How the baby boomers stole the millennials’ economic future | LIVE STREAM

Good morning everyone and welcome to AEI. We look forward to this discussion today. There's nothing like starting a Tuesday morning with a bit of generational warfare, so we trust you've come prepared and we'd like to welcome all of you watching at home or at your desk, as well as starting this discussion , I'm going to go ahead and introduce our speaker and our respondents and then we'll have our speaker just come here and offer some comments and then his respondents will give their reaction to his comments and then a discussion will follow and then at the appropriate time we'll do pause and we will allow you to give your opinion with questions.

The title of the book we are here to discuss today is The Theft of a Decade about how Baby Boomers Stole the Economic Future of Millennials and the author is Joseph Stern Berg, a member of the editorial board of the Wall Street Journal, where he writes the political economy. You joined the Wall Street Journal in 2006 as an editorial writer in Hong Kong, where you edited the Business Asia column, which is where I first interacted with you years ago, and before that you were an editor and writer at the New York Sun and the Public Interests and began his career as a journalist here in Washington DC, Mr.

Stern Berg is a graduate of the College of William & Mary in Williamsburg. The first to respond is my colleague here at AEI Ramesh Ponnuru, who is here as a visiting fellow and examines the

future

of conservatism with a lot of attention to the political

economic

s of health care and constitutionalism, many of whom you know as a senior editor at National Review for a long time, where he covers national politics in public policy and you can also find his regular column in Bloomberg View and finally joining us as another respondent Connor Williams, a fellow at the Century Foundation, where he writes about education immigration education of the first childhood school choice and work-life balance for American families he is an expert on American educational inequity English learners dual immersion programs urban educational reform and the history of progressivism so welcome to our respondents today and without further preambles, please join me in welcoming Joe Sternberg to the podium thanks Ryan and thanks to all of you for coming as noted by Orion.

I began my journalism career here in Washington about 15 years ago and fondly remember attending AEI events at the old office. Yes, I certainly think they are It's a big draw for young people who are trying to get their bearings and think about

economic

issues, political issues and that means it's very flattering to have been invited here to give my own talk and also a bit discouraging, so I I will try. to

live

up to all the people who have talked about these events before and I'll do it by focusing on two of the big questions that I address in the book: economic questions and then I suspect we're going to talk a little bit about politics later in the show, the two economic issues that I've been focusing on a lot while talking about Liz Booker, first of all, what's happened to Millennials in the last decade because I've found that there's a lot of confusion about whether something's happened to Millennials.

The economy has been very difficult over the last decade and that this is a real problem for us. I'm a millennial, that's very unusual compared to what previous generations have faced, and of course the second question is who did it, so I'm going to argue that actually a lot of what we're experiencing now is a result of various political options rather than forces of economic nature or the natural evolution of the economy, and I think this way of thinking about political options rather than inevitability should have will have a big impact on the way some of these These issues will develop politically in the coming years, so before I get into any of those questions I want to quickly define what a millennial is because this is the other thing that a lot of people have discovered.

It seems like we're really confused and the important point is that we're older than you think, so when I talk about Millennials in this talk, I'm looking at a generation that was born between 1981 and 1996, which means a lot of us were just at the age we were entering the workforce when the financial panic and the Great Recession hit and the youngest of us were already out of college, so if you came here expecting me to tell you about all these snowflakes we heard a bell on college campuses, you will be disappointed, it's not our fault, it's Generation Z, the people who come after us, so if we talk about what happened to the Millennials, I think that's the beginning and the end of that discussion It has to be the labor market and this is a big part of the story I tried to tell in the book because it went wrong for us in a spectacular way that was really unusual compared to many of the previous economic crises that the United States had suffered. "Yes, we certainly saw an increase in youth unemployment because we saw an increase in general unemployment and of course young people are always the most vulnerable in any economic crisis, but I think what made it different this time was the severity, I mean, we have." We're familiar with thinking of the Great Recession as the worst recession that the United States had suffered since the depression and that means that inevitably young people were going to be hit hard by that and what exacerbated that was that we had a huge cohort of young people.

Entering the job market at that time, depending on how you count, there are between 71 and 80 million Millennials floating in the US population right now, meaning the economy was trying to absorb a huge cohort of young people. still developing their skills during the worst crisis we have suffered in 80 years and the other interesting thing about this crisis is that it seemed to affect many different companies differently and some of the companies most affected in this crisis particularly tended to be the most small businesses that young workers rely on most for initial opportunities, which meant there were a lot of the unemployed Millennials you knew floating around and there were possibly more unemployed Millennials than the unemployment data suggested because we were also experiencing a trend in that more and more of us were going to school as a kind of warehouse for ourselves while we waited for the job market to recover.

You can see evidence of this in an increase in higher education attendance right around the time of the Great Recession that I don't think can be explained just by this normal trend where Millennials are always going to go to college and higher numbers than the ones our parents would have done and you can also detect hints of that in the survey data and now that suggests that many Millennials feel underemployed in their jobs now that they've graduated, you know, I think one interpretation, you know, It could be that we have unrealistic expectations about doing a glamorous job right after graduating, but I think there's a strong case too. that we ended up with the millennial workforce that had acquired a lot of education and training to try to inoculate us against the effects of the crisis and then found out that that didn't work for us, now that these bad labor market dynamics have directly fed on top of the other things important things that have happened to Millennials over the last decade, one is the student debt crisis we hear so much about.

I'm talking about an implication that many Millennials find their way into higher education to try to protect themselves from the recession. There was a dramatic buildup of student debt during this period and then another implication of that is that if job opportunities weren't still available to us when we graduated, that debt load seemed much more unmanageable than it otherwise would have been and you You know that's an important point that I think sheds new light on some of the policies around the issue of student debt right now. I think Millennials often feel cheated by some of the investments we've made in higher education because labor market returns are a haven.

It hasn't been there for us as a consequence of the fact that it took so long for the economy to recover, you know, in terms of the employment situation, you know, the next shoe to drop as a result of the bad job market that we've suffered. The last 10 years are going to be the real estate market and I think we Millennials here often find ourselves caught in a vicious cycle because the places where there are job opportunities for us tend to be affluent urban areas here in Washington New York Austin Texas Los Angeles, Seattle, but those are the places where housing is least affordable for us and Millennials often find themselves in a trap where the job market, even once you are in a place where you can find a job, does not offer the salary level that it will permit you. allow you to know allow you to afford housing in areas where you have had to move for work and yes, I think that is something that is creating a lot of tension for Millennials and I think it's important to understand when we talk about What happened with Millennials is that, In fact, for many people of this generation it is not a question in the past tense.

