Monday, January 16, 2017

That Whole "Boomers Screwed the Millennials " Myth

Rage is all the hotness these days; everyone has to rage against someone or something whether it's correct or logical or anything else.  It's like demanding safe spaces; everybody's doing it.  For the last 7 years of this blog, I've occasionally taken aim at those who rage against "income inequality" (there better be inequality!) and rage against the economy while empowering the very groups that cause the problems they're complaining about.  A few times, I've taken aim at those who blame all the troubles of the world on the boomers (who are their parents or grandparents) and show how those arguments are simply attempts to divide us against ourselves. 

The latest is one that's from CNBC and getting some traction around.  "Millennials are Falling Behind Their Boomer Parents".  The piece opens:
With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.

The analysis being released Friday gives concrete details about a troubling generational divide that helps to explain much of the anxiety that defined the 2016 election. Millennials have half the net worth of boomers. Their home ownership rate is lower, while their student debt is drastically higher.
The analysis of the Fed data shows the extent of the decline. It compared 25 to 34 year-olds in 2013, the most recent year available, to the same age group in 1989 after adjusting for inflation.
The glaring problem with this comparison is that it leaves out a very important comparison: how are those boomers who were 25 to 34 in 1989 doing today compared to how they were doing in 1989?  Despite years of rising prices, wages have been stagnant since the mid '70s, a few years after the gold standard was dropped.  The typical American man earns 29% less today than he did 40 years ago.  More to the point of the article the typical man working today is doing worse than he was in 1989.  The problem isn't that millennials are doing poorly compared to baby boomers in 1989, the problem is that the typical worker is doing poorly compared to 1989 no matter what generation they're from.

I was careful not to say everyone is doing poorly compared to 1989.  The high skill/high demand occupations, the top 10% of wager earners, are making more money.  These aren't all stock brokers and bankers; engineers, managers, doctors, and high-tech entrepreneurs are in this group.  Bonner and Partners provide this graphic
Note the very different time scales on the horizontal axes.  The top chart is only the right half of the bottom chart's time scale.

Despite all this, the biggest "sin of omission" in the CNBC article is in not explaining why this situation is happening; and the reason they won't go there is obvious.  The economic problems here, the so-called "income inequality" problems, are the result of the big government  and central bank manipulations of the economy.  The problems are the result of the debt-based economy we live in, and CNBC is behind Keynesian interventions.  No, it's easier for them to imply that the country is buckling under the weight of the baby boomers, and it's all those old peoples' fault.  It's easier for them to imply those old people are sucking up all the money in the economy and keeping it from being paid to those deserving millennials.  Those old boomers should just die and get out of the way.

The longer the debt bubble keeps growing, the more likely something bad is going to happen.  Nobody can tell you the date and time, but with the national debt virtually at $20 Trillion and another $200 Trillion in other commitments, it doesn't seem the confidence game can be kept up indefinitely.  When people "rage against the machine", they should rage against the right machine, the spending policies and the Federal Reserve Bank, not their parents. 


  1. Mr Greybeard, I was born in 1958, yes, technically a boomer, but did I have a say in all the fiscal and monetary policies? No, but I sure get blamed for them by some millennials and read it on other blogs I peruse. I used to dialogue and try to explain the way it really is, but much like talking to a democrat or liberal... I know, I digress. I don 't any more, they have it in the head and no amount of facts or proof will ever be believed from us, the baby boomers.

    1. Yeah, I'm just a few years older than you, and likewise I'm sick of being blamed for deficit spending and all the other crap they blame on boomers. I'm concerned about the angry GenXers and Millennials who seem to pushing grandma and grandpa to die off so that they can get ... something.

      The thing is, I think if you look at the data on birth rates, thinking the baby boom was unusually high is an illusion.

      Back in October of 2015 I tried to present a case that the only reason it looks like we had a baby boom was that the birth rate in the 60s plummeted as the pill came on the market and then abortion was legalized. The peak birth rate of the baby boom was a lower rate than in 1920.

