NewsWire: 4/26/21
"The restlessness of New York in 1927 approached hysteria. The parties were bigger, the pace was faster, the shows were broader, the buildings were higher, the morals were looser and the liquor was cheaper; but all these benefits did not really minister to much delight. Young people wore out early—they were hard and languid at twenty-one."
--F. Scott Fitzgerald
The markets have lately been spitting froth like an uncorked bottle of cheap champagne.
We see GameStop calls fueled by "stimmies" setting volume records. Billion-dollar blank-check SPACs hawked by pop stars. NFT doodles selling for millions. Speculators buying up suburban neighborhoods (even while the CDC still enforces an eviction moratorium!). Pension funds loading up on dollar-denominated Nigerian debt. Rookie day traders going wild on no-fee transactions. Smart money beating the market on high beta, high debt, high credit-spread, high short-interest whatever.
Many in the media, taking all this one step further, are now saying that America is about to enter another "Roaring Twenties." Get it? The Great Influenza is over, so let another Great Party begin!
IMO, it will never happen.
Why? Because the mood of every decade must, in some identifiable way, reflect the collective personality of the young-adult generation coming of age.
Let's turn back to the original 1920s. The predatory, dare-devil mood of that decade fit perfectly the personality of the "Lost Generation" (born, 1) who were then entering their 30s--a ruined, throw-away, grown-up-too-fast bunch of kids if there ever was one. Having been let loose to root, hog, or die on city streets or in factory sweatshops as children, they were then shipped off to get chewed up by mechanized war and disease in French trenches.
"There died a myriad… /For an old bitch gone in the teeth /For a botched civilization," wrote Ezra Pound in 1920. When they came home (those who didn't linger in Paris guzzling wine or in Barcelona dodging bulls), they were just the kind of tough-talking generation that could put a "roar" into a new decade. When they played, their jazz-age mottos were "down with Volstead," "don't be the sap," and "sassy but classy." When they voted, which wasn't often, they preferred free-enterprise Republicans who left them alone.
They became the trust-nobody young hustlers, dealers, inventors, rum runners, speculators, and barnstormers of one of America's naughtiest eras, what Frederick Lewis Allen later called "a decade of bad manners."
Now look at today's Millennials (born 1), whose late-wave members today fill up the ranks of today's 20somethings and will be entering their 30s throughout the 2020s.
What are the odds they could fuel another Roaring Twenties frenzy? Quite honestly, I'd say close to zero.
This is no offhand judgment. It comes after long reflection. I study generations for a living. I've been examining and following Millennials throughout their lifecycle. I've written many books about them. In fact, back in 1991 Bill Strauss and I, in a book we coauthored (Generations), coined the label "Millennials" for them. And many hundreds of Millennials have thanked me or cursed me for this favor ever since.
Early on, back when the oldest Millennials were still in grammar school, Bill and I were struck by their distinctive location in history. In particular, we noticed the soaring moral panic over children that set in among most adults just as these kids started arriving in the early 1980s. Unlike the prior two generations (Gen X especially), America was determined to shower these "babies on board" with attention, structure, and protection.
As a result, we foresaw that--as Millennials reached their teens in the 1990s and matured into the young collegians and careerists of the 2000s and 2010s--they would surprise everyone. We predicted they would reverse the dominant cohort trend of older Americans born since World War II.
Time has since passed. And I think, by and large, we've been vindicated. Our early down cards have flipped over and become up cards.
For example, we predicted that:
- Millennials would become closer, not more alienated, from their parents.
Done. Retrospective surveys confirm that young Boomers in their 20s hardly spoke to their parents. Millennials, by contrast, often talk to or text their parents several times a week. The share of young people in their 20s and early 30s living with their parents has steadily risen--even during the recent economic expansion--and is now at a historical high going back over a century.
- Millennials would take fewer, not more, risks in their personal lives.
Done. Take your pick of any risk-taking behavior associated with young people: smoking cigarettes, drinking alcohol, fighting in school, committing violent crime, not wearing a seat belt, having sex before age 18, starting a business, living alone, moving to another city. You name it--these risks have all been lower for Millennials, sometimes dramatically lower, than for Xers and Boomers at the same age.
- Millennials would practice greater, not less, deferred gratification in pursuing long-term goals.
