boomers or tankers?

This may be a gross oversimplification, and I’m willing to be corrected, as long as you’re nice about it.  But what is a blog for if not for trotting out ideas that are not yet ready for prime time?

 

So here goes.  While certainly there are many generations at fault for our economic crisis, isn’t it true that the majority of our political and economic leaders during the swelling and popping of the housing bubble were Baby Boomers?  Aren’t these the same people who protested Viet Nam and oppression from government and big business in the 1960’s?

 

These spoiled children of the Greatest Generation believed that they could change the world once they came into power.  Well, they’ve been in charge since the early nineties, and so far they have done a much worse job of running things than their stodgy parents.  The Greatest Generation may not have been perfect, but at least they didn’t destroy the world’s economy.

 

The Baby Boomers are so large that any generalization is bound to fail, but it would be interesting to know how many of the bonus babies at AIG or executives at Bear Stearns, Citigroup, and Lehman Brothers were free loving, pot smoking hippies in the sixties (or at least got close enough that they didn’t inhale).

 

It’s ironic that the generation which said it would save the world turns out to be the one that destroys it.  The very people who argued most passionately for love are the ones who are selfishly burying their children and great great grandchildren under piles of Chinese debt.

 

At the very least their tragic tale warns against the dangers of triumphalism.  Beware of anyone who declares that they have got it all figured out and that if given a chance, they will bring “peace, love, and understanding” to the world.  Such narcissism always ends badly.

15 Comments

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  1. Well since I am one (a baby boomer), I suppose I’ll need to attempt to enlighten you young’ns….

    I’ve blogged about this before. For those who want further enlightenment, go to my blog and look up the entries on Post-modernity….. Here is the short version…

    Back in the late 60’s and early 70’s (my high school and college years) we were told not to trust anybody over 30…. Those who told us that turned 30 and became stock brokers and yuppies, and took over the Democratic Party. As I relect on those tumultous times that some wanted to call the Age of Aquarias, it was clear the gods of that age were pleasure, materialism, and self… Sound familiar? Yes, the baals of our current secular materialistic culture…. You see they are still seeking after the Age of Aquarias; the secular millinium of peace and socialistic nirvania…. The current Obama mania echo’s the empty promises of 40 years ago; a generation as they count generations… The boomers are a generation of contradictions as most generations in a fallen world are… Out to save the world, but the world they wanted to save was a world centered around self.

    Peace….

  2. Postscript: Here is a link to the long version:

    http://hirotao.blogspot.com/2007/06/growing-up-with-forrest-gump-conception.html

    Mike, Please pardon my shameless “advertising”…

  3. Amen and amen, Mike. I hope my generation will recapture our grandparents’ spirit of shared sacrifice toward a goal greater than ourselves. I see reasons to think we will, and I see reasons to think we won’t. Thanks for nothing, Boomers.*

    *except for civil rights, rock n’ roll, the PC, the internet…

  4. Bill and Guy:

    I think it’s interesting that you come from different generations and share the same observations. I’m not terribly optimistic for the millennials–they have been told that they are “amazing” for doing even the most routine tasks, and many seem to have an overly idealized sense of self.

    I think it’s even worse with younger kids, as they are being even more spoiled by their parents. Yesterday a kid was in my house–he’s got every toy you can imagine–and even though neither parent is working he said that “if he’s good today that his mom promised to buy him a Pokemon game for his DS.” This is the same kid that told his dad “I’m going to kill somebody” when he was told it was time to go home.

    I’ll stop before I turn into Andy Rooney. I will say this for my generation (I think it’s X). We’re not terribly narcissistic, but maybe only because we stopped trying to change the world. We’re just along for the ride.

  5. You might be a little harsh here Mike. A couple of thoughts:

    1. Yes, some Boomer greed and incompetency led to these problems, but the world is such a different place (globalization, a credit economy, etc) from the Builder generation. The rate of this change is so dramatic that it is understandable why mistakes are made. It is unfair to compare two vastly different historical periods and say “you messed up, he didn’t.”

    2. Of course most of the execs are going to be Boomers, this is logical simply given their age and time in the industry. I’m not sure a generational generalization works here. Plus, weren’t some of these hedge-fund guys from our generation? They were young and on the fast track on Wall Street. I’d be interested in the average age of some of these guys.

    3. While I appreciate generational studies, I sometimes wonder: is it generational or life-phase? In other words, everyone of every generation is optimistic, rebellious, etc when they are young. However, we change as we grow. So there is no telling what our generation or the next generation will be like when they are 60 and running the world. I imagine their autonomy and narcissism will express itself.

    That’s all for now. I look forward to seeing you all next Monday.

  6. Brian:

    You make good points, as usual. Certainly any generation may have made similar mistakes, but it seems like a Greek tragedy that the generation which claimed to have all the answers are the ones in command when the whole thing tanked.

    I wouldn’t want to universalize my experience, but I don’t think my generation was terribly optimistic. I remember my peers suffering from a lot of cynicism and pessimism–perhaps it had something to do with Russia having the nuclear bomb.

    At any rate, I haven’t done the research to support my claims, so I really don’t know. That’s why I put it on a blog–the one place where people can shout their uninformed opinions!

    See you Monday!

  7. It seems like much of the mess we are in is because of the boom in housing prices. And that was fueled by (mainly, but not entirely) the boomers. When housing value went up, everyone took larger mortgates – sometimes for bigger houses, sometimes to remodel, or a variety of other reasons.

