The Greediest Generation: A book proposal

The Greediest Generation: Why the Baby Boomers are Screwing Themselves, Their Children and the Planet.

The Greediest Generation

Sven Steinmo

Book Proposal

Two decades into the twenty first century and America is failing. The richest nation in the history of the world is tearing itself apart. Why? How could we let this happen?

Steinmo argues that the ideas and values that once bound our country together have been replaced by a politics of “me.” And that the self-centered materialism of the Baby Boomers is to blame. The Greediest Generation delivers a compelling history of America’s largest, wealthiest, and most powerful generation and explains why this generation has abandoned its sense of social responsibility and in the process is ruining the future for its children. 

The Greediest Generation explains how individualism and a politics of self-interest engulfed a generation and destroyed the collective foundations that once made America great. Offering both an explanation of the forces that have led to America’s decline and a remedy for our nation’s future, The Greediest Generation explains America’s current distress while giving hope for a better tomorrow.

About the Book

The Greediest Generation is a book about what happened as the largest generation in American history came to power: It shows how “old fashioned” values like saving, underconsuming, and ‘fitting in,’ were replaced by individualism, unending debt, and conspicuous consumerism. It argues that to understand why America has been overtaken by individualism, self-centeredness, and “me first” politics, you need to understand the Baby Boomers. It shows how the largest and most powerful generation in history changed America and is tearing it apart.

The Argument

The Greediest Generation argues that the economic theories currently used as the sextant to guide our nation’s public policies undermine this country’s moral foundations. The big lie upon which these theories are built tells us that individual freedom is more important than social responsibility. Underlying this theory is the idea that we are all better off if we pursue our individual self-interest rather than our collective goals. As a consequence, we have come to increasingly accept public policies that have sometimes been in our short-term self-interest but are ultimately ripping apart the social fabric that binds us together as a country. The Baby Boom generation is at the heart of this story.

This has not been a conspiracy foisted on Americans by a clever elite against their will. Instead, this book will show that the Baby Boomer generation has been the willing executioner of a public philosophy that has served the elite and itself quite well – even as it eviscerated the future for their children and hollowed out the ideals and values that made America great in the first place.

Boomers too easily blame the current mess on whomever or whatever they happen to hate the most – whether that be the media, the politicians, the rich, lazy millennials, the Left, the Right, or Donald Trump. There is certainly plenty of blame to go around. But this book argues that the real issue is something deeper and more profound: Over the last several decades our basic public philosophy changed. Over the past forty years Americans become mesmerized and beholden to the belief that the more individual freedom everyone has, the better off everyone will be.

The book shows how the post-war Baby Boom generation began with progressive social goals and ambitions, but eventually became frustrated, disheartened and alienated. Privileged by the wealth and opportunity that the Greatest Generation had built for them, the “me” generation genuinely believed they would be the agents of social change. But as they grew into adulthood they turned inward. Encouraged by increasingly sophisticated marketing technologies, Americans – and Boomers in particular – came to accept a new public philosophy. This philosophy championed the individual and his wants over the society and its needs. It worshipped the consumer and not the saver. It rejected duty in favor of choice. Personal freedom and the pursuit of individualism were prioritized above all else. Whereas the driving motif of the Greatest Generation was responsibility. Today it is freedom.

Steinmo argues that the so called “neo-liberal” economic theories of Friedrich Hayek and Milton Friedman fit like a glove over a generation that had been burned by Vietnam, distrusted its government and worshiped the individual. Justified with these economic ideas, Americans increasingly came to accept – and sometimes even believe - that acting in our individual self-interest is not only acceptable, but socially responsible. They were suckered into supporting an economic system founded on the theory that we are each better off if we are not bound by or to each other. If we stop minute and think about this - for even a moment - we all know this is absurd. Still, the basic assumption underlying neoliberal economics is the theory that everyone should be given as much freedom as possible to pursue their individual self-interest - and somehow, we will all be better off.

The Greediest Generation is both a political history and an argument about social values. This book begins with 1930s and shows how Americans rejected the free market after the Great Depression and instead built a huge number of social and economic programs designed to manage capitalism, stabilize the economy, and redistribute wealth. The reader will learn that America was once the most egalitarian country in the world and had the most “progressive” social policies of any democracy on the planet.  Many will be surprised to learn that by the mid-1930s America had the highest levels of social spending of any democracy in the world. And by the 1950s, the US had imposed steeper taxes on the wealthy than Britain, France, Germany or even Sweden. And these policies were massively popular. Steinmo argues that America was in fact developing its own version of a Social Democratic society.

But of course, America did not continue down this path and instead has become one of the most unequal societies in the world. Currently the USA has lower levels of social spending, higher levels of child poverty and less social mobility than any other modern democracy. This book tells us how and why this happened.