Done. Earlier youth generations ignored, defied, or opposed the system. Not Millennials. Without complaint they have been scaling the wall of grades, test scores, rankings, and recommendations--and willingly hocking their own future (something not asked of earlier generations)--all just to earn that gold star of establishment acceptance: the college or professional diploma.
- Millennials would gravitate toward more, not less, conformity and convention in the culture.
Done. In dress, Millennials prefer "normcore." In music, every emotion is expressed--except rage or confrontation. In videos, the plotlines are mostly PC, many turned into formulaic sequels in which all the nasty edges are smoothed over. Earlier youth generations celebrated transgressing mainstream norms. With cancel culture, Millennials celebrate silencing the transgressors.
- Millennials would demand more, not less, from communities and government.
Done. In case you haven't noticed, "prosocial" Millennials like to put the adjective "social" in front of everything, from social media to social investing. Where young Boomers and Xers so often fled surveillance by the community, Millennials embrace it, their most dreaded fear being "loneliness." As for politics, Millennials broadly favor the party of big government, the Democrats, by a nearly two-to-one margin. That's the most lopsided Democratic advantage among young voters since the New Deal in late 1930s.
So come on. Do you really expect this generation to fuel another bad-boy decade, another Roaring Twenties?
Sure, I see the young urban professionals who have their YOLO epiphanies… and then proudly announce on Facebook that they're moving back to their mom's hometown.
And yes, I know of young swashbucklers think they can short-squeeze GME on Robinhood. But keep this in mind. For every one of those dollars, Millennial careerists are dutifully pushing another thousand into long-term, safe-sounding "target date funds" which many believe (erroneously, of course) don't go into anything as risky as equities or real estate.
Here's another reason we aren't about to have another roaring decade. We just had one--one and a half, in fact. America recently experienced a long boom in the 1990s, peaking with Dotcom Bubble, and again in the pre-GFC 2000s, peaking with Subprime Bubble. These bubbles recapitulated much of the wildness, free agency, risk-taking, and hi-tech dynamism of the 1920s.
Now if there is one rule of generations, it's this: No youth generation wants to re-enact what the last youth generation did. If young Boomers knew anything, it's that they would never be goody-two shoes like the Silent Generation. And young Xers, that they would never be canting yuppies like the Boomers. And Millennials? That none of them will end up hogging all the money at the end of X Games or "Survivor."
That's why booming decades of free-wheeling wildness in American history do not frequently recur. Those who grow up in their wake have no desire to repeat the experience anytime soon.
Before the roaring 1990s you had the roaring 1920s. And before that you had the roaring 1850s (brought to an end by the crash of '57). And before that, the speculative mania of the 1760s (brought to an end by the dumping of tea into Boston Harbor).
I'm reminded of a conversation I had with my Millennial son the summer before he left for college. He collected a 2-hour audio file packed with grunge music produced in 1994--everything from Nirvana to Live to Pearl Jam to Soundgarden.
I listened to it and then asked him, "You seem pretty happy. What moved you to create that list?"
He said, "I wanted to know what was on America's mind the year I was born."
"So did you find out?"
His answer: "I still don't have a clue."
So let's fill in the missing pieces. If there is a later parallel to the original Lost Generation, it's not today's Millennials but the Gen-Xers who came just before them. Gen Xers, like the Lost, took a lot of risks young before later discovering that, while a few of them have ended up doing very well ("living well is the best revenge," wrote Fitzgerald), most of them have lost ground--and that they don't have much time left to make it back up.
For Millennials, the earlier parallel is not the Lost, but the G.I. Generation (born, 1901-24) that came just after them. Their most famous writers were not the likes of Dos Passos or Hemingway, but the likes of Steinbeck and Asimov. The Lost came of age doing private deals. The G.I.s came of age preparing to build big public things, res publicae, in an era when America redefined itself as a national community.
The rest of the 2020s may not be a roaring or wild decade. But that doesn't mean it won't be momentous.
As for all you nostalgic Xers who really do yearn for another roaring decade, take a hint from Thomas Wolfe: You Can't Go Home Again. Pack away all your scary-looking, damaged-font party posters from the '90s. You won't need them in the 2020s. But someday your grandkids will really enjoy them. Or maybe their kids.
This essay went out Friday morning on Hedgeye's "Early Look." We are issuing it here for all our subscribers. We are adding charts to illustrate a few of the Millennial trends we reference.
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