesn’t approach rational thought.
jack
for what it’s worth, i was making a fair amount of money in my late twenties because i had a business. then i decided to go to college and make something of myself. never really caught up. part of that was the Reagan recession.
the reason i got rude to you is that you show no evidence of thought, or experience, whatsoever. even when you think you have “evidence” it is hard to see the connection between it and the conclusion you came to. the conclusion you came to by reading your favorite “thought leaders.”
You have to admit he has quite the handle on “immoral nonsense”. If inadvertent.
Jack
i hope you don’t have any insurance policies. because if you ever collect on one of them you will be committing the immoral nonsense of taking money someone else earned.
and of course, you never want to withdraw money from your bank savings account, because that money… principle as well as interest.. will be money someone else earned.
you appear to be one of those who can’t understand pay as you go.
but Social Security is one place where you do NOT collect money someone else earned. Worker’s benefits are the workers getting back the money they paid in “taxes,” with an effective interest… remember the time value of money?… that is paid for by the growth in the economy made possible by what those workers did over their working life time. how the benefits are calculated is a mere detail to simplify the accounting and preserve the principle of “worker pays” with an insurance factor that enables those who have the bad luck of not making enough money over a working lifetime that their savings don’t add up to enough to retire on get an insurance payment made possible by the premiums of those who do not have the bad luck.
this is as different from welfare as your fire insurance is different from welfare. and the interest they collect is no different from the interest you get from the bank… except that it comes with a better guarantee.
it must be wonderful to have strong thoughts that make you feel better about yourself without having to take the trouble to actually know what you are talking about.
Jack
even your deceased cult leader Ayn Rand took her Social Security benefits because, as her uncle Miltie told her, “you paid for it.” And in spite of being a first rater, she needed it.
Please note, even your hyper pfrree marketeers understand that the people who get Social Security paid for it themselves. And even people who are as smart as you sometimes find that they end up needing Social Security after all.
> I hope you don’t have any insurance policies. because if you ever collect on one of them you
> will be committing the immoral nonsense of taking money someone else earned.
Don’t be silly, Coberly. Insurance is a contract with a company, and people voluntarily (until 0bamacare) paid for it. Are you willing to make Social Security similarly optional?
Similarly, unemployment insurance is paid for on a contract basis. The problem with extending the period of benefits to 99 weeks is that the premiums paid were based on an much shorter maximum. (I think it was 26 weeks.) Anything benefits beyond that period were NOT paid for by one’s premiums, and thus is taking money one did not earn.
The old-age portion of Social Security, however, is entirely different, because the first recipients did NOT pay “insurance” premiums commensurate with the projected benefits. The old age portion is neither an insurance policy nor an annuity contract. It is simply taking money from the younger and giving it to the older.
And while some few people make more when they are young, they are the exception not the rule. In any case, someone who works from are 18 to age 67 will have 14 years of income NOT COUNTED when computing his benefit. Furthermore, the Supremes have ruled that that is NOT your money, that you have no right to it, and that the government can reduce or end benefits at any time.
The Survivor’s Insurance and Disablility Insurance portions DO act more like real insurance — much like unemployment insurance.
“…that you have no right to it, and that the government can reduce or end benefits at any time.”
I find it interesting that people talk about the government’s ability to reduce SS benefits without acknowledging the fact that they equally have the right and ability to increase SS benefits any time they agree to.
What “right” does the government have to take what one person earns and give it to another?
Can you find that passage in the Constitution, please?
Jack:
Article I, Section 8 gives Congress the power to “lay and collect taxes, duties, imports, and excises.” The Constitution allows Congress to tax in order to “provide for the common defense and general welfare.”
Now go away and be a good boy as you are starting to become annoying.
I notice that you do not quote the ENTIRE clause:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States”
Congress does NOT have the Power To lay and collect taxes to pay my PERSONAL debts provide for my PERSONAL defence and PERSONAL welfare.
Care to try again?
Jack:
No Congress does not ultimately decide, the courts do such in interpretation of the Constitution . In one case, the courts decided the US/Congress could not tell a farmer what and how much they could grow and in another the courts struck down a drinking age penalty of highway defunding for a state. However, the Roberts Court did impose the PPACA penalty upon those who failed to obtain the minimum specified insurance as a “tax.” Furthermore, if you have read my other post; the DC Court of Appeals drop kicked the last ruling by a panel of three judges on subsidies obtained through Federal Exchanges out of the court in favor of an “en blanc” hearing. 11 justices agreed to the “en blanc” hearing which mostly likely will be in favor of subsidies to those who have obtained insurance through Federal established exchanges. Senator Cruz loses again in his attempts to repeal the PPACA.
Congress can pass legislation and the courts can approve or disapprove on its validity with reference to Article 1. Healthcare is a National interest and citizens having insurance to pay for it. It removes the burden of your not having a means to pay for healthcare from my having to pay for your healthcare after you have gone to the ER.
We have gotten off topic on this post of mine.
Jack
i don’t know about Run, but i wouldn’t care to try again. you have your mind set in cement and there is nothing i or anyone else can say that will help you out. fortunately, no one really cares what you think.
if you find yourself with time on your hands, try to think what it would mean if all those words didn’t mean EXACTLY what you think they mean.
the fact that SS is insurance that you are “forced” to pay for does not make it less insurance. and the fact that the “contract” that forces them to pay your benefits is not spelled out on a piece of paper enforced by the courts of the United States does not make it less a contract spelled out in the laws of the United States.
as to whether SS is “the general welfare” or my personal welfare, i would hazard that the personal welfare of 300 million people per generation IS the general welfare.
no doubt you will never need your social security benefits, but if you happened to fall on your head, the rest of us would have to pay for your welfare benefits. with SS at least you will have paid for your own benefits. as Ayn Rand would be the first to explain to you if it wasn’t so painful.