The book intends to be controversial. But rather than simply accuse Boomers of being selfish sociopaths, The Greediest Generation demonstrates how the individually rational decisions have resulted in collectively disastrous outcomes. By making sense of these choices, it also offers a way out. The book ends with a set of specific recommendations that can help us rebuild the fabric that we need to bind society together.

Why This Book, Why Now?

The Greediest Generation has tremendous market potential because it helps explain why America is so divided today and how we got here. This not a book about Donald Trump. But it explains how a person like Donald Trump could be elected and why so many Americans support an explicitly self-centered narcissist for president. 

 It offers a fascinating and untold postwar history:

·      Contrary to the Hollywood myth, when America really was “great,” it was the most progressive and egalitarian country in the world. America imposed higher taxes on the rich and on corporations than any other country in the world.

·      It shows that in the 1950s and 60s, psychological research and sophisticated marketing campaigns were used by corporate America to sell a new vision of the American Dream.

·      It tells the story of how religious leaders were recruited in the 1950s in massive anti-New Deal campaign designed to undermine citizens’ faith in their public institutions.

·      It details how the anti-establishmentarianism of the 1960s actually grew out of the corporate campaigns to sell more stuff.

·      It shows that the Vietnam War was initially supported by the majority of Baby Boomers, and why it eventually divided this generation.

·      It shows how the ideas of a little-known economist, Fredrick von Hayek, were picked up and championed by corporate elites and anti-government ideologues and how they eventually came to guide American public policy.

·      It explains why Ronald Reagan was so successful at selling the idea that Government was the problem not the solution.

·      It makes sense of Bill Clinton’s policies that effectively abandoned the unions and the even basic principles of the traditional Democratic Left.

·      It helps us understand why Barack Obama invoked such visceral fear among so may in the white Boomer class.

·      Finally, it offers specific ideas and proposals that might help rebuild what David Brooks calls, The Second Mountain.

In The Greediest Generation readers will discover interesting and little-known facts about their own history. The combination of historical analysis and a somewhat personal look into the history of the Baby Boomer generation along with unique insights and anecdotes both enlivens the book and relates it to  the lives of average  readers. Without attacking Baby Boomers as individually selfish socio-paths, its insightful analysis shows  how a generation of Americans were sold on the idea that the common good is really just a collection of individual goods.

The topics and issues discussed in this book will be familiar to most as discussions regarding economics, political history, pop culture, television, and marketing are frequent in popular discourse. However, what makes this book unique is its ability to discuss these themes and the unseen forces that controlled them- changing a generation and our country in the process.

The style of the book will be a combination of deep historical analysis and surprising stories and interesting anecdotes. The book is a serious attempt at covering underlying problems framing our  current public discourse on the future of the American society and is written in a lively and conversational style. The book’s many entertaining examples will lend themselves to becoming compelling  conversation and appealing sound bites.

This book thus appeals to those who are asking the questions: “What has happened to our country?” “How did we get here?” and “How can we fix it?” Viewing modern American history through this generational lens readers will gain an understanding of the social, intellectual, and political history that has defined America and transformed our nation. Those wanting both an understanding of America’s failure and a promising way forward will find the solutions presented at the end of the book particularly thought provoking.

Chapter Summaries

Chapter 1: The Boomer Dilemma

The Greediest Generation opens with evidence demonstrating clearly, and bluntly, the extent to which our political economy today advantages Baby Boomers and disadvantages their children and grandchildren. It shows how public policies have been changed since the Boomer generation came into political power and points directly to their self-interest. 

The chapter is written as an easy to understand, and somewhat personalized account of the policies pursued by the author’s own generation. It is a clear indictment of the post-war generation and the public policies that have been passed on their behalf. It argues that while everyone has someone else to blame for America’s current mess (the 1%, the rich, the Republicans, welfare recipients, immigrants, the Democrats, or even the millennials themselves) the real problem has been the unwillingness of the Boomer generation to pay for the same public programs that they benefited from when they were young. The result has been a massive transfer of wealth from the young to the old and growing disenfranchisement and anger in America.

Some interesting facts/anecdotes:

·      Taxes on average citizens are significantly lower today than they were in past decades. Yes, taxes on the very rich are much lower, but the middle class has also profited from the multiple tax cuts introduced since the Boomer generation became the largest voting bloc in American history.

·      Federal spending has increased very slightly over the past 4 decades (from 17.9% of GNP to 20.8% of GNP), but the distribution of that spending has changed massively. Federal programs directed at retirees have grown from 38% to 47% of total spending in the past 15 years – while spending directed towards the young has declined by almost exactly the same amount. 

