James Quinn is a senior director of strategic planning at The Wharton School of University of Pennsylvania.  James has held the positions of treasurer, controller, and head of strategic planning at with retailers, homebuilders and the university in his 22-year career. He earned a BS in accounting from Drexel University and an MBA from Villanova University.

This article reflects the personal views of James Quinn, and do not necessarily represent the views of his employer.


The Baby Boom Generation will never be mistaken for the Greatest Generation that survived the Great Depression and defeated evil in a World War that killed 72 million people. I hate to tell you Boomers, but putting a yellow ribbon on the back of your $50,000 SUV is not sacrifice. Our claim to fame is living way beyond our means for the last three decades, to the point where we have virtually bankrupted our capitalist system. Baby Boomers have been occupying the White House for the last sixteen years. The majority of Congress is Baby Boomers. The CEOs and top executives of Wall Street firms are Baby Boomers. The media is dominated by Baby Boom executives and on-air stars. We have no one to blame but ourselves for the current predicament. Blaming Franklin Roosevelt or Lyndon Johnson for our dire situation is a cop out. Baby Boomers had the time, power, and ability to change our course. We have chosen to leave the heavy lifting to future generations in order to live the good life today.

Of course, not all Baby Boomers are shallow, greedy, and corrupt. Mostly Boomers with power and wealth fall into this category. There were 76 million Baby Boomers born between 1946 and 1963. They now make up 28% of the U.S. population. Their impact on America is undeniable. The defining events of their generation have been the Kennedy assassination, Vietnam, Kent State, Woodstock, the 1st man on the moon, and now the collapse of our Ponzi scheme financial system. They rebelled against their parents, protested the Vietnam War, and settled down in 2,300 square foot cookie cutter McMansions with perfectly manicured lawns, in mall infested suburbia. They have raised overscheduled spoiled children, moved up the corporate ladder by pushing paper rather than making things, lived above their means in order to keep up with their neighbors, bought whatever they wanted using debt, and never worried about the future. Over optimism, unrealistic assumptions, selfishness and conspicuous consumption have been their defining characteristics.

Boomers are currently in their prime earning and spending years. A Baby Boomer turns 50 years old every 7 seconds. The older Boomers had a fantastic run from 1989 through 2004. Median net worth for those between the ages of 55 and 59 rose 97% over 15 years to $249,700 in 2004. Median income rose 52%. The younger generation between the ages of 35 and 39 saw their median net worth fall 28% to $48,940. Their median income dropped 10% over the same 15 year period. It is clear that all Baby Boomers are not created equal. Based on calculations made by the Federal Reserve, at least 50% of Boomers will not have a happy retirement. The bottom 30% will reach the age of 65 with net worth of less than $100,000. They will try to subsist in poverty, dependent upon social security and part time Wal-Mart jobs until they die peniless. The top 30% will retire to lives of luxury and leisure. The middle 40% will muddle through with social security payments the only thing keeping them from an old age in poverty.

We have become a have and have not society. Our economy favors education, entrepreneurship, and creativity. Those benefitting from a good education will make dramatically more money than the uneducated laborers. The top 20% of households make 12.5 times the lowest 20% of households. This ratio was 7 to 1 in 1982. The top 1% of households make 20% of all the income in the U.S., the highest rate since 1928. Does this statistic portend a decade long depression?  The difference between now and 1928 is the huge household debt burden of Americans. This usage of debt by the poor has masked the gap between haves and have nots for the last 20 years.

As I drive to work every day in my fully paid for 2002 CRV with 110,000 miles, I have plenty of time to observe my surroundings. Sitting in traffic on the Schuylkill Expressway, I have noticed that the number of luxury Mercedes, BMW, Cadillac and Lexus vehicles seems out of proportion to the number of wealthy people in the Philadelphia population. When I see an older gentleman, wearing a suit, driving one of these automobiles, I assume that he is a wealthy executive who has put in his time and rewarded himself with a luxury vehicle. But, most of these vehicles are being driven by Joe the Plumber types. As I take a short cut through some of the more depressed areas of West Philadelphia, I see people talking on their Apple iPhones, Direct TV satellite dishes attached to dilapidated row homes, and Cadillac Escalades & Mercedes parked on the mean streets. This is not exactly the world that Henry Fonda’s character, Tom Joad, described in The Grapes of Wrath:

“I’ll be all around in the dark – I’ll be everywhere. Wherever you can look – wherever there’s a fight, so hungry people can eat, I’ll be there. Wherever there’s a cop beatin’ up a guy, I’ll be there. I’ll be in the way guys yell when they’re mad. I’ll be in the way kids laugh when they’re hungry and they know supper’s ready, and when the people are eatin’ the stuff they raise and livin’ in the houses they build – I’ll be there, too.”

