Sunday, November 8, 2015

"Gas All Boomers" Or At Least Tax And Cut Their Benefits More Says WaPo

No, nobody in today's Washington Post Outlook section devoted to the boomers said that first line, although it has become a commonplace on such sites as Economics Job Market Rumors where anonymous and frustrated millennials very frequently and fervently spout that opening line to the point that it lost whatever ironic humor it had some time ago.  But then irony is a Gen-X thing, not a millennial or boomer thing.

However, taxing them more and cutting their benefits is certainly called for by new economics reporter (and Gen Xer) James Tankersley, in an astoundingly bad article full of so much nonsense one does not know where to start.  He claims that because of their huge numbers, none of this will happen, even though the latest budget deal has in fact cut benefits for them (really for everybody not already receiving them, but with front end boomers the most likely to have been counting on those now cut benefits in the near term, see my post on this here).

While I shall deal with Tankersley's numerous misrepresentations, let me note more of the anti-boomer venom filling this special issue (Is this WaPo trying to market to millennials?).  So, Heather Havrilesky has the following:

"For the remainder of the decade, we can expect a brand-new wave of melodramatic retrospectives, each designed to remind us of a magical time when boomer heads were packed full of  idealistic notions and covered in lustrous free-flowing hair.  But just as what goes up must come down, what frolics in the mud of Woodstock must eventually sulk in the flourescent chill of the cardiology office. Somehow as boomers age, their commitment to dragging that dusty 60s archival reel out of the basement yet again seems to grow exponentially"

[I shall accept that some of this complaining is not without merit.  Her eventual take is that people now should take things as seriously now without looking back to the 60s either for inspiration or comparison, especially invidious comparison, and that starting in the 70s and on the more conservative majority of the boomers took over the show.  But mostly she is whining and snarking.]

Not quite as hostile is the much older Landon Y. Jones, one of the early coiners of the term "baby boomers." who declares:

"The designation has to do with coming of age at the right time. They enjoyed sex, drugs, and rock-and-roll, took all the good jobs and are now retiring and becoming a burden on society," which is the gist of Tankersley's whine, although Jones is mostly interested in the origin of the term and how it has been used indifferent countries rather than blasting on and on in this vein, which is in fact him reporting on the views of the late Dutch critic of the boomers, Pim Fortuyn.

Before going to Tankersley, I will note one other writer a bit more sympathetic to the boomers, Shirley Abrahms, who dispels five myths about them.  Supposedly, in spite of Tankersley et al, they are not as wealthy as widely thought (although some are), they are not clearly much healthier than their parents (and the recent Case-Deaton report on middle aged white males dying sooner since 2000 fits in with this, although she did not mention that), that boomers are reasonably charitable rather than just being "selfish," that they are not as technologically incompetent as many think, although certainly Xers and millennials are more  competent than they are (not to mention the rising post-millennials now beginning to make their first appearances), and finally that their sex lives are not total disasters, although aside from all the viagra and cialis ads, I was under the impression that they were mostly being criticized for having been too much into sex, etc., although perhaps that wicked past had supposedly led to a pathetic present.  For all her wisdom, Abrahms undercuts her own credibility by somehow thinking that 18 year olds were voting for LBJ in 1964, which was most definitely not the case (why is it that WaPo has gotten so bad that even its supposed fact checkers goof up?).

So, on to Tankersley, regarding whom I really wonder if either he or his anti-entitlement bosses are aware just how totally off this debut article is.  I am not going to quote and will not answer everything, but will try to focus on some of the biggest bloopers.  I shall also note that near the end of his article that a lot of the problems he identifies are really a matter of the large numbers of boomers and not any clearly intentional actions.  But this does not absolve them from deserving to "pay more" somehow for all the damage they have supposedly caused.  A main thrust of my response will be, if indeed they were causing all these problems, were not the earlier Silents and Greatest at least as guilty, if not in some cases worse?

OK, I shall quote one paragraph, which summarizes most of his complaints:

"Boomers soaked up a lot of economic opportunities without bothering to preserve much for the generations to come.  They burned a lot of cheap fossil fuels, filled the atmosphere with beat-trapping gases and will probably never pay the costs of averting catastrophic climate change or helping their grandchildren adapt to a warmer world.  The took control of Washington at the turn of the millennium, and they used it to rack up a lot of federal debt, even before the Great Recession hit."