    Then, boomers repackaged the mortgages and resold them to companies. Everyone thought they were covered (the infamous “Credit Default Swaps”) but they weren’t. Mess ensues. This is oversimplification, obviously, but that’s the basis for the mess.

    Everyone thought “This time it’s different.” Housing prices will continue to go up, even though it was obvious, even in the middle of the boom, that prices were historically high. But it wasn’t different.

    Here’s the important part (bet you thought I didn’t have a point). “This time it’s different” is the same mentality that led to the stock market crash of 1929 and the subsequent depression. It also led to the tulip crash in Holland. It happens all the time. John Kenneth Galbraith wrote about the phenomenon in his must-read “A Short History of Financial Euphoria.”

    He shows that the same pattern repeats over and over. So it’s not the boomers – it’s all of human history. Given the chance, everyone does it.

  8. Mike, apathy is probably the best adjective to describe the Gen X’rs. (See “Reality Bites”)

    Brian, I don’t think you can blame globalization or the fast pace of change on our current crises. Greed, neglect and in many cases fraud, all in order to chase 30% returns that were not sustainable, are more to blame. I believe you can make a circumstantial argument against the Boomers for leading us over that cliff.

  9. To take issue with something jlemke said, I don’t think it was just Boomers or even largely Boomers who were getting mortgages they couldn’t afford. They might have been the ones offering them, but it was Xers and the first independent Yers who were signing ont he dotted line. (In the interest of full disclosure, I apparently straddle those two generations according to different ways of determining them–a daughter of definite Boomers, but born when MTv was born). It’s 20- and 30-somethings who were raised (by their Boomer parents) with a sense of entitlement that believed they should be able to buy any house out there. I know when we were working with our mortgage company to buy our first house a few years ago we were told we could afford a lot more house than we eventually bought (like about $100,000 more). If we had listened we would be royally screwed right now (and we would NEVER pay off that house, which I guess for lenders is the whole point). Luckily, we had Boomer parents who taught us personal responsibility and not to be duped into things like that.

  10. John – it seems that you are both right and wrong (very postmodern!). At the beginning you say it is primarily the boomers, but at the end you say “He shows that the same pattern repeats over and over. So it’s not the boomers – it’s all of human history. Given the chance, everyone does it.” This last point is my point. Yes the boomers are in the primary position to do some of these things, but it is not because of a unique generational characteristic, it is because they are 50-60 and that is who runs things! Every generation, if given the opportunity, will act as boomers. Therefore, it is simple humanity not “being a boomer.”

    Jeff – I’m not blaming the crisis on globalization etc, but what I am saying – in response to Mike’s post – is that we cannot compare two drastically different historical periods and act as if they are the same (so blame one and praise the other). America and the world is very different from the 1930s/1940s. Therefore, we can’t say the builders (greatest generation) would have handled this well. We simply don’t know. The world is too different. My simple point is a basic point in the study of history: you cannot place contemporary understanding and situations back on another period of history.

  11. Brian, that’s precisely my point. I think I’m right – this time, it was largely the boomers. But in reality, everyone will catch “irrational exuberance” given the chance. So you missed my point, but we agree.

    E, you are certainly right that it wasn’t “just” boomers – note that I said it was “mainly” boomers. That’s a statement I think would stand up to scrutiny, but I admit to having no data except anecdotal.

    My observations in mid-michigan: Older Gen X’ers contributed, but the boomers did most of the trading up in homes. Many (not all) from Gen Y seemed largely bid out of the housing market. Since houses were already too expensive, many from Gen Y are still renting (at least in mid-michigan) and they are not being hurt. The “greatest generation” is still living in the homes they bought 40 years ago, so they didn’t participate much either. Again, these are generalizations and there are certainly exceptions at every level.

    I believe my larger point still holds: Given the chance, ALL generations would have done it (even the greatest generation). What stops irrational exuberance is the memory of the previous financial bubble. The reason the greatest generation didn’t participate is their memory of the Great Depression. But if they didn’t have that memory, they would have done it too. Keep in mind that the generation both before and after them participated in a bubble. Their immunity only came because of their fear, not their inherent goodness and self-sacrifice. IM (very) HO.

  12. John – Thanks for clarifying. I’m glad we agree.

    Now the question is: Mike, have you repented of your generational bashing?

  13. The parents of the baby boomers grew up in a major depression and lived thrugh a war marked on the home front by rationing of just about everything… Since they coudn’t spend money on consumer goods, they spent it on war bonds. At the end of the war there was all that money and all that pent up demand. In the United States the economy boomed… Many, though not all, of the war generation seemed intent on giving their kids (baby boomers) all the goodies they had missed during the depression and the war… and if it was all going to end in an atomic nuclear holocost(sp) why not “eat, drink, and be merry”… Consumerism is the litirgy of the religion of secular materialism… It’s evangalisim medium is advertizing and with the advent of TV’s coming into the homes in the 1950’s, there was a whole new way of conveying that “evangilistic message” of Consumerisim. The appeal is “self fullfillment” by having all the “right” stuff….

  14. Thanks for all of your insightful comments. I am learning a lot from them. They reinforce my original thoughts and yet stretch me in ways that I hadn’t considered fully. I especially appreciate the observation about the greatest generation being protected from a bubble because of their memory of the great depression. This makes a lot of sense, and if history holds, means that our children won’t repeat the mistakes that the boomers are making now (but will buy war bonds from China!).

    Brian, which generation should I apologize to? I think I bashed them all.

  15. Didn’t Schaeffer talk about this all the way back in 1980, about personal peace and affluence. Didn’t he predict that the hippies would eventually become “the man,” and that he felt for them for that very reason?

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