There is plenty of research to suggest that these effects will be long-lasting for this generation. There is evidence to suggest that if you enter the job market in a recession when unemployment is unusually high, it will take you a decade or more to recoup the cumulative lost earnings you lost earlier in your career. You know, I think you're the Millennials right now. Finding yourself saddled with a lot of long-term student debt that, as you know, will last much longer than the recession that might have helped push some of us on the margins into additional education and housing, is going to be a real challenge because if you're a millennial.

From time to time, some of us are older than you think. I'm 37 years old. I'm a millennial and you know people, especially older ones, who haven't been able to get on the housing ladder and still find themselves. I wonder if they will ever be able to afford the house and pay it off when we hope to retire, so I think it's important to keep that in mind if we're going to have a political discussion a little later this morning because I think there may be a tendency to think that if the Economic growth is very strong now in the last two years, that has solved many of these problems and I think it is important to remember that that is useful, but from the perspective of many Millennials it is not a completely satisfactory solution, there are still many problems that remain. there.

The second part of this topic that I want to address before we get into the panel is just the question of who did it now, of course, arguing that the result of this was that many of these phenomena are the result of political decisions before, during and after the financial panic and the Great Recession; Now that's not always a common view, especially among some boomer economists who, as you know, often argue that the transformation that the United States is going through economically right now is a result of demographic change or globalization in some way or just the forces normal economic developments, but I think there's actually an element of policy choice in a lot of this and that should inform a lot of the policy debates we have going forward.

One topic I talk about a lot is simply the dynamics of investment in productivity growth in the economy. I think Millennials have been living with the consequences, particularly since the Great Recession of an American economy increasingly struggling to unlock business investment to improve productivity, and you can point to many policies that were part of the

baby

boomer political consensus. that may have graffiti that can be pointed out with many regulations or regulatory biases in favor of replacing capital. replacing labor rather than augmenting it in the economy, one can point to a large educational policy environment that places a heavy burden on eighteen-year-olds to invest in their own educational

future

without any guidance from anyone else in the economy. economics on what to do. skills, our training will be really useful to us once we enter the working world and I have some sympathy for the

boomers

in all of this, I mean, and this surprised me a little bit when I was writing the book because I expected that there would be I think the

boomers

They

live

d through an earlier version of some of these transformations in the economy in the '70s and '80s.

I think the problem was that they often didn't learn the right lessons from those experiences, and therefore the tendency would be to double down on policies that they hadn't. worked, you know, a topic I talked about a little bit in the bookIt was boomer attendance on a team that confuses the results of a safe economy, such as, you know, strong wage growth. unions or workforce in negotiations with employers, yes, there was a tendency for boomers to confuse those outputs of productivity growth with inputs to economic security, a tendency to focus on trying to regulate those things instead of thinking more carefully on how to boost the economy. investment of productivity in the economy that will provide the economic security that we are all seeking.

One topic that I think we're also going to have to talk about a little bit is going to be something like monetary policy, which feels very dark to a lot of Millennials, but I think is actually a very important part of a lot of these investment failures. Know? I think what was interesting during the firefighting phase of the financial crisis was the extent to which the boomers tried to double down on the housing bias they had created in the economy rather than thinking more carefully about whether we were actually implementing policies that were going to help, especially the little ones. companies, unlike large companies, small businesses that hire more young people than the economy, and you know they certainly do, after the Great Recession we saw a huge doubling down on new things like focusing on education or trying to grow aggressively as a solution to an economic problem that boomers didn't always seem to understand and that has had a lot of implications for Millennials as well, so I think that's a broad summary.

I've left a lot of little ideas floating around that we can maybe hold on to during the discussion and Q&A, so I don't want to talk much more than that, just let some of those ideas percolate, but I think the big point is of this exercise for me was that first it really is a problem and I think that in order to have a balanced political debate on many of these issues in the future, I think both ends of the political spectrum are going to have to realize that younger voters in the Millennial generation are not crazy for thinking that we have serious economic problems that continue to persist and then my final point, which I hope is a theme that comes out clearly in the book, is just a plea for you to continue to think creatively about many of these problems because clearly Millennials are looking for new solutions to something that seems to deviate from what seemed like a boom-era consensus on how to address many of these problems.

I think my take on the larger political trend, this notion that Millennials invariably gravitate toward the socialist left, is not the same. necessarily that we are completely persuaded by those arguments because some of the surveys may be a little contradictory, but that we know that we are looking for more competition in terms of answers to these problems about which we want to see a more dynamic discussion about that and, in particular, Speaking to an audience here at AEI, my plea to people on the right end of the free market spectrum is to take these issues seriously and really focus intently on addressing many of the issues Millennials face. we're worried right now, I think I'm going to leave it there because I feel like I've talked too much and I've been talking about the book for about a week since it was published and I've found that for me the panel discussion and the Q&A are a lot funnier than the me talking part and I'm sure that's the case for all of you, so I'll go and let Connor and Ramesh offer some of their Thoughts, well hello, I'm Connor Williams.

I'm here, let me just offer you a few reasons why I'm here for the first time, apparently because I'm a member of the Century Foundation. It's a think tank just down the street. To the left of AI, so I'm ideologically diverse today, but I'm also here because I'm a father, a father of two, and I'm here as the voice of youth because, according to Joe's book, I'm a year younger than him. . but most say I'm here because I biked to AEI today and I mean, I biked because I like biking and it's an easy way to get around, but it also saves me on the order of two to three thousand dollars a year depending on My calculation terms have saved gym memberships in terms of money I didn't spend on parking or public transportation, which is one of the many things I do day in and day out, two months and two years out of the year to save enough money for everyone. other things I have to pay for, including especially those two kids, I mean, I'm here because I am and I want you to filter everything I say for the rest of this through this lens.

