Generational warfare

And so maybe it's really starting now: the Old Generation vs. the Young Generation. That's what a commentator on PBS tonight suggested is happening, and a part of the whole Occupy Wall Street movement. He was talking about the huge problems that young college graduates are having finding a well-paying job. College graduates between the ages of 25 and 34 - who should be entering their prime earning years - are making quite a bit less than those in the same boat a few years ago. Males in that category are earning 19% less, after taking inflation into account, than they were in 2000, when that group's earnings peaked. Females are earning 16% less than in 2003, when theirs peaked. And that's only for those with full-time jobs!

Meanwhile, the lead story on NBC Nightly News was how many people in their 50s and 60s have been totally devastated by what's happened in the last 3 or 4 years. Savings wiped out, unable to get a job or afford health care, losing their houses - really a very bleak picture for the group of people that's supposed to be winding down rewarding careers and entering their golden years. Juxtaposition that shocking reality with a commercial on the same program by the AARP, the group that represents people over 50. "We're 50 million strong," the ad declared, "we EARNED all the benefits we're supposed to get, we won't take anything less, and WE ALL VOTE!" Dang - talk about confrontational! And so the sides seem to be shaping up: the old demanding what they earned, vs. the young demanding a decent future.

I think that more and more, people are starting to see that this country is facing something more than an economic dip, a much more sinister, pervasive problem that absolutely will not be resolved in a few months or even a few years. Probably more like a decade or even two. To many, it's all about the corporations and the rich and the Republicans - that certainly is the consensus among the Occuply Wall Street (OWS) crowd and its supporters. But as I've pointed out in essay after essay on this site, the wealthy and the corporations - with all of their greed, power, and privilege - are the source of only a part of the problem. Where the OWS thinks maybe they're responsible for 90% of our problems, I think it's more like 40%. That share of blame, by the way, is partly addressed in my March essay here "A Really Big Question, part. 4"

So I'm not giving Wall Street a total "pass" on responsibility. But at the risk of being redundant, if you're really interested in an objective view of how the rich and their unequal share of the nation's wealth play into our nation's fortunes, read my essay "Income Inequality in America". There you'll hear Nobel Prize winning economists and highly respected liberal economists explain why - with all of their faults - the wealthy are NOT really the source of most of our economic problems, while finding out what really IS behind them.

But what I'd really like to go back to is a point made in February's essay "The Party's Over, and People Don't Get It". Aside from suggesting that we were in for a much longer period of much harder economic times than most people were willing to accept, a key point there was that we've seen this coming for decades. Quoting from that essay: "I remember back in the mid-1970s when I started in the investments business; conservative analysts were alarmed by the federal government spending more than it took in, year after year. The nation's debt was rising at a then-alarming rate, while the value of the U.S. dollar was rapidly eroding. We have to stop this now, they said, or else our children and their children will pay a heavy price down the road! Congresses and Presidents came and went, but nothing fundamentally changed. To fix the problem required raising taxes and/or cutting government spending - two equally unacceptable policies. Anyone who pushed either option would likely be voted out of office by angry voters: "You raised my taxes!" "You cut spending on my favorite program!"

So Congress borrowed more money instead, kicking the can down the road, letting the next Congress deal with the problem. Disturbing annual deficits in the tens of billions of dollars in the 1970s became shocking deficits of hundreds of billions in the 1980s and 1990s (except for a few surplus years in the late-1990s), and then insanely high deficits that eventually exceeded $1 trillion a year by the late-2000s. Each time, as Congress refused to make the tough decisions (cut spending and/or raise taxes), everybody said: "If we don't fix this now, it's today's children who will pay the price." Nobody pretended to not understand that their inaction would put the burden of their decisions on the backs of future generations; the presumption was always "well, we didn't fix it this year, but next year we will!"

But it was a cruel hoax, a deceit. Most politicians knew in their heart of hearts that they couldn't solve the problem, that they didn't have the nerve to take the tough actions needed to do so. And besides, by the time the problem got totally out of control - they'd be long gone. Someone else's problem!"
Pete Peterson, Nixon's Secretary of Commerce in the 1970s, wrote about this in his 2004 book Running on Empty. Because of failed leadership in both our major political parties, he documented the trend towards our nation's insolvency, the inevitable clash between old and young, and the bleak prospects that future young people would have in America.

Strange as it sometimes seems, the future quickly becomes the present. And our "present" really isn't much of a gift, if you'll excuse the silly pun. Government's refusal to act responsibly for most of the last four decades, combined with the American people's own fiscal foolishness (rather painstakingly detailed in many of this site's past essays) have combined to put us in this virtually unsolvable virtual insolvency.

Limited resources: that is the most fundamental crux of the social science of economics. There's not enough for everyone to have everything they want, so choices have to be made; economics is the study of how a society makes those choices. While most of the focus right now is how to let Wall Street and the wealthy have less and give more to the "99%", I think the real question, the real battle, is going to be between the past and the future. With somewhat of a shrinking pie, do we continue to give the elderly their full portion, while malnourishing the young? Or do we go the other way? Or see to it that neither group gets as much as they want, making both groups unhappy, but a bit less so?

Parents and grandparents, against their children and grandchildren - is that what it will come to? The Vietnam social divide all over again, 40 years later? That's what I predict, and I'm not pleased at the prospect.  But nobody should feign surprise that this is where we're heading; this sad situation has been an obvious eventuality for decades.