When I see “poor” people appearing to live a more luxurious life than myself, I don’t feel jealous. The thought that goes through my head is: Which banks or finance companies were foolish enough to loan these people the money to live this lifestyle? These foolish financial institutions will never get their loans repaid. What does bother me is that the Bush-Paulson-Pelosi Bailout of Stupid Banks will use my taxes to buy these bad loans from the foolish banks. So, who is the fool in this scenario? The “poor” person got to drive a Cadillac Escalade for a period of time, the foolish banks got bailed out, the bank CEOs took home $30 million, and I lived within my means and footed the bill for the reckless actions of others. It appears that the fools are the Americans who lived their lives according to the rules. The anger is building. I don’t think the politicians running this country realize what true anger looks like. They are used to Americans being herded along like passive sheep.

I’ve heard many Republican ideologues blame the current crisis on the people who took the subprime loans for home purchases. I’ve also heard many Democratic ideologues blame the crisis on the regulators. The ideologues are wrong, as usual. If a poor person has no home, no vehicle, and no prospects; then a bank tells them that they can buy a $300,000 home, drive a $55,000 Mercedes SUV, and live like people on TV; why wouldn’t they say yes? What is their downside? If you have nothing and “The Man” offers you the American dream, you’d actually be foolish to say no. Now that they have lost the home in foreclosure and the repo man has taken the Mercedes, they are exactly where they were a few years ago with no home, no vehicle and no prospects.

The regulators were certainly asleep at the wheel. They did not enforce existing rules, foolishly waived leverage rules for the biggest investment banks, and believed that the banks would regulate themselves. They were wrong, but they never made a single loan. The commercial banks, investment banks, auto finance companies, and credit card companies made the ridiculous loans to people who could never pay them back in the search for short term profits. Greedy Wall Street executives created an artificial market for the loans in order to generate billions in fees so they could enrich themselves through stock options and obscene bonuses. They spent their false riches on $2 million NYC penthouses, $100,000 Porsche 911s, and $5 million beachfront estates in the Hamptons. Based on the estimated $2 trillion of losses that our banks have generated, the CEOs certainly deserved annual pay 500 times as high as the average worker. There is no way an “average” worker could possibly be talented enough to lose $2 trillion. You would need to be truly extraordinary to lose that much.

CEOs’ average pay, production workers’ average pay, the S&P 500 Index, corporate profits, and the Federal minimum wage, 1990-2005 (adjusted for inflation)

Source: Executive Excess 2006, 13th annual CEO Compensation Survey

The brutal necessary lesson that should have been learned is that if you loan money to people who can’t pay you back, your bank will go bankrupt. The “poor” people who made a bad decision in buying homes and cars they couldn’t afford have lost those homes and cars. The banks made a bad business decision in making those loans. The taxpayer was not involved in these business transactions. This is where Hank Paulson, Ben Bernanke and George Bush, formerly free market capitalists, decided to commit our grandchildren’s money to bailing out the horribly run financial institutions. Our government has chosen to allow these banks off the hook for their bad business decisions at the expense of taxpayers. Rewarding bad decisions and bad behavior will lead to more bad decisions and more bad behavior. The government has made a dreadful decision that will haunt our country for generations. Now the Federal Reserve has lowered interest rates to 1% again. This is where this horrible nightmare started. The massive printing of currency throughout the world will ultimately lead to a hyperinflationary bust. The law of unintended consequences can be devastating.

Source: Credit write downs

Early in the 1st Reagan administration Americans saved 12% of their income and household debt as a percentage of GDP was 63%. In 1980, the oldest Baby Boomers turned 34. They entered their prime earnings and spending years. This is when something went haywire with our great country. Deficit spending became fashionable for government, corporations and individuals. Dick “deficits don’t matter” Cheney was probably in his glory as the country ran up deficits of money, morals, and brains. The Boomers and our government chose to try and borrow and spend their way to prosperity. As we now know, Mr. Cheney’s advice about deficits not mattering was about as good as his belief that you can fire a shotgun in any direction without implications. The Boomer generation has freely made choices over the last quarter century that has brought us to the brink of a second Great Depression.

