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Guest Post: The Chart Of The Decade
Submitted by John Aziz of Azizonomics blog,
This chart tells millions of stories. I’m trying to get my head around its implications.
That’s right: since 1984 (surely an appropriate year) while the elderly have grown their wealth in nominal terms, the young are much worse off both in inflation-adjusted terms, as well as nominal terms (pretty hard to believe given that the money supply has expanded eightfold in the intervening years). So why are the elderly doing over fifty times better than the young when they were only doing ten times better before?
Are young people a stupefied generation coddled by parents and government, addicted to welfare, junk food, drugs and reality TV?
To some extent, but are they any less fiscally and morally responsible than the marijuana-smoking, free-love-embracing, national-debt-accruing baby boom generation? That’s a matter of opinion, but my answer is probably not. Baby boomers hate Ron Paul, while the under-35s seem to love him.
Is it due to government policies that favour the elderly and screw the young?
America is suffering from excessive consumer debt:
Net worth is calculated by subtracting debt from assets. The biggest debt for most people is a mortgage. So having more mortgage debt or less mortgage debt tends to be a pretty good determinant of net worth. (And no — unlike in the United Kingdom and Australia which have a severe problem with housing affordability — housing in the USA is still cheap today priced in wages)
The elderly have very often already paid off their mortgages — no doubt helped by the 1980s and 1990s where both stock prices and house prices grew rapidly. And why did rise so rapidly?
Some say that it came on the back of excessive expansion of the money supply beyond the economy’s productive capacity. But that doesn’t seem quite true:
The money supply grew in tandem with industrial production. This was no bubble, but organic growth (albeit as I have shown before on the back of cheap Chinese goods and cheap Arab energy).
My hypothesis is that the present situation is a product of government expansion.
Here’s government expenditure as a proportion of GDP:
Government spending in democracies very often tends to constitute a transfer of wealth from non-voters to voters (as well as groups that can’t afford lobbyists to groups that can afford lobbyists — perhaps that is one reason why corporate profits are soaring while youth unemployment remains elevated, and why Wall Street banks get bailed out, but delinquent small businesses do not).
Here’s the voter turnout by age in the 2004-2008 Presidential elections:
Older people vote in droves. Politicians want their votes and therefore promise them more free stuff — medicare, medicaid, services — and they vote for whoever offers them the most.
The biggest issue though, is this:
Keynesians may say that this reflects a government’s failure to create jobs for young people. They claim that the problem is that there is not enough money circulating in the economy, and that government can “raise demand” by pumping out more cash. But there is plenty of money in the economy; so much money that Apple have built up a $90 billion cash pile. So much that China has built up a $3 trillion cash pile. So much that banks are holding $1.6 trillion in excess reserves below fractional lending requirements.
More likely is the reality that overregulation and barriers to entry preventing the unemployed from picking up the slack in the jobs market. As John Stossel reveals in a recent documentary film, in New York City it costs $1 million to get a licence to drive a taxi. Anyone who wishes to operate a food cart, or run a lemonade stand has to traverse reams of bureaucracy, acquire health and safety certificates, and often pay huge fees to receive the “necessary” accreditation. While some barriers to entry are necessary (e.g. in medicine), in other fields it is just an unnecessary restraint on useful economic activity. In many American cities it is now illegal even to feed the homeless without government certification and approval. Citizens who defy these regulations face fines, arrest, and even imprisonment.
In a recent article, the Economist noted:
Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality. Examples range from the merely annoying (eg, a proposed code for nurseries in Colorado that specifies how many crayons each box must contain) to the delusional (eg, the conceit of Dodd-Frank that you can anticipate and ban every nasty trick financiers will dream up in the future). Far from preventing abuses, complexity creates loopholes that the shrewd can abuse with impunity.
The other force that makes American laws complex is lobbying. The government’s drive to micromanage so many activities creates a huge incentive for interest groups to push for special favours. When a bill is hundreds of pages long, it is not hard for congressmen to slip in clauses that benefit their chums and campaign donors. The health-care bill included tons of favours for the pushy. Congress’s last, failed attempt to regulate greenhouse gases was even worse.
Complexity costs money. Sarbanes-Oxley, a law aimed at preventing Enron-style frauds, has made it so difficult to list shares on an American stockmarket that firms increasingly look elsewhere or stay private. America’s share of initial public offerings fell from 67% in 2002 (when Sarbox passed) to 16% last year, despite some benign tweaks to the law. A study for the Small Business Administration, a government body, found that regulations in general add $10,585 in costs per employee. It’s a wonder the jobless rate isn’t even higher than it is.
The truth may be that the inability of the unemployed to become self-employed is the force that is squeezing the jobless most. Certainly, job migration overseas has changed America, but why should it mean continued elevated unemployment? There is enough money to keep the economy flowing so long as there are opportunities for people to make themselves useful in a way that pays. With the crushing burden of overregulation and the problem of barriers to entry, these opportunities are often restricted to large corporations.
These issues of youth unemployment and growing inequality between the generations are critically important. Unemployed and poor swathes of youth have a habit of creating volatility in response to restricted economic opportunity.
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+1 on the heightened awareness, which inevitably is paired with insomnia!
Woo hoo! Hey, look everybody, I'm worth $170,494 fiat dollars! In your face, Mr. $3662 fiat dollars!
Good point. How much of the "net worth" is locked up in depreciating assets?
It's all a crap shoot.
This is called "EAT YOUR YOUNG". In nature, Animals get stressed and occassionally eat their young.
Meanwhile, humans have evolved beyond this by arming their youth, sending them off to war, and letting them kill each other for the glory.