For starters let us note that the stagnation of real wages began in the 1970s, about the time when most boomers entered the labor market.  So both the Greatests and the Silents did much better than the boomers on that one, with the period of rapidly rising real wages being 1945-73.  Yes, the early Greatests suffered in the Great Depression and fighting in WW II, but those amazingly quiet Silents really raked it in.  Look at somebody born in 1930.  only barely experiencing the GD as a child and not having to fight in WW II, if experiencing the privations of rationing, again as a young person, but then entering the job market in the late 40s and having the full experience of that postwar boom, well into middle age when the wage growth slowed, and in their 50s when fica taxes rose sharply as part of the Greenspan Commission's 1983 deal designed to "make sure the baby boomers pay for  their own retirement," which mostly they have despite the misrepresentations of Tankersley.  There were no payments for  COLA recipients prior to 1971, but any Greatest or Silent retiring not too long after it was put in then paid zippo into Social Security but got many times what they paid in benefits, far more than the boomers will get (who so far have not whined about this latest benefit cut, which Tankersley ignores, needless to say).

Tankersley's spin is that even though wages have not risen, a point he ignores, boomers got promoted to higher salaries as they aged.  While indeed growth has reverted to its 1975-95 average, there is no reason that Xers and millennials will not be able to have such promotions either. After all, the boomers are now indeed beginning to retire in serious numbers, opening up all those upper tier jobs for their juniors to earn more.  The idea that SS and Medicare will not be there is of course the biggest phone screed that WaPo hands out, when in fact the projections have the millennials receiving more in benefits than current recipients, even if the system "goes bankrupt," not that Tankersley is anywhere near even being conscious of this I think.  And, of course most of those projected increases in costs are tied to medical care cost increases, which hopefully will be kept more in line in the future.

Then we have all this stuff about burning fossil fuels and ruining the environment.  Last time I checked, the golden era of gas hog polluting cars was the 50s and 60s, with environmental laws arriving in the early 70s and with higher oil prices leading to much greater gas efficiency of cars. This backslid in the later 80s and 90s when oil prices fell and we got the SUV boom.  But offhand the Greatest and the Silents look at least as guilty, and frankly more so, on this matter of polluting the atmosphere than do the boomers, whose main sin would indeed to be their large numbers, not their excessively polluting ways compared to other generations.

Then we get this weird claim that the millennials "took control of Washington at the turn of the millennium," thus making "the boomers" responsible somehow for the clearly irresponsible policies of George W. Bush, even though he lost the popular vote in 2000.  But Bill Clinton is a boomer, and he was in charge in the 90s, when the national debt actually fell. Do not the boomers get some credit for him?  Or do we only get the blame for his sexual improprieties?  The more striking increase in non-war debt came with Reagan, he of the Greatest Generation, with some of the boomers not even old enough to vote when he came in.  Surely he was more a creature of the Greatests and the Silents, with their failure to obey rational expectations and Ricardian Equivalence by lowering their savings rates when they got his tax cuts (with income tax cuts indeed offsetting those fica increases aimed at the boomers).  

He goes on and on about a lot more, but I think I am going to stop here other than to note that he opens by complaining about people talking about raising the retirement age for future retirees not somehow noting that indeed the 1983 agreement put in place such increases for the boomers, increases which are already happening and will continue to do so. Really, this article is a disgrace.

Barkley Rosser

Added on 11/17/15:  It is not men but women among poor whites for whom their death rates are rising among 45-54 year olds.  Also, I apologize to anybody offended by my failure to capitalize the names of patented medicines for overcoming edf, not to mention fica.


Thornton Hall said...

IMHO "The Greatest" are, by far, the worst. They did some great things, but mostly just by being there.

But when the had a choice, they chose terribly. They could have told us what our boys were going to experience in Vietnam, the atrocities they would witness and the atrocities they would commit. But they chose not to.

They could have noticed that they got a college education for free, but instead voted for Reagan, who introduced tuition for the UC system as a telling example of what was to come.

