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Washington Post: The Problem is 'You', Not 'We'
Imagine a major national newspaper that never saw an $8 trillion dollar housing bubble. Suppose its most often cited expert on the housing market was the chief economist of the National Association of Realtors, who also authored the 2006 bestseller: Why the Housing Boom Will Not Bust and How You Can Profit From It.
Yes, I'm talking about the Washington Post, which had the gall today to run a column by Jim Hoagland complaining about how "we" are passing on a bad world to our children. The "we" in the column is meant to refer to the generations currently in their 40s, 50s, and 60s, who he claims are leaving huge problems to our children.
He's right about the problems, but he's wrong about the "we."
The reality is that the Washington Post and the elite clique for which it is a mouth piece have badly failed us and our children. The housing bubble was easily recognizable. The economic disaster that we are now facing could have been easily avoided if the Washington Post and its elite friends (e.g. Alan Greenspan, Robert Rubin, and Henry Paulson) were not too incompetent or corrupt to see the evidence of problems everywhere. Needless to say, those of us who did try to issue warnings were ignored by this elite crew.
The Washington Post has whined endlessly about the long-term deficit problems facing the country. But how often has it told its readers that the long-term deficit problem is almost entirely the result of the broken U.S. health care system: a system that costs more than twice as much per person as the health care system in most of the countries who enjoy longer life expectancies than we do?
Perhaps the Post does not choose to share this information because it identifies with the wealthy people who run the insurance companies, the pharmaceutical companies, and the highly paid medical specialists, all of whom get rich off the waste in our health care system. (Perhaps the fact that these industries advertise heavily in the Post also affects its willingness to print pieces exposing the enormous waste in the U.S. health care system.)
The Post also has been a big proponent of a trade policy that is based on selective protectionism. The Post's trade policy subjects less educated workers (those without college degrees) to competition with low-paid workers in the developing world, while leaving the most highly educated workers largely protected from such competition.
Since the vast majority of the workforce falls into this unprotected category, most of our children will see lower standards of living because of the Post's trade policy as it redistributes income to its elite friends. The Post even applies the euphemism "free trade" to its policy of selective protectionism to make it more palatable.
I could go on at considerable length. The list of the failings of the Post and its elite friends is long -- lying to get us into the war in Iraq would be the next obvious item on the list.
The point is that the Post and it crew of cronies have badly failed the world in a large number of ways and continue to do so. The Post and Hoagland's efforts to attribute the blame to the rest of us for the trouble caused by the greed and incompetence of their elite clique deserve nothing but contempt and ridicule.
- Posted in
76 Comments so far
Show All"But how often has it told its readers that the long-term deficit problem is almost entirely the result of the broken U.S. health care system: a system that costs more than twice as much per person as the health care system in most of the countries who enjoy longer life expectancies than we do?"
Baker, what?!?! You are blaming the long-term deficit problem on medicare? Medicare and government subsidized health care for government employees are as far as I know the only costs paid by the government. All other costs are paid by individuals directly or through their individual-paid health insurance. What nonsense!
The long term deficit problem is caused by the trillions upon trillions of dollars spent, largely borrowed, on the military and needless foreign wars and the over 700 U.S. military bases in over 100 countries worldwide.
-- EKATON --
Dean Baker is a very good economist, and it is confusing - but only if you assume he is referring to government spending deficits. I don't think he is.
I think he is referring to the current account deficit (foreign balance of payments) - this is related to the very poor savings rate of USAns relative to other industrial countries, which in turn is realted to high cost of healthcare.
---USAn---
Actually, if you had clicked the link imbedded in thr quote, you would have read that it's soaring "private sector" health costs that's the problem. However, your point about the Empire and the vast amount of waste generated in its support is 100% correct.
.You beat me to it!
The trillions of dollars spent by the American consumer on for-profit health care, the fact that 50% of all bankruptcies are health related, must certainly impact our economy in a negative way.
As , of course, do the trillions spent on boondoggles like Star Wars and umworking missile defense shields and the grossly inflated military budget also.
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We see things, not as they are, but as we are.
Anais Nin
How about these deficits: people's health, availability of affordable healthy food, availability of meaningful employment, educational attainment, childhood welfare, adequate housing, solar heating and electrical production, secure retirements, control of CO2 emissions, affordable eco friendly vehicles, adequate affordable public transportation, confidence in our institutions, public safety, oceans increasingly bereft of life, stock of ecologically sustainable housing....(an expert could go on). Do you think these deficits are harming our Economy, our gross national well being, and our ability to responsibly contribute to the developing world?
"Do you think these deficits are harming our Economy, our gross national well being, and our ability to responsibly contribute to the developing world?"
Absolutely. Great response. And huge cuts to the military budget might allow those funds to be directed toward solving some of the problems you mention.
-- EKATON --
Sioux Rose
Amen EKATON! And let's not forget about the lost trillion or was it billions, here or there? Or the subsidies to big business, or the offshore accounts, or the tax policy that went nice and easy on the upper upper crust. Blame the poor and sick. Dang, this Christmas with the gigantic giveaway to the banksters reminds me of a huge costume ball hosted by 1000 Ebineezer Scrooges, raising their expensive champagne toasts, as outside, all those Bob Kravitzes and their starving families cook up a dead bird if they're lucky, and pass its slim pickings round the homeless fire(s).