·      Though many people think Social Security is some kind of forced savings plan, it is in fact a welfare transfer between generations. Young people pay taxes which directly benefit retired people. This program has worked wonderfully. Whereas 40 years ago, the aged were the poorest demographic cohort, today they are the wealthiest. Their children and grandchildren have not fared so well.

·      Today public debt (that is past spending which will be passed on to future generations) is over 22 trillion dollars. This is a very difficult number to grasp. But we can visualize it as a stack of $1,000 bills --- reaching 67.9 miles into the sky! This is equivalent to $180,000 per taxpayer in America today.

Chapter 2: Foundations: Building the American Dream

This chapter offers a new interpretation of America’s widely misunderstood or forgotten past. The chapter opens with the story of how the Great Depression brought Americans together against free market capitalism and shows why they started to build an American version of Social Democracy. The chapter describes life for millions of average Americans in the 1930s and 40s explaining how and why they became such strong supporters of economic redistribution, the New Deal, increased government regulation, and the welfare state. 

The narrative explains what made the so-called Greatest Generation so great: They pulled together, rejected the rampant individualism and free markets of the roaring twenties, and demanded redistribution and social justice. They believed in their government and trusted their leaders to fight against the “economic royalists.”

By first demonstrating the strong communitarian values that shaped our society and fostered a positive relationship between Americans and their government, this chapter sets the stage for explaining how and why these ideas eventually were discarded by the Baby Boomer generation.

Interesting facts/anecdotes:

·      At the height of the Depression over 1/3 of all wage earners were out of work. For the majority of single breadwinner families, this meant that there was no bread.

·      Over 6,000 “Hooverville” shanty towns (basically camps for homeless families) spread across America.

·      The New Deal did not end the Depression, but it restored American’s faith in their government.

·      Over 60 million American’s listened to FDR’s “fireside chats” on the radio.

·      By the mid-1930s, the USA had higher levels of social spending than any other modern democracy.

·      From the 1930s to the 1960s, taxes on the wealthy and corporations were significantly higher in America than in Britain, France, Germany and even Sweden.

·      Franklin Roosevelt won four national elections and was only one of two presidents in US history that was more popular when he left office (in his case, he died) than when first elected. In his four elections he won 3,315 electoral votes. His Republican opponents won a total of 248 electoral votes in all four elections.

·      President Truman turned his electoral fortunes around in 1948 and upset Dewey by moving to the Left and promising tax increases on the wealthy and a National Health Insurance Plan.

·      In 1938 seventy-eight percent of Americans agreed that the government should take on the responsibility to provide medical care for those who were unable to afford it.

Chapter 3: You Can Be Anything You Want to Be

At the end of WWII Americans moved to the suburbs, looked for stability, and trusted their government and its leaders. They were conservative. They wanted the best for their children and hoped that by working together, saving for the future and building even more public institutions (highways, universities, dams, etc.) they would make a better world.  They wanted a very different world than the one they had been born into and told their children “you can be anything you want to be.”

In this chapter readers will enjoy fascinating anecdotes and untold history about the birth of the American suburb and how the spread of the greatest “selling machine” of all time, the television, allowed for the reshaping of American culture. The chapter shows how the emerging science of psychology along with new research techniques (such as the focus group) allowed advertisers, television creators, and corporations to build and sell a new image of the American Dream – where individualism and immediate consumption would triumph over conservatism and savings. The Baby Boomers were the target audience for these new ideas.

Interesting facts/anecdontes:

·      Jaird Levitt built the first post-war suburb, Levittown, in 1947. By building identical houses in an assembly line style, he was able to build 17,000 identical houses for just $6,990 each – fully furnished. He built a new home every 16 minutes.

·      White Americans loved the safety and homogeneity of these suburban communities – even if their children eventually thought they were boring.

·      It was a particular form of American genius to say, “this is yours and this is mine, but we are all the same.”

·      Keeping up with the Joneses was considered a good thing.

·      Americans strongly supported the social programs built during the New Deal and the Fair Deal. They wanted more and were willing to pay for them. Tax rates remained high throughout the 1950s, topping out at 91% on the richest Americans. President Eisenhower called Republicans who wanted to roll back New Deal programs and regulations, “stupid.”

·      Executive salaries declined relative to worker’s salaries in the three decades after the war.  They were 82 to 1 (for CEOs) in 1936-39. This dropped to 47 to 1 in 1950-59, and 39 to 1 in 1960-69. By 2003-4 it rose to 367 to 1.

·      The top 1% of income earners paid an average of 60% of their income in taxes.

·      Television watching became a national pastime. So much so that in some towns the sewage systems had to be rebuilt because so many people flushed their toilets between TV programs.