During the current Bush administration, Americans’ savings rate actually went below zero, while household debt as a percentage of GDP soared above 130%, a doubling in 25 years. These figures prove that the apparent prosperity of the last 25 years was an illusion. Beginning in 1982, Baby Boomers chose to take the easy road. Saving, investing and living within your means were cast aside as “Old School”. Boomers were handed a better future through the blood, sweat and tears of the “Greatest Generation”. Through their hubris, they’ve squandered that better future, the future of their children and imperiled our entire capitalist system. Between 1989 and 2007, credit-card debt soared from $238 billion to $937 billion, a 300% increase. Household liabilities that are in delinquency or default totaled $775 billion at the end of June, according to CreditForecast.com data. This is equal to 7.5% of all U.S. household debt, up from 3% just two years ago. In the last five years, our live for today Boomers, sucked over $3 trillion of equity out of their homes to fund their selfish lifestyles. At the end of June, there were 2.72 million mortgage loans in default at an annualized rate. For all of 2008, defaults will hit 3 million, up from approximately 1.5 million in 2007, and 1 million in 2006.

What “essentials” do the Boomers invest all this borrowed money in every year? The U.S. Census bureau provides the answers:

•    $200 billion on furniture, appliances     ($1,900 per household annually)
•    $400 billion on vehicle purchases     ($3,800 per household annually)
•    $425 billion at restaurants             ($4,000 per household annually)
•    $9 billion at Starbucks             ($85 per household annually)
•    $250 billion on clothing             ($2,400 per household annually)
•    $100 billion on electronics             ($950 per household annually)
•    $60 billion on lottery tickets         ($600 per household annually)
•    $100 billion at gambling casinos         ($950 per household annually)
•    $60 billion on alcohol             ($600 per household annually)
•    $40 billion on smoking             ($400 per household annually)
•    $32 billion on spectator sports         ($300 per household annually)
•    $150 billion on entertainment         ($1,400 per household annually)
•    $100 billion on education             ($950 per household annually)
•    $300 billion to charity             ($2,900 per household annually)

The priorities of our Boomer led society are clearly born out in the above figures. We spend more eating out than we give to charity. We spend as much on big screen TVs and stereos as we do on education. This may explain why 37 million (12.5%) of all Americans live in poverty and our high school students trail the students of 25 other countries (including Latvia) in science and math knowledge. Our school system processes many more clueless morons who don’t know the candidates for President, versus intelligent, thoughtful, hard working, driven young people. The $160 billion spent on gambling is indicative of the get rich quick without hard work attitude of the Boomer generation. Even worse, households with income under $13,000 spend, on average, $645 a year on lottery tickets, about 9 percent of all their income. Our government feeds this addiction by siphoning off billions in taxes from these gambling revenues to redistribute as they see fit.

What the data proves is that Boomers love to shop and eat, whether they have the money or not. The top 100 retailers in the U.S. have 250,000 stores that generated $1.7 trillion of sales last year. How could America function without 31,000 McDonalds, 35,000 KFCs, Taco Bells, & Pizza Huts, 15,000 Starbucks, 7,000 Wal-Marts, 2,000 Home Depots, 4,000 K-Marts/Sears, and 8,000 Blockbusters? There are 91,000 shopping centers in the United States. The Advertising industry spends $275 billion per year to convince you to spend money you don’t have for things you don’t need. This generation lacks self control, morals, a work ethic, and savings ethic. Based on the recent actions of our government and corporate leaders, we seem to lack any ethics at all. It is immoral for the boomer generation to run up $53 trillion in unfunded future liabilities in Social Security, Medicare and Medicaid to leave as our gift to future generations, while we live it up today. Optimists like to point out that Europe and Japan have much worse unfunded liability problems than the U.S. That is like taking pride in being the best looking horse at the glue factory. In the end, we’ll all still be glue.

