A Boomer, an Xer, and a Millennial Walk Into a Bar…

24 thoughts on “A Boomer, an Xer, and a Millennial Walk Into a Bar…”

  1. This confirms my long held suspicion that infrastructure was heavily subsidized for boomer’s parents, but increasingly less so for subsequent buyers. So sizable contributor to expensive housing.

    Prop 13 was a bad solution to an actual problem. It wound up capping (thru transfer of ownership trickery) commercial property even more than residential. So residential carries the bulk of the load now, whereas beforehand (if I recall right), both shared about equally.

    Colorado had a skyrocketing property tax problem during an oil boom too. They fixed it by adjusting mill rates to keep them from rising excessively during boom times. So no pressure built for a prop 13 equivalent.

  2. Excellent post. Y’all gotta remember that the global economic climate was much different from the 40’s through the 70’s as the US was the only developed country in the entire world that was essentially untouched by World War II. We dominated every market. The started to change as the rest of the world caught up (with considerable help from us, I might add). Policies that worked back then, won’t work now. We have to adjust to the present reality. That’s one thing I love about this blog. I might add that even though America was in good economic shape in the late 20th century, there were a lot things that weren’t so great – rising crime, environmental degradation, terrible race relations, riots, presidents being shot, etc. We have made a lot of progress since then.

    P.S. Those are amazing looking meals in the photos.

  3. My own family validates everything you’re talking about:

    – My grandparent’s house in San Mateo county in the 50s : $11k. The tiny, never updated, bungalow is now worth 850k or so. My grandpa grew up in poverty in Oklahoma & never graduated H.S. He was a postal worker and has a full pension.
    – My parent’s starter house in Sonoma County in the 70s: $36k. My dad is a H.S. graduate, a Vet & an electrician. He had a union/pension but those “bastards at Wells Fargo” tricked him into a 401k. He still has health care for life but pitiful savings. They rode the equity boom and sold up several times, which has helped.
    – I (Gen X) managed to squeek into the Bay Area during the mortgage meltdown. Of course, I worry about retirement & health care especially now that I’m getting old man looks during these tech company interviews. Desperately seeking Plan B.
    – My other 2 Gen X siblings are in a bad place. They didn’t go to college, have minimal savings, a couple of divorces between them along with ever increasing rents. Somehow, they’re still getting car leases and student loans.
    – My Gen Y sister simply gave up California and moved to Texas. Given the hand she’d been dealt, no too bad. Working as a nurse, no debt because of Army benefits. Now why did she feel she needed to go to Afghanistan to get vocational training at a price she could afford (free, via my tax dollars)? That’s an interesting question.

    I expect a crash but really not sure what form it will take. There’s so many weaknesses in the current setup. Unfunded pensions, real estate bubble, derivatives, poor education, subprime auto loans, oil price spike, War with Russia… oh vey.

  4. As a 60yo Baby Boomer, I want to add a couple of points from my perspective. I went to college without borrowing, but student loans were not common in those days. Educational grants were, but the shift to student loans started around the start of the 1980s (my memory is that this was part of the Reagan legacy, but I could be mis-remembering). Also, in those days, college attendance was still considered unusual. If enrollment then was higher, it was because there were a lot more Boomers, as well as the effect of the Vietnam War (delaying the draft and vets going on the GI Bill). A final point, I wanted to buy my first house in 1979 for $25,000 (my annual income was about $11,500), but interest rates were 19 percent, and I couldn’t qualify. I remember the Realtor telling me that “we’ll never see single-digit interest rates again.”

  5. Just spent a weekend with my parents (early 60s), who would not consider themselves rich but are about to buy their third house. They complained about the $4k property tax on their primary residence (a 3000+ sq ft vinyl clad monstrosity on the edge of town), the crumbling road in front of it, and the excessive charge of $8 every other week for their recycling to be picked up. A big plus for them choosing their neighborhood was the lack of sidewalks, because those just need to be shoveled anyway, and there was lots of complaining about neighbors they didn’t know well yet. I love my parents dearly, but find their lifestyle almost abhorrent, and their disconnect from reality (present and future) is painful. There will be a crash, a sharp correction, and the reality my brother and I and their grandkids live in will look pretty damn different than their white-picket dreams for us.