·      Major companies like DuPont and General Electric understood quite early that TV could be used to sell products and ideology. They employed Freudian psychologists such as Edward Bernays, “the father of public relations,” and Ernst Dichter, to conduct “motivational research” to understand and manipulate citizen’s “inner desires and needs.” Bernays, wrote in his book, Propaganda, for example, “Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country.”

·      In the 1950s thousands of preachers and ministers were recruited in the corporate campaign against the social welfare state under the banner, “Freedom under God.” Spiritual Mobilization, which was funded by companies and donations from wealthy individuals, conducted a sermon contest the theme “The Perils to Freedom.” The top prize money as $5,000. Fifteen percent of American clergy participated. 

Chapter 4: The Rise of Generation Me

This chapter tells the story of the Baby Boomers as they grow into adulthood and how they started as optimists and ended as cynics. The chapter contains two main themes. First it echoes a well-known narrative showing how this generation took the ideals embedded in American democracy (and the Pledge of Allegiance) seriously but became disenchanted and disillusioned with the Vietnam War and Watergate. Second, it emphasizes the ways in which this generation was influenced by the marketing strategies and campaigns of the 1950s and 60s. These forces came together by the 1970s toward an increasingly frustrated and inward-looking generation. The Pepsi generation turned to EST.

This chapter will illustrate how boomers were taken hold of by the unknowingly toxic belief that in order to make society better, you must first focus on bettering yourself.  Having been burned by government and alienated from collective action, duty turned into self-actualization. 

Interesting facts/anecdotes:

·      By 1969 the average Baby Boomer had watched 12,000 - 15,000 hours of television – of which 15% was commercials.

·      According to advertisers, in the early 1960s children were learning to sing along with beer commercials before they learned the words to the Star-Spangled Banner.

·      Boomers thought they were showing their individualism by driving Volkswagen Beetles, wearing bell bottoms, and drinking the ‘uncola.’ They barely noticed that everyone they knew was doing the same.

·      Only a tiny fraction of boomers went to Woodstock or participated in the Summer of Love in San Francisco. But nearly everyone saw the movie and millions were so stoned when they watched it, they now remember being there.

·      In the early 1960s, young people were stronger supporters of the Vietnam War than were their parents. In the last years of the war – after it became clear that the government had been lying all along, strong majorities in every age group thought the war was a mistake.

·      The Vietnam War accelerated the divide between the educated Boomers and the working class. More young men committed felonies avoiding the draft than soldiers died in South East Asia.

·      In 1974 a boycott by OPEC oil producers quadrupled the price of gas in a few short months. By mid-1970s inflation skyrocketed and interest rates reached 16%. 

·      The Swedish Nobel Prize in Economics was dominated a Swedish economist, Assar Lindbeck, who hated the Swedish welfare state. Under his influence, the prize was given to anti-government economist after anti-government economist. Beginning with the little known, and barely respected, economist Fredrick von Hayek in 1974. Over the next ten years, five right wing economists from the University of Chicago were handed this prize.

·      In the late 1970s, hundreds of thousands of Boomers participated in EST training, encounter groups, and other neo-religious, or spiritual, exercises. A common theme was that your first obligation is to yourself: “The personal is political.” I’m Ok, You’re OK, a Transactional Analysis (TA) book sold 15 million copies and was in the top 10 of NYT best sellers for two years. Other best sellers included: How to be Your Own Best Friend, and The Joy of Sex.

·      The Graduate was the top grossing film of the era.

Chapter 5: When Greed Became Good

This chapter argues that it was Ronald Reagan who best captured and articulated the changes in public philosophy that were brewing in the country. Though he was of an older generation, he fundamentally understood that what the largest voting bloc in American history really wanted was more freedom, more choices, and more stuff. Seizing on the economic theories which were gaining increased traction among economists, Reagan brought forward the idea that what was wrong with America was that Americans were not free enough. The new theory was that if everyone had more choice and more freedom, we would all be better off. In the process, the idea that we should work together and be responsible for each other was replaced by the theory that everyone is fundamentally a selfish individualist, and that self-interest, not collective effort, is the best engine of economic growth.

Baby Boomers, stressed by the slow growth, high inflation and astronomical interest rates - just as they were starting their own families - began cutting their hair and looking for a ‘real’ job. Reagan’s promise was “Morning in America” which he financed with two massive tax cuts. Tax rates were cut for virtually everyone, but particularly those at the top. As a result, more people had more money in their pockets which boosted the economy and blew up the national debt. People loved the new economy, because they could buy more stuff without having to pay for it.