The 25 year Boomer borrowing and spending binge is coming to an end. The hangover will be really bad. The Federal Reserve and Treasury are trying to keep the frat party going, but everyone is passed out on the floor. The Case Shiller housing data shows that the 20 largest cities have experienced an average 20% decline in price from their peaks. The futures index predicts a further 10% to 15% loss in value. There are 75 million owned homes in the U.S. One in six, or 12 million homeowners, owe more than the house is worth. With further expected losses, 20 million homeowners will eventually be underwater on their mortgage. In California, where home price declines will be 40% to 50%, half the homeowners in the State will owe more than the house is worth. If you are one of these homeowners and can afford the mortgage payment, time will eventually bail you out. If you can’t afford the mortgage payment, you should lose the house to someone who can make the payment. This is the failure side of the creative destruction that is true capitalism. If the government steps in to subsidize and eliminate failure, the system will ultimately collapse.

Part two of the great Boomer credit contraction will be the collapse of credit card companies who have mailed out 27 billion credit card offers in the last five years. They are now reaping what they have sown. As Boomers could no longer borrow from their homes, they switched to credit cards to make mortgage payments and car payments. That well is running dry. The losses to card companies will make the losses in 2000 to 2002 seem like good times. Losses in the 1st half of 2008 soared to $21 billion. Losses are expected to total $55 billion in the next year and a half. This brings me to the latest outrage perpetrated upon the U.S. citizens by Hank Paulson and his Treasury cronies. The credit card industry, which collects 23% interest and $12 billion in late fees from consumers, is lining up to get their piece of the $700 billion bank handout. Capital One has just received a $3.6 billion injection from the American taxpayer, one week after projecting that their write-offs will be $7.2 billion in the next twelve months. This will allow them to send another million offers to more people who shouldn’t have a credit card. Why not? The taxpayer will pay, if the losses are too high. Why aren’t the pundits on CNBC outraged at this misuse of taxpayer money? Would the bankruptcy of Capital One hurt our country in any way?

The Great American Empire has begun its long slow decline. It may take a few generations to reach its nadir, but the poor decisions already made and crucial decisions postponed in the last 25 years by our Boomer dominated leadership has put our country on a path to a declining standard of living. The U.S. is like a punch drunk ex-champion boxer who still thinks he has what it takes, but is living off his old press clippings. He lived the good life, got fat and didn’t do the hard work required of a champion. A slew of young brash fighters are itching to take him down. It is just a matter of time. In our heyday during the 1950s, manufacturing accounted for 25% of GDP. In 1980 it was still 22% of GDP. Today it is 12% of GDP.  By 2010 it will be under 10% of GDP. Our Government bureaucracy, which contributes nothing to the advancement of our society, now is a larger portion of GDP than manufacturing. Services such as banking, retail sales, transportation, and health care now account for two-thirds of the value of U.S. GDP. We have become a nation of bureaucratic paper pushers. Past U.S. generations invented the airplane; invented the automobile; discovered penicillin; and built the Interstate highway system. The Baby Boom generation has invented credit default swaps; mortgage backed securities; the fast food drive thru window; discovered the cure for erectile dysfunction; and built bridges to nowhere. No wonder we’re in so much trouble.

Now that I have laid out our bleak future, I can tell you that, like Dickens’ Christmas Carol, this is only a vision of what might be. There is time to change our course before our ship wrecks on a jagged reef. David M. Walker, former Comptroller of the United States, at a recent Fiscal Wake Up Tour at the University of Pennsylvania, described what has been happening in this country for the last 25 years in one word – laggardship. The last six months have been a perfect example of laggardship. Our leaders have floundered from crisis to crisis, overreacting and blustering rather than leading. True leaders are proactive, not reactive. After not addressing our energy policy for decades, as soon as oil reached $140 a barrel, Congress lurched into action so their constituents would think they were leading. As our financial system has imploded, government “leaders” have flailed about with one rescue package after another and Congress looks for scapegoats. Meddling, tinkering, and non-enforcement of rules by Congress and other government bureaucracies caused the crisis that they are reacting to. Government creates the problems and then assumes even more power over our lives with their ridiculous “solutions”.
No one in Washington has shown an ounce of leadership in decades. True leadership requires strength of character, clear vision to see the future as it is, the bravery to make unpopular decisions, and the honesty to tell the public the unvarnished truth based on the facts.

The facts are: we have a $10.5 trillion national debt; $53 trillion of unfunded liabilities; a military empire that has U.S. troops in 117 countries and has spent $700 billion on a pre-emptive war that has killed over 4,000 Americans; a $60 billion trade deficit; an annual budget deficit that will exceed $1 trillion in the next year; a crumbling infrastructure with 156,000 structurally deficient bridges; almost total dependence on foreign oil; and an educational system that is failing miserably. We can not fund guns, butter, banks and now car companies without collapsing our system.