“We have gotten off topic on this post of mine.”
Of course that is Jack’s whole purpose.
What is at issue who is responsible for the deplorable conditions of the Republic? For the past 25+ years the Federal Reserve fought against regulation. Saying the market would regulate itself. The only real question has the Republic grown stronger or weaker following the recommendations of Federal Reserve Chairmen. Are the present interest rates set by the Federal Reserve helping savers, creating jobs, creating more debt for the Republic, or promoting speculation? Was the Republic richer when Wall Street was at 1200 or when it reached 14,000?
Much as I hate the term “unpack”, it fits here, so let me ‘unpack’ some of beene’s comments.
It wasn’t just the Fed who supported, via Alan Greenspan, looser financial regulations. That chain of events began more like 30-35 years ago and Greenspan goosed it along. Wall St. heavily lobbied Congress, and even Bill Clinton bought in – to his ever-lasting shame, IMO, with the repeal of Glass-Steagle.
The current interest rates are, according to what people like Paul Krugman say, tangentially related to the crash, because it wiped out liquidity and made the Fed the lender of last resort (if I understand him correctly). I don’t pretend to fully understand the “zero lower bound” issue, but I get that no one was lending due to lack of cash (and fear) and no one was seeking credit because they weren’t working and had no way to pay it back, being in debt up to their eyebrows.
As far as I can see, the biggest mistake made was in only recapitalizing the banks – leaving the Mom and Pop to fend for themselves. The theory, I gather, was that once recapitalized, the banks would fall all over themselves shoveling money out the door to the people so they could buy, buy, buy, and re-float the economy. For some reason, people in government, like Tim Geithner, who had such tight Wall St. connections, missed the fact that said banksters would hold on to every crying dime, the better to pay their CEOs, and Mom and Pop could just go on food stamps. “Let them eat McDonald’s dollar burgers!”
Imagine where we’d be if either the Fed had tied some conditions to that money, or if Congress had passed some kind of legislation that would have allowed/encouraged Mom and Pop do deleverage ASAP without starving to death in the process?
I’m just asking – I’m just a retired grunt who’s thankful my house wasn’t mortgaged and I wasn’t $5-ing a Mastercard bill to death.
“It wasn’t just the Fed who supported, via Alan Greenspan, looser financial regulations. That chain of events began more like 30-35 years ago and Greenspan goosed it along. Wall St. heavily lobbied Congress, and even Bill Clinton bought in – to his ever-lasting shame, IMO, with the repeal of Glass-Steagle. “ Sandi
Sandi is correct there were others who advance looser financial regulations. May have begun when Greenspan was Chairman of the Council of Economic Advisers during Ford administration, or as early as Greenspan’s association with Nixion.
OR when Rubin became the Democratic Party’s banker. Rubin’s 20 years association changed the philosophy of the Democratic Party form strict government supervision banking. So I would suggest that Wall Street banking and the Federal Reserve are the same, as the Federal Reserve is administrated by the largest Wall Street bankers.
For those interested in this subject google Rubin prodigies to see the associations of Rubin, Federal Reserve, Wall Street Banking, and the Treasury Department.
beene:
Look up Section 20 of Glass-Steagall.
“1986-87 Fed begins reinterpreting Glass-Steagall; Greenspan becomes Fed chairman.” http://www.freedom4um.com/cgi-bin/readart.cgi?ArtNum=74200 What I have attached is a time table of actions which took place and lead up to the repeal.
25 people at the Heart of the Meltdown: http://www.theguardian.com/business/2009/jan/26/road-ruin-recession-individuals-economy
When I first started to write about this, I ruffled some feathers amongst the economists as they were their usual blind selves. I would add Timothy Geithner to the 25.
Beene,
I agree Bob Rubin was a great disappointment to me, having grown up in the next county up from me; I felt a kinship with him – we fished the same waters. But he sold us out, big time.
Just watched the first two hours of Ken Burns’ “The Roosevelts”, and was reminded of how dirty and corrupt the associations between politicians and business leaders has been forever. Not all, of course, but enough to remind me we have been here before.
Or perhaps we never left.
Run are you a libertarian?
Thanks for reposting “1986-87 Fed begins reinterpreting Glass-Steagall; Greenspan becomes Fed chairman.” http://www.freedom4um.com/cgi-bin/readart.cgi?ArtNum=74200 What I have attached is a time table of actions which took place and lead up to the repeal.
I saved it this time.
The follow two quotes tell us of the need to end the Federal Reserve as a private bank. For those interested there are a dozen more like those below from presidents, economist, and other leaders at http://www.themoneymasters.com/the-money-masters/famous-quotations-on-banking/
“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.” John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in ‘Money: Whence it came, where it went’ (1975).
“Let me issue and control a nation’s money and I care not who writes the laws.” Mayer Amschel Rothschild (1744-1812)
Checked on section 20 along with some other sections. Think you will find the quote from wiki interesting as it seem since passage of Glass Steagall that there were those who deigned that banks association with markets had anything to do with the depression of the 30’s, seems it took time but in the end the bankers repealed it.
“As described in the 1933 Banking Act article, many accounts of the Act identify the Pecora Investigation as important in leading to the Act, particularly its Glass–Steagall provisions, becoming law.[19] While supporters of the Glass–Steagall separation of commercial and investment banking cite the Pecora Investigation as supporting that separation,[20] Glass–Steagall critics have argued that the evidence from the Pecora Investigation did not support the separation of commercial and investment banking.”
http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Legislation
Sandi, thanks for mentioning the video, will have to look it up.