Hello Mr. Obvious, long time listener, first time caller...
http://www.youtube.com/watch?v=FE7YKu8apPA
The only amazing thing is Net Worth is not negative !
Then there'd be nothing left for the banksters to steal... where's the fun in that?
There is plenty left to steal. No-one said you couldn't steal from someone with a negative net worth. It just gets a bit harder to steal from them in the face of inflation, as thier debt is inflating away, removing the most valuable tool in the central bankster arsenal.
Next step is MF Globaling and seizure of "back taxes" from bank accounts by all 50 states+all of the territories and the associated fees.
thats the funny thing....these numbers are probaly based on Mark to Fantasy, what the boomers thought their houses were worth in 2007
The young aren't saving because they are not getting paid any interest to leave their money in the bank, they don't trust stocks and they don't report gold/silver holdings.
Spot on. I'm under 35 and as soon as my check is direct deposited into my account, it's taken out and converted to tangible goods. Banks are for people who trust thieves with their money.
Booze, cigs, and rubbers? Gold, Silver, Lead? Be more clear, some of us are trying to learn.
Well that's a losing strategy for any animal species. Cannibalize your young and pretty soon you go extinct.
Whats good for the goose isn't always good for the gander
yeh but as an individual we all go extinct...
on a long enough timeline...ahem!
The disparity is enough to give you Spiral Eyes.
If that first chart was a yearly time series projected into the future I can imagine the oldster's wealth reaching a plateau, if it hasn't already, before declining. Rebalance of wealth to a lower baseline... Or, behind the scenes, the migration of wealth away from the middle-classes.
So when's the youngster's uprising?
We are all Tyler Durden!.. But in death we are a Meatloaf.
It's straight forward and it's called work. You can argue that younger people are lazy spendaholics but that's BS. The fact is that good jobs are much fewer and farther between now than they were then. You can't get ahead when you make jack in wages.
What? It's not bad when you make $10/hr, minus a quarter in taxes, a fifth in Med. Ins., a third in mortgage/rent, and a fifth in food/gas.
Plenty left over to save!
Wake up one day and realize you're 35 with a net worth of 3k. really amplifies that hyper-inflation nightmare you just had.
More likely is the reality that overregulation and barriers to entry preventing the unemployed from picking up the slack in the jobs market.
Yes, but continually importing even more young, poor and unskilled people into the country/system is keeping that red bar down too.
But generally, yes, once you strip out the jobs Americans can't do (don't have the skills), won't do (we all know what those are), and aren't worth doing (bad incentives) there isn't much left.
Student loan debt surely adding a nice piece to the liability side of the balance sheet for the < 35ers. Thanks, Fed & fedz, for turning our kidz into indentured servants...
Agreed. The <35ers should show zero wealth at most, more probable negative.
Lets talk about Social Security too. Talk about wealth transfer. I can't believe anyone under the age of 45 remotely thinks that Social Security is a good idea. We are paying for these old farts to drive around in big RV's and spend all day at the golf course or the casino. Ya ya, they have paid some in. But by and large they are taking out WAY MORE than they ever put into the system. When the younger than 45 crowd goes to retire, they will have to work longer (retire at 68 or even 70) and they will get less out of the system, either actual less dollars, or dollars that have been debased. Either way, we will get less, MUCH less.
I love when they say after 2035 that the SS trust fund will only be able to pay 75% of liabilities. Who would invest a dollar today to get 75 cents back tomorrow????? I'd let them have everything I have ever put into the system to date, if I could opt out and keep the rest. Trust me, I could shove it all in a matress and have more to show at retirement.
And to add insult to injury that .75¢ will only be worth about .15¢ since Uncle Ben fired up the inkjet on high speed.
Its actually even worse than that:
Since gov't has essentially taken over health care, the quality and breadth of services will deteriorate all the while costs of providing care increase.
Catch 44. Whoops, make that Catch 66, when you include inflation (Dave's point above).
This is axiomatic when it comes to gov't run programs.
"What you gonna do next old timer -- show me your AARP card?" -- scene from Meet the Fokkers 2
And people wonder why grandma gets buried in the crawlspace when she dies. Meanwhile, the SS checks keep rolling on in. Generational payback is a bitch!
"in New York City it costs $1 million to get a licence to drive a taxi. Anyone who wishes to operate a food cart, or run a lemonade stand has to traverse reams of bureaucracy, acquire health and safety certificates, and often pay huge fees to receive the “necessary” accreditation."
So basically this author's conclusion is that young people need to be self-employed working hot dog stands? The problem is not regulation. The problem is globalization combined with the absence of pensions or other functioning retirement system. 25 year olds are competing with 65 years old for burger flipping jobs. Most people are not born to be business owners, but they may do very well working in manufacturing or mid-management given a chance. We were sold a bill of goods starting with Reagan and probably before. Turning the U.S. into China is not the answer, as much as idiot ideologues like Stossel would like to see us do so.
The answer is... "Carousel!"
Logan's run... A vision into the future. I've always been a firm believer that the elite will tell you what they are going to do to you before they do it.
Life clocks are a lie! Carousel is a lie! THERE IS NO RENEWAL!
One of my favorite B movies, perfect for Farah Fawcett, but how'd they ever get Peter Ustinov to sign?
Jenny Agutter <3
"The problem is not regulation". I stopped there and junked you. Idiotic statement. We are so fucking over-regulated it is scary. Remember - more regulation favors those who (a) write the regluations, i.e. lobbyists and TPTB (b) have the wherewithall to navigate the regulations to their benefit.
Pure nonsense.
BTW this shit didn't start in the 80's ... it started about 90 years ago.