I truly hope that President Obama can rise to the occasion and become a true statesman and leader. David Walker lays out our dilemma:

“The regular order in Washington is broken. We must move beyond crisis management approaches and start to address some of the key fiscal and other challenges facing this country if we want our future to be better than our past. Our fiscal time bomb is ticking, and the time for action is now!”

Ultimately, it is up to the Baby Boom generation to change our country’s course. The oldest Boomer is 62 years old and the youngest 45 years old. It is time for Boomers to take a hard look in the mirror and rethink their priorities. It is time to cast aside the $88,000 Range Rovers, $1,200 Jimmy Choo boots, $5,000 Rolex watches and daily double lattes at Starbucks. It is time to live within your means, distinguish between needs and wants, reduce debt, save 10% of your income, make sure your kids get a good education, not try and keep up with the Jones’, show compassion for your fellow man,  and possibly pay more taxes and get less benefits, for the good of the country. We must support true leaders like David Walker and get rid of the old time corrupted politicians who want to keep the status quo. Texas Congressman Ron Paul gives the blunt truth that a true leader is willing to give:

“Our government has lived beyond its means for decades. We now face a crucial juncture, at which we determine whether to continue down the path of debt, inflation, and government intervention or choose to return to the economics of the free market, which have been ignored for almost a century. Increased debt leads to higher taxes on future generations, while increased inflation diminishes the purchasing power of American families and destroys the dollar. No society has ever been achieved prosperity through indebtedness or inflation, and the United States is no exception. We cannot afford to continue our current policies of monetary expansion and unending bailouts. Unless we return to sound monetary policy, sharply reduce government expenditures, and realize that the government cannot act as a lender of last resort, we will drive our economy to ruin.”

The Baby Boom generation has one last chance to change the course of U.S. history, keep us from wrecking in a storm of debt on the approaching jagged reef and shed the title of “Shallowest Generation”.

Category: BP Cafe, Consumer Spending, Markets, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.


  1. Greg0658 says:

    I’m in basic agreement.

    James Quinn writes “What is their downside? If you have nothing and “The Man” offers you the American dream, you’d actually be foolish to say no.”

    My comment:
    Funny that those sign on this dotted line, is or was the juice for “the Man”.

  2. Greg0658 says:

    read every word now

    “I truly hope that President Obama can rise to the occasion and become a true statesman and leader.” David Walker says on our dilemma

    some of my firends call me Rev JoyKill and I say
    “NOT gonna happen – ITs to big a problem – and the team against team play imbedded in our culture equals failure.”

  3. donna says:

    Loved your rant.

    Agreed on many points, but we WILL need government spending to get us out of the mess. We need to spend on the right things, though, like infrastructure and the conversion to a green economy that will be more self sustaining, and education for our kids.

    The handouts to those who got us into the mess are not the answer, though.

    And Greg, I am hoping you’ll be surprised by Obama. I am not one who thinks he will work miracles, but I think he will get us headed the right way.

  4. swartzfr says:

    All true. I am a ‘boomer’ but probably not typical. I never owned a cell phone, blackberry, IPod or any other device except a watch. Paid for all my cars with cash, kept them for at least 7 years. Put 30% down on my house. Saved and invested to the point of obsession. Have had a total of 3 Starbuck drinks in my life. Never bought into the consumption society at all. Bought only what I needed not what I wanted. At times I always felt I was out of sync with society in general, now I know my view of how to live was right after all.

    I feel that Obama will do the right things and that the habits of many will change out of necessity. The carnage will be significant but as we all now know there is no gain without pain.

  5. Francois says:

    “Capital One has just received a $3.6 billion injection from the American taxpayer, one week after projecting that their write-offs will be $7.2 billion in the next twelve months.”


  6. dwkunkel says:

    I’m essentially in the same situation as swartzfr. My wife and I are the only people in our neighborhood over the age of 10 that don’t have cell phones. Those who expect Obama to do what is necessary to fix things are delusional. Nothing will change until enough of us as individuals make it happen. This mess can only be fixed from the bottom up.