In my humble opinion, he meant the artificially inflated health care costs is a drag on the economy and consequently on the tax base for the Federal budget.
I do not think he meant it to be the only reason for the budget deficit.
Yes, Dean Baker, yes. The WaPo is not alone.
To the new Obama administration:hire Dean Baker as an adviser. Maybe he'd do it for free. We need him in policy design.
MY CONTEMPT AND RIDICULE DO NOT EFFECT THE "ELITE"! the only way to nail the elite is to BOTCH their plastic surgeries. They ALL want to live forever and be #1 and be sexy/cool.
Even as they destroy us and their own childrens world.
How do you wound a narccisist?? All is vanity. This is what is killing us. The vanity of the elite.
ha ha, real funny right?
[The "we" in the column is meant to refer to the generations currently in their 40s, 50s, and 60s, who he claims are leaving huge problems to our children]
That would be the generations that gave us the 60's, the fights for civil rights, the messages of seeking love instead of war, that were shot in protests at Kent State, that saw their dreams and hopes for a better more peaceful world assassinated along with Martin Luther King and the Kennedys, that brought attention to issues like the environment, sustainability and the evils of corporate greed, and who railed against a machine that consumed human dignity and characterized compassion as a degenerative weakness. Those generations?
Seems to me the hopes and dreams of those generations were quashed by the interests and priorities of the generations before them, as we all slowly gave way to the machine and subscribed to the wage-slave system that keeps us.
A simple chart of generational wealth and political influence overlaid with quality of life measures and opportunity will reveal that it is those now in their 70s and 80s who enjoyed the very best this country had to offer. Those in their 40s, 50s and 60s perhaps had the easiest times, but by no means wielded the greatest political influences, except maybe in now raising subsequent generations whose priorities may be less regimented and more spiritual than those old fogies that lived just to work. The irony for younger generations as they work to live and play is that they are facing the greatest challenges in human history, and they are mostly likely not to blame their parent's generation but a group of powerful men in charge of a system that has no place in our future.
As the neocons continue to revise history as it is being made, they will continue to blame the victims for the economic meltdown.
This article provides one example.
Another example that is rapidly growing legs is the recent neocon myth that legislation during the Carter and Clinton Administrations provided access to credit for low income and minority borrowers, forcing banks into the subprime business, thereby creating the economic meltdown.
The truth is that the Dubya Regime revived obscure 1863 legislation that allowed the Federal Government to sue any state that attempted to regulate subprime lending. The Regime proceeded to sue any state that attempted to regulate subprime lending. In the meantime, Alan Greenspan kept interest rates too low for too long, thereby enabling the housing bubble.
Quite a courageous article from Mr. Baker. By publishing this article, he jeopardizes getting any more of his articles posted in the Washington Post.
"The reality is that the Washington Post and the elite clique for which it is a mouth piece have badly failed us and our children. "
Indeed. Any paper that would house such elitist pissants such as George Will and Charles Krauthammer is definitely not speaking for the common folk.
The Washington Post puts the illness in the term, Potomac Fever.
"All Nature's difference keeps all Nature's peace." Alexander Pope
.This particular newspaper is certainly not solely to blame for our current economic crisis, nor is its reportage much different than any other mainstream newspaper today. The article in question seems typical of the misinformation one finds in most dailies across this land. I wonder if Mr. Baker has an axe to grind here?
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We see things, not as they are, but as we are.
Anais Nin
No, it isn't solely to blame, ardee, but the article is about the WaPo and I thought it topical to address that fact.
The WaPo has more influence than most other papers. It is THE editorial page for the elite political class in Washington, DC - the center of the US political universe. The writers and talking heads in the WaPo are tools of such, and they relish the power they have. And what power it is.
"All Nature's difference keeps all Nature's peace." Alexander Pope
Does anyone know where this "blame it on the boomers" trope is coming from? It was just some Gen X people promulgating it; now some boomers have joined in.
As though 78 million people all had the same values and behaved in the same way.
People who promote this trope mistake the most extreme artistic stylizations in the mass media (like, aren't all hippies just selfish jerks like in Easy Rider) for the truth. It makes you wonder if they are too lazy to go out and talk to some baby boomers, like a journalist would. (Right on, Cosmobilly).
Despite the social revolutions, it is, however, true that the baby boomers did not in a serious or effective way challenge the ECONOMIC RULES operating in this country. For a number of reasons, most obviously that changing society is a lot easier and more fun. Thus, when they went into the workforce, some became yuppies, in other words, they joined the establishment -- because there wasn't anything else to join! (Other than a few small scale cooperatives, socially conscious businesses, etc.) The elites tolerated the social changes, and became libertarians instead of conservatives. They were willing to give ground as long as the economic rules weren't changed.
Can the boomers be blamed for not confronting the economic rules? A little. But education in economics - which barely exists at the high school level - has been completely taken over by free marketers, and would have been the same then. There were also serious disagreements between various ideologies on the left. No single front on economic reform would have been possible.