I am your success sequence. I'm a every rule that generally, as a conservative on the panel, says that those Millennials are so promiscuous in their recklessness and there is a Lakatos in their toast and their leagues. I'm the sober-minded man, the one who got a job at nine, saved a ton for his people. college who was at a first generation college, single income family of six went to college on great financial aid, married the girl I dated in college when I was 20, had a couple kids and twice I was about to have the third, which again, forgive me, just rip that's because that's where I'm going I went to grad school I kept working there I have my whole life everything that success sequence people say keep clean nose and work hard and get a degree I did all that and I realized something after we had our kids and that's how I became passionate about it.

This was saving aggressively for retirement. I was putting money into 529 as soon as the kids were born to save for college. I paid off my own student loan debt. On our journey toward my wife's student loan debt, we simply weren't hitting any of the milestones as quickly as my parents did. I wasn't currently beating my dad and I think I also know that at every stage of my career beating him and I still couldn't sum it all up, this again. I followed all the rules. I was so angry about this that I wrote an article for The Guardian that is part of how I got here to this stage.

Bernie Sanders pushed it on Facebook, which meant the entire Internet gave me his opinion, and it turns out the Internet wanted to play a game for my version of this book. If I can ever raise enough money to take the risk and take the time, congratulations on writing my version of the game they want. play is that you have to adjust the game so let's play now these are the mistakes I made so you should have gone to a different college a cheaper one you just shouldn't have gone to college or if he majored , something else and then repeat with grad school, you should have moved to a less safe neighborhood where you live in the city you live in, you should have left the city completely and moved to the suburbs, you should have left the cities and moved moved to a different region. a cheaper place a smaller city you should have bought a car so you could live in the suburbs you just shouldn't buy a car you should have bought a car at a different time you should have married someone else married at a different age you should have gotten married not yet you should have gotten married you should have had children at a different time a different number of children you should not have had children at all you should have had your parents dead by now you should have saved more for retirement you should have used your retirement to buy into the house you should have got the side job, another side job, a couple of side jobs and there were some things they didn't say, and again, we're all like my unearned luck when I call it privilege exactly because this is just luck.

I never really got seriously ill, the couple of accidents and traumas we went through were all cancer scares, not cancer, they were all minor problems related to car accidents, assaults and things like that, they never said, well, you shouldn't have been arrested because I didn't understand that All of those things are true, right? It's true that all of those options have a lot to do with upward mobility. It is also true that I made most of those choices between 18 and 22 or between 18 and 25 and at the time it was living forward, now understanding backwards. Maybe I could have had a smoother financial path if I had majored in something else or had a different number of kids or whatever, but I had no way of knowing everything I was doing.

I was following the rules by making reasonable, eminently defensible decisions for someone my age and it turned out that, according to the internet, they were deeply consequential decisions that I should feel a little bad about, that's what it means to be a young man because let's be honest, this is about from my last panel, it is the voice of the youth, this will never happen again. Being a young, working parent in the United States right now feels like that, it feels like every choice you make, no matter how serious you are and how anxious you feel. what you do and how carefully you weigh your options, you're always at a much higher risk than before, but you just go one way and you have five extra years before you can retire and I go one way and you know you've entered the real estate market, but you came in after all the growth was gone in those assets so overvalued now that it's just not going to pay off, so that's what I'm here for.

I am the canary in the mine. I'm here to tell you that if a guy like me, who again had college-educated parents, first-generation college, but I'm still a white man, I'm a straight man, has a PhD, my relationship survived college and survived until now. , all went well. have made their way, it's still taken me a while to put it all together. I warn you that the people who are flocking toward radical solutions to our political present are flocking because many times they don't have my luck, my privilege, or just the really defensible decisions they made just didn't work out and it really isn't their fault. , it's just that we've made the path so precarious now that that changes if you stay.

I'm sure you'll agree. Wow, Connor is bringing the ideological diversity as promised, I'm bringing the generational diversity here being a Gen all the other characteristics that make us so universally celebrated. I tend to have a bit of an allergy to the kind of generational politics, to the exaggerations, the generalizations about generations that often tend to exaggerate what different age cohorts have in common and to underestimate the diversity within generations, but this book made me I liked it more than I thought. Coming in with that predisposition, I thought there were many places where there was nuance and consideration and it was at all times very intelligent and humane.

I have to say, I'm allergic to generational politics on both sides, so it's certainly true. that particularly as the age profile of American conservatism has aged, you hear more and more complaints about young people these days and yes, you hear a lot about avocado toast. I don't know why, it has become a flashpoint. who has done it but he is and you know why they are socialists and you know why they don't get married you already know and so on I don't know if the book completely avoids some of the dangers of that type Many times during my stay I read something about, already You know, Millennials report much higher degrees of worry about their financial future than

baby

boomers and I thought, well, is it a cohort effect or is it just an age effect, it's something that people of age are more likely to do. around 30 years old than people in their 50s who, ideally, have already made and executed their financial plans or at least have a better idea of ​​how things are going for them.

Emphasis on the enormous lingering effects of the Great Recession I think it's important to think about the well-documented fact that joining the workforce in the middle of a recession is taking a hit to your lifetime earnings, not just a a couple of years from which you then recover. He disagreed with many of the analyzes of the policies that led to the recession or that responded to the recession in particular. I thought the discussion about monetary policy and interest rates out there had to get a laugh out of what I was talking about about how monetary policy seems obscure to many Millennials.

I couldn't trust myself that it's true for every generation, what brings us all together, brings us all together, so for example there's a discussion about how the average 30-year fixed mortgage rate was lower in the 90s than in the 80s and then even lower, a lot of that is what you would expect when you have a decreasing inflation environment, when you have decreasing risk. premium and is an exaggeration of the extent to which there was any kind of political optiontowards lower interest rates and an underestimation of the extent to which that is just sort of market forces that would take you and the city, you know the idea of ​​that kind of thing in the future.

Over the past ten years we have harmed the economic well-being of

millennials

by keeping interest rates artificially low. I mean, to the extent that we can look at the international evidence on this, I don't know that it's particularly promising for that thesis if you look at the eurozone. area, for example, that tried to have an airy policy of less expansion that raised interest rates in the midst of the Great Recession. I don't know if you'll find that the results were particularly better for young people by doing so. I'll try. If we move forward here and are more generally optimistic about the financial outcomes of

millennials

, then this book may lead them to focus on retirement security, for example, in part because I'm influenced by Andrew Biggs' work at the American Enterprise Institute. .