Anyone who listens to Stossel and who believes that deregulation is the answer to all of our problems, cannot see the forest for the trees. If we let the oligarchs run amok, we get 2008, cheap labor in China, etc. The big banks were deregulated, and disaster followed. I don't disagree with you that many regulations favor big business, but the answer is NOT deregulation as clowns like Stossel advocates. The solution is correcting the abuses and regulating in a rational way. As for the problem starting 90 years ago, it's more like a hundred now. That's not what this article is about. This article is trying to explain the change in generational wealth from the early 1980's through recent times. To me, the answer is very clearly deregulation and free trade.
I knew you would reply with the bank regulations. I agree they are necessary and Clinton should never have removed G-S. Okay, that's one. Check out the Code of Federal Regulations - then tell me we need more regulations.
Limited, judicious, and narrow regulations are warranted. But what we have now is a joke that strangles business and renders all US citizens law breakers.
So, yes, the answer is to do away with about 99% of the regulations we currently have. It's logical to all but the statists.
You have no idea what the other 99% of the regulations are. You acknowledge that the big one you know about (Glass-Steagal and the thousands of pages of CFRs that addressed it) was good and its repeal was bad. You can label me a statist if you want. I will label you simple-minded, e.g., someone who espouses overly simplistic answers to complex problems.
Simple-minded? You mean like people who believe that complex social problems can be solved by the simple act of voting for the very criminals who create them?
The only coherent thought I've ever seen you post can be paraphrased as "Must get a hold of the gun in order to fix [social problem of the day]." Everything else you post is incoherent justifications about why your gun is so much better than [political opponent of the day].
The idea that politics can solve anything is nothing but childish, wishful-thinking. It's quite simple really. Violence begets violence begets violence...
Will you ever choose to break the cycle? Or will you continue to "strengthen your resolve" by never giving up the idea that you know what's best for everybody else?
You know, I bet far more evil is perpetrated by evil-dogooders such as yourself rather than by those who consider themselves evildoers (if they even exist).
Thanks NA for saying exactly what I was thinking.
Remember - the road to hell is paved with good intentions.
"Trillion dollar taxi liscenses? Who cares! They shouldn't have the option to drive a tzxi anyways, because I'm a East Coast liberal, and I get final say in how people live their lives, damn it!"
i'm in my early 60's. i own a business and i would start another one but ... its ... just .... not ... f'in ... worth it. too much regulation, too many rules, too many opportunities for someone to sue you, and above all, if you lose, you lose it all but if you win the government takes 40% +. if you want jobs, you need to change the cost / benefit ratio for the job creators because right now, THE INCENTIVES ARE VIRTUALLY NON-EXISTANT WHEN MEASURED AGAINST THE DOWNSIDE.
Some might call this a dependency trap.
Man, I'm glad I'm old.
Time for American Spring? Although all the kids gotta do is hang out & play xbox til pops kicks the bucket, then they get the windfall.
The governments will steal it first. Any wealth that cannot be "hidden" will be taken, young or old.
Inheritances are going to take it in the ass...inflation, health care, taxes, etc. Wouldn't hope to win the death lottery...money will be spent before they're in the ground.
Congress is addicted to government solutions.
Two sides to the same fraud dollar.
Um...think maybe a lot of wealth is now held by folks who were under 35 in 1984 but aren't now? I'm just sayin'...
This is also a big story of third world (read young cheap workers) immigration. We exported our factory and tech jobs, and imported cheap labor to compete with our own people.
BTW, this boomer LOVES RP, but would love some protectionism and a moratorium on all immigration until the real unemployment rate is around 5%.
One other thing. I am scrimping and putting away everything I can for the sake of my offspring. If we all are in a multigenerational living arrangement, I will thank God for the chance to see my grandchildren growing up in the same house with me, and will be more than happy to forego RVing to provide for my loved ones for as long as they need it. Fuck "stuff" and the "American Dream." Family is the ONLY thing I care about. And I'll be damned if I let my dear ones spend my last cent to keep me alive on a ventilator or some shit like that. All I want is for my kids to love and care for their kids like I cared for mine.
Amen, you still kave the blood of your farmer forefathers running through your veins. Farmers dream of passing their wealth to their children where the PhD intellectual crowd believe they made it through their hard work (cough, cough) so they will spend every dime before they die....who cares about the kids.
Obviously an extreme generalization, but more true than the greedy bastards would have us believe.
I also married an educated country girl of modest means (with all the advantages that brings) who sees things the way I do. Top it off with a couple of acres out in the middle of nowhere and you have the beginnings of a plan.
My sentiments exactly! You are a good man. I can imagine the joy I'll have when my son brings a lady home and her & and my daughter+ her husband are pregnant. Beautiful grand children filling the house with laughter. Food we can grow most, clothes are cheap. Maybe I'll need to trade some silver for more room. WebMD for most health issues and catastrophic for worst case scenarios. Agreed, Fuck stuff and the materialism that has become associated with the American Dream.
I'm conceptualizing an Excel spreadsheet to estimate the weighted cost of living as a function of people per household/ft^2, and I think the NAR does not like the conclusion most people will be coming to soon.
+1 for channeling my grandfather. He never saw us all living under one roof, and it was his biggest regret in life. But he saw us often.
And don't forget Gavrikon when winter's chill is unstoppable and your kid's can no longer subsist on gruel made from Emer's Glue and sawdust, it's time to kiss everyone goodbye and take a long walk into that cold cold night. Try to walk at least a mile so they don't find your body till spring.