Now that the social revolution has taken hold, we progressives have to address this unfinished business. Reading thinkers who see economics as a descriptive natural science rather than a bunch of mathematical models is a good first step.
They want to recreate the generation rift of the 60's. Basically a repeat of 1968 is in the making, racial divisions, generation gap, etc . Divide and rule baby.
Someone who was born in the late 50's graduated into an economic mess and an economy that began exporting jobs abroad, gutting unions and benefits, replacing pensions with 401K's and a series of economic disasters (S&L crisis, dot.com bubble and sub-prime crisis) that has left many baby boomers in much worse shape than their parents were at the same stage.
Baby Boomers with kids face(d) tuition costs that are crippling compared to when they went to college, leaving them and/or their kids heavily in debt or their wealth much reduced to pay for it.
The great spending binge by the Federal Government began in the Reagan years when the Baby Boomer was 17-34 yo, and hardly a political force. You are not even eligible to run for President under the age of 35, an age not reached by the youngest Baby Boomers until 1998.
Clinton had changed the CPI index by that time to understate inflation so people could not make rational financial decisions, since they were based on faulty economic indicators, a great fraud foisted on the American people of all ages, which reduced social security payments over the last 15 years.
The other reason for giving us a generation rift is to eliminate social security, by getting the generations squabbling and then fuel the fire by letting the younger folks know that their social security taxes are going to pay for the older generation and the bank will be empty when they retire, the young subsidizing the old, leaving them nothing when they are older. This will set the stage for duping them into a privatized plan, that will do well initially, but whose bubble will burst before they get to retire.
Of course, they will not let them know that they spent the surplus from the Social Security Trust Fund which should have close to 3 trillion now but which has been spent on wars and other things. And government could replace that money by issuing their own debt free money, which means social security could be in pretty good shape, but they do not want to cut the banksters out of any profits, so they won't tell anyone.
But people are easily duped, ala the Obama fraud, and MSM are masters at creating divisions where there would be none. Change you can count on. Right. Change for the worse, you watch. The first 2-3 years of misery will be blamed on Bush, the 4th year a recovery Obama takes credit for to win the next election, and then another 4 years of disaster and time for another change in 2016. History repeats.
Thanks, that's pretty much what I thought. Especially re social security. Boomers weren't responsible for Reaganism, and (I did an analysis) voted for him less than older people did...
But WHO's pushing this trope, and through what channels? Talk radio? Magazines? Somehow it's infected the body politic.
Those behind the Obama movement also reopened the racial issues that had been lying dormant for so many years, at least in white America.
"Who" hides behind the conspiracy nobody believes in.
But if you go back in time, when a government transitions from a democracy to a less democratic or restricted form of government, the government tends to align itself with the young people who are more impressionable, and thus divide the young and old.
Obama call for mandatory National Service for the young people, a civilian security service, and besides eliminating social security, these may be better facilitated by creating a rift between the generations.
Hitler and Mao both employed the young in various roles to support there regimes, and many young people reported their parents and other relatives for violating government policies. Not saying Obama is like them, but his so called appeal to the young voters seems to be an effort to sell him as a youth leader and seems likely led by the same people creating the rift between generations.
Call it a recruitment effort on the war on the middle class. Biden led the efforts on the War on Drugs, now he is being called on to save the Middle Class. That does not bode very well since the War on Drugs did nothing to stop drugs, but led to America having the largest per capita prison population in the World, with more than 25% of the worlds prison population despite only 5% of the population.
I think it's natural for a politician to try to speak to the young; not only do they vote, but their opinions have more sway with their friends, and they have the time and energy to volunteer for the campaign. I don't see Obama in quite as sinister terms.
It is so important for progressives to not only realize but STATE that WE ARE ALL ON THE SAME SIDE. I would like to hear Obama say this. Intergenerational resentment is a cancer on the left.
.Actually, until this last election those between 21-35 years of age voted far less frequently than did older folks.
There is nothing sinister about our new President, but there is little to trust either.
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We see things, not as they are, but as we are.
Anais Nin
Sioux Rose
MimiCCS: Excellent analysis. There's definitely a "divide and conquer" strategy at work here aimed at turning the workers on one another so that the solutions from the top need never be dealt with.
Yeah, people are so busy fighting each other they do not see who is kicking their butt.
.Most perceptive, thank you.
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We see things, not as they are, but as we are.
Anais Nin
He's right about the problems, but he's wrong about the "we."
It's "we" only in the sense that the Republicans and the Democrats can't be dislodged from power by having the masses of people stop voting for them and create the atmosphere in which new parties with effective thinking start claiming a share of power and slowly but surely push the R's and the D's out. Do things have to become even more frightening and desperate than they are now for that to happen?
SR...I can tell you exactly where the "blame the boomers" is coming from. In fact, it IS coming from us GenXers. Yes, we are angry. We are angry because the bubble shut us first-time buyers out of the market. We are angry because we had to forgo homeownership--and in some cases starting a family--because we couldn't afford to join the American Dream without taking out a toxic loan.
Do I blame the boomers? You bet I do. How many times have I heard my older boomer friends assume that my lack of homeownership was because I was financially irresponsible, spent too much on going to the movies, or otherwise simply failed to work even harder. As if any of this would've mattered when the median home price was TEN TIMES the median income.
