Don’t Blame the Boomers

Jill at Brilliant at Breakfast has words for the young folks who blame America’s problems on Boomers.

Last month I had an extended and rather heated exchange with one of our commenters who made a host of sweeping generalizations about baby boomers, few if any of which were true. I’ve had conversations with some of my Gen-X friends on this as well, with many of them similarly blaming the baby boomers for their own plight. I’ve even seen Gen-Xers trying to claim Keith Olbermann as one of their own, even though he was born in 1959 and therefore is indisputably a baby boomer. I hate to tell them this, but no less a Gen-X icon than old Lloyd Dobler himself, John Cusack, only escaped the dread Baby Boomer label by a mere six months.

I’m seeing a lot of this lately; blaming the baby boomers for everything that’s gone wrong in this country, hand-in-hand with the idea that Gen-X, Gen-Y, and the Millenials are somehow either a) hapless victims of the evil boomers (largely the province of Gen-Xers who are now reaching an age when the refusal to “sell out” is starting to have the nasty consequences of no savings and no health insurance); b) greedy, evil people who have sucked up all the resources and left nothing for anyone else; or c) an entire generation of hippies who had all the sex and all the drugs and all the fun and then became Republicans and tried to deny anyone else the fun they had.

I’ve seen a lot of this, too, and while I don’t think all Gen-Xers, etc., are guilty (that would be generalizing), enough of ’em are guilty, and it annoys the bleep out of me.

Jill is right when she says,

There’s this notion Chris and others put forward that the 80-hour workweek is somehow the invention of sellout baby boomers out of pure greed for bigger houses and ever-more electronic gewgaws and STUFF. But the fact of the matter is that at least for people born my year and later, especially those of us on a white-collar track, the defined benefit pensions and job security that our parents enjoyed was already largely gone by the time we emerged from college into a recession caused by the second oil shock in a decade.

This was my experience, also, and I’m older than Jill. By the time I was out of college the kind of job security my parents had enjoyed was already evaporating. I agree that younger people today are getting a raw deal generally compared to us Boomers, but we Boomers got a rawer deal than our parents did after World War II. And I believe the forces causing this creeping rawness were put into place while most of us Boomers were still babies.

I have in my hands a book titled Selling Free Enterprise: The Business Assault on Labor and Liberalism, 1945-1960 by Elizabeth Fones-Wolf. Dr. Fones-Wolf documents that during the very years the Boomers were birthed, a cabal of wealthy corporate leaders used their resources to undermine the popularity of New Deal progressivism and unions. They succeeded, and this success ushered in the era in which corporations could demand that workers pretty much turn over their lives to the Company. Before most Boomers were even in high school most of the damage had been done, and by the time we entered the workforce the rules had already been changed, although we didn’t realize it right away.

Our parents were certain that the road to success lay in staying with one employer for years and years and years, accumulating pensions and vacation time, and for the most part that worked for them. But most of us Boomers learned, slowly and painfully, that this life plan was no longer possible. Certainly some among us bought the corporate bullshit and played the games, but most of us have just been trying to survive. And now making a living is even more precarious. This concerns me deeply. I want to reverse this pernicious trend and help younger people achieve a better quality of life.

However, my dears, if you are going to blame me for your problems … go bleep yourselves.

I’ve pointed out many times that the archetypal rightie-bot is a Gen-Xer whose earliest political memories are of the Carter Administration. You see this over and over again. I’m not saying all Gen-Xers are rightie-bots, but I do think a disproportionate number of the loyal soldiers of the Right are Gen-Xers. I expect someday the Millenials will turn around and slam Gen-Xers for causing their problems, so be prepared.

Every generation has its idiots. My generation is as diverse as any. The activists among us did get some things wrong, such as putting too much faith in single-issue and “identity” politics. We also thought Ralph Nader was our hero … oh, wait; that’s a cross-generational mistake. Sorry.

The truth is that we Boomers were brought up in the 1950s to be idealistic and patriotic. I’ve written about this before, here and here. We faced an entirely different culture with entirely different challenges than younger people do today. No doubt some of what we did makes no sense outside that context — you had to be there — but if you’d been brought up in the 1950s, you’d have felt drawn to beads and patchouli oil, too. Trust me.

Recently Andrew Sullivan wrote an article for The Atlantic that extolled Barack Obama as the post-Boomer candidate (in truth, Obama was born in the waning years of the Boom) and blamed the Boomers for America’s culture wars and “a cultural climate that stultifies our politics and corrupts our discourse.” This is, IMO, one of the biggest piles of steaming crap Andy has ever produced, and that’s saying something. The rifts in our culture pre-date the Boom, and what has corrupted our discourse more than anything else is the emergence of the extreme Right via the Goldwater/Reagan wing of the Republican Party. (See pseudo conservatism.)

Must of the griping against Boomers is the result of rightie propaganda about the 1960s and the counterculture and Boomers generally, and like most rightie propaganda the Narrative has little to do with what actually happened. It’s disheartening to see so many allegedly progressive people fall for it. So if you’ve fallen for it, wise up.

Update: See also Richard Blair at All Spin Zone.

Straw Dogs

In today’s New York Times, Paul Krugman explains the Bush mortgage bailout plan, announced last week by Treasury Secretary Henry Paulson.

The plan is, as a Times editorial put it yesterday, “too little, too late and too voluntary.” But from the administration’s point of view these failings aren’t bugs, they’re features.

In fact, there’s a growing consensus among financial observers that the Paulson plan isn’t mainly intended to achieve real results. The point is, instead, to create the appearance of action, thereby undercutting political support for actual attempts to help families in trouble.