I tend to think that many of them There are some very important discrete problems, some of them highlighted very cleverly in the book on rights, but that young people are saving at higher rates than previous generations and that their material well-being is simply greater and it is likely to continue to be higher. than that of their predecessors, as is often the case with this type of analysis, there is a discussion about the change from defined benefit pension plans to defined contribution pension plans and it is a balanced discussion that mentions some of the disadvantages of the defined benefit plans but at the same time It's usually not ignored and it's ignored here too, but most people didn't have access to those defined benefit plans to begin with and, simire what your average worker is experiencing, It's a better retirement security situation than I had.

I guess the last point I'd like to make is that you don't know, look, there's a lot of smart analysis about what we should do. change with education skyrocketed what went wrong with their education system was wrong with real estate markets and so on and to the extent that you get young people or people younger than me interested in some of these issues and give them a kind of thesis that Can you fit that analysis into something that is useful? On the other hand, is theft really the right way to think about this problem? Does it encourage the right kind of problem-solving mentality or does it really encourage a kind of whining and gratitude because you know?

I think there have been some serious mistakes in educational policy, some serious mistakes and monetary policies that work, very few of them seem to me like things that the boomers did to enrich themselves at the expense of successor generations, which normally when we think of theft we think of someone who takes something and gets rich understand I don't think almost I don't think much of what's in this book really lends itself to that thesis. I think what really appears in this book is a set of policies that people adopted for Intel for sensible reasons, although not always correctly, for understandable and non-inflammatory reasons, but that in one way or another work less and less well with the time and when a policy works less and less well over time, that means it will work less and less.

Well, for younger people, I think this is the true story that this book tells and I think it's a very important and useful story. Great, I mean, thank you both and you've actually given me a lot of help and given me a lot of things to chew on. in my comments here and you know I want to start with a sort of take on the big overarching theme of Ramesh's comments, which is that maybe it's not so bad after all from all angles and that I can only think that Connor has given a very good coherent explanation of why Millennials do not think that way and I think we should be very careful when we talk about these topics that we should not miss.

In light of what's the really valuable signal that millennial perceptions of some of these issues are trying to tell us, you know, I think actually the politics around this is actually a signal that, even if you know, I'm sure if you were looking at the balance sheet of the Connors household or if you were looking at various financial results, you know that you can get headline data that will tell a very positive story about it and I think that can miss a lot of your I know there are dynamics that they seem likely to be occurring domestically and I mean, I don't necessarily want to argue that you know when I should never reject a perception if you think that perception is wrong, but I think one of the points.

What I wanted to highlight in the book is that we need to be alert to the fact that, particularly in an environment where politically a lot of younger voters are telling us that they feel like something is going wrong for them economically, that's actually a sign that we need to take it seriously and I think I'm trying to suggest that there may be things lurking beneath some of the headlines that suggest there are real problems here and as you know I'm certainly sympathetic to this argument. that the generational question is often exaggerated I think you know that the term millennial itself had its origins in this book in the late '80s.

Generations of the early '90s, the story of America's future, which I think made a lot of claims on different generational cohorts that have not done so. It really stood the test of time very well, but I think it's reasonable to talk about these economic issues in generational terms simply because you know whether by accident or bad luck it happens that that way you're capturing the effects on the economy. cohort of people who were young at the time the Great Recession hit and you know you can start to talk about some of the economic implications of that, you know, on issues like monetary policy, effective interest rates.

I think I'm not entirely inclined to let the boomers off the hook for a lot of those decisions because one of the things I found surprising while researching the book is how little is still understood about itself, but the practical effects of many of the previous monetary policies. and after the Great Recession and the way that those policies interacted with the economy in a way that could have big implications for younger people entering the labor market, yes, there are some lines of research that are starting to suggest that In In reality, the benefits of the Federal Reserve's pro-growth policies in recent decades were concentrated in areas that were already economically healthy and did not necessarily do much to lift boats in regions of the country that were struggling.

There is reason to believe that those policies were really good for larger companies that could raise debt by accessing bond markets, but they were much less helpful for smaller companies that could rely more on bank financing and that are also the ones that hire to many young people. workers like Millennials in that market. I refer again to one of the things that I and I mentioned in my opening remarks on issues that relate particularly to monetary policy, but in many other areas, so I think we also need to fight against some of these notions that many of these trends were simply inevitable.

I mean, I don't think there's anything inevitable about some of the trends and mortgage rates that we see before and after the crisis and recession and I think we're starting to see some interesting research looking at the extent to which monetary policy itself could cause some of these phenomena that we then assume occur naturally because a risk premium is falling or inflation is declining, yes, some of that is actually a choice, it's not a natural consequence of anything, so I can certainly say that there will be a lot of discussions about particular villains that I identify in the book or that you know what the political solutions might be, but I don't think we can get away so easily by arguing that many of the things just happened.

This fascinates me. I came here prepared to say: you know, one of my problems. I think with the book it's the generational loners. and other things that echo Ramesh, I actually think the problem is the rich, not the elderly, this is really a question of class solidarity, but now I need to defend the millennials, this is nothing. I brought statistics. I did a little research before him because I was saying that before we were in the green room, there's an article about millennial anger now that goes viral like every other week, so I did some research and found a couple of these compelling.

I mean one of the fascinating things if you don't I don't think there's a problem: asking boomers how they paid for post-secondary education if they attended. Have you ever done this? And the boomers at Audion should feel like I should ask them, but I remember talking to a relative who told me she paid for college in full with no debt for years private with no financial aid working at a grocery store on vacation that was it going home for Christmas winter break working all summer that was all tuition boring room covered it all So I did some research and dug this up with minimum wage right now, because for boomers, the hours of minimum wage jobs that were needed to pay for four years of public university were 306 and the minimum wage that could be paid for four years for a millennial now.

On average, four thousand four hundred and fifty-nine have 300% more student loan debt than our parents and we are now half as likely to own a home. It could just be guys like Mia complaining. I mean, it could be, but I think. that we have some macro data that the current situation around the advancement of credentials around zoning I think a lot of things that are actually you conservatives are willing to be talking about how we have managed to get out of the misery. live near good job markets and whatever. I think there are good local exclusionary zoning policies that we can work on a whole house, but I don't think we should deny that people who are trying to put all the pieces together and We're facing a very strange and very expensive upward path, so which seems to have put me in this position of denying that there are problems affecting the economic well-being of Millennials.