And who benefited from all this? The boomers. Yes, those older people who bought back when housing prices made sense. They, in fact, were often able to buy when they were in their 20s! They supported the media, the politicians, the mortgage brokers, and the real estate agents who supported bubble policy and thinking. Why? Because it made them gobs and gobs of money.
Bubbles benefit the home-owning class. They don't benefit the young who just want to buy a place to live and start a family.
Because your boomer friends were insensitive, you're angry at 78 million people? Is the depth of your anger justified? Do you think that all 78 million people are responsible for high house prices? (I know lots of boomers who aren't homeowners, including me.) You should be asking why house prices are high in the first place (hint: it's a tax system that favors owners of land over laborers, with perks such as the mortgage tax deduction). You should be asking if the boomers are responsible for this system, and if they could have done anything about it on an individual basis. I don't see you saying the system that creates high house prices is unfair. Honestly, I don't see anything in your response except (justifiable) resentment at being patronized by your friends, and a whole lot of envy.
I would much prefer to talk about constructive actions, such as, indeed, working together to get more affordable housing. This is not done by attacking Gen-X's natural allies, the working and middle classes OF ALL AGES. This is done by understanding how the economic system is gamed for the benefit of big landowners (see Henry George - he had it right). The small homeowners are bought off with the crumbs. That's what FDR did to kill off socialist trends in the 1930s.
Why is it that critiquing the intergenerational nature of the bubble is *envy*?
I think part of the problem is that most of my fellow liberals are looking for the economic boogie man. Blame the banks. Blame the feds. Blame the federal tax code.
Yes, to be sure, they are all part of the problem. The feds should've kept interest rates high. The banks should've only lent to people who were good credit risks. And, of course, the mortgage tax deduction needs to be abolished. But these are not the *only* problems.
Everyone who paid more than they could afford to buy a house is part of the problem. If they would've been willing to remain part of the renting class until they could buy within their means, we wouldn't have had as big a bubble. Nor would we have had as big a collapse.
Also guilty are all the people in the media and in daily life who kept talking about how prices could only go up,up, up...and bragging about how wealthy the bubble has made them. By and large, these people are baby boomers, since they were the ones who were old enough to have gotten in on the real estate game early.
Boomers had so much to gain from the bubble. So in their positions of power in the media, they stoked the flames. From their power positions in the mortgage, banking, and real estate industries, they stoked the flames. But they also stoked the flames in daily life every time they told us younger folks to "Buy now before you get prices out of the market." (Read: you better pay inflated prices so that the Gen Xers make the Boomers even richer.)
As if my generation was *already* priced out of the housing market.
It's envy because a)as I've stated, although they got lucky in it, the boomers weren't responsible for creating the financial incentives for owning property; and b) nothing you've written suggests that you wouldn't have done what the house flippers did: use the system for your advantage. In other words, it's envy because your critique isn't of their morals, it's of their luck.
Just addressing the bubble: Others beside boomers had and have positions of power in the media and daily life. You don't criticize them - your parents' generation. How about Bernie Madoff? Roger Ailes? Michael Bloomberg? They were lucky too, luckier than the boomers. Why are you sparing that generation? I would like to know.
Also addressing the bubble: Do you really think that 'the boomers' specifically picked on 'younger folks' "so that the Gen Xers make the Boomers even richer"??? Mortgage brokers picked on ANYBODY with a credit rating or without. Older people too got burned. A con artist doesn't care about who s/he cons. Don't you see that??
I agree that liberals should recognize the unfairness of the financial incentives to own property (and should be working to overhaul the tax system). But that's a small justification for a hatred that I really feel you are misdirecting.
Because boomers are older, they had positions of power when the madness started. The immoral part is everything they did to increasing the gap between the homeowning class and the renting class.
Who are the biggest supporters of the mortgage tax deduction? Boomers. (At least that is what I have experienced in my progressive political activism.)
Who was telling GenXers to "buy now, before you're shut out"? Boomers. (And I'm not talking about "real estate" professionals here. I'm talking friends, neighbors, coworkers, the media.)
Who was voting for the politicians who supported the status quo? The boomers were certainly part of it, but not all of it.
My generational frustation comes from boomers turning a blind eye at policies that have disproportionately benefited them and disproportionately harmed the younger generation. I don't think it's a conspiracy, as others in this discussion assume I believe. I just think it's a case of when the system works well for many people in a particular generation, there's little incentive to do anything but play along. Alas, money trumps values for many on the left.
In fact, as you can note from other people on the list, I am being personally attacked (by boomers) as being lazy and immature if I can't afford to buy a home. It's downright bizarre when even post-crash, a house is still ten times median income where I live. Clearly it's not just me and my supposedly lazy, slacker generation.
Quite simply, the power structure is stacked against the under 40 crowd. And the people in power are by-and-large people who are old enough to have bought their assets when the values were in line with incomes.
I would love to see home-owning boomers come out for repealing the tax deduction, so it's not just us GenXers who get labeled as envious whiners. I'd love to see home-owning boomers come out for HIGHER interest rates, which would make houses more affordable. I'd love to see boomers come out for a return of lending standards--i.e. only give money to people with good credit, 20% down, and enough income to reasonably swing all the costs of ownership.