Whereas the previous generation paid down huge public debt caused by the mobilization for WWII. Reagan’s strategy was to simply give people more money to spend and pretend the debt would pay itself off. Responsible government was out, “let the market decide” was in.

Interesting facts/anecdotes:

·      David Stockman, Ronald Reagan’s Budget director, described Congress’ scramble to pass out ever more tax cuts and tax breaks in the 1981 “Economic Recovery Act” (ERTA) as “Pigs on Ice.”

·      Newsweek magazine declared 1984 as “The Year of the Yuppie.”

·      In 1980 the top tax rate in America on high income earners was 70%. After Reagan’s second tax “reform” in 1986 it had been cut to 28%.

·      One of Reagan’s favorite stories (he was famous for his storytelling) was about a “Welfare Queen” who drove a Cadillac and had up to 80 different names and 12 social security cards “and bilked the government out of $150,000.” This story was a total fabrication.

·      Ronald Reagan was elected in part on the promise to balance the budget making much hay over President Carter’s $79 billion deficit in 1979. By the time Reagan left office in 1986, the annual had skyrocketed to $221. In his eight years in office, he had added $1.4 trillion to the US federal debt.

·      Personal savings also began its nose dive in these years. Gross domestic savings fell from 23.8 percent of GDP in 1980 to 19% in 1990.

·      In 1987 Michael Douglas won the Oscar for Best Actor, exclaiming “Greed is Good,” in the movie Wall Street.

·      For the first time since the Great Depression inequality began to grow in America.

Chapter 6: When Harry Meets Louise

This chapter argues that Bill Clinton eventually furnished the house the Ronald Reagan built. Clinton was the first Baby Boomer to be elected President (every President since then has been a Boomer – except Barack Obama). The chapter takes up the theme of the infamous TV commercials “When Harry Met Louise,” which were effectively used to kill Clinton’s signature policy proposal: National Health Insurance. As such, his presidency can be seen as a case study in “The Boomer’s Dilemma.” Elected on the promise to return to the ideals of underlying the New Deal, he promised a fairer and more equitable society and a government that would protect the environment. He specifically promised to create a National Health Insurance system that would ensure that no Americans would be forced into poverty because they could not afford health care for their children.

Strong majorities of Baby Boomers truly wanted to ensure health care for everyone and reforms that would help save the planet. But when they found out that these policies might actually cost them personally, or worse yet, limit their personal choices and freedoms, they turned away.

Slammed by public disapproval in his first year in office, Clinton also took an about face. He and his team turned to the increasingly sophisticated marketing technologies of market segmentation, focus groups, and message targeting. Through this research they learned that the largest block of voters, the Baby Boomers, believed they wanted a fairer society -- but when push came to shove, they were more focused on their immediate needs and desires. The “soccer mom” was born. Consequentially, Democrats’ traditional commitment to social responsibility was replaced by the new demand for individual responsibility. Instead of National Health Insurance and gas taxes, they delivered banking deregulation and NAFTA. The first Baby Boomer president became wildly popular, despite his apparent inability to control himself, because housing values exploded at the same time that Boomers’ pensions and IRAs were stuffed with massively inflated stock portfolios.  Hardly anyone noticed that wages were stagnating, and that inequality was growing instead of shrinking.

Interesting facts/anecdotes:

·      The term “soccer mom” was invented by Clinton’s team.

·      Fortune magazine named Enron America as one of “the most innovative companies” in the country every year between 1996 and 2001.

·      In 1995 Baby Boomers were significantly more likely to support cuts in government spending and services than their parent’s generation.

·      Sixty-five percent thought that welfare programs should be cut in order to reduce the deficit.

·      Clinton ended “welfare as we know it,” and claimed in his 1996 State of the Union speech, “The Era of Big Government is Over.”

·      Clinton’s “New Democrat” ideas took up Reagan’s theme of “personal responsibility” instead of social responsibility.

·      Robert Reich, Clinton’s Secretary of Labor resigned in 1996 out frustration arguing that the bankers and Wall St. financiers in the administration had “out-gunned” him and the traditional New Deal values of the Democratic Party.

·      The Republican Party, led by House speaker Newt Gingrich, watched the Democratic Party abandon the white working class “Joe six-pack” voters and swept them up with the “Contract with America” campaign in 1994. For only the second time since 1932 the Republican Party controlled both houses of Congress. 

·      NAFTA continued the race toward globalization and free markets and accelerated the loss of working-class jobs in America but increased the wealth of those who had savings and investments.

·      Average house prices doubled and suddenly millions of Baby Boomers felt increasingly comfortable. Mean wealth holdings for 35 to 44 year olds nearly tripled (due to housing inflation and stock market booms.)

·      By 2002, the average size of new homes had grown to over 2,220 sq. ft: A 38% increase since 1975.