  2. A big part of the problem is that those silver dimes, made up until the mid 60's, are worth about $1.30 now. That should tell everyone what happens to money when the government spends and creates endless credit. Another is that they have allowed companies to employ imported and/or illegals to destroy the job market for labor. As a college student in 1966, (I graduated in 1964) I worked one night a week at a hog slaughter operation and was paid nearly $4.00 an hour for the work. It was messy and greasy work but was an excellent paying job at that time. (Go ahead and figure the hour rate using the silver dimes for todays pay had they kept visa labor and illegal labor out of the country) You can also see what this is doing to programmer jobs today. Oh yea, and that rural town with the's now a "sanctuary city". If the Millennials and the media wake the hell up they can find out who has been devaluing the currency and destroying labor prices. Trump won for a reason...they best figure it out if they want a future because the uniparty is killing them. indyjonesouthere

    1. As a shortcut, it's convenient to say that $4.00/hr in '66 scales to today's pay as that value in silver dimes scales to our funny money, or ($4*13) $52/hr. I've done it hundreds of times. It's not a great comparison because the prices of things naturally tend to come down as companies learn how to make them more efficiently. For every doubling of quantity, cost comes down about 20-30%. Increased productivity (including of food) helps us all out. It's probably more accurate to figure how many hours you had to work to buy something in particular, or pay rent, vs. how many hours at today's wages.

      All that aside, your main points about who's devaluing the currency and who's destroying labor prices by importing cheap competition are exactly right.

  3. If it wasn't the boomers voting patterns entrenching all of the conditions I'm dealing with today before I was old enough to vote, then what caused it?

    The boomer failure, and they deserve the blame for it, was not stopping and reversing the stupidity of their parents (my grandparents) of the depression and "greatest" generations.

    We're still in the cascade failure from the election consequences from before I was born, but when the boomers were fully franchised...

    Why didn't they stop it?

    1. McThag, you're missing important points here. What we're living in is the results of the statists "long march through the institutions" that has been going on since at least the late 1800s and you're blaming it on people who wouldn't be born for at least another half century? Or blaming it on their parents who would have had to have been born in the 1880s to vote?

      If you're saying it's the boomers' fault because they didn't vote it out, what about the ones who spent their entire lives trying to vote it out? Or is trying to vote it out not enough for you? In which case, what else were they supposed to do?

      Look, you're painting millions of people with completely different ideas with the same brush, just because they were born in some demographer's assigned time period, which is made-up crap anyway.

      The US got here incrementally over decades. I tend to think it was started by Woodrow Wilson in 1913, but he didn't get into office in a vacuum. He just did the most damage. The argument that "you guys caused my problem" is intellectually lazy at the very least and is simply blaming someone else for your problems.

    2. So they stopped it all back when LBJ put it in high gear? Well color me corrected then.

      There's always an opposition, and they failed. But most of the day to day BS we're dealing with TODAY is from two administrations. LBJ and Nixon. Two presidents I had zero hand in voting for or against; but the boomers did. So, pray, who else is to blame for the congresses while those two were president? The long dead Wilson? The just as dead FDR?

      And Wilson is most certainly before I was born, so my position that we're dealing with a cascade failure of election consequences predating my birth is valid; you're just extending the beginning of the cascade.

      I cannot have caused a problem that predates my birth nor can I be blamed for elections and the actions of those elected before I assumed my right to vote.

      My point is the boomers, as a whole, cheered on the acceleration of what Wilson may have started and what boomers did oppose it, failed to stop it.

      With every passing day it gets harder to stop and puts the day it can be reversed even farther away, and I think the people who inherited the mess have every right to complain that the people who could have stopped it with far less effort failed to do so.

    3. Sorry too illogical for me. By that reasoning anyone who has voted since the Jimmy Carter administration is responsible, so it's Boomers, GenX, and Millennials that did it. It's not like we disallow one generation from voting when another comes of age. Millennials largely gave us Obama so they're responsible. Just as illogical.

      I don't buy it and I don't buy your argument.

      In addition, consider this: in a presidential election, a good turnout is 75% of the public. In off year elections for congress that drops precipitously. In 2014, it was 37%. If a presidential election is decided by a roughly 50/50 vote (as they all are) that means 35% of the population picked the president and 18 to 20% chose the congress. Using 2014, that means on the order of 18-1/2% of the people you're condemning voted the way you don't like. And you're condemning all 100% of them.