It's not a rule you want to follow. What I do think is that focusing within one generation tends, first, to exaggerate the problem and, second, to exaggerate the Maleficent type or the idea that boomers made these terrible selfish decisions that are hurting the Millennials and, you know, there are serious problems. that we should work to address higher education credentialism and the growth of licensure requirements, which again was kind of absurd, look at it through the lens of sort of generational self-interest, why, why, why, The number of job categories that require government licenses have expanded. I think it's kind of a boomer-centric incidental story, but think about a boomer who was born in, you know, nineteen-fifteen, at the height of the baby boom, he's becoming an adult, you have the risk of going to Vietnam, the crime rate. is high and rising, you're going to enter an economy where growth is significantly slower than in the 1950s and 1960s, you run into stagflation, something the best and the brightest don't really have great answers for, so it would be very easy to tell the same type of story.

Woe to us! Our predecessors made terrible decisions, they saddled us with these huge problems for which there are no obvious solutions. We also run the risk of, you know, a global thermonuclear war that will destroy everyone. us and it seems to me that you know, each generation receives both the assets and the liabilities that have been passed down and it's just not useful or productive to focus on the passive side of that. Well, I'd just like to push back against that a little bit. First of all, I want to make it clear to all the boomers in the audience that it is safe for you to read this book because I am very sympathetic to this argument, which I think I have heard quite a bit over the past week.

I think older readers said that the boomers also faced a difficult economic environment and I discussed that at some length and in fact in the book I think this is part of an explanation for the bad political decisions that the boomers themselves have made during the last years. last 30 or 40 years because we often think of the boomers, as we know them, inhabiting this happy era of stable employment where you could have one family, they're the only ones generating income in the home and, you know, a wife, if she so desired, would have the option of staying home to take care of the children and would have a job for life if the reality is that that is the economy that boomers grew up in in the 50s or 60s, not is the economy in whichthey actually worked and For the boomers who graduated and entered the workforce starting in the 1970s in the stagflation era of Vietnam and then through the traumas of the early 1980s as the American economy tried to recover from that, I have a lot of sympathy for the argument that Boomers faced a difficult time earlier in their working lives and that is why, for example, another author who analyzed these issues refers to them as a generation of sociopaths; he'll be relieved to think that I think that's unfair, I mean.

The way I came to think about the political side of this is that the boomers understood that something had gone wrong in the '70s and that the economy was not working like it had for their parents and much of what we have since You've seen policy attempts to address those problems, now you know you can argue whether you think it was theft or not, but I think certainly the impetus for a lot of those policies in effect, if not quite in intent, all of them have been the time. of favoring the interests of boomers who were formulating policies that they thought were intended to solve the problems they had had, rather than trying to take a somewhat more holistic view that could encompass an economy. that would work, you know, maintain some kind of intergenerational balance, yeah, the housing market that led to the crisis, I mean, to a fascinating degree, I realized that you know, the real emphasis on homeownership in Washington in It actually had its origins in the '80s at a time when boomers began to worry that they weren't buying homes at the rate their parents were, and it can't be argued that the boomers' emphasis on housing simply happened by accident.

I think you can see a lot of policy stimulus along the way that was aimed at pushing boomers into homeownership without really thinking about what the broader effects on the market might be over time. You know, I think certainly Ben, this is probably an area where Connor and I could have had a very long, disagreeing conversation between them, but I think one problem that can be pointed out, especially in the Obama era, was this tendency. to seek political solutions that would recreate the semblance of economic security that boomers had grown up with. could recreate the strong unionization that could recreate the general feeling of economic security without focusing enough on recreating the productivity boom of the '50s and '60s that created that kind of curiosity, so I think it's completely fair to have a conversation that talks about how some of these policy choices have created an economy that over time has lost the ability to maintain any kind of intergenerational balance over time, yes.

I mean, I'm certainly open to discussion about whether or not they want to call that a robbery, but the political environment definitely happened. I feel like I needed to let you guys finish this, well, you know, us Generation and I didn't agree with all the other guys. I'm still amazed at the extent to which sitting next to a member of Generation the back is the success sequence guy here, how about having my third child? and there was nothing there about that amount of money, which I think is actually the missing part of the big reveal at the end of the book: you are actually Millennials.

It's not as young as you think, which is true, but to the extent that you're talking about a chord that tends towards 40 at the top edge, there are many of us who have now entered the world of having children, which is hugely expensive and, again, it's just not there as part of this generational analysis, there's nothing there really about the cost of childcare or how having children greatly influences your long-term career path or college savings long term they are. of occasional mentions about how instability around housing, whether renting or owning, prevents people from starting families, but there's not much about how, once you're there, that actually contributes to this family formation problem. really difficult long-term assets that Millennials have.

I mean, I think this again is a fair point. I mean, part of the reason that maybe it seemed a little less urgent to me when I was writing the book is simply because the reality is that for many people in the Millennial cohort their family formation has been delayed by many of these trends, so I think, especially when you put it that way, it's almost interesting that a lot of the millennial political debate right now is focused on issues like homeownership or the student debt issue or jobs. security in general I think there's definitely some interest in some of these more family-oriented topics, but I think maybe we'll get to a point where that discussion becomes a lot more urgent, but for now I think if the formation of the family en We're not at the point where a large number of Millennials are dealing with that issue, but you know that could affect some of these dynamics.

I mean, I think a lot of the solution is going to end up in problems like the labor market that I'm talking about, I mean, I think in a way I wish we could start thinking about these issues, like the ability to have the resources to raise a family. . I think it's actually a result of an economy, it's a result. of an economy where investment is skyrocketing properly is a product of an economy that is experiencing strong productivity growth, since we don't live in that type of economy right now, you know that's going to create a lot of these stressors in chain, so I I mean, even if I don't necessarily mention it in the book, I think that young people, you know, it's possible to extrapolate from already knowing some of the themes in the book to some of these other themes.