I've already got my spot picked, assuming I don't get to exit this vale of tears surrounded by my loved ones after being stricken by something that is fast-acting and untreatable. Look up "rapid decline." Doing my best to make sure the family isn't ever reduced to glue and sawdust, but I guess we'll all find out all too soon how well we planned for what's coming.
I just wish that people of my generation were leaving a more sane world to our offspring. For what we have done, many of us deserve to shuttle off this mortal coil sooner, rather than later. Hate to say it.
Don't forget to stock up on the 3 Gs: Guns, Gold, and Groceries.
or Bs? Bullets, Bullion, and Beans.
Now this is my kind of topic!
Fuck old people.
There are websites that cater to those with that proclivity, or so I've heard.
As an older person I am so tired of hearing about medicare / social security being "entitlement" programs. If it came out of my paycheck ( which it did) it is Not a gift!
How much did you really pay in as a percentage of what you will take out? I can tell your contribution is a pittance compared to what you will use. So yes it is a gift paid for on the backs of the next generations.
And if the system returns nothing to anyone within the next 10 years or so? I've been screaming about opting out for at least 25 years, now. Even 10 years before retirement, I'd be happy to get back what I put in, and let's call it even. I'd use it to stack up some gold and silver and say to hell with the fucking government and their fucking checks.
You can't opt out of a ponzie without it collapsing. That was never a real option. I'd love to opt out to but we are all slaves to the previous generations greed.
I know. Sux, donnit?
Hey, there's plenty in the SS Trust Fund.
In fact, here's a pic of W with the head of SSA during his reign of terror, as opposed to past and future reigns:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4065119&mesg_id=4065119
Cant opt out but it is possible to reduce living expenses and income to as low a point as possible and put very little into the system to hasten its collapse.
On average retirees get three times as much as they paid in. So 2/3 of what you are getting is a gift. There will be no Social Security for younger generations. We are paying for it now, for you, and will get nothing later. You're welcome.
I question your math. If "inflation" is destroying the purchasing power of the dollar at 2% / year (at least; see other discussions, "in 1913, $20 gold piece or $20 paper bill bought a man's suit; today, $20 piece [from 1913] still buys the suit, $20 paper bill buys the belt only.") then over a 45-year working lifetime the $ paid in early are worth many more [present] dollars. Still, you have a point; Social Security IS a Ponzi scheme, run by the Government to strip money from young black men (who die young actuarially) to give to old white women (who live long actuarially). "There will be no Social Security for younger generations. We are paying for it now, for you, and will get nothing later." You won't "get nothing" because the oldsters took it all; you'll get nothing because every Ponzi scheme eventually collapses, and the "adjustments" made over the years to maintain the Ponzi SS scheme didn't work; NOTHING can stabilize a Ponzi scheme, the only way to win is not to play (cf. War Games). "You're welcome." To what? Poverty in our old age due to government meddling? Watching those we love suffer and starve from the same? The economic, social and political collapse and its aftermath? Some of us tried to do better; the ignorant, complicit and corrupt outvoted us. BUT, you're welcome to change all this - if you can interest your colleagues in putting down the toys, trash and divesions long enough to do so.
Actually, your elected representatives borrowed 2.6 Trillion from Social Security (Over the years) for the banks and aircraft carriers. They are now being forced to pay it back since they decided that giving all of our futures to the banks was better for them personally which in turn forced many boomers into the 75% bracket at 62 or $800-1500 a month because they could no longer generate income which in turn created a 48B deficit in Social Security receipts vs Payments or maybe it was that reduction of 5% off the paychecks that Obama gave. Who knows? You don't.
In 1935, The Social Security Administration envisioned times when govt would run deficits and could borrow from the Social Security funds as long as it was in surplus. Now there is a 48B deficit which is slowly reducing the 2.6 Trillion that your elected representatives borrowed from the fund and that's why there is a whole shit load of bullshit talking points about the baby boomers that no one bothers to research before projectile vomiting them out on a public forums.
That makes all of you projectile vomiting Douche Muffins. The reason your so dangerous is because of this ingrained stupidity not to swallow before going full Linda Blair on us.
( I'd like to H/T the person who put Douche Muffins up here. It's just fits, ya know?)
Raise your mouses on how many here could live the life of the rich and famous on 2G a month.
Rich and famous? No, but I can live fairly well on less then that and as an ever increasing portion of the younger population who are supposed to pay the bills for the aging grasshopper swarm are at a very low income level the wheels will come off.
The money got spent largely because the boomers and WWII generation decided to throw themselves a lifelong party funded by paycheck loans taken against their kids and grandkids.
Someone is getting screwed either way.
It sucks that most of the contributions of the Boomers where stolen by those in CONgress. So, either those that paid in and did not watch the activities of the politicians get screwed... or they sit back and watch their kids and grandkids take it.
As a middle aged person who will never see a dime from these ENTITLEMENTS, I am very tired of hearing older people tell me they paid for it. BULLSHIT. Almost every older person will take out more than they put in. Hint: look at the retirement age and life expectancy. The very first social security recepient put in about $20 and received over $20k in benefits.
Ponzi.
How quaint. Another stingy old baby boomer who thinks that because he paid a few nickels in, he deserves a champagne and caviar retirement. Here's a tip, your elected representatives pissed it all away (but at least we have 10 Nimitz-class carriers!). Ever hear of that joke "Be nice to your kids, they get to pick your nursing home." Well guess what pops? Those chickens are coming home to roost.
"As an older person I am so tired of hearing about medicare / social security being "entitlement" programs. If it came out of my paycheck ( which it did) it is Not a gift!"
Go to bed old man!!
And take a math book with you! They have this concept in math known as an equality.