  7. JMH says:

    I believe we are entering a bubble period characterized by ranting and finger-pointing, as characterized by your commentary. This may be the first sign that we are in the “end of the beginning” of the economic difficulties we are experiencing. But I would like to highlight a few quotes:

    “The Baby Boom Generation will never be mistaken for the Greatest Generation that survived the Great Depression and defeated evil in a World War that killed 72 million people.”

    Perhaps it would be worthwhile to consider the Truman Commission, and what Truman uncovered at the time. An editorial suggesting the DoD under Donald Rumsfeld (not a baby boomer) should be subjected to a modern day Truman Commission yields some interesting facts. Here is a link. A snippet:

    ” As a U.S. senator in 1941, Truman drove thousands of miles around the country going from one defense plant to another documenting waste and fraud. He then headed the Senate Special Committee to Investigate the National Defense Program — the Truman committee, for short. The process saved American taxpayers $15 billion (in 1940s dollars). And by uncovering faulty military equipment, he prevented the deaths of hundreds if not thousands of U.S. soldiers. ”

    I read that some believe that without Truman’s efforts, the US never would have been able to mobilize sufficiently to prevail in WWII within four years of entering the conflict, if at all. My point is that while there can be no question about the dedication and sacrifice of men and women who served the country so well in WWII, it is naive to state that all members of the WWII generation were paragons of virtue. If one is to accept the premise of your argument that baby-boomers are simply the most self-centered generation, one must dismiss dedication and sacrifice of those who served as enlisted and junior officers in Vietnam, Desert Storm, and other conflicts from the 70s through the 90s. One must also dismiss the dedication of the senior enlisted and officers serving in Iraq and Afghanistan today, most of who are baby boomers. By selectively comparing the virtues of one generation with the excesses of another, you are engaging in an act of deception in order to support an argument that has questionable merit at best.

    Mr. Quinn, you state:

    “Of course, not all Baby Boomers are shallow, greedy, and corrupt.”

    But then state:

    “Over optimism, unrealistic assumptions, selfishness and conspicuous consumption have been their defining characteristics.”

    The rest of your editorial is a collection of indictments of one form or another of the baby-boomers. I do agree with one of your observations:

    “If you are one of these homeowners and can afford the mortgage payment, time will eventually bail you out. If you can’t afford the mortgage payment, you should lose the house to someone who can make the payment. This is the failure side of the creative destruction that is true capitalism. If the government steps in to subsidize and eliminate failure, the system will ultimately collapse.”

    But what are we to make of this assertion:

    “Past U.S. generations invented the airplane; invented the automobile; discovered penicillin; and built the Interstate highway system. The Baby Boom generation has invented credit default swaps; mortgage backed securities; the fast food drive thru window; discovered the cure for erectile dysfunction; and built bridges to nowhere. No wonder we’re in so much trouble.”

    It would appear you have completely dismissed the technological achievements of the baby-boom generation: integrated circuitry, software, telecommunications, advances in biological sciences, to mention a few. Hopefully you recognize the societal advances since the 40s… You might also consider the Charles MacKay’s book: “Extraordinary Popular Delusions and the Madness of Crowds” as he makes it clear that societal excesses are certainly not exclusive to any particular generation.

    There can be no question that there have been egregious decisions in the past, especially of a financial nature. In view of the latter, I find it quite striking that your background includes service with retailers and homebuilders. Were you telling your former employers to take actions that would reduce their sales in order to prevent the accumulation of excess debt on the part of their customers, for the good of the nation? You are currently associated with one of the best schools of finance. I don’t know if you instruct, but if so, did you suggest to students studying during the 2003-2007 period that reckless financial engineering may result in disastrous consequences for the country and the world? Did you try to make these points to others on the teaching staff at Wharton at that time? Are there editorial you can point to from that period?

    It may seem odd that I would invest the time to respond to you as I have, as there are many similar viewpoints expressed on the Internet. I find your thesis particularly disconcerting, however, as you are associated with an institution of higher learning. In my view, you are basing an argument on Taleb’s narrative fallacy – “creating a story post-hoc so that an event will seem to have an identifiable cause”. (It’s rather amusing that Taleb is a graduate of Wharton. Clearly you have not influenced him.) You might also consider his “triplet of opacity.”

    I have certainly not been without fault in prior decision making, have indulged in both intellectual vices at times. In the financial realm, such indulgences have been costly to me. But I am not entrusted with the responsibility to educate younger people who are owed the best academic foundation to make the critical decisions upon which society depends.