In particular, the Paulson plan is probably an attempt to take the wind out of Barney Frank’s sails. Mr. Frank, the Democratic chairman of the House Financial Services Committee, has sponsored legislation that would give judges in bankruptcy cases the ability to rewrite mortgage loan terms. But “Bankers Hope Bush Subprime Plan Will Scuttle House Bill,” as a headline in CongressDaily put it.

As Elizabeth Warren, the Harvard bankruptcy expert, puts it, “The administration’s subprime mortgage plan is the bank lobby’s dream.” Given the Bush record, that should come as no surprise.

The plan has so many conditions that Barclays Capital estimated only about 12 percent of all subprime borrowers, or 240,000 homeowners, would qualify for relief. For example, people already delinquent on their payments, or anyone the mortgage lender decides ought to be able to pay the subprime mortgage, are excluded.

Krugman says there are three problems with the plan. First, banks and other financial institutions will take huge losses. Second, hundreds of thousands, probably millions, of American will lose their homes. And third, there is injustice, since many of the people stuck with subprime loans were victims of predatory sales practices.

Free-market culties tsk-tsk any mortgage relief program as short-sighted. Robert Murphy wrote at Townhall:

Lenders will learn the lesson that their contracts aren’t safe; contrary to popular belief, the government will not serve to enforce the law. (Or rather, the “law” can change on a dime, depending on the public’s mood.) Lenders won’t simply shrug their shoulders, say “aww shucks,” and continue with business as usual.

No, lenders will rationally respond to the new environment, by being much pickier in giving new loans. After all, it becomes much riskier to grant a mortgage to a young couple with little job experience, if the government will shield them from the consequences of default on the loan. Many people say that “the American dream” involves homeownership, yet this will be harder to achieve if the government introduces yet another uncertainty for lenders.

Another cultie named Peter Schiff thinks the problems lies with borrowers who simply aren’t taking big enough risks:

Lost in current discussion is the fact that few subprime borrowers have any skin in the game in the first place. Having put nothing down or having extracted equity in previous refinances, most subprime borrowers will lose nothing if their homes go into foreclosure. In some cases the teaser rates were so low that borrowers actually paid less than what they might otherwise have paid in rent. In fact, those who have already extracted equity have received huge windfalls from their homes and will leave their lenders holding the bag.

Talk about lucky duckies! However, according to Krugman,

Relief is restricted to borrowers whose mortgage debt is at least 97 percent of the house’s value — which means that in many, perhaps most, cases those who get debt relief will be borrowers who owe more than their house is worth. These people would be nearly as well off in financial terms if they simply walked away.

So, no equity “windfalls.” But let’s go back to Murphy, who explains the beauty of the capitalist system:

The reason borrowers agree to adjustable rates (which have the possibility of skyrocketing) and to pledging their home or other assets as collateral, is that this allows them to receive concessions from the bank—in particular, it allows them to borrow a great deal more money than would otherwise be possible. Very few people would persuade a bank to lend them money to buy a house, if the bank didn’t ultimately have the right to take ownership of the house in the event that the borrower couldn’t make the mortgage payments. Yes, borrowers would prefer that they get a $300,000 mortgage with no strings attached, but lenders wouldn’t be too happy with this arrangement. The beauty of a capitalist system is that property owners must compromise to reach mutually beneficial arrangements, since private transactions are voluntary.

He acknowledges that there are some “shysters and shady characters” in the home loan biz, but for the most part “the politicians want to grant a mulligan to hundreds of thousands who bought homes they couldn’t afford.”

But Krugman wrote,

The Wall Street Journal found that more than 55 percent of subprime loans made at the height of the housing bubble “went to people with credit scores high enough to often qualify for conventional loans with far better terms.”

And at Newsweek, Daniel McGinn wrote of a borrower who didn’t know a $300 property tax bill would be added to her monthly mortgage bill. I suspect this happens a lot, especially to first-time buyers. In my own home-buying experiences I learned you sometimes have to threaten the mortgage broker with bodily injury — or close to it, anyway — to get a straight answer to the question “what will be my total monthly payment?” In my book, a transaction is not “voluntary” if one of the two parties is withholding information from the other to maintain an advantage.

McGinn has more sympathy for the borrowers than Schiff and Murphy:

My own view is more sympathetic, for two reasons. The first, frankly, is self-interest. As a homeowner I’m concerned about the value of my own home. Studies show that anytime a house is foreclosed, the value of nearby properties tends to drop. Last month I spotted a “public auction” sign in front of a house two blocks from mine. I hope it’s not the first of many. My own mortgage is a conservative, fixed-rate loan, so I won’t directly benefit from the subprime bailout—but if it keeps some of my neighbors from losing their homes, I’ll benefit because it will help my house retain more of its value. (I will, of course, also be happy to avoid watching neighbors traumatized by foreclosure, but in this column I’m weighing the pros and cons economically, not emotionally.)

The other reason for my sympathy is that I’m aware of how hideously complicated mortgages have become over the last two decades. I have absurdly well-educated friends who don’t really understand how mortgages work. Even though I write about this stuff for a living, at times I’ve agonized over whether to pay points or whether my mortgage broker’s fees are legit.

But the Bushie plan offers little for most subprime borrowers, but at the same time does little to reduce investor losses. So what’s the point? I think Krugman called it exactly — it was created to undercut any attempt by Congress to actually help people holding subprime mortgages in danger of foreclosure. Free market culties like Schiff and Murphy may not like it, but in this case government is being used to prop up “free markets.”

In ancient times the Chinese made dogs and other animals of straw to be offered in sacrifice. Before the ritual a straw dog would be wrapped in embroidered cloth and handled with great care, but once the offering was made the straw dog was trampled and burned. “Straw dog” became a metaphor for something utterly expendable. “Free market,” unregulated capitalism makes straw dogs of us all.