They jump into that knowledge. I think you already know. Millennials may not be dealing with parenting and the financial problems that it creates, but maybe the reason they are not dealing with it is because of the financial problems that come with children, but I think they are not just the financial problems. that there have been a lot of things that have come together and made it more difficult, both economically and culturally, for young people to raise families and there are some places where I think we should look at those specific issues. that we can, that we can address a I think higher education is part of that right, I mean, I think the extent to which we've said it to a lot of people again, not as some kind of generational conspiracy, has just been a great, a huge consensus spanning generations, everyone has to go to college or they will be a loser for life and won't be able to afford it.

I think that's something that has made people wait more and more. before they start thinking about having kids because I think they need to build up these financial assets first and you may already know, higher education, child care, some of the issues around parenting specifically, rather than looking at the economy in general, can be fruitful there is no doubt what it is worth I have a column sitting with an editor right now this is if you look at the debate of the 2020 primary campaign it is notable that we are not talking about k12 almost nothing there is very little in terms of k-12 education reform, but among the existing candidates, at least on the Democratic side, there are a ton of child care proposals and various universal pre-K funds and ways to get at the postsecondary cause as if they were absolutely pushing exactly this, for what?

It's worth it again, that's the family economy, you should adjust the game. We very seriously considered moving from DC to the suburbs to another community a couple of times, part of the problem is that we save with our two kids, so so far it's about 20k a year for child care in DC, so multiply that times 2 for the cute kids and since pre-k starts at age 3 for full-day pre-k and DC, that's $80,000 of non-spending we've done on child care because -k took over at age 3 we moved to We in the suburbs have to wait until kindergarten starts at age 5 so you sit here and say well I can save some money on housing and in the long run it's probably the best investment.

So we don't spend on child care, but within our current income, we may not know, we can actually make that move. You should check out the internet, they have a lot of constructive life advice, but you know, I just want to follow up. on the topic that you talked about, you know, because I think ultimately it's a great way to think about these issues and the way that economics views Millennials just because, and again speaking as someone who is more oriented free market. many of these topics and particularly to an audience here at AEI. I think you know there's room for people to worry because for so many Millennials success often seems not to be entirely the product of their hard work or their investment in themselves or their own training or their skills, but they are also a strong element. contingent and it seems like he's become more contingent over time and I think you know his youth is helpful for people that you know on the conservative side of the spectrum to engage in that conversation because then we can talk about the origins of the policies from our side from the hallway that can help open that up.

I mean, for example, if you're looking at issues like inequality, which is a political concern for Millennials, I think it might be good for us to be able to talk about that in terms of issues like to what extent rent-seeking is the factor. decisive for the economic success of some industries or companies in the economy versus the old arguments we used to have about these issues. You could plausibly argue that inequality is actually just a normal result of a properly functioning market economy and you know that's a very different discussion from the discussion that I think people on the left end of the spectrum want to have about. these topics, but me.

I'm also not sure that ignoring some of these questions when Millennials are telling us so loudly politically that they are concerns for voters of our generation, I think just saying "well, you know the boomers had it bad," or every generation passes for something like this. I mean, first of all, I don't think that's entirely true if you look at the exceptionally bad situation Millennials are facing graduating into the worst economy the United States has seen in 80 years and I also think that's not going to happen. be a really satisfactory political solution to some of these discussions that we have.

I think that's right, the last thing I want to say before we move on to the Q&A is that it's interesting to be at AEI and listen a little bit. A bit almost like a Marxist false consciousness. All these Millennials just don't get it right. I am willing to trust them on their merits. I think it's no accident that they are gravitating and moving to the left when they feel like moving. on the far left because that's where they find answers to people who explain look, you're dealing with a real challenge of just finding what looks like a clean path to fixing your life, the person, the party, the platform that gives a real answer to that.

The substantial, substantive answer to this is how are you going to turn it into some kind of long-term financial security and life cycle growth, are they going to control the political future, that's all, if you can talk to it and it doesn't have to be So. Only Millennials have had a bad time and something unique about millennials is that we like to talk about Europe as if the problem in Europe were youth unemployment and that is fueling their radicalism. Our problem is that we have this kind of general sense among many people. my age and younger that there is just no way up and they know who sees them as the villains.

I don't think we have to say they don't understand. I think I trust them as individual rational actors to really understand this, yeah, well, I don't know if I've heard anyone say that Millennials don't understand things and have suffered from false consciousness, so I'm happy to go with that, it's okay, so let's turn to time. for some questions from you here and my only rule here at AEI is that your questions are actually questions and that you leave the extended comments to our three speakers on stage here and to Joe, if that's okay with you, I'll let you go.

Go ahead and just call people while they're doing it, so I don't need to be the middleman here, but I'll be the bad cop at the end and interrupt us tothat we can get out of here on time. We had, we never, we have a roamer there and then we'll go back there for the second question. Okay, and we have a roamer. Please let me know before asking your question. Thank you, thank you, very interesting presentation. I'll take a comment from Ramesh and turn it into a question, since we're not in the wishing forest with Robin Hood and his merry band of thieves.

The notion of stealing something implies that the person who steals something is trying to obtain something. This is doing it for a self-oriented reason and then I wonder if there really has been a theft or if this was just a series of perhaps wrong political decisions and not that they are not really meritorious, they are not really married. being called immoral a word you use several times no, I think you can think of it in terms of theft simply because political decisions always seem to be so geared toward defending the economic interests of older voters over the potential interests of older voters. youths. voters, I think you know the example of housing; there's a great example of this because you know there was a situation where, especially after the financial crisis, the orientation of a lot of Washington policy was to try to support seniors who already owned their homes. houses in those houses as much as possible at the expense of any kind of thinking about what the long-term implications of that might be in terms of distorting the market for its younger buyers and, in fact, we have seen those distortions continue to accumulate.

I think a growing concern now is that having had this environment, our interest rates on mortgages have been so low, especially over the last decade, suppressed by the policies of the Federal Reserve, do you know how many boomers are finding themselves locked in their homes? because it's too expensive to borrow and get a new mortgage if you have to move and yes, the amount of frustration I've heard from Millennials, including people our age and those in their thirties, about the situation. I received an email from a millennial woman who was complaining that she and her husband were finding it very difficult to buy a house in their community because they were discovering that there were a lot of boomers who had allowed themselves to be locked into these houses and They were just basically occupying houses that were too big for them rather than allowing a normal life cycle to develop in that type of market where they could downsize so new families could emerge and, you know, you can do that.