I have been agitiating for these things for years, but the liberal boomers turn a deaf ear and assume I'm simply being greedy. Alas, we'll never get anywhere if we don't collaborate.
You haven't addressed the fact that the Silent Generation (your parents) are the ones the boomers work for, and were the ones with economic power (despite Clinton being a boomer) during the 80s and 90s, and we all know the people with money set the policy.
I think that what's driving your anger is not the fact that boomers have been lucky (in some ways - we probably won't get any retirement, and I as a tail-end boomer, born 1959, don't expect any), but that boomers either claim or have claimed for them a moral superiority that you are saying is not justified. The silent generation is not claiming that moral superiority and therefore you're not angry at them.
I think that this moral superiority is largely a myth pushed by the mainstream media (which trades in stereotypes and, as other posters have said, have a political interest in keeping the generations squabbling and a marketing interest in making people identify with particular demographics). You say your friends and acquaintances are displaying moral superiority. Maybe it's just that they are self-centered. I can see as I age how easy it is to forget that I should treat everyone over the age of, say, 16, as being as competent as I was at that age. But not all boomers feel they are better than others, and you should consider that a personal failing rather than some kind of cabal.
As for the boomers' responsibility to fix the system, people pick their battles. Young people have more energy. How many revolutions are driven by middle-aged people (who have children or elderly at home)? None. They're driven by the young and the boomers did their thing in their time; I'm afraid reforming the property system is going to be powered by Generation Y if it is at all BUT - and this is a very big BUT - with the intellectual and strategic and artistic assistance of Gen X AND the boomers. Don't think that because people aren't on the front lines they aren't working. I'll give you an example: the modern vegetarian movement in this country was going on among health-minded people and seventh-day adventists before the 1970s. The boomers and some silents got interested and built an infrastructure. Some started food manufacturing businesses and restaurants. Whole Foods knocked a lot of those out in the late 1980s and early 1990s, which is why you don't see many mom and pop health food stores any more. If you look at "the vegetarian movement" now, you'll see the main activists are Gen Xers, and their focus is more on animal rights. Would they be right to diss the boomers for not paying enough attention to animals, ignoring the groundwork that made THEIR battle possible? That's what you're doing.
This is my last post. Good luck.
Declining home prices make this a great time to buy a home. If you can afford what you buy and have good credit, you can get a mortgage at reasonable interest rates.
Anyone owning a home makes no money what with interest payments, property taxes and insurance, and maintenace costs. The bubble years simply meant their net worth was inflated, but on paper only, and many were required to take out equity to pay costs that increased faster than wages and now owe more money than their homes are worth.
The American Dream of home ownership was simply a myth to support the money making scheme for the banksters. Fifteen years into a 30 year loan you still owe 80% of the principal, since your payments go to pay the interest at the front end. Legalized theft. You are much better renting until you can buy a home with a 15 year mortgage at no more than 50% of the homes price.
Bubbles benefit the banksters, not the guys who work for a salary and own homes and have kids to raise and educate.
Of course, if you don't have a job paying too well, and want to look for someone to blame, look at the Trilateral Commission that was founded in 1973 (youngest baby boomer was 10 yo) by the generation in power, and thus began globalization and sending American jobs overseas in search of cheap labour and executing a plan to lower Americans standard of living to bring us closer to that of the developing world so we can be merged under global governance scheme known as the NWO, or One World Government.
They promoted the neo-liberal economics that led to the bubble economy and deregulation, and a federal debt that was went from 1 trillion to 11 trillion in 25 years to finance Globalization and Free Trade using our military and economic clout on other nations who resisted, to the benefit of our Global Corporations.
Their control of MSM and the educational system was so extensive, even then, that most people were unaware of what was happening. There was no internet or cable TV at the beginning of this conspiracy, but even then some people spoke about the conspiracy, but they were ignored or discredited by the MSM, like they are today.
Brzezinski (co-founder of TLC) and Volcker (TLC-his economic policies detroyed the US real economy and gave us the bubble economy) are chief advisers for Obama and were part of the first TLC Presidency of Jimmy Carter, elected when the youngest Baby Boomer was 13 yo. So forget about change for the better.
Wake up kid, you are going to be a slave. The enemy is not who you think.
Strange to call a 36 year old woman a kid, don't you think? Or is it just that the home-owning class infantilizes the renting class?
In any case, it seems naive to deny that the bubble benefits older people who were already homeowners before the bubble began growing in ernest around 2000/2001. Anyone who entered the game at the lower rung of this Ponzi scheme gained, and gained quite a bit.
Follow the money. And the money says that the housing bubble created an intergenerational transfer of money that dwarves social security. Well, at least for the 66% of baby boomers who were homeowners before the madness started.
.Quit your whining. It was you who set up the ageism with your first post, now you object to being hoisted on your own petard. It seems more than a bit immature of you to seek to cast blame for your personal problems on an entire generation, one whose accomplishments were rather detailed above.