    I request sir, that in view of the intellectual leverage of your position, that you might reconsider your axioms.

  8. jp says:

    I’m 27 years young. In college, I remember my first days of frosh classes, daily walking by the fountain where one kiosk after another was set up by credit card companies. How did they attract college students/legal adults to sign up? With a free candy bar. Just sign here and here, we keep the white and purple triplicates, and the green one is yours. Spending is so easy.

    And this is the problem with the American consumer society. They preen and groom you to perpetuate the credit culture. If mom and dad bought everything on credit, that must be the way it’s supposed to be done forever. If I need more stuff, I’ll just get another candy bar–I mean– credit card. This without recognizing the players extending credit can pack up their kiosks and go home anytime. What then? Credit is more finite than we think, although savings is forever. America needs to rethink and reeducate instead of hoping for endless cycles of revaluation and reflation.

  9. sbwood7@earthlink.net says:

    I think the article — although slightly polemical — was thoughtful, and he did admit most baby boomers did not benefit greatly from the last 30 years. To be more precise, I think he might have stated that the leadership produced by the baby boomer generation has been amongst the worst in American history.

    JHM — Although one of your comments deals with the overall technological progress over the past few decades, which I agree has been considerable, I have seen similar more narrowly focused comments time and time again, with the gist that income disparity shouldn’t matter, as either technological gains, or outsourcing, continually make many products cheaper. These comments almost always invariably refer to how personal electronic devices are now everywhere.

    Having a cheap cell phone, or laptop, or some other electronic gadget does not balance out spending always increasing percentages of income on housing, food, utilities, and education, or servicing debt, or the fact that many jobs have left the United States and are not coming back. Being able to watch movies on a 52” widescreen doesn’t do me much good when I am unemployed, or underemployed. (Of course, the TV would be bought on credit).

    As far as the academic qualifications of today’s students go, academia doesn’t exist in a vacuum. Education doesn’t end once outside the university campus. Mentoring and developing employees (hopefully to become competent leaders) is lot of hard work, much of which isn’t and shouldn’t be the job of professors, but the job of supervisors or managers. “Those how can’t do, teach.” Well, those who “do” have to teach also. Of course, most large businesses pay lip service to improving the skill set and quality of employees, but from what I’ve seen, could not care less in actual practice. That is pure leadership failure on a business and social level.

    This was not a foregone conclusion 30 years ago. It was also not the result of some unstoppable social or economic evolution. It was a conscious choice of the government and business leaders of this country. I would call them idiotic, but that is definitely not the case. Merely sickeningly selfish.

  10. Andy Tabbo says:

    Excellent Rant.

    The Baby Boomers are now seeing the Ponzi Scheme/Trust Based system that is the U.S. unravel in front of their very eyes. It is no coincidence that the stock market, via mutual funds and Peter Lynch, home prices, via second and third home purchases, all saw significant rallies as the Baby boomers were in their late 30′s and 40′ and early 50′s…..the mindless money flow into these assets was SIGNIFICANT…the panic selling of these same assets has been SIGNIFICANT. This selloff in assets will continue as the most selfish and self centered generation “tries” to retire and realizes they need to get back to work.

    - AT

  11. deanscamaro says:

    I agree with the position in the article. sbwood7, in my estimation, stated the problem we have these days:

    “To be more precise, I think he might have stated that the leadership produced by the baby boomer generation has been amongst the worst in American history. ”

    Lee Iacocca understands it, as detailed in his book, “Where Have All The Leaders Gone?” I don’t believe the message from the pre-baby boomer generations got through to the BB’s because there was no experience associated with the warnings.

  12. km4 says:

    Chalmers Johnson conclusion in Blowback was that a nation reaps precisely what it sows so your terrific portrayal of wanton greed and ‘illusion of prosperity’ for past 25+ yrs that has created systemic damage is a spot on sobering rant !

    I agree with Kunstler that most Americans had better get a new “Dream” and fast !

  13. BG says:

    I agree with most of the content in this post. I am a BB and have personally experienced many of the same things others here have experienced. Like others, greed got the better of me during the Dot.com boom and took me to the point of bankruptcy. I was able to hold on and get my finances in order. I am now debt free and own a very nice home. My investment strategy is now laddered CDs with a very conservative stance except for a little bit of play money for entertainment.

