How Did the Baby Boom Affect the U.s. Economy?

Did the baby boomer generation destroy the economy for millennials?

Joseph Sternberg, a columnist at the Wall Street Journal and himself a millennial, argues that they did in his new volume, The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economical Future. According to Sternberg, millennials have found themselves saddled with a broken economy and a combustible task market thanks to the careless choices of babe boomer politicians.

I've interviewed anti-baby boomer authors earlier, but what makes Sternberg's book stand out from the residual is his unique diagnosis of the problem. Rather than focus on market place excesses, financial malfeasance, or corporate greed, Sternberg believes the trouble is that Republicans and Democrats have continually sought a "third way" betwixt state intervention and market freedom. The event, he writes, is a dysfunctional system that encourages corruption and rigs the game in favor of Large Business.

I had some objections to Sternberg's statement, and so I reached out to him and asked him to make his instance.

A lightly edited transcript of our chat follows.

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Sean Illing

What do y'all hateful when yous say the baby boomers stole the millennials' economic future?

Joseph Sternberg

I guess the way to answer that is to take a step back and think almost the big question I was trying to respond when I sabbatum downwardly to write the book. And that question was, exercise millennials have a point?

We're maxim, "We're having trouble finding our feet in the job marketplace. We're struggling to deal with our pupil debt trouble. We're struggling to climb onto the property ladder." And the boomers are looking at us and they're saying, "Life has never been equally skillful for anyone every bit it is for you. You guys can't mutter about not beingness able to climb onto the property market when you're paying $4 for a Starbucks coffee, $8 for avocado on toast for brunch."

And so I was really trying to figure out which side of that argument is right, and I retrieve the millennials are correct. We take really suffered from the aftereffects of the financial panic and the Great Recession a decade agone, in a mode even previous generations that graduated during recessions oasis't.

For example, I talk about how nosotros discovered that nosotros were hitting the chore market for the first time right when the unemployment situation from the Great Recession was the worst, and how e'er since and so, it took a long fourth dimension for the unemployment rate to drift downwards. That meant that we were having to compete with older workers in the labor market place during the phase when we were really trying to find our manner. That has a lot of implications for the economic instability that a lot of millennials still feel because it turns out to be really difficult to recover from that.

Nosotros suffered from the educational debt phenomenon because when we couldn't observe jobs, a lot of us went to college. Or we got graduate degrees. Our boomer parents encouraged us to fund a lot of that with debt, on the premise that information technology would eventually pay off in the chore marketplace.

Merely that was clearly wrong, and we're paying the price for it.

Sean Illing

We concord about all that, so the question is actually, how did this happen? What are the policies or the decisions most responsible for this state of affairs?

Joseph Sternberg

I think information technology's less about specific policies and more about an mental attitude that led to the policies. The boomers did face their ain challenges. They're saying, "Well hey, hang on a 2nd. Nosotros graduated into the stagflation in the late '70s, and the economy in the early '80s was a mess, and we recovered from that."

Just the problem is the boomers extracted from that certain attitudes about the way policies should work. A large problem was this kind of economic centrism that adult on both the left and right in various ways.

Sean Illing

Can you lot clarify what you mean by "economical centrism"?

Joseph Sternberg

What the boomers were really trying to do throughout most of their political careers was to have both the protective power of the state but also harness the productive ability of the market. And that produced many policies during the '90s that tried to steer a lot of investment into particular corners of the economic system, similar the tech economy.

Information technology showed upwards in things like the buying order that we heard a lot about in the George W. Bush administration, where policymakers tried to use the long arm of the government and institutions like Fannie Mae and Freddie Mac to try to heave ownership for boomers who had been worrying that they were getting left behind in the housing market.

However, that actually created a lot of instability in the economic system, which produced this lingering crisis for millennials.

Sean Illing

I want to push y'all a little on this because, bluntly, I was frustrated by what seemed like a adamant try to excuse some of the excesses of capitalism in your book. You're comfortable blaming "economical centrism" for a lot of failed half-measures, merely you exit of your way to defend corporate greed and the financial manufacture. Why is that?

