Editor's Note: Below is a complimentary excerpt from our renowned Demography analyst Neil Howe's research product Demography Unplugged.

OK Boomers... Let's Talk About Socialism. - zboom

newswire: 8/13/2020

  • In a recent op-ed, columnist Andreas Kluth claims that “the pandemic is turning Millennials into socialists.” He says that young people’s political preferences are understandable given their experiences in the labor market, but what they need are pragmatic reforms based on liberalism, not socialism. (Bloomberg)
    • NH: Is the pandemic turning Millennials into socialists?
    • Well, you could argue that the pandemic is turning all Americans into socialists. The vast majority of asset owners, young and old, know they would be toast today had the government (via the Fed) not rushed in with nearly $3 trillion in asset purchases since the beginning of March. The same goes for workers, a large share of whom know they would be destitute had the government (via Congress) not rushed in with nearly $3 trillion more in spending on wage and benefit subsidies. Until a date as yet to be determined, we've all become wards of the state.
    • To be sure, older generations see this as a mere temporary expedient. Soon, they expect or hope, we'll get "back to normal."
    • Millennials see it differently. They were already a lot more inclined to favor "socialism" before the pandemic arrived. As of late November last year, Gallup reported that Americans under age 40 were just about evenly split when asked whether they were more positive about "socialism" (49%) or "capitalism" (51%). Older generations hugely favored capitalism--Xers by 22 percentage points and Boomers by 36 percentage points. (See "Socialism is as Popular as Capitalism among Young Americans.") According to another survey by YouGov, conducted at about the same time, 20% of Millennials said they were "extremely likely"--and another 50% said they would be "somewhat likely"--to vote for a socialist candidate.

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    • If anything, the pandemic has simply intensified this ideological tilt. COVID-19 has been singularly regressive in its economic impact--hitting minority, low-wage, and younger workers the most.
    • To some extent, yes, support for radical ideologies is a phase-of-life phenomenon. Young Boomer protesters back in the late '60s went through their own dalliance with charismatic Communists like Ho and Mao. But "socialism" was never a mainstream Boomer attraction. Memory of events also matters. Most Boomers and Xers will forever associate “socialism” with the widespread brutality, corruption, and poverty of the allies of the Soviet Union before its fall. Recalling none of that, Millennials approach the word from a fresh perspective.
    • Yet Kluth raises another excellent explanation for why Millennials are drawn to socialism. And that is the hypocritical Boomer denial about all the public-policy benefits they have enjoyed over their lifetimes--benefits which younger generations either have not enjoyed or are not likely to enjoy in their turn.
    • Let's call this "Boomer socialism." Think about it.
      • Education. Young Boomers were educated by the best-ever teachers largely because the smartest women in the G.I. and Silent generation were barred from entering other professions. Then, when droves of Boomers went to college, all levels of government hugely subsidized the cost. Most state universities were practically free. And because they steadily added capacity, they kept private tuition down. Few Boomers incurred heavy student debt--even those who went on the professional degrees in medicine or law.
      • Jobs. Of all the Boomers who didn't go to college, a large share got publicly funded vocational education and took decent-paying union jobs. Ever since, voc ed has atrophied and unions have pretty much disappeared in the private sector. Those unions still around often resort to two-tier wage scales to keep wages lower for younger workers. (Federal law prevents wage discrimination against older, but not younger, persons.) Meanwhile, a torrent of new licensing laws bars new entrants into professions as varied as manicurists to interior designers until they pay to become credentialed.
      • Real Estate. When young Boomers first bought their homes, builders could put up just about anything reasonable on the available space. Today, state and local governments routinely zone out new units through caps and regulations in a barely concealed effort to boost prices for current owners. Constitutional tax provisions like California's Prop 13 overtly penalize the young and reward the old. According the Harvard economist Edward Glaeser, "There’s this inter-generational redistribution that’s occurred by restricting housing supply." Noncollege Millennials have basically given up trying to move to America's major coastal cities. Housing prices are simply too high. (See "Biggest Metros Spawning Greatest Inequality" and "Why Housing Supply Has Lagged Behind.")
      • Retirement. When Boomers were kids, most of public spending went for defense and infrastructure... and not a lot for other stuff. Today, most goes to senior benefits like Social Security and Medicare... and not a lot for other stuff. So despite high historical rates of taxation, there's not much left to spend on projects that would invest in the future. As for Millennials receiving their own Social Security, well, the pandemic may have pulled its insolvency date up to 2028. So good luck with that. (Meanwhile, the CARES Act perversely invites Millennials to get by for now by taking money out of their 401-k's; see "COVID-19 Sets Back Americans' Retirement Plans.") At the state and local level, the patent generational inequity of public pensions is notorious. Organized pensioners will likely push some cities into insolvency before Congress is forced to intervene.
      • Public Debt. Don't get me started. When Boomers were growing up, older generations were steadily paying off the national debt burden (down to a postwar low of 23% of GDP in 1974). During the Millennial watch, that burden has mushroomed. The publicly held debt reached 79% at the end of FY2019. And thanks to the pandemic response, the CBO estimates it may jump to 108% by the end of FY2021. That's higher than at the end of World War II... only this time without the war. There are two things we know for certain about America's grand stimulus response to the 2020 pandemic. First, much of it serves to protect the prices of assets owned by older people. And second, since all of it is paid for by borrowed money, Millennials will end up bearing its long-term cost.
    • I could go on here and talk about CEO compensation trends, monopoly pricing, tax-code changes, and the like. But I won't.
    • My basic point is simply this. When Millennials look up the age ladder and see the net worth of 70+ Americans towering over that of younger age brackets like never before in American history, they are likely to come to different conclusions than Boomers about how the system functions. (See "The Graying of Wealth.") Most Boomers think they earned it all on their own merits: See, capitalism works! Most Millennials suspect that it has more to do with how Boomers benefited from their particular age location in history. When young, they had the wind at their backs. As they got older, they kept the wind moving in their direction by instituting policy priorities that they knew--or should have known--would benefit themselves at the expense of those coming after.
    • Boomers should have seen what was coming. It has been a decade since Millennials invented the "Old Economy Steve" meme (see also this analysis), which made fun of Boomers in the wake of the Great Recession for their relatively easy start in life. Today, for many Millennials, that critique has morphed into an ideological re-evaluation of how Boomers have gotten ahead. It's not through capitalism. It's through a certain kind of socialism--"Boomer socialism"--which has by now matured into a sclerotic, grandfather-clause economy rigged to help seniors and near-seniors.
    • One final observation. While much more positive toward "socialism" than older generations, Millennials remain no less positive than older generations toward "business" and "markets." Few of them advocate state ownership of the economy or top-down regulation of production and consumption. In college, they study microeconomics a lot more than young Boomers did. (The '70s curriculum was more oriented to Paul Samuelson and macroeconomics.) Hardly any Millennial cares to go back to the Soviet Union, a system they really know little about.
    • For many Millennials, "socialism" means nothing more or less than this: The power to rewrite the basic rules of the game when they no longer work.

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.