Today’s Millennial Generation Is Worse Off than Their Parents

Picking up from where we left off…

…our poor callow youth have been dealt some low cards.

This week, we’ve struggled to connect the dots. What was the connection, we wondered, between…

  • Fewer people owning their own homes
  • Millions of people facing eviction when the feds’ reprieve expires
  • A ‘transitory’ society…with cars, houses, offices shared, rented, or leased, rather than owned outright
  • Falling rates of marriage; falling births
  • The Federal Reserve’s ultra-low interest rates (the Fed has been lending money at below zero for nearly 12 years straight); rising asset prices
  • And the towering wall between the many, who are poorer today than they were 50 years ago…and the few, who are much richer?

It was while we were wondering that another news item came in, from journalist Allan C Brownfeld:

In a Gallup Poll this June, only 63% of American adults say they are “extremely proud” or “very proud” to be American, the lowest level of patriotism ever recorded since Gallup first asked the question in 2001. Among the youngest people surveyed, only 4 out of 10 respondents age 18-34 claim to be extremely or very proud of being American.

Is it any wonder?

The US’s capitalists

The other day we looked at why young people find it hard to buy a house.

They’re now bidding against investment firms like Blackstone and other big players with access to billions of dollars at near-negative real rates, provided by the Fed.

And they’re not about to join the US’s capitalists any time soon, either.

At today’s prices, it would take them 1,400 hours of work to buy the Dow…compared to only 160 hours for their parents.

It’s similar even for automobiles.

While not the same kind of asset, an auto is a major purchase.

And as prices rise, it becomes harder and harder for marginal earners to afford it. They have to rent…lease…or string out car payments.

Fantasy currency

We have given the basic figures many times. We do so again just to highlight the plight of the callow youths of today.

We entered the workforce, with no student debt, in 1971. That was also the fateful year in which Richard Nixon turned the dollar into a fantasy currency and began the War on Drugs.

In 1973, the F-150 sixth generation came out, with a manufacturer’s suggested price of US$2,889.

At an average wage of US$4 an hour, we could have worked 722 hours (forgetting taxes) to buy the truck.

Today’s young man, just starting out, would have to work 1,200 hours for his wheels — even the most basic model.

To make a long story short…

Queering our money was bound to have unexpected costs. The young are now getting the bill.

Let’s look at how this came to be.

HOODWINKED! Why Australia’s ‘miracle’ economy is a farce

Quack economics

First, the new, fake dollar financed the transfer of the US manufacturing sector to lower-cost labour markets overseas.

It was easier to print money than to earn it. So the US allowed China, Vietnam, and Mexico to do the work. We merely printed the money with which to buy the finished products.

This brought a flood of cheap goods into the US and helped to put off the inevitable consumer price inflation.

But it left a whole generation of young people with few good-paying jobs.

The lack of a good paying, blue-collar career track caused young people to go to college.

And so, they spent some of the best years of their life being indoctrinated in the latest fads and fashions of quack economics, sociology, and anti-racist training.

And now, they believe the US invented slavery…and that if we don’t all get vaccinated and begin driving electric cars, we are damned to Hell.

Soft hands, mush minds

Alas, in the real world, you get wealth not by handing out claptrap…but by providing real goods and services.

And now, with soft hands and mush minds, what are the young to do?

Their fathers (and often, mothers, too) made things. But in the 21st century, the good jobs in manufacturing are largely gone. Young people are much more likely to find work in the ‘service’ sector.

Trouble is, manufacturing workers earn an average of US$70,000 a year. Accommodation and food service workers (to take the lowest category) don’t earn half as much.

Pew Research reported last year that more than half of these young adults, 18–29, are now living with parents. That’s more than any time since the Great Depression.

What happened?

In this glorious age of artificial intelligence, blockchain, and the Fed’s nifty ‘dynamic stochastic’ model…

…you’d think all these bright eyes and bushy tails would be able to afford their own digs…their own cars…and their own families.

Instead, they are less likely to have a driver’s licence…and less likely to own cars or houses…than their parents.

And as the bills for the Fed’s money-printing debauch come in…and young people’s costs of living rise…don’t be surprised if they get a little cross.

Regards,

Dan Denning Signature

Bill Bonner,
For The Rum Rebellion

PS: The Rum Rebellion is a fantastic place to start your investment journey. We talk about the big trends driving the Australian Economy. Learn all about it here.


Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries.

A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities.

Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally.

With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance.

Bill has been a weekly contributor to The Rum Rebellion.


The Rum Rebellion