This is the chart of the decade:
http://4.bp.blogspot.com/-J6cLizZkxXI/T1T9gKKtZcI/AAAAAAAAAus/rvNsdh8Z1eI/s1600/120305-V.png
If that rolls over it's the biggest H&S I've ever seen.
Looks like a still-developing "Jaws-of-Death".
Target: -0
All this analysis does is conclude the obvious.Young people are now in trouble. Wealth of the older group just grew with inflation. The younger group simply has been screwed, no jobs...no wealth...but what do you expect with a dying dollar? When we get hyperinflation everyone will be rich rich rich...then suddenly poor.
And ya'll thought deregulation and/or free trade was gonna make us all rich. Now we know:
deregulation just deregulated criminals on Wall Street to rob, rape and pillage the earth
free trade caused global slave-wage arbitrage
Ponzis always end. This one will too. Badly.
1000+, Ding.
this is too easy ... the end of the Cold War dumped a third of humanity on global labor markets. The Peoples Republic of China wants to remain the monopoly power ... hence 'embrace' 'state capitalism' using the mercantile model of Korea & Japan.
As we speak, manufacturing is moving back to this country because of the gradual equalization of global wages rates. The 'slam dunk' cost saving/value-add push for offshoring is long gone. It is a cycle and that one played out and is reverting to the mean once again.
manufacturing of a more flexible, just-in-time, high value-added where company trade secrets are not compromised by a sovereign nation (see China or Korea) is already returning here. Most modern US young people know nothing about manufacturing (I worked 2 simulatneous jobs in different factories to pay for college in Celveland ... the East & West Coasts know zirp about manufacturing it seems from what I've seen ... I paid my student loan off early from my first large bonus ...before I took on my first mortgage)
But, there will be a monstrous inflationary impact eventually as the mindless search for global low cost labor is gone .... ....... once the credit bust issues dissipate ...
Yeah I am always harkening back to the days when AT&T had a monopoly and there were like 4 airlines. Ahhh the good old days when you didn't have to worry about choosing and could just have one company force their product down your throat.
Plus there sure is a lot less regulation now, jackass. Stack them up and I can guarantee there are way more regulations then 20 years ago moron.
Regarding free trade, it is called that for a reason idiot. You have no right to force your ideals down my throat.
And last but not least you jackoff correlation is not causation.
I will add if you even had the slightest clue you would understand how mega corporations use regulations to stop the growth of smaller more agile competitors. You should be embarrased for making such an ill informad misconceived post.
you would understand how mega corporations use regulations to stop the growth of smaller more agile competitors
They Lobby to have those obstacles put in there. Exhibit one: our fucked up patent system.
It's not a million dollars for a hack license, it's about a million dollars for a medallion. Most drivers are working on someone else's medallion--that's what the dispatcher's office is all about.
(I say this mostly because I fuckin' hate John Stossel.)
I like the article, and think it's pretty accurate.
College loans courtesy of the government creat huge liabilities for the under 35 y.o. A college loan to obtain a BS in computer science from Brown or a BA in economics from Harvard are probably good investments. An equally expensive loan to get a BA in glass blowing, not so much.
The fourth chart (M2 v manufacturing growth) is completely misleading. The left hand scale, which measures M2, is twice the dimension of the right hand scale, which measures manufacturing growth. So while it appears that M2 rose "organically" at the same rate as manufacturing, IT ACTUALLY ROSE AT TWICE THE RATE OF MANUFACTURING OUTPUT.
But, hey, that wouldn't "prove" the author's argument that government regulation, not the Fed, caused the wealth shift from Busters to Boomers.
I'm 58, making me a baby boomer. I like Ron Paul, but I know he's never going to get elected, so nix that idea.
Most of my friends are BBs as well, and, as a group, they're idiots. They say things like, "we need at least $80,000 a year just to maintain our standard of living," while they have $800K in stocks and investments.
So, instead of retiring early and taking their money out of their 401ks, IRAs or whatever - many of them are past 58 1/2 - they keep on working, padding their "nest egg."
The folly of this is that by the time they retire, the world as we knew it will have ended. It already has. They'll lose in the next market downturn and keep working until they're 70 or longer to "make up the difference."
Me, I've been semi-retired in my own business since i was 43. After my business went bank-o - with plenty of help from asshat employees and dishonest corporate competitors - I decided the rat race just wasn't worth it.
I am now happy, though not content, make enough to get by and even save a little - PMs, cash, tools, necessities - and figure that I'll work my 4-5 hours a day at my own pace until I die.
Retirement, like a lot of other stuff thrown at us by the MSM, is a myth. People relying on pensions and especially SS are going to be sorely disappointed. I've already been disappointed, so it doesn't matter to me.
As for the younger crowd, they're nothing but wage-slaves. That covers about all of the demographics in America. We're royally screwed, but don't even know it and continue to keep thinking it will get better at some point.
This country has some severe deficits - in education, imagination, entrepreneurism and free-thinking. As far as I can tell, it's all been downhill since Duane Allman died, but, like I tell anyone who whines, be a warrior, and a happy one. You have to fight for everything these days. Might as well enjoy the fight.
My sister has three girls in high school and they all plan on going to college. They're all so screwed, but they don't listen to me much unless there's a crisis, so I don't talk to them much, though I do give them silver on their birthdays.
I have a feeling they'll be seeking out my counsel as time goes on.
+55
Excellent insight.
+ 100.
The older people get, the more they hate young people.
And vice versa, apparently.