      It's illogical. If you frame the problem incorrectly, you'll never find the answer.

  4. There a number of things that have caused this. But the short list is:
    1. Losing our jobs overseas. To many powerful people make a lot of money by manufacturing in China and selling in America. They don't give a damn about flyover country. We need to reverse this soon.
    2. Borrowing and printing money. This should be obvious to everyone and yet here we are $20 trillion in debt with $10 trillion in the last 8 years alone and politicians show no sign of stopping.
    3. Excessive regulations. Almost as though the intent was to stifle companies within the U.S. Hmmmmm!
    4. The left wing penchant to tax and tax business as though it was an endless source of revenue.
    5. Welfare. Our poor live better than the middle class in Europe and we still call them poor and when we report how much they have to spend we don't even count any of the benefits they receive.
    6. Drugs. Drugs are responsible/associated with 80% of murders and violent crimes, 80% of theft and burglary, and 75% of rapes.

  5. The German Jews onboard the boxcars were responsible for the Nazi Holocaust, not the relatively few psychopaths you see making speeches on old black and white movies. When you find a crummy painter who wrote a book describing who they want to genocide, an appropriate response is to try to get them mental healthcare; you don't obey them. What are you, nuts?

    I notice the lack of Napoleons and Hitlers in the first world since WWII; first world human culture may be learning from history. A correct approach was done in response to additional weapons registration in Connecticut in 2013. Simply don't obey, and minimize collateral damage while doing so.

    Oh, and children are property of their parents prior to them moving out and setting up independent household. This is because the cure of statism is worse than the disease of abusive parents.

    I'm not trying to convince the majority of the readers, that would be doing electoral politics in furtherance of statism. A correct approach is to build your house strong enough to keep the official kidnappers out.

  6. Let's see now ...
    I worked as a grunt at 20 or so in an auto factory in the mid-70s, then got a job as an electronics tech in the late 70s. Went to school, got BSEE/MSEE degrees in early 80s. 3 years after receiving the MSEE degree, I finally made the same dollar amount as I did working for the UAW almost 10 years earlier (better working conditions though).

    Later obtained a PhD and did PhD level work for a while.

    Sometime around 2010, I looked up govt figures on labor and inflation: 3 high-end tech degrees and 25 years experience, I was effectively only making twice what I made as a beginning tech ... although the increase was impressive looking at the absolute figures.

    I hesitate to compare those figures to when I was child paid in real silver quarters ... which as I recall were still prevalent well into the 70s.


  7. Oops, I omitted the part about how the Jews in the boxcar situation is related. Quotes below not attributed.

    but did I have a say in all the fiscal and monetary policies?

    Yes, you chose to obey those policies. If there was an official policy that required you to burn left-handed persons at the stake, would you obey it? Of course not, you would actually go out of your way to avoid complying. I can measure your acceptance of those fiscal and monetary policies by the amount you went out of your way to avoid them. I will assume that amount of avoidance is zero for engineering purposes.

    what else were they supposed to do?

    Avoid. Evade. Disobey.

    Bastiat writes: The State is the great fiction through which everyone endeavours to live at the expense of everyone else.

    More fundamentally, government is the lie by which humans pretend to deny their agency. Humans have feet which can walk away from the census taker, hands which can refuse to dial informant hotlines.

    who's destroying labor prices by importing cheap competition

    The present prices you are able to charge customers are a property right belonging to you, therefore it's valid to murder customers if they hire competitors. Customers are your slaves. This is communism.

    If it wasn't the boomers voting patterns entrenching all of the conditions I'm dealing with today before I was old enough to vote, then what caused it?

    Voters hire legislators who can change most of the rules on any day they please. That's democracy. At they same time, voters pretend voters and legislators can't change the rules, because otherwise they'd be culpable for the outcomes.

    Using 2014, that means on the order of 18-1/2% of the people you're condemning voted the way you don't like. And you're condemning all 100% of them.

    Nearly 100% of them are giving aid and comfort to the enemy by voluntarily paying taxes. They pay taxes to the IRS, through dollar inflation, and by obeying regulations which say to hire cronies. These add up to the entire logistical support for the enemy. Culpability doesn't diminish in the slightest merely because the organized criminal group contains three hundred million members.