    1. I find in interesting how much boomers seem to hate their neighbors but love their cars and big houses. My dad still tries to engage me in “car talk” while we’re hanging out in the driveway of his exurban retirement home (5th they’ve owned) but all I see is a boring, unwalkable neighborhood. I wonder what will happen when they can’t drive…

      1. > all I see is a boring, unwalkable neighborhood

        Be careful of self-selected demographic in noting generational tendencies. My father [now deceased] was a Boomer who late in life came to understand all the issues with the current scheme. And I know Millenials aplenty who are pro-car and anti-neighborhood; or just couldn’t care less.

        Speaking as a Gen-X who has a lot in common with the common image [how ever doubtful I find it] of the pro-urban Millennial. I also grew up in a place with our own wells [four of them!], septic [two of them], and a member of an electric cooperative [read as: power goes out for a week at a time]; if someone really wants to understand the beauty of the city they should take a stint **actually** being in charge of all the infrastructure required for a ‘modern’ life – expensive and exhausting.

  6. I love this until the end. Forty year olds don’t run much of anything (speaking as one who’s in his forties). The vast majority of civic, business and political affairs are run by people in their 50’s and 60’s. might reconsider that timeline.

    1. I did consider the timeline. Who will be in their 50’s and 60’s in fifteen years? YOU! In fifteen years the Boomers who currently dominate every center of power and control every election will be in Sun City (or Forrest Lawn). Gen Xers will be in charge and they will have to answer to Millennials who will want very different things than the fading Boomers.

      1. Not trying to be argumentative but…
        That all depends on active participation and voting. As you know, voters skew older and young people vote even less today than ever. Private markets that need to make money will pay attention to where the numbers are, but politics is all about who shows up. And despite what the media says regarding generational memes, the actual number of people by age decade is quite consistent

        1. I don’t actually think it matters who is elected to public office when it comes to the big ticket conundrums. As a nation we’ve been spending far more than we’ve been earning for decades. We’ve funded the gap with borrowing. We’ve funded the gap by running a printing press to paper over the debt. We’ve promised ourselves pensions, highways, military adventures, and all manner of entitlements with no plan for how to pay for any of it. Voters won’t tolerate cut backs or tax hikes. But this set of arrangements is going to come to an end one way or another – probably not in a manner of our own choosing. And when it does there’s going to be a lot of kicking and screaming regardless of who’s in power. I expect the “solution” will come wrapped in a flag and will involve scapegoats and firearms. That’s the traditional method of wiping the slate clean.

          1. >I don’t actually think it matters who is elected to public office

            We are doomed; the people making the funding decisions and allocations do not matter… yeah.

      2. Speaking as a Gen-X … we will not be in charge. Being-in-charge-ness will skip us; and I say that hopefully. The mantle will pass from the Boomers directly to the Millennials. We Gen-Xers are financially the worse off – true, by the numbers, regardless of much hype – and we have low levels of social and civic engagement.

  7. Yes this election cycle is, without extraterrestrial intervention an inevitable trainwreck and Bernie will not be President. I only suggest that who knew a year ago that the young people would be able to make their views so well known through him? And peaceably. We ultimately manifest our thoughts and I personally choose to remain optimistic that seemingly insurmountable “problems” from this viewpoint can and will be overcome. Consider listening to this weeks’ TED Talk: “The Case for Optimism”. Many thanks for your posts Johnny !

    1. I’m not a pessimist. I think we need a crash to reset things. People only respond to immediate threats. The crash is necessary. Ugly. Painful. But required. Then things will get better. Mostly.

  8. Excellent post Johnny… Perhaps though the system may transform, avoiding the “crash” you often insist is inevitable… albeit with some major pain. Consider the manifestation of the Bern. The writing is appearing on the wall. I believe the young will find a way.

    1. I’ll quote a friend. “The Democratic party’s demographic makeup represents an America that doesn’t yet exist, and won’t for about 15 years, while the Republican party makeup represents a demographic that hasn’t existed in the nation since the 1970’s.”