Joseph Sternberg

The reason I tried to veer away from the role of finance and corporate greed in all this is that I retrieve it'southward a potential trap for us. Greed is plainly a factor hither, and I remember conservatives are ofttimes too dismissive of that. I become that argument.

But I too recall that nosotros need to think a niggling flake bigger about some of these issues. And what I worry near is that if you focus solely on the financial greed or some detail aspect of some item industry, in that location's a good take a chance we'll end up making the distortions a lot worse.

For case, I point to a problem that we've developed right at present in the financial system, where if you are a large company that tin can tap the bail market place, this has been a terrific decade for y'all. But if you're a small company that needs a banking concern loan in order to hire that fourth employee, who's probably going to be a millennial, you lot're really suffering.

And that's what tin can happen if y'all try to focus too much on trying to clench downwards on specific behaviors within the financial system, within the cyberbanking industry or the similar, and you lose sight of the bigger discussion that we need to be having about how these distortions were created in the offset place and how trying to lean on specific levers of economical policy or push specific regulatory buttons simply creates more distortions.

Sean Illing

I think you're trying to wall off criticism of the market arrangement itself, but let's try to become at this another way. You write that the real problem is that political leaders "have gotten in the way of the all-time parts of our fiscal web."

But I think you make a serious mistake by inserting a barrier betwixt the incentives governing Wall Street and the incentives guiding politicians. Because our political arrangement runs on individual coin, the incentives of Wall Street become the incentives of politicians. Information technology's the corporate lobbyists who write the laws, who shape the policy, who prepare the agenda.

I think your analysis deliberately obscures this part of the story.

Joseph Sternberg

I won't argue with you about the extent of lobbying that goes on, and I think that this was actually a characteristic of boomer governance, that you would have these revolving doors on both sides of the aisle between industry and regime. I totally agree about that.

I'd recast the problem a piffling bit, though, and say that it's nearly the lobbying opportunities that popular up the more than the regime tries to regulate that kind of activeness. And I retrieve that this is a kind of conversation that millennials actually demand to have, and it'due south too something that nosotros really demand to keep in listen if nosotros are going to become down the path that politicians similar Elizabeth Warren or Bernie Sanders are advocating, where they are arguing for more activist regulation of some of these parts of the economy.

This kind of regulation inevitably creates winners and losers, and the winners are generally the people who are within the system and have the wherewithal to lobby for a particular outcome that they want. The losers are the little guys on the outside of that.

I recollect that actually now the thing that nosotros need to be careful well-nigh is suggesting that the regulation always benefits the little guy. I think the regulation usually benefits the big guy.

Sean Illing

Well, maybe the trouble is the centrism you noted a minute ago. Perhaps a more sweeping overhaul, of the sort Elizabeth Warren or Bernie Sanders suggests, is necessary.

Aside from that, you as well pin a lot of blame on private politicians for making the wrong sorts of investments in the state or the economy. But if in that location'southward been a change in the sorts of investments political leaders are willing to make, it's not because the voters forced those changes, and it'southward not because the politicians decided on their own to abandon public infrastructure and invest in labor replacement, for example. Information technology's because the special interests that prop up Washington pushed them in that direction.

My sense is that you ascribe as well much agency to political leaders and don't focus enough on the forces shaping their decisions in the first place.

Joseph Sternbert

I can definitely see that kind of argument, and it's an important chat to have about how these things came to be. The issue of how much bureau to ascribe to politicians, how much of information technology is driven by the lobbying activity, I guess that'south partly unknowable, and it's especially difficult to get to the bottom of information technology while the policymaking is really happening.

Just I'll exist honest and say this is probably where my bias is as a free-market conservative, although not necessarily as a Republican. My instinct is to think less almost a more activist government and instead focus on cut off the opportunities for the lobbying and the hire-seeking before they even arise, rather than trying to manage the effects later on.

Sean Illing

Right, and I think it's that bias that frustrated me a trivial scrap, and to exist honest I have my own biases hither. But your book reads to me like a defence force of conservative economic orthodoxy, only it's masked in this millennial-friendly bundle. Only as far as I tin can tell, it recapitulates the same arguments I've heard from libertarian conservatives for years.