They were made rich by the labor movement then chose to demonize it. They invented the 20th Century under a 91% marginal rate and then pretended taxes killed creativity.

They refused to speak up when Castro became Hitler and took credit for the Marshall Plan in Germany only to send the IMF to knee-cap an entire continent in our own back yard.

The Greatest had the dumb luck to survive a trip through hell, and then generously foisted the same trip on millions more. said...

Of the various complaints that Tankersley makes, the one I have the most sympathy with, although I do not particularly see it as "the fault of the boomers" is the high tuitions that are now being charged for students. Of course Tankersley did have this on the list of things to blame on the boomers, although he did not go on about it, and did note that many boomers have gone into debt to put their kids through college.

As Dean Baker has noted, what has caused much of the trouble has been the rising inequality over last decades. This is tied to the lack of increases in median real wages over the last 40 years, something that has negatively impacted boomers as well as Xers and millennials, at least the vast majority of them.

Personally I see this inequality trend as key to the out of control increases in college tuitions, which I see as driven by both the increase in the number of administrators and the explosion of salaries at the top of university administrations, including overpaid sports coaches. This has all been driven as a trickledown from the continuing explosion of CEO salaries, with university presidents fancying themselves to be CEOs and thus deserving of similar pay. This has to stop, and I think we should all be involved with this. But it is something that is really damaging millennials now and in the future in ways that most of the other stuff Tankersley rattles on about does not.

Nick Rowe said...

Good post (but then I'm a boomer). Took me a little time to spot the quotation marks around "gas all boomers".

Quibble: ...that [boomers] are not as technologically incompetent as many think, although certainly Xers and millennials are more competent than they are (not to mention the rising post-millennials now beginning to make their first appearances),..."

Not sure if that's right. Isn't it more a question of *which* technologies? Fixing computers vs cars, say? said...

Clearly the point had to do with not only computers but operating in the modern milieu of current social media and software and general handling programs and computers, more a matter of managing software rather thnn fixing hardware.

Heck, I used to be able to jimmy around with cars back in the ancient of times, getting stalled cars going in odd situations after fooling around under the trunk with various things, but because cars aren now thoroughly computerized, I can no longer do that (not that the Xers or millennisals or post-millennials can either, with a very rare exception). It is call the AAA or whomever and get it towed to the nearest repair station.

Thornton Hall said...

a couple of things. You'd be surprised how much schools spend on facilities, especially gyms.
Two: state funding for higher Ed as a percentage of state personal
Income has plummeted.

greg said...

With the continuing dramatic decline in energy return on energy investment, and the failure of our plutocratic masters to direct investment toward all our futures, it will take skill and sweat and luck for us all not to go over the edge. Millenials do have cause, though in fairness only against our wealthy masters, and those who tacitly or actively supported and shared in their plundering of the future in order to support their comforts of today and yesterday.

We must start a crash course in renewable energy investment, and traditional production methods which emphasize labor and minimize energy input, or our civilization will crash and burn, and we will save none of it. Nor will we be able to save ourselves.

Those who live other than humbly will be the enemy. That is what it has come to. said...


The cuts in state support for public universities has certainly contributed to what is going on in the public unis, but it does not explain the sharp rise in tuitions at private ones, which has simply gone so far as to be completely insane, if anybody looks at them closely. All those studies showing high rates of returns are baased on people attending years ago when those tuitions were simply a whole lot lower.


For better or worse, I simply see no generational element at all in our energy problems, which is why I find Tankersley's effort to blame all such problems on boomers to be, well, as disgraceful as I have already indicated.

greg said...


Well, I suppose you could say that it was merely the boomers misfortune to be in charge at the turning point, when the increasing energy cost of energy and other resource production started to be a significant problem. My own analysis of the economy (and hey, feel free to disagree,) suggests that this is one of the causes of today's increasing inequality. As the EROI, the "energy return on energy investment" declines, the share of the economy dedicated to extracting and distributing energy must increase, crowding out investment in the rest of the economy. Because the financial sector at the other end of the economy is also growing, the center of the economy, that which supplies the non-wealthy with their needs, must decline. (The trade deficit also sucks money out of that sector.)