      Bernie Sanders, Donald Trump, and Hillary Clinton are each potential agents of change by various means.

      I don’t think Bernie will win the election. The numbers just aren’t there.

      Trump could win since there are enough disgruntled people who want to see the old system dismantled – although they may not realize exactly what that entails or how ineffective Trump will be at delivering anything other than talk. Trump will bring change through chaos and disorder. That’s certainly one way to go.

      Hilary will desperately attempt to maintain the status quo – pressing the gas pedal to the floor and holding on to the steering wheel with a death grip as the vehicle heads for the cliff.

      All roads lead to a crash. The interesting part will be how the country picks up the pieces and who is in charge afterwards.

      1. I agree with this analysis. Even if Bernie could win, he’s basically saying “Be like Europe.” I love Europe but those welfare systems are based on rosy post WWII GDP growth models, U.S. military cover and the kind of social cohesion (we’re all in this high-tax system together! Ja!) that we don’t have.

        Maybe when Millennials come to power we’ll have that kind of cohesion. They are so much about group hugs and affirmations. But that doesn’t solve the math problem. The only thing that would is massive cuts to the major budget categories like Defense, Medicare and Social Security. But nobody seems ready to have those adult conversations yet.

        Trump’s come the closest (make Europe & China pay, blah blah), but he’s also such a raging racist populist that obviously we can’t have him Commander in Chief… I wish we could just put the U.S. into some sort of receivership until we sort this out. No more loans and pie charts every Friday until we wake up.

        1. There’s also raising taxes on the extremely wealthy and corporations, then spending the money on infrastructure. We could also cut the defense budget a fair bit.

          As a baby boomer, I remember much higher taxes on the wealthy and corporations in the 40s through the 70s. We also had much higher growth, rising wages and rising living standards. Bernie Sanders is even older than I am, so he is old enough to remember this. Of course, when he brings up the idea of higher growth rates fueled by the same methods that worked in the past, he is told to get real. It’s almost as if history has been erased.

          Maybe Mad Men needed to have an episode where Don Draper filled out his 1040 or something. Young people have every right to be angry. Now they need to vote. Right now, every crisis has been an excuse to make things worse. That’s not the necessary outcome, but it will be if younger people don’t learn some history, vote, and run for office.

          1. I am Left-Of-Center but I also believe “idea of higher growth rates fueled by the same methods that worked in the past, he is told to get real” is valid. Those methods will not work; now is not then. We have passed from the Age Of Innovation which saw staggeringly huge economic growth fueled by **real** innovation – the railroad, electrification, the internal combustion engine, telecommunications, etc.. – into the Age Of Efficiency – do more with less, increased integration, etc.. One of these is **not** like the other; the productivity gains are not there, this age will not produce the abundance of wealth which went sloshing over the sides of the bucket to [a mostly white] ‘everyone’. The Age Of Innovation began to peter out ~50 years ago – so we propped up the system with mountains of debt and faux-development [the suburbs]. Now the prop has sunk into the mud.

  9. Do they not understand that it is a bad idea to screw over the people who will, in a couple of decades time, be ensuring you’re not lying in your own filth?

  10. One of the side effects of Prop 13, in my neighborhood at least, is that we have quite a few empty properties that have been inherited by children who do not live in the area. These houses were purchased in 1950, 1977, 1982. So they have extremely low tax rates.

    $1,366 is what was paid in yearly property taxes on a 3 bedroom, 2 bath ranch on 12,919 SF lot that could be subdivided into two lots on this property. The owner is the daughter of a 93-year-old woman who died two years ago and lived here 62 years. She seems in no hurry to sell.
    The house is estimated at over $500,000. So the property sits empty and neglected.http://www.realtor.com/realestateandhomes-detail/15159-Hamlin-St_Van-Nuys_CA_91411_M14103-29123

  11. This was one of your most beautiful pieces. I wish I were there at that dinner. You might consider turning these kind of gathering, with the varied and intelligent people, into a business. 🙂

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