·      Walmart became the most successful company in the world, with over 2,000 outlets and 239 Super Centers, offering “always lower prices” and undercutting prices and wages of small retailers around the country.  Walmart and its affiliates became the largest employer in America. It did not offer its hourly employees health insurance.

·      The FDA approved Viagra in 1998 re-opening the door to the sexual revolution.

·      Inequality grew even more than it had during the Reagan years.

Chapter 7: Show the Terrorists who we really are: Go Shopping.

On September 11, 2001 America was attacked by a radical Islamist terror organization and for a few brief weeks, as the country mourned the deaths of more than 3,000 of their fellow citizens, it appeared that the country might join together in common sacrifice and commitment. Even Midwesterners suddenly felt connected to the Big Apple. Alas, this feeling did not last long. Instead of encouraging us to lock arms in common purpose to fight what might be the greatest threat since the Nazis, President George W. Bush (the second Baby Boomer president) told his countrymen to go shopping. “Get down to Disney World in Florida,” he said. “Take your families and enjoy life, the way we want it to be enjoyed.” After a brief slowdown in the US economy after the 9-11 attacks - that was quickly compensated by the Federal Reserve cutting interest rates to make sure no one in the financial markets lost any money - the Boomers went on the consumption binge of a lifetime. Of course, it was more debt-fueled consumption – but paying these bills would be someone else’s problem.

In Fall 2007 the massive credit bubble began to implode. The obvious problem was that Americans had gone on a spending binge financed by the paper values of their housing assets. But we must remember that this bubble was not just a product of housing prices, it was even more a consequence of the “free market” ideas that deregulated banking and finance in America. Whereas banking had been a rather traditional and conservative industry in the 20th century, it was transformed into a casino in the 21st. This is great, as long as the slots were producing. But what Americans rudely discovered was that those who were running the casinos were acting just as irresponsibly as they were.

The even bigger problem was that the casinos were playing with our money. This is why when Treasury Secretary Henry Paulson said we needed to borrow a trillion dollars so that the bankers wouldn’t lose all our money, we responded, “where do we sign?” Of course, we wouldn’t have to pay back the trillion. That problem would be left to our kids.

Rather than accept the risks that goes with the rewards of playing in markets, the Boomers let their representatives know in no uncertain terms that bailing out the banks was the right thing to do. And their representatives were only too eager to follow orders. (Don’t forget that their elections were also being financed by the finance industry - and many of them would also be getting excellent jobs as consultants to these same companies as soon as they finished their “public service.”) So, what happened? The federal government saved the markets by “recapitalizing” the banks with new public debt. In other words, the banks’ private debts were socialized and became public debts.

Of course, the story did not end there. Perhaps realizing their folly, the financial elite and Boomers alike demanded that debts be reduced. The Greatest Generation would have done this by paying more taxes. But the Boomers were never going to go for that. Instead they demanded a ‘sequester’ on public spending. Public spending - on everything except for the Boomers’ entitlement programs of course – had to be cut. That meant real cuts in everything from preventative health care to basic R and D. In other words, the programs that benefit future generations were cut and those benefiting the old were protected.

Interesting facts/anecdotes:

·      In 2007 the DJIA went from just over 14,000 to just above 6,200 in under a year while the Case-Schiller housing index went from 220 to 140 over the same period – a 36% fall over the same period.

·      When the stock markets crashed, Boomers first thought was, “what will happen to my retirement accounts?” That is why they so eagerly supported borrowing a trillion dollars (from their children) and giving the money to the bankers who had made the bad investments in the first place.

·      In the first decade in the 21st century, the government added more to the federal debt than it had accumulated in the past 200 years. Total federal debt grew from $5.6 trillion in 2001 to $11.9 trillion in 2010.

·      Federal spending increased by 6.5% of gross domestic product in this decade as well (from 18.2% to 24.7%) The majority of these increases went to programs that directly aided those on or near retirement.

·      Tax revenue declined by 4.7% of GDP (from 19.5% to 14.8%), mostly due to George Bush’s two major tax cuts (2001 and 2003).

·      By 2010 forty five of fifty states had added income tax exemptions, standard deductions or tax credits based on age (ignoring wealth).

·      Between 1985 and 2010 mean net worth for people between the ages of 65 and 74 almost doubled (from $130,400 to $206,700). Mean net worth for those under 35 was cut in almost half (from $95,400 to $24,400) in those same years.

·      Tuition in public universities more than doubled between 2000 and 2010 as state government continued to tighten their budgets against “wasteful spending.” According to Bloomberg, the cost for a four-year college degree increased 1,280% between 1978 and 2012.