I plead guilty to owning my first home before the ascension of that bubble, therefore I am responsible for your inability to purchase your own home? My four children all own homes, two of them are on their second homes. My youngest (28) and her husband just bought a foreclosed four bedroom home at a rather reasonable price for the Bay Area.
The housing bubble was certainly not an invention of the Boomer Generation, as if we met in secret and planned this whole thing out, what childish nonesense. Any reasonable ( read mature) appraisal of the situation would quickly understand that those guilty of the bursting bubble were the mortgage broker who sought ever larger commission and bonuses, the banks who lent money and disguised the terms, who urged folks into homes larger than necessary with balloon payments and rising rates they artfully disguised, and the government that rejected its obligation to police the industry.
What were boomers supposed to do, refuse the rising value of their homes? I have owned four homes in my lifetime, I cannot recall reading a mortgage all the way through, or the loan papers either. I found an agent and a banker I trusted and I trusted them, silly me. Having no degree in law I think that legalese a foreign tongue, frankly. The simple truth is that many, many boomers have been crippled by the fallinmg prices on their property, and your rant about an inability to purchase a home should take its proper place in the line of human misery, a line comprised of all ages, by the way.
If you cannot find a home in your area that you can afford, especially in todays market in which homes are going begging for buyers, then the fault is solely your own. Rather than show how childish you are take some responsibility and place blame where it belongs, on the institutions not the homeowners, and on yourself for not working hard enough to get into your own home.
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We see things, not as they are, but as we are.
Anais Nin
"The housing bubble was certainly not an invention of the Boomer Generation, as if we met in secret and planned this whole thing out, ... "
So. You missed the meeting, eh? ;)
Housing prices are falling. She'll have her chance.
-- ekaton aka d.k.shaw
.Hee, I should really read my email more often!
The gist of this poster's argument is a dangerous and possibly disingenuous one. It attempts to lay blame on an entire generation for the specific ills this poster is experiencing. In a way it seems normal immature angst but there is suddenly a trend to hammer a wedge between the generations.
When a baby dies every 8 seconds somewhere in this world I find it difficult to sympathize with such a one as this, not only is her rant an impedance to progress but it seems egocentric and unconcerned with real reasons to make great changes.
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We see things, not as they are, but as we are.
Anais Nin
Let's do the math--if the median home price in the greater Seattle area is $400K and the median income is $50K and you are a median income (or lower) household, doesn't it stand to reason that a home would *still* be out of your price range?
The boomers still have this myth that those who "work hard" will be rewarded. Here in Seattle, you need at least $100K in household income to buy even a small, two-bedroom starter home. Such a household income would put you in the top 25% of earners. Does that mean that the other 75% of us are slackers?
Boomers didn't need to be in the top 10 or 25 percent of income earners to afford an 800 square foot, 2-bedroom home.
If your children are far enough up the food chain to buy a home, that's wonderful. But in a country with the class divide that we have, not everyone can make it to that sort of earning level, even if they work hard, play by the rules, and save, save, save.
Yes, homes go begging for buyers, but the sellers (we're not yet seeing much foreclosure in Seattle) are still asking prices that are out of whack with local incomes and are not willing to negotiate.
Again, if we're going to overcome our divides, the wealthy need to understand the less wealthy--and stop accusing us of being lazy people who simply don't work hard enough.
Ditto for the generational divide. Us GenXers simply want the boomers to acknowledge that the system that benefited them has created a financial hell for us.
.At least this post sheds the overtone of your last effort, and I applaud you for it.
Look, I am not a Boomer, a bit older than that frankly. I do not , however, support any notion that has the effect of separating the classes and the generations, any more than I would believe a solution possible if we do not come together to make that happen. Certainly I agree that things are changing rapidly in this nation, surely the work ethic and the core beliefs of boomers are less valid than once they were. Werk Machts Frei a sign once noted over Bergen Belson Camp, it was false there and it is a bit false today here, sad to note. I sympathize with your plight and understand how important ones own home can be to anyone. My children have benefited from the foreclosure market in California to be certain, and I am surprised that it has not come to Seattle as yet. Not that I am happy about this market, as it means much misery for those on the losing end obviously.
I must urge you to understand that it is not the Boomer who has put you in this predicament, nor the generation preceding them either, it is not a generational thing at all in fact. This nation is ruled by the power of money, our government answers to that money and not to you or I, regardless of our age or financial situation. There are those who profited greatly from an artificially inflated home market, and they drove that market to the bursting point and escaped with their ill gotten wealth as well. Now many boomers are suffering and in fear of not only losing their homes but of being unable to retire as well. In other words we are all of us in the same boat. I urge you to look upon your fellow citizens as allies not enemies, for if you do not then we are simply isolated and easier prey.
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We see things, not as they are, but as we are.
Anais Nin
You are correct in that the wage suppression policies of this government over the last 35 years have impacted your generation more than the baby boomers, but you still have time for things to get better before retirement, they don't. They entered the work force as wages started to be depressed, while you entered the work force 20 years after the suppression began, so there is till hope for you, but without a doubt, the system must be changed, and it did not work so great for Baby Boomers, especially the late ones.
