Kudos to James Quinn for clearly hitting a nerve with his October 31, 2008 Seeking Alpha post about the Baby Boomers, titled the Shallowest Generation. It did a good job of putting together a lot of interesting statistics that I have seen individually in different places over the years (although it was a bit much for a blog post).
But as they say, statistics don’t lie but statisticians can. I say that because Quinn’s rant has a major logic flaw: I don’t see any connection between the demographic data and the economic data. It might be in there and just hidden by the length of the post but I don’t see the proof that it is people between ages 47-62 who are spending the money in the manner Quinn is railing on about (that is, borrowing beyond their means to pay for consumables that should only be owned by people of a higher station in life, running up credit card bills, spending more at casinos than church/temple/mosque, blah blah blah).
I am 62 so I’ll be one of the first guys through the chute. I do worry about my “little brother” (52) and what will have happened to the money “in his social security account” (ha-ha) by the time he needs it. I have a shot at getting my $200,000 back if I live to about 75. Figure in net present value vis a vis when I paid it in and what it will be worth when I take it all out and I’m getting about what a mortgage-backed security or a credit-default swap is worth today, cents on the dollar.
Of course there really is no “social security account.” The reason is that the “greatest generation,” about which Quinn longingly and admiringly blabbers, got my money. But no complaints here. In my case that included my grandmother who died at 98 having collected for years after paying nothing into social security, and my parents still going at 90 having paid in very little compared to what they have received back in the 28 years since they retired.
So yeah, I think FDR and LBJ are to blame for that screwup originally. And Tip O’Neil, Moynihan and Reagan screwed it up further. I agree with Quinn’s comment about “Baby Boomers have been occupying the White House for the last sixteen years” but we can’t blame Clinton and “W” for the financial system they inherited from the “greatest generation.” All this pair did in 16 years was explain oral sex and the need for elocution lessons to our grandkids.
Then Quinn goes on to claim that it is “not all Baby Boomers (who) are shallow, greedy, and corrupt… (only) Boomers with power and wealth.” But if they have wealth, how have they “lived above their means in order to keep up with their neighbors,” and how have they done anything wrong if they “bought whatever they wanted using debt…” That is capitalism: use someone else’s money, not your own, especially when you have your own. None of Quinn’s data supports his claim that Baby Boomers who have “wealth” are "shallow, greedy and corrupt.”
In fact none of his data supports any aspect of his claims. But the charts look convincing. I especially can’t find a source for the claim of 12% savings rate in 1980 (but can find sources that say it isn’t true). But even if it was true in 1980, it must have been a one-year aberration. As for the rest of his “savings/spending” data, baby boomers weren’t saving in the 1980s because we were raising our kids. Savings rates are likely down now because our kids are raising our grandkids. Or government statistics being what they are, savings rates are down now because all those wealthy 12 million illegal aliens are sending their money back to Mexico.
Quinn does point out some of the legitimate problems faced by those now between ages 35-39. But he goes on to say,
“Our economy favors education, entrepreneurship, and creativity. Those benefitting from a good education will make dramatically more money than the uneducated laborers.”
That’s why I remortgaged my house in the 1980s, to pay my 30-somethings’ college tuitions. Boy, that was “selfish” of me. Quinn's bio says he works for a college. Hey Quinn, I helped pay your exorbitant salary.
Quinn’s screed then descends into an indictment of government, corporatism, and so forth, blaming Bush and Bernanke. The jury’s still out on who or what caused the meltdown. Baby boomers Corzine and Paulson, successive heads of Goldman Sachs, would make my list of suspects along with Barney and Chris. But “W” and Bernanke are probably the least culpable people in the public arena. One’s an unsuccessful businessman who got his money and his political positions the old fashioned way, from his father and grandfather respectively. The other was a college professor until three years ago (and I’m sure he wishes he still was one).
Quinn takes a little side trip into how manufacturing was outsourced without explaining why and what the alternative would have meant economically.
By the way, Quinn, how come you got so many miles on your 6-year-old car? Don’t you realize that you’re the cause of global warming?