Baby boomers are the curse that never gets lifted. They will live to be ninety years old while their children will barely make it to seventy. These boomers just won't go away, they won't retire, won't stop running for office, won't shut up. This generation thinks it's o.k. to saddle their children with piles of debt just so they can live a bloated lifestyle. No need to write articles, just point out in one paragraph that we're fucked, there is no way to avoid the ongoing collapse in living standards, collapse of the currency, and ultimately of the nation itself. Only when the boomers are out of the picture will we be able to reverse their policies and rebuild our country.
Yeah but who is going to be taking care of them when they're eating oatmeal and shitting their pants in the nursing homes?
I swear, at least once a day, I come across a boomer who is bitching about something -- and it's not something that matters in the grand scheme of things. They are the product of being spoiled for 60 years.
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THAT sentence negates any insight you believe you've shared.
"...Data published on Monday (3/5/2012) in a report by the Federal Reserve Bank of New York reveal that, as of 2011, the “outstanding student loan balance now stands at about $870 billion.” This debt is held by a total of 37 million people (for an average of around $24,000 per borrower). As the chart below illustrates, two-thirds of student loan borrowers are under 40 years of age (with a total of about 40 percent under the age of 30), though as many as 17 percent of student loan borrowers are older than 50..."
http://centerforcollegeaffordability.org/archives/7930
An average of 24k per borrower..!!! And this is just student loans. WOW.....
$24k does not stop them from waitin gin line to buy the iPoop or throw $10 bucks at a movie ticket.
Until the iMINDSET changes, I see little improvement in the "f" word......"fundamentals."
I think the problem is that the baby boomers didn't have the decency to die off. My grandfather and hushand's grandfather died at 60ish, leaving our parent with a nice inheritance around the age of forty. Our parents, still alive at 70 - 80 and they horde their wealth in case they need medical attention. Now, I'm not suggesting a death wish on my parents or in-laws, just an observation.
I'd hanker a guess that the early die-offs were the smoking generation.
And boomers were sold a bill of goods by their parents." Yes, Virginia, there really is a Santa Claus".
Oh and we have this little skirmish over in "Nam so we'll send more troops and bombs than the second world war. Naturally only 50,000, count them, 50,000 young men were killed.
Your problem is with the criminals in banking and politics, not the "boomers"
Bullish for iPads I suspect.
I think this comparison is partly a reflection of the times being compared. In 1984, the elderly had just finished having their savings knocked out by the inflation of the 1970's, While the elderly in 2009 had the benefit of the big stock market and housing gains of the 1980's and 1990's. And lots of young people in 2009 had just had their home equity decimated by the housing crash.
Wait another decade or so until inflation has had time to wipe out the savings of the boomers. Then the picture may look a lot more like 1984.
When the government creates inflation through money printing it hurts the poor much more than the rich.
The rich can invest in gold and other commodities to benefit from or abrigate the inflation. As it takes time to build up enough wealth to be able to invest this way the older generation was in a better position to do it.
I don't agree. Inflation mainly hurts the people who own bonds (i.e. the rich). The bonds get paid back in money with much less purchasing power.
For people who don't have any savings prices go up, but wages go up at about the same rate. So they come out about even, except that they get shifted into higher tax brackets and pay more taxes.
And people who are deeply in debt get helped the most by inflation because their salaries go up faster than their debts.
Inflation will greatly help the young. All of their student debts will be much easier to pay back when salaries double or triple. And their houses will increase in value, but their home loans will stay the same. So they will get automatic home equity.
But wages aren't going up, they're going down.
According to the BPP (not the US gov), inflation is currently running at a bit over 2%:
http://pragcap.com/hyperinflation-its-still-not-coming
So we aren't really having serious inflation yet. The decrease in median income that we are seeing may come from the retirement of high-income boomers which offsets the current low inflation rates. Also, we are still really in something a lot like a recession (although it may not fit the formal definition of one) and wages typically tend to lag during a recession.
Believe me, in the 70's when we had major inflation, wages went up along with prices. It must be that way, because if prices went up but wages stayed fixed, no one would be able to pay the high prices.
There was a lot of stuff we had in the '70s that we don't have anymore.
I remember good phone service, drive-in theaters, and organized labor.
Excelsior!
Hell, don't forget somewhat fair, normal corporate profits.
You make the ghost of Ayn Rand cry. :(
Wait until all the retirees get their government checks wiped out by inflation. Then we'll see the real generational conflicts emerging.
Young people of teh world: Buy PMs!
...From the geezers, hehe
1) There has recently been a massive UPWARD shift of wealth. But there are plenty of elderly poor.
While it is true that the "Corzines" et al are over age 35, the upward shift has not been evenly distributed to those individuals over 35. In short, the "net worth" disparity between the .1% and most others is the same whether over 35 or under 35.
2) The over 35 "net worth" increase due to the rise in house prices is mostly illusory.
3) The increase in student loan debt has caused a fall in under 35 net worth, but that's not something "seniors" (often the co-signers) lobbied for.
4) The "war on drugs"(sic) has resulted in millions of under 35 to be imprisoned and less employable when released.
5) Policies detrimental to all ages are set by an elite few who are mostly over 35, white, and male.
But it is not a war with the old set against the young, whites against blacks, or men against women. Most of the soldiers and police who carry the guns, and protect the status quo are not elderly ... and that alone should raise questions about just who is victimizing whom?
Is Obamacare a handout to the “elderly” or the Health fraud, Big Pharma, Insurance industries ?
Are the trillion$ handed to financial racketeers a handout to the elderly?
Is the global warfare machine a handout to the elderly?
Were the trillion$ “borrowed” aka pillaged from the SS taxes collected used to benefit the elderly?
No, the money was used so the boomers and folks ahead of them could feel good about themselves, whether through social programs that were never affordable or military spending so they could feel like they wore the white hats on planet Earth- in both cases it boils down to "See what good people we are"?