Policies that encourage corporations to outsource and leave the US, illegal and legal immigration, and doctoring the CPI figures, not to mention allowing health care costs to increase at a ridiculous rate so that we pay 2 times more what any other developed country pays, and reduces the amount of wages corporations who provide these benefits can pay, are behind this, and it is by design.
As for the dream of Home Ownership, I bought a house in 1995 for 200K, paid 50K down, took out a 30 yr mortgage. After 14 years, I have paid 168,000 dollars in mortgage payments, and got the principal down to 115,000, or 123,000 interest, more than the loans principal. I was required to buy flood insurance which started out at 600 per year but which was 3000 per year last year, and god knows what it will be this year, despite my area never being flooded in over 50 years. I also have the property insurance, started out at 1000 and is up to 1800 since the property increased in value, more than the average wage and property tax started out at 2400 and is going to 8500 next year, for the same reason. Total on tax and insurance about 125,000. So interest, insurance and taxes are about 250,000 and I have paid 85,000 in principal plus downpayment for a total of 335,000.
I owe 115,000 and have projected interest, taxes and insurance of 250,000, for another 365,000 to go.
After 30 years, I will have paid 700,000 for a house which at the markets peak was 500K and which today might be 400K, maybe a bit more due to it's location. If the house increases in price other costs will go up as well.
How is this a good investment? Not to mention another 100,000 on maintenance and repairs. And I only spend 3 weeks a year in it, my mother lives in it, since I live overseas where I rent, but thats a different issue. When I graduated 25 years ago in a serious recession, I had to go so far west for a job I ended up in Asia, which is in the East, and have contributed to the loss of US jobs as part of my job.
And I got in when prices were low. You do not want to own a house.
The lazy claim is just to make people they deserve it.
Maybe Obama will bring you change, but not unless he turns against Globalization and starts protecting American jobs and put Americas interests first. As it is, the global corporate citizen has more rights than American citizens, but the debt is owed by the American citizen, notice how they always divide it by the number of citizens.
MiMiCcS, I always learn something whenever I read your postings. Wasn't Carter also a founding member of the TLC as well?
As for the baby boomers, I think a lot of us (I was born 11/01/1949, age 59) are going to die off rapidly as rampant obesity among the ranks will take its toll. I seem to lose more friends and acquaintences monthly. This should ease the social security situation somewhat for younger folks, as there will be fewer of us old farts to support. And yes, had the deductions been invested properly and not spent for financing wars the system would by now have been self-sustaining if not into perpetuity, at least for a long long time.
-- ekaton aka d.k.shaw
You are correct that you have been screwed. The question is, by whom? I would pin th e blame on two things. Laws making family homes into huge tax shelters were a very bad idea, since this boosts the costs for first-time buyers who want to raise a family. The second was the 1.2 billion a day federal deficit. That money had to go somewhere, and a lot of it went into the real estate bubble.
The "family home as tax shelter" thing is very ingrained in the US economy. There must be some way to get rid of it. One way would be a tax on land, which would discourage speculation and multiple ownership.
Ah, but who are the biggest supporters of the mortgage tax deductions? Boomers!
I have been agitating over the tax code for years, only to find that most progressive organizations are controlled by boomers who keep insisting that the mortgage tax deduction is critical for the middle class.
Again, it's important to follow the money trail and who benefits. People who bought into the housing market early (Boomers) benefit enormously from the mortgage tax deduction--not because they save so much on their taxes, but because the tax deduction gets factored into the price of future home sales, thereby significantly increasing the value of the asset (home) they already own.
Interestingly, it doesn't benefit the GenXers at all. Sure, they get a tax break, but because the deduction helped fuel the exorbitant rise in home prices, the tax savings of the late buyers (meaning those that became homeowners for this time after, say, 2000)is more than offset by the extra cost of the house itself.
We won't get over this generational conflict until the boomers can acknowledge that the policies they've supported have benefited them at the expense of younger generations.
The tax deduction is so people can afford the interest which is the banksters profit. So if you pay 10,000 in interest in a year, you deduct it from your gross income, and pay less tax depending on your tax bracket, maybe the averge person saves 1,500 in taxes as a result of paying 10,000 in interest. Great deal, huh.
Gneralizations such as:
"until the boomers can acknowledge that the policies they've supported have benefited them at the expense of younger generations."
Thats like saying women are like this, or jews are like that, or blacks are like whatever, and should be avoided. Many boomers did not support these polices, some were ignorant of what the policies were, and others did support them.
At 36 you have been an adult for 15 years, which is when Clinton took over. Did you vote for Clinton and support Clintons policies? If so, some of todays mess can be attributed to him, who was one of the first Baby Boomers (DOB 1946). But you will argue that you were too young, too busy, too ignorant to know better, and for the most part you and many Baby Boomers have some of the same excuses.
When you were 21, the youngest Baby Boomer was 30, the oldest 47. In this country, those who hold the most power are 50 or older. Why do you focus on a certain age to the exclusion of who the people who create the policies that most people do not understand anyways.