I'm sure people will argue. which you know we didn't mean it and maybe it's a robbery, maybe it's not a robbery, but I think so, if you look at it as a whole, there's definitely been this bias in favor of older voters that you know, often implemented by older people. policy makers and I think it is entirely fair that we ask if, especially in the last ten years, this policy environment has adequately taken into account the situation that young people find themselves in, was not the crisis the result of too many people who really couldn't afford a house and were allowed to buy one, yes, and that was a consequence of the particular boom era political fixation on home ownership and you know it's actually useful to ask the question of that way because you know part of my journey of discovery while writing the book is that I thought a lot of this was just going to start in the Great Recession.

In fact, I found that many of these phenomena I'm describing had their origins before Part of this is a much longer-term story that ended up getting worse as a result of the political solution to the crisis itself. and yes, that is also important to understand because there is a certain bipartisan element to this. Yeah, I think one warning I would give to a more conservative audience here at AEI is to not think that Barack Obama is the only problem in terms of some of these political issues, I think we also need to have a discussion on the right side. across the political spectrum about things like whether we got housing policy right in the run-up to the financial crisis, when we had a Republican in the White House.

I think we had a question here. I'm just wondering, and you know, I don't know if I'll read his book, but he has particular suggestions or recommendations about measures that could be taken without getting to the far-left things that are being raised. especially in light of the federal government's fiscal situation, the measures that could be taken to equalize, so I take a lot of money out of my retirement plan and give it to my children or I didn't focus as much in the book on specific topics. policy proposals because as a reader I often find my eyes glaze over if you get to the bulleted list in the last chapter of a book and I think what I'm trying to do is just find a way to express them. problems that can trigger a broader discussion about what the solution will be.

I mean, you talked about fiscal policy, which is something I talked about at some length in the book; It hasn't actually appeared here, but you know again it's an example. where there's going to have to be a lot of discussion and not just to get the numbers to add up correctly, but also a little bit as a matter of political choice and to make sure that we don't allow the boom or, you know, we allow social payments. to boomers under some of the old age benefits completely negate the scope that Millennials will have to make our own tax decisions as we start to get elected to Congress, so you know, that's an example of how you know, almost I think it is useful. go a little bit beyond just thinking in terms of technocratic levers that you can try to pull or have a bulleted list of points at the end of the book and try to think a little more holistically about what some of these problems are, you know?

I think, as Connor pointed out, it's undeniable that the political response to this among Millennials so far has been a shift to the left and far to the left and I think that's because there's a certain appeal to having politicians who at least acknowledge that some of these vectors I'm describing are problems. I think there's a really interesting argument to be had in pointing out that a lot of those far-left solutions are not the right solutions that some of them actually threatened to turn into. Generational balances are worse, but before you can get involved in that kind of argument, you have to have a clear understanding of what exactly the problem is and I think that's the way I'm trying to move the ball forward, you know, out in the field with the book, as much as you know, any thoughts on offering specific policy ideas, you know, what do we do now?

If you could address the tax issue, where I think we probably agree on a lot of things now if you think about Social Security, for example, or the The key decision is really made 77 to move to a wage index for benefits at one point , I add, when people at the midpoint of the baby boom were about 22 years old and not in charge and there was no real change to Social Security except on a modest scale. Since then, in the mid-80s, everything has been running on autopilot and no one has really fixed the fact that it seems to me that eventually you will have to raise taxes, probably with the burden of that tracking on upper middle class people under 55 o You're probably going to have to cut benefits and the burden of that will fall on upper middle class people under 55, so you basically know who you're going to pay most of this bill to and it's just a matter of knowing . how exactly that was structured and if we mustered the will to do it there is a question here thank you very much my name is yes.

I like their approach because I know a lot of minions and I talked to them and they told me everything. about these things because this is basically an academic topic and I always told them what are you going to do about it and they have no idea. I came to this country in 1967 as a private student. A not similar face but a situation of limitations, I imagine. Like most of us who came, we figured out how to figure it out. In your story did you get any of them? We will make some suggestions as if the gentleman was dealing with how he was when he always sailed for them.

I think it is necessary. What you are about to do is for this millennium, so start thinking about becoming entrepreneurial in how you solve the problem. I'm going to patch it since I don't know. I think there will definitely be an aspect of that. and I hope we see a lot more intellectual entrepreneurship from millennials. I mean, on some level, I find this tilt towards the far left, you know, favoring politicians like Bernie Sanders or Elizabeth Warren, a little disconcerting because This Young Generation is all about the modern, the new and the high-tech and, However, we are adopting economic philosophies that have their origins in the Victorian era, and a group of older politicians you know come from socialist movements in Vermont. or staff rooms, you know, the helmet, yeah, sometimes I wonder how much they really understand about the situation, you know, the Millennials, so one of the things that I hope is that, especially as we start to get older in that period of our lives. where we become more politically active, where we get elected to Congress, we can have that discussion and I think it will be very helpful, especially for the left right now, but also potentially for the right if we can break away.

We get a little bit away from what our elders are trying to tell us and actually engage in some new business thinking for her and what the political solutions to these problems might be. I would only warn that socialism is not maybe you know what it is. It's not Drake's new album, but it's not like a check on capitalism, right, I mean, it blocks Mandeville and the foundations of our existing economic organization are older as far as that joke is concerned, but I also want to believe that A business boom is coming. - I would love to have my own, oddly enough, I own a mine or a very minority stake and my family's brewery in Seattle, you know, shout out to the flying lion, but entrepreneurship is risky and I What I think you're going to find is that Millennials who can barely chart a path to paying off some student debt and getting some kind of secure housing near a job that would help them organize their lives, taking entrepreneurial risks is not a big concern for them. , they don't feel safe.

They've already been taking a lot of risks, taking on about $100,000 worth of debt to get their college degree, and now you're telling them to jump on some idea and see if you can get to the battleground. of the market, I mean, it is a difficult task for people who already live quite precarious lives. If I could chime in, we've circled around this discussion about sort of millennial politics several times, when you think about why Millennials are voting so heavily for Democrats and seem to be favoring socialism over capitalism to a higher position. than previous generations? There are a couple of different things going on, I actually think you're not seeing a real increase in support for socialism as much as you are.