It was definitely used for the elderly of the WWII generation, what they paid inot government was a fractrion of what they took from it. I dont see the "greatest generation" label standing the test of history, they won the war they blew the peace.
Why Geezers Are the True Enemy of Occupy Wall Street
http://www.youtube.com/watch?v=eGIoDTtUS80
Aziz, does the fact that a 65 year old has had 30+ years to work on reducing absolute mortgage debt .vs. a 35 year old (who is probaby in the beginning of the amortization phase) have anything to do with it?
Just asking...
Sure, it would help explain the gap -- but not the widening of the gap between time periods.
Just butting in...
Looking at the median net worth of the 35 and under age group between 1984 and 2009, I think I may have some ideas as to why the median net worth of that age group has declined.
In 1984, were people shelling out $60 per game for new video games, or hundreds of dollars for the newest iWhatever?
If you DID shell out that money, at LEAST you had a physical product, not something in the "cloud" where it can be taken down such as megaupload.
In 1984, there was no satellite radio subscriptions, cell phones were very rare, most people only had a computer in a school class room, and did not need to upgrade their equipment constantly. There was no internet service subscription either.
Just a cell phone and internet subscription can easily burn through $150 per month. Not to mention the cost of the device.
At that time, there were a number of states where car insurance was optional, health care was much less expensive, college and technical school tuition was much less expensive, you at least had the possibility of breaking even on the interest you earned in a savings account or CD.
In 1984, new car loan interest and credit card interest was still deductible as well, and that would not go away until 1986. That legislation opened a whole new can of worms with the home equity loans.
Finally, in 1984, you did not need to pay a fee to use your own money with debit cards, or have all sorts of fees (Hey, its a fee, not a tax, right) added to damn near EVERYTHING.
Everything today is a rip off, designed to squeeze the last cent out of you, it seems.
I would agree, exceptionally well designed to squeeze the last cent out.
ain't this country great?
Even the "older than 65" group didn't fare that well. They have only increased their net worth by 40% in 25 years. That wouldn't even cover inflation. So, infact, both groups are worse off than they were 25 years ago. Of course, the "under 35" group is in worse shape.
Thank you Central planners!
The money supply grew in tandem with industrial production. This was no bubble, but organic growth
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No bubble?
Don't look at M2 if you're gonna look for money supply growth-
Look here-
http://research.stlouisfed.org/fred2/series/BASE
http://research.stlouisfed.org/fred2/series/TCMDO
Looks pretty bubbly to me-especially the credit to cash ratio of the money supply-
Ron Paul is a neo nazi racist. See it here.
http://www.youtube.com/watch?v=0De_IOr0LeA
Please tell us which CFR, NWO, Bankster shill you will be supporting this November.
This is perhaps the worst discussion thread I have read on ZH in the last year
All the things the creators of the real problems use to distract the sheeple from the real issues:
I have created perhaps 10 businesses over the years. And I am probably good for another 3 to 5. But the government has created so much risk in starting a new business it is not worth it to me. I can make adequate amounts of money quite a bit more safely. Liability all by itself probably keeps most people out of the new business game.
Let me see, young people think it is a total waste of time to save money as long as the baby boomers are in charge of the show.
Couldn't be more wrong. It's a waste for ANYBODY to save money, right now. Should be self explanatory, inflation far ahead of interest rates...yada yada
Many in this 35 years and younger cohort have negative net worth due to student and cc debt.
First off it has to do with massive expansion of debt. World debt has multiplied manifold in this period, fuelling rising prices of stocks and housing. The first people in the ponzi (older) benefit handsomely while future generations pay. What is debt really to an old generation? Its an obligation someone else will have to deal with.
Secondly, both those markets are rigged. Here in Australia, the stock market is rigged according to the Chilean model: legislate that everyone pay a tithe of pay into private retirement savings. This feeds the banksters and props up the stock market.
The housing market is even more rigged. The tax rules are bent to favor property speculation over saving, every time the market dips the government announces various demand side subsidies that ultimately benefit property speculators.
Can you spell Tainter collapse?
The chart is the only logical consequence of a fiat moentary system centrally planed by a central bank. It couldn't possibly look any different under this SYSTEM.
whatever, just put it on my credit card.
But there is plenty of money in the economy; so much money that Apple have built up a $90 billion cash pile. So much that China has built up a $3 trillion cash pile. So much that banks are holding $1.6 trillion in excess reserves below fractional lending requirements.
*************
Corporations hoarding cash does not coincide with plenty of money in the economy-
It translates into a demand for holding cash "out" of the economy-
http://research.stlouisfed.org/fred2/series/MULT
http://research.stlouisfed.org/fred2/series/M2V
Geez, I don't know which is the WORST offense, quoting neocon swill and shill, John Stossel, or quoting their rag, The Economist:
"Two forces make American laws too complex. One is hubris. Many lawmakers seem to believe that they can lay down rules to govern every eventuality."
Excooooose meeee! How about the obvious: they've been dismantling the US economy (and others) over the past 35 years to enrich themselves; hence all those multi-billionaires!
Just take one example:
IRS rule 401 (a) (5)
Highly and absolute discriminatory against the 99% in favor the the ultra-rich!
All the predatory legislation, and predatory jurisprudence favoring the bankster cartel, says it all --- especially to those, like myself, who has been reading it all over the past 40 frigging years!
Nice graphs, but the overall blog post is pure crock!
Ever actually start and run a business?