    The culture of debt in the US is no accident. It was mandated long ago by by contributions (bribes) to our law-makers by those who would benefit most. Debt in this Country is written into the tax code and discourages anyone who actually pays cash for anything. Well, we have gotten exactly what our wonderful law-makers desired.

    I would also love to know which law-makers wrote the laws that paid tax credits to U.S. corporations that exported our jobs to other countries and subsequently laid-off literally millions of tax-paying Americans. Those bastard should be shotfor treason and deported to the country they colluded with.

    So, you see. It is all our fault. We got exactly what we asked for. WE are our own worst enemy. And as a result, we have done serious damage to ourselves and our Nation. Damge, that no terrorist or Country could ever do. I have never seen a Country with such intelligence, education, greed and ultimate stupidity. We should quit blaming someone else. It is our own greed and corruption (Yes, corruption!) that has got us to this point.

    The thing that will piss me off the worst is the words I can already hear about the lack of Social Security funds for retiring Americans who have been paying into this financial mirage all their lives. Don’t tell me about the 3 workers for 1 retiree crap. The money paid in was never invested in a damn thing! It was stolen and replaced with another fucking IOU. This hood-winking shit has got to stop. If people in areas of financial responsibility are unable to adhere to rules of honesty and integrity, then they should be held accountable in one of our worst penal institutions.

    You see, we are our own worst enemy! The enemy is among us!!

  14. ooo says:

    Interesting article, but your selective memory and faulty logic continually undermines the point you’re trying to make. My favorite was this gem:

    “Past U.S. generations invented the airplane; invented the automobile; discovered penicillin; and built the Interstate highway system. The Baby Boom generation has invented credit default swaps; mortgage backed securities; the fast food drive thru window; discovered the cure for erectile dysfunction; and built bridges to nowhere. No wonder we’re in so much trouble.

    This completely ignores developments like the personal computer revolution, the Internet, modern telecommunications, satellite technology, space exploration, advances in biotechnology, dramatic reductions in global poverty, etc, etc. I’m sure I’m forgetting some, but you get the idea.

    You would have done well to acknowledge that the reality of the situation is more nuanced than the picture you attempts to paint.

  15. Tom Lowe writes:

    The shallowest generation was the postwar generation, not the baby boomers. People who are 75 now, not 55. People too young for WW2 but too old for Vietnam.

    They’ve had everything handed to them from Day One right up to the present–and it continues to this day. They had easy access to good-paying jobs, careers, cheap home financing, new car almost every year, and welfare opportunities like the now-defunct Mineral Lands Lease Lottery which my own parents still rake in about $10k/month off of but which I cannot participate in because the program is long defunct.

    At least baby boomers had to cope with an illegal war followed by decades of economic and cultural stagnation overseen and directly caused by their elders from the true shallowest generation.

    But you: you simply want to bash a certain generation for personal reasons, and there is nothing else to what you are saying.

    I have heard your type of generation-bashing nonsense before, and many times. And it is just that: nonsense.

    And in fact I consider it to be traitorous nonsense intended like the many other similar screeds to break down the fabric of this nation and its society.

    I suggest you leave the USA and do not come back.


    Tom Lowe USA

  16. MurrayR says:

    The U.S. is dependent on foreign products for its energy, food and leisure needs. Simply put: America is consuming more than it produces. And as this imbalance continues to grow, the long-term risks to the economy become a more severe economic issue.

  17. nap72 says:

    Good article on the Shallowest Generation.

    While I agree on almost everything you wrote there was one glaring omission.

    One thing you failed to mention was that many/most of those loans given to “poor” people were forced by the policies passed during the Clinton Administration. These policies forced many banks to make loans to people who the banks knew would/could not be able to re-pay these loans. The government said it was discriminatory for the banks to turn down these people who could not afford it, and the government warned them they would shut them down if they continued to turn down “poor” people for their inability to pay.

  18. pureguesswork says:

    Despite all the statistics and charts, this is nothing but emotionally charged nonsense. People love this sort of stuff–keeps them from doing real thinking. Is the point that one generation is bad and the other good? The baby boomers have done what–work shorter hours than previous generations? Worried about their children less as they indulged themselves in countless hours of pleasure seeking? O tempes, O mores. It was a silly meme when Cato used it and it remains a silly meme a few millenia later.