However, the boomers, and in particular the wealthy boomers, and who are presently in society's positions of power, are in denial as to the real sources of the problems of today's society. Only a few raise flags and try to address them. I suppose they (we, for I am of that generation) could plead insanity, but that does not help the millenials, who, if they are very lucky, will merely inherit a terribly difficult situation, and without nearly the resources we would have had, had we applied them to the problems at hand. said...


I agree that plutocrats, most of them boomers but not all, are running the energy industry and causing problems. But I do not know when "the turning point" was. Oil prices have gone up and down ever since it first was drilled in Pennsylvania in 1859. Prices were high until Standard Oil had its monopoly busted in 1911. They were high again at the end of the 20s when the Red Line Agreement was made between Jersey Standard (later Exxon), Royal Dutch Shell, and what is now BP, only to collapse after 1930 when the East Texas oil field was found (and the Great Depression collapsed demand). Prices rose during WW II and even higher in the Korean War, as the Texas Railroad Commission controlled production, but fell in the 50s and 60s, with Middle East production rising (especially in the Persian Gulf). Then we had the OPEC price shocks in 1973 and 1979, with OPEC keeping prices high until the cartel crashed in 86 during the Iran-Iraq war, with prices then low until about 2000, after when they began rising again, peaking in 2008 before totally collapsing, then going up again, only to fall again more recently.

So, greg, please, exactly when out of all that mess was "the turning point"? said...

Regarding the matter of energy and generations, or more generally pollution and generations, I think all of the generations currently around have a responsibility to get things together so that generations not here, say the grandchildren of the millennials, will have a decent world to live in.

As it is, as I noted in my post, efforts to control pollution, if not CO2 specifically, have been going on fairly seriously since the early 1970s. Many pollutants have been substantially reduced, with much improved water quality and some improvements in air quality since then. I saw the Cuyahoga River in Cleveland back in the mid-60s when the river caught fire. It is much improved today. SO2 emissions used to be twice what they are now in the US, with that the most dangerous of all air pollutants. Obviously several generations have been involved in those efforts over the last 40+ years. What has not been dealt with and needs to be is CO2.

Myrtle Blackwood said...

Re: "What has not been dealt with and needs to be is CO2."

I you believe this, then the creation of a garden becomes an imperative. I've been spending years creating what I thought would be a 'peak oil' garden. But already the neighbourhood children have converged on it to graze. It's a novelty with their diet this week consisting of McDonald's burgers; the next night Dominos pizza, and last night it was fish and chips.

It isn't so much whether one generation has been 'deficient' in attending to the crises of our times. It seems more that the root cause of our disease is the intergenerational dismissal of fine and worthwhile traditions that used to (literally) sustain us in more ways than one.

What are the forces at play that have led to this?

Myrtle Blackwood said...

From the boomer perspective, "just breathe, your life means nothing"

greg said... asked:

“So, greg, please, exactly when out of all that mess was "the turning point"?”

Yes. A good question, which deserves a good answer. Part of my excuse for the delay in response. Its long, so I’ve divided it up. (A version of the following comments is posted at my blog.

The short answer might be that point when it became (nominally) more profitable to exploit society, to plunder it, rather than provision it and invest in it. When it became more profitable to be a pirate, than a builder. (Understanding this clarifies the motives and actions of the Right, and the modern capitalist. “Greed is good” is the motto of a pirate, not a builder.) But this transition itself is a consequence of the increased difficulty in extracting resources from the environment. In particular, non-renewable energy resources.

So if you want a date, sometime around the Reagan presidency, in perverse reaction to the oil crises of the1970’s.

In the beginning, (Well, once the ball got rolling, about 1880.)

the real cost of energy extraction was low, lower than the cost of developing the infrastructure needed to distribute and consume the oil. So the cost of extraction was the benchmark for the price. Only as the infrastructure for demand was emplaced did demand on occasion drive the price. In the first half of the 20th Century, because of the- inconsistent nature of the supply and its irregular rate of increase, sometimes demand, sometimes supply drove the price.

With the opening of the Middle Eastern fields, supply smoothed out. Supply and