·      Executive salaries and compensation continued to skyrocket as more Baby Boomers moved into the corner office. By 2011 the average exec in America’s 500 largest firms received $10.5 million in salary and compensation. In 2011 they received an average salary/bonus increase of 16%.

·      While most people believed cheating on your taxes is wrong, Baby Boomers are more likely than any other demographic group to believe that it can “sometimes be justified.”

Chapter 8: What happened to Hope and Change?

“I refuse to condemn your generation and future generations to a planet that’s beyond fixing,” President Barack Obama, 2013.

This chapter examines the rise and frustrations of the Obama years through a generational lense. In 2008 the young asserted themselves. Rejecting the politics of self, they fought for and won the election of a new kind of President. Not only was he African American, but he offered a different vision and promised “change.” To be sure, many older voters supported the inspiring politician from Chicago, and many were especially eager to see what seemed like fruition of the Civil Rights dream. But, as we now know, this turned out to be an exceedingly difficult period in American history. First, Obama was saddled with having to refinance Americans (mostly Boomers) housing boom, but more importantly after only two years in office, the Baby Boom generation fought back. Not since 1932 had there been such an electoral reversal as witnessed in 2010. 

At first at least, Obama looked like he would be able to deliver on at least some of his promises. But first, he had to pass the giant stimulus bill which pumped $787 billion into the US economy in order to stabilize markets after the financial crash of 2008. Then, in March 2010, Congress over-rode the objections of the senior citizens who already had public health care via Medicare (remember, “keep the government off my Medicare” placards) and passed the largest health care reform passed in America since 1964.

Then, the Boomers revolted. It is simply unfair to blame the Republicans for undermining Obama’s presidency. They were accurately representing their constituents. Their claim was that they wanted to control government spending. Still, four things must remain untouched: Social Security, Medicare, Defense, and Interest on the debt. Unfortunately, this would mean cuts in everything else. This is simply because these four spending items make almost 75% of total federal spending! 

By everything else, I mean everything... The coast guard, education, welfare, roads, railways, transportation, federal government salaries, the costs of running and maintaining the White House and the Congress, even farm price supports, - everything combined that the federal government spends money on costs the taxpayer about the same as defense spending alone and just a little more than 1/2 as much as the government spends directly on pensions, health care and paying the interest on our debts.

Then the Baby Boomers elected Donald Trump.

Interesting facts/anecdotes:

·      A USA Today/MTV/Gallup poll of registered voters 18 to 29 years old showed that Democrat Barack Obama led Republican McCain by 61% to 32%, “the most lopsided contest in an age group in any presidential election in modern times.”

·      In 2010 Boomers got their revenge. In that election 61% of actual voters were over the age of fifty. It was the best described as a “generational backlash.” Boomers overwhelmingly supported the Republican Party and it took over both Houses of Congress.

·     President Obama's health care plan was supported by 52% of people between 18 and 29. Those who were already getting government subsidized health care insurance via Medicare, in contrast, opposed ObamaCare  53% to 38%.

·  When asked “would you rather have bigger government, more services, versus smaller government with fewer services” 53% of the youngest cohort, 18 to 29, favored bigger government with more services. Among those already receiving Social Security, (which is once again the largest public spending program in the United States) only 28% favored bigger government and more services, and a whopping 62% favored smaller government and fewer services. Clearly, most senior citizens do not consider Social Security to be government spending

·    When asked “in the past year, have you or someone in your house been without a job or looking for work?” 51% of 18 to 29-year-olds responded yes. Of Social Security recipients, only 23% knew of someone without a job or looking for work in the past year. What me worry?

·      Increasingly older voters have become more and more anti-tax over the years. Perhaps simply because they wish to protect their income and wealth from the taxman – so they can pass it along to their children.

·      Baby Boomers still watch more TV than any other group, averaging 40 hours a week. Fox news is their most watched new network.

·      By the mid-2000s only six percent of Baby Boomers believed the they could trust government leader to tell the truth most of the time.

·      America’s investments in infrastructure continues to lag. There were 56,000 “structurally deficient” bridges in America in 2017. 1,900 of these are on the Interstate Highway system built by Eisenhower. According to the World Bank the US has the “largest public infrastructure gap” (difference between spending and needed spending) of any country in the world.

·      The Chinese government announced in 2016 its ambitious “Silk Road Initiative” to enhance regional connectivity and embrace a brighter future.” They plan to spend at least $150 billion building roads, harbors, train lines and other infrastructure across the globe in the next 10 years.

·      The older you are the less likely you are to believe in climate change, especially human caused climate change. Only 39 percent of men over 50 years old believe in human-induced climate change compared to 52 percent of Millennials.