And all the time, I just thought is was because they just hate and despise Gen X,Y & Z's
Why is everyone saying "kids" are lazy? The article says under 35! We should be saying that MOST Americans are lazy PERIOD! I am 37 and make over 100k a year with a 4 year degree and have been for over 10 years now. We have openings all of the time for over 100k but there are not enough qualified US workers to fill them! Many of my "friends" who lost thier job and house over the past few years never went back to college or did any type of vocational training.
Maybe they could train people instead of expecting them to go 30k in debt for a degree that may or may not pay off.
More likely your company likes to keep jobs open for "evidence" they need cheap labor when lobbying their CONgressmen.
Why do you need to go 30k into debt to get a degree? I worked full time and went to school. It took 5.5 years but I had only 10k in loans at the end which I paid off within 5 years. Many jobs you can get with a 2 year AA degree from a CC for almost nothing and make 50k a year.
My wife and I noticed that there was an independant coffee shop in town. Was tucked away in a fairly unobtrusive location. We drove over to give them a try but they were closed down. We also noticed a small asian restaraunt that looked interesting. Closed.
Meanwhile there are always tons of customers at the many Starbucks nearby and at corporate chain restaurants like Applebees and Chevy's. One of the side effects of American citizens being turned into little more than a herd of consumers is that grazing choices are driven by advertising, familiarity and brand awareness. People in general have no sense of exploration. They are happy to have the same menu they are used to at the same restaurant in every town they ever visit.
So if you are Joe Unemployed and you'd really love to open Joe's Diner, good luck to you. The corporate chains have massive departments dedicated to interacting with Government regulations. As a little guy you'd better have deep pockets, lots of time and endless patience. Even then most people won't be willing to even try a meal at your new place. They are eager to line up for a McRib or a bright orange Taco but they don't want to go to some odd little place that doesn't even have commercials.
It's too late. The big government / big corporate duopoly has won. The only thing that will ever drive people back to a more human, local perspective would be some kind of complete failure of the corporate business model. Maybe a massive sustained oil shock or the breakup of America.
I've owned a small business since 1982 and I have never seen the risk/reward ratio for unconnected small business people so twisted in favor of risk- bad risk. If one has a "me-too" service or product(s) then , don't bother unless you like to invest a huge amount of money to make a little.
If one has a solution to a problem that people need, and it makes on the morning shows, the venture capitalist will cut your ownership down to 2% so fast you won't know it and God help you if it's just a fad. You need rich parents who can afford the best lawyers before talking to anyone with money.
Don't bother...if you really want to make it on your own as an entrepreneur go to asia; otherwise just keep working putting what you can into gold, silver, and guns
Sad to see so many playing into their hands.
I can't wait till they let me press the red button and death panel every single baby boomer clusterfucker. Karma is a bitch
Are you going to kill Mom & Dad first? I feel sorry for you.
my mom takes spirulina and calcium just got checked out and has the bone density of a 25 year old. It's called survival of the fittest, or something like that? I just won't miss folks like you, the brainwashed straglers
Hey, youngster, I'm 58, self-employed, party like it's 2020, smoke my brains out and drink like a sailor on leave. Hate my generation because they sold out on the ideals of the 60s, but you'd know nothing of that because you're a little shit-ass iPad fucknut who wants to exterminate all the baby boomers, no?
Tell you what, shit for brains, how about sucking my aging, rock hard dick before you waste me?
Fuckhead, probably voted for Obama and still thinks it was a good move. (I did, and regret it. I will never vote again, like I didn't from the time I was 18 until about 40.)
Douche-bag. Go skateboarding or something useless, troll-bait.
You are completely 100% wrong in every adjective you just used to describe me. I rest my fucking case, and how about you SMD before I pull the plug, K?
Most in the big blue bar group have still not bought their first iAnything. They played thousands of fewer hours of video games than red zoners and avoid multi-tasking in general.
Blue bar people have been laid off in higher numbers with the cost of health insurance being one factor. This may help even things out very quickly over the next five years. The $50K blue bar net worth gain since 1984 works out to only $2k/ year, not the windfall that it appears graphically.
Red zoners compete more directly with labor worldwide than any previous U.S. demographic. This is why the Fed missed the boat in not allowing modest deflation to stem the jobs outflow.
Add student loan debt upon graduation and a large part of the explanation will also be revealed. Universities and banks have tapped into a significant portion of students' future.earning power.
The lad age 19 in May could not locate full-time employment since before Christmas last, having him wallowing around the home compound leaving unfinished projects in the wake of his momentary inspirations and having to deal with an underaged girlfriend pining for a piece of ass every waking and sleeping moment of his existence. I could not stand it any further, so i contacted an old friend who had made a career change several years earlier and bugged out for wide open spaces in the Dakota's finding success and a moderate level of prosperity, offered him the opportunity to employ my lad with with his eager and gainful knowledge of the salts of this earth. My friend took me up on the offer for my son to travel 7 hours west and find his destiny. His mother and I are now talking to one another again, God save this family and may their once again be peace in this household.
Probably your 19 yr old that's been harassing my 16 yr old daughter. I knew I should have called the cops on that punk. BTW, learn the diff between their and there.
The "chart of the decade" is a yawner. The current young, who are either just starting out or have yet to start out, have low net worth due to (1) higher student loans (2) greater credit card availability and (3) poorer job prospects than the young of 25 ago.
The current seniors have more assets than the earlier seniors, primarily because of the great bubble in housing and stocks between 1984 and 2009. More medicare and medicaid probably has saved the Boomers some dough, but the difference in Social Security benefits, adjusted for inflation, is a very minor contribution to net worth.
Our societal acceptance of over-indebtedness spans all generations, and certainly didn't begin, nor will it end, with the boomers.