We're seeing a decline in support for capitalism and I think you know, for some of the reasons we've discussed here, that the last ten years in particular, graduating into this job market and so on, has been kind of a traumatic experience for many. . of people and then the second thing that Jo mentions in her book, but that I think conservatives are sometimes obsessed with the generational issue to focus enough on much of it, is that young people are less white than older people and everything What we've seen in politics over the last 50 years suggests that that means there will be more democratic and less republican voting behavior and we already know that, so I guess what I would say is that there is an economic component to that, but we can be as pro-avvocato as possible if conservatives don't do better among hispanics, asians and blacks, they will do worse among young people than they do among older people, that's just a demographic reality, right? do we have time for one more do we have one more question? or I think we have actually we have time for two more questions why don't we maybe ask you and then that one?

We can choose which one I really am John Dolan. I'll start by saying that I think finding common ground is a great place to advance this argument and I understand the difficult economic situation that Millennials have and I think that if you frame the discussions in that framework as opposed to theft, you will have a more receptive audience in the future. I think the other element I'll pose as a question is that guilt is an error centered in my mind. I haven't heard it yet. I read the book The Role of Globalization. I heard a hint about the increaseastronomical in the cost of education, but I didn't hear specific details about what to do about it, so I would tell you what you are going to do to present to your audience. to the notion that globalization could play a role instead of blaming another generation and what are they going to do about the cost of education in the future, okay, and then we get to a question here, thank you, so 22 people enter the democratic race for a president and all these promises, three more this morning, we don't know if we've kept them, but do you think the burden of student debt is some kind of catalyst for the demise or the evolution of the conservative movement because For example, I have I have friends who are lifelong conservative Republicans in Cincinnati, Ohio, rural Cincinnati, Ohio, who here, hey, Elizabeth Warren, says $50,000 and I'm going to break away from my party to do it because it's on my own interest, so what is your opinion on the promises? that's going to keep coming up, well, so you know, on the issue of globalization, that's something I mentioned, you know a little bit in the book because that was actually the big problem that the boomers were dealing with for most of the time. part of his life. economic lives, I mean, remember that one of the factors that contributed to many of the disruptions that the boomers experienced in the '70s and '80s was the fact that the American economy had been so unusual in the '50s and '60s because the major Competitors such as Japan and West Germany had been completely offline as they recovered from the war.

Now I want to say that one of the things that I think is interesting is that and you can see this a little bit if you start looking at some survey results about millennials' attitudes toward issues like trade, I mean my opinion and I'm curious about getting answers about this, is that we just take it for granted that we live in a more globalized economy now and, from that perspective, at least on the conservative side right now. Meeting someone like President Trump is probably a distraction for us because when I look at a lot of his withering trade policy, it actually sounds like something straight out of the conversations that boomers were having with themselves in the '80s because I really think that there is where a lot of his rhetoric at the beginning, in fact, I found a clipping from the New York Times at one point of him in the '80s stating that if he had been in charge of negotiating trade policy differently with Japan instead of Reagan , the United States would have gotten a much better deal.

So I think one of the interesting political challenges that Millennials face is that we're going to make economic decisions in an environment where we actually take for granted some of the phenomena that the boomers didn't take for granted in terms of globalization or the trade that could open an interesting debate, I am referring to the issue of student debt. I think it's undeniable that the fact that there are some politicians who are talking about this and seem to offer a solution is a big draw to a lot of younger voters now the problem is and this is something that I think we need, at least on the far right of the spectrum, we must be much more frank when speaking and how it is that we have to ask whose money is here. some of these politicians are generous to politicians and the reality is that if you look at the age ranges of the different cohorts and the population right now, a lot of this generosity will actually be at the expense of millennial taxpayers, so you know, on the one hand, you can understand why people are attracted to that argument, but on the other hand, you feel a little frustrated because you know we often talk about this issue on the right in terms of you don't want to. that the State gets too involved or the fiscal mechanics.

We're just thinking in terms of dollars and we're not thinking about the fact that some of these politicians are actually giving us gifts with our own money. And you know, I think it's an opportunity to participate in some of these discussions, as long as I'm starting from the premise that this is actually a serious problem and there is a huge political demand for a solution, so excuse me, it just seemed to me that there are different pieces of the student debt puzzle that I think vary in their urgency and They are sometimes grouped together in misleading ways, so I'm not so concerned about people who leave school with really high debt loads, but who are also on the path to high lifetime incomes, partly as a result of that debt. .

What worries me are people who have taken on a significant amount of debt, often not the highest amount, but a real debt load, and then didn't finish. get the degree because what we're seeing is, first, that there are a lot of people and, second, that the economic outcomes of people who have some college are actually closer to those of high school dropouts who to those of university graduates and one of the things that I gain in some way is a reduction of the problem in some way perhaps also an expansion because perhaps the way to think about this is that we have a system that is oriented to achieve that people finish high enroll in school graduate college get a job that requires a college degree and that is the path to success that we seek and it works for only one in six young people in America and maybe we should look at this whole system and try to get away from it and I would just say that's a nuance that I talked about in the book and it's a frustration of a lot of these debates that are happening on the Democratic side right now because you know The student debt crisis is not between people who owe more than a hundred thousand dollars in student debt.

You know, that's only about 5% of the total number of borrowers. Default rates are much lower than for people who owe smaller amounts. I mean speaking as a journalist. At the risk of offending my brothers and sisters in the profession, I will maintain that one of the reasons people think that is where the crisis is is because those borrowers are adequately represented proportionally in the social circles of many sectors, but you We know we need it, and it would be nice again if we could have a somewhat more nuanced discussion instead of always getting caught up in the crux of something like Elizabeth Warren's plan, which seems to call for paying off large amounts of student debt to people who actually I don't need the help, you know, and potentially the cost to all Millennials in terms of the tax burden of doing that, including taxes that would ultimately be lovely for the people who do need the help.

This is an important discussion and I hate to cut corners. It's off, but we're in a moment where there are big questions, big discussion, and I'd like to point out that given the hostility with which the Internet and Twitter talk about these issues, I'd like to celebrate the civility with which we discuss them today, so please. Please join me in thanking Joe Sternberg on our panel, right, Mike?