Chapter 9: Old Rules for a New Society

The silver lining in this story is that it is possible to turn this around. Perhaps Trump can be defeated, but this will only be a band-aid to the deeper problems facing our society. If we really intend to make America good again, then we need to return to the sense of common responsibility and sacrifice. We can reject the economic theory based on selfish individualism and reconnect to the fact that we are also social beings. We may have acted as a greedy generation, but that does not mean that we are individual socio-paths. Observe what happens when there is a flood, a hurricane, or a stranger in need of help. Americans, even Baby Boomers, rush to lend a hand.

a)    A Universal Public Service Requirement: 

Of course, there are specific policies that can be enacted – or re-enacted that could pull us back to the center. But, in my view the single most important thing wc must do is rebuild the idea of social responsibility. Therefore, the first and most important policy suggestion I can think of is to create a national service requirement for all able-bodied citizens. In this system everyone would be required to give back to the society in one form or another – and there could be many forms. One of the few social institutions that made rich kids from the Northeast interact with and appreciate poor kids from the Midwest, and vice versa, was the draft. Don’t like guns? Fine. Do a civilian service option like the Germans do. Don’t want to do it now? Fine. You can do it later but as a condition of getting Social Security. This is how we build community and responsibility towards each other in a polarized world.

b)    Medi-Gap for All. If it’s good enough for granny, why shouldn’t her grandkids get it too? It is not nearly as expensive as you would think if you can get everyone in the insurance pool. Equally importantly, the jobs of the future will be flexible. For those not already on Medicare, one of the most frightening things about changing, or losing, your job is that you might also lose your health insurance. This is insane. America cannot compete in a globalized and technically advancing world if citizens are afraid to change jobs… and they vote.

c)    Education, Education, Education. The Boomers got it for free. Why shouldn’t their kids and grandkids? It would cost about $6 billion a year to make community college free for everyone. More kids with more skills means more productive workers who get paid more and then pay more tax over their lifetimes. It would literally pay for itself. There is zero reason not to do this.

Like it or not, robots are coming. By all accounts, the increasing sophistication and intelligence of robotics will cost the American economy millions of jobs. These will not just be the jobs of truck drivers, fast food workers, and shopping clerks. Doctors, lawyers, and accountants, to name a few, are also on the list of those jobs which will be fundamentally changed and even eliminated in the next 10, 20, or 30 years. We must rebuild the education system and prepare the young for these changes.

d)    Bring back the tax system we had in the 1950’s, 60’s or 70’s. Take your pick on whichever decade you like; they all would mean higher taxes for everyone. And the outcomes in any of those decades for the average person is better across the board than what we have today. When America really was “great” top tax rates were reached 90%. How about we are more moderate today? Let’s have a top tax rate of only 70% for the uber-wealthy. Rates could easily be set so that the maximum average tax rate on those with annual earnings of over, say, $100 million would be only 50% - which is ten percent less than it was during the Eisenhower administration.

e)    Stop Playing Politics with Social Security. Politicians constantly say that we have to reform Social Security, or else it will go bankrupt. Unsurprisingly, the most popular changes imply cutting back on future benefits and/or increasing taxes on those who will get lower benefits in the future. In short, Boomers will be protected while their kids and grandkids get screwed. Here’s a simple plan for permanent solvency. Remove the Social Security Tax “cap” and tax more than salary and wage Income. Currently, earned income over $127,200 a year is exempted from Social Security Tax. A person who earns, only $10,000 in a year, however, has to pay 7.65% of her income ($765) per year in SS taxes. ‘Reversing the cap’ would mean that income below (let’s say $10,000 year) is not taxed, but incomes over $127,200 should pay full Social Security taxes. Moreover, as it stands, only earned income is taxed. Interest income, capital gains income, and the lion’s share of ‘deferred payment’ income so favored by the super-rich is exempted from Social Security taxes. Why? Because they like it that way. I say, all income, whatever the source, should be subject to the same taxes and the same tax rates.

f)     Introduce a carbon tax and fund basic green tech research. Warming is here and it’s only going to get worse. Any solution has to be technological. If the US sits around in denial while the Germans invent the tech and the Chinese take it to scale, we will be buying it off them rather than selling it to the world. If that happens, America’s special place in the sun is well and truly over.

g)    Give people the freedom to die. This is the ultimate ‘personal freedom.’ Consuming one third of your lifetime health care expenditures in the last month of life in a futile attempt to live forever while bankrupting your kids in the process is truly selfish. The US spends double what every other advanced country spends on healthcare and our average outcomes are no better.

h)    And finally - Let children (or their parents) vote. After all, they’re the ones paying the bills when they come due, why shouldn’t they get to decide what we spend it on?