But I will agree, the younger folks are going to suffer the most if things do not change, not that the Baby Boomers, especially the younger ones, won't suffer. When you are in your 50's, your job gets cut first. Along with the loss of job and income, savings get eaten up, you pay for your own health insurance or lose it and go uninsured, and if you make it to 65, maybe you still have a home or you don't, and maybe there will still be a social security or not. Most bankruptcies are due to people getting sick and losing their job and health benefits. At 36 you probably do not have to worry about health for awhile, but you are in the same boat as a Baby Boomer if you do get sick, but perhaps your parents are still around to help out of thats the case.
But if it makes you feel good to be a victim, have at it, but it's counterproductive.
BTW, Obama is a Baby Boomer as well, just one of the younger ones.
.I am in awe of your logic and ability to express it so very well....I cannot help but wonder at this poster's motivation for attempting to place a wedge between the generations as she does.
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We see things, not as they are, but as we are.
Anais Nin
" ... attempting to place a wedge between the generations ... "
Neil Kashkari (you just can't make this stuff up) is the chief administrator, picked by Hank Paulson, of the "bailout" monies being stolen from the taxpayers. He is 35 years old, making him a "gen X-er". Should we now blame all "gen X-ers" for the fraudulent bailout program that is simply enriching bankers, covering their self-created losses, and doing absolutely nothing to halt foreclosures and doing absolutely nothing to make homes more affordable for people of his own generation?
-- ekaton aka d.k.shaw
.By gosh you've got it! It was those inscrutable GenX'ers all along, dratted kids! If that wont fly logically surely we can cast about for another scapegoat.....
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We see things, not as they are, but as we are.
Anais Nin
Yep, getting rid of such a popular tax break is politically impossible.
People love rising home prices because they think they are getting something for nothing.
Then once they prices got so high not enough people could buy then the government pressures business to relax lending criteria! It's insane.
Then the government spends 850 billion to prop up the housing bubble. And YOU, Mr. Non-homeowner who wouldn't take the crazy risk of defaulting on a mortgage, get to help pay for it.
Now the Fed is inflating the dollar like crazy so that the housing bubble will survive and grow. You can't take away a deduction, but you CAN reduce the value of the dollar drastically. That doesn't bother people so much. This will also cost you. Bigtime.
If they do succeed in reinflating housing -- and with their infinite money, it will be hard to stop them -- then it is simply a return to an unhealthy unsustainable situation.
Americans will cling to the housing bubble no matter what, I think. It is deeply ingrained in the system. They will go down with the ship if it comes to that.
All I can say is keep trying. The purchase of land is a zero sum game that produces no wealth. Most Americans can't understand this. Say it enough times and maybe it will sink in. Family homes should never have become tax shelters. It is unfair to those who cannot afford homes. And having the government use tax dollars to prop up home prices is REALLY unfair.
So every boomer has benefited from the housing debacle. And every last one of us boomers "supported the media, the politicians, the mortgage brokers, and the real estate agents who supported bubble policy and thinking. Why? Because it made them gobs and gobs of money." Then why is it I've never been to a meeting of Boomers where we've all been conspiring for years on precisely how to carry off this swindle and disenfranchise the holy innocents of GenX? I don't even get the newsletter where all this chicanery is hammered out. Am I culpable anyway, even though I never supported ANY of the agencies you name, for anything they've ever done in 40 years, merely because I'm a "boomer"?
The point is, you are stereotyping to an absurd degree and it makes your entire analysis ridiculous. Even if some boomers did buy houses when the prices were affordable, during the illusory housing bubble, what should they have done? Should they have said, "It's immoral for us buy now, when we can afford it. We have to think about the next generation, and looking into our crystal ball it's clear this bubble will burst soon and those GenXers won't be able to afford housing."
I bought a big house in the country with 10 acres and several outbuildings in 1990 for $39,000. No mortgage, cash on the barrel head. It's now probably worth about $200,000 and 5 years ago at the height of the bubble it was worth over $300,000. Should I feel guilty over this, try to find some GenXer I can hand it over to for less than I paid, since they obviously are more deserving of it than I am? If I don't do this, am I still undeservedly benefitting from a situation I had no hand in creating anywhere along the line? Or am I simply blameworthy because I was born in 1952?
Nah, the problem is US! Stop buying the GD Washington Post! Shut them down in a week flat! If you don't like their version of the 'news', if you get your real 'news' elsewhere, stop paying for their piece of crap paper and use something else to line the bottom of the birdcage! Ditto to anything that Rupert Murdock's sliming, gangrenous hands have touched!
You want to really make a change, a real change, a change that will not require pitchforks or torches or guillotines? (not that I'm against any of them at this point..)
Stop paying your credit card bills. Everybody, now at once! They've been holding this fable about 'your credit rating' over your head for years but really, who has a credit rating anymore? It's dead, gone, smelly and swirling down the drain. They already got plenty of money from you (didja hear about them thar bailouts??) Bail. As in jail, but I digress.. Stop paying your credit card bills, let Wall Street and the Delaware and North Dakota Mafia go belly up.
Remember that line, 'backed by the full faith and credit of the US government'? Well the government is broke, we're the government and it's over. Unless we take it back.
Here's another thing we can do: Hang, or at least imprison, anyone who displays sociopathic behavior. You can tell when they give an interview and they're asked about something horrible that's happened on their watch and they say, "so?" It's time to clean house, get the rats out of power and take back our sovereign rights.