Joseph Sternberg

Well, I'grand not sure that's an entirely fair characterization of what I'thou trying to say in the book. I call up that you would struggle to observe people who would say the market got united states into this and then let the market become us out of it.

I recollect the more common refrain that you tend to hear on the right is that actually, the government interference in the market got u.s. into the crisis and then we demand to find ways that nosotros can dial that dorsum to get u.s.a. out of it. I mean, that's why you tend to find conservatives who are so panicked near the event of Fannie and Freddie, and their history earlier the crisis and their fate since so.

I think it'southward important for millennials to revisit some of these arguments instead of bold that the financial crisis has settled them. 1 of the bug that we face politically is that a Republican was the president at the time the 2008 crisis started. And in fact, some Republican politicians might experience very invested in some of the policies, specially in the housing market that contributed to that crisis.

Whereas what's really interesting, from my perspective, about what's happening on the Democratic side, is that it seems that with the possible exception of Joe Biden, a lot of the Democratic politicians who were more associated with that Clinton wing have been fading, and what you take is the emergence of politicians like Elizabeth Warren or Bernie Sanders who weren't invested in that "3rd manner" policy framework from the '90s and 2000s that dominated before the crunch.

Sean Illing

I have to push a little bit more here because I call back y'all have a tendency to drift into a "both sides-ism" argument in the book.

You write: "The standard response from both political parties — now firmly under boomer management — has been to double down on economic theories and policies left over from when they were younger." That's very misleading to me.

Yeah, the Democrats were complicit in the neoliberalization of the economy, but it'south the GOP that has consistently pushed trickle-down economic science well after it failed; it's the GOP that continues to this day to button an extremist philosophy of deregulation; it's the GOP that imperils our future by refusing to act on climate modify. I call up y'all practice a disservice when you erase this distinction, when yous pretend it'due south well-nigh boomers and millennials rather than Republicans and Democrats.

Joseph Sternberg

No, I'thousand non sure I would agree with that. I think the nature of these political arguments is that where 1 assigns blame is, I think, partly shaped by your own prior opinions, and your own understanding of the way that the economic system works.

Y'all tin can also make an argument from the Republican side that in that location are people in the Republican Party who were arguing for more market and less regime all along who were probably right. That perhaps if we had been more successful at taming Fannie and Freddie before the crisis, we wouldn't have found ourselves in the state of affairs that we did come 2008.

I'm not expecting that everyone is going to agree with this volume, just I recall we demand to not assume that a lot of these policy issues have already been settled in ane direction or the other. It'south of import for millennials to benefit from some of this left and right, back and forth, that the boomers experienced, even if we're going to end up coming out in a unlike place than the boomers did.

Sean Illing

We're probably simply going to keep going in circles on some of this, so I'll ask you this: Let'due south say you're right that the boomers have ruined the economic future for nigh millennials. What are we supposed to practice now? Is this volume pure fatalism or practise you see a path forward?

Joseph Sternberg

I exercise run across a path forward, and you accept sussed it out. I think nearly people concur that trying to observe some centre mode, in which nosotros meld the state and the market, isn't actually working. Then that leaves united states of america with two options: Y'all can either have more land and less market, or y'all can have more than marketplace and less state. And I think that certainly a lot of the energy among millennial voters seems to be in the more than state management.

I guess my point is that there are dangers in that approach. If nosotros go down that road, are nosotros really creating more opportunities for the kind of distortion, or the rent-seeking, that actually got our parents and u.s.a. into this jam in first place?

What I'm really trying to practice here is aid open up up a broader political give-and-take about millennials, to think about what nosotros need to have a much more careful arroyo to making certain that we are actually making the right decisions hither. And we shouldn't close ourselves off from the idea that actually, sometimes, the marketplace tin exist an important tool for u.s.a. to solve some of these problems plaguing us right now.

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Source: https://www.vox.com/2019/5/22/18617686/baby-boomers-millennials-capitalism-joseph-sternberg

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