'Quarterlifers' to Benefit From the Coming Recession

In past recessions, it was the poor, often uneducated, who feared a recession most, because they were the most likely to be laid off. The Democrats were, historically, the party that called out the most for government action.

This time the recession will be different -- a debt deflation.

It will be the asset-rich who will be hurt most. Those with homes and 401(k)s, both Republicans and baby-boomer liberal Democrats.

On the other hand, it is the "quarterlifers" - those between 18-30 - who have relatively little to lose. With no house and no 401(k), the coming deep recession presents to them an opportunity to own a house, once prices bottom at 30% less than the 2006 top.

These "quarterlifers" (renters) are also an important part of the Obama success. Do you think they are in favor of a government-bail out of homeowners whose mortgage is greater than the current value of their home?

The politics of the coming deep recessions are not between the traditional haves and have nots, but between the asset-poor, educated young (backing Obama) and the asset-rich Republicans and Democrats, backing McCain and Clinton.

It will be McCain and Clinton making the most noise for government action. Obama, if he listens to this important constituency of his-- the quarterlifers -- may not be so vocal.

Comments

[whidbey:]

Everything is relative, if you have nothing you will not get something for nothing, and if you have something, you will sell only if you you get something desired. What changes is the value of the currency involved. The reallocations in society come when distributional effects of government programs "give away things" taken from one citizen to benefit another citizen, the tax code, the regulatory system, the services. Congress is your enemy.

2008 Mar 02 01:52 PM

[OKMONEY:]

What percentage are quarterlifers of the general population? How many are educated, well employed, self-employed, investors, speculators, entrepreneurs? Those that fall into this class are asset-rich; but they are few. Most quarterlifers are the product of one of the worst times in our educational process. They are the renters, the untrained, let alone uneducated. They have neither the money, credit or, dare I say, the brains to take advantage of any bargain except a sale on "Bud Light".

Pray tell, from what Ivory Tower do your observations come let alone your predictions? You seem to think there are scads of pent up quarterlifers just flush with cash, 800 FICO scores, $500,000 401(k)'s just waiting to pounce on these upcoming bargains. Have you seen any of the foreclosed properties up for sale now? About 1/2 of them are just copper, aluminum and scrap wood. Come on down from that Ivory Tower and smell the coffee (not @ Starbucks; try Alice's Restaurant)!

If you are asset-poor and educated you must have gotten your PhD in basket weaving or dodge ball. The educated have the greatest asset of all, and rarely are they asset-poor.

Obama is the product of the arrogance, ignorance and irresponsibility of the Bush dynasty. It's the pendulum taking a hard left swing. He was and is in the right place at the right time.

2008 Mar 03 01:48 AM

[flaco:]

Who said anything about the educated young having $500,000 401(k)s? The author said just the opposite, and I agree with the author.
I am young, with a bachelors degree and have been wanting to purchase a home. While I agree that the public education system is flawed at best, I have had the luxury of living overseas my whole life (military parents). In my area, townhouses go for $300,000+. An educated person knows that these townhouses, that five years ago was worth $130,000, are overpriced. I have bit the bullet, not incurred any debt, saved ($20,000) and waited for the housing bubble to burst. Now that it has, I will wait a year or two more before pulling the trigger to see how far down prices fall. I just wish Bernanke would quit cutting rates! Its killing those of us who like to save and killing the value of the US dollar.
Another point I agree with the author on is the political aspect. Billary is a true politician, who side steps questions, and attacks her rivals on issues that she isn't even strong on. McCain, who was my candidate of choice in 2000, now seems to be a puppet being stringed along. How can a former POW vote against waterboarding as torture?

2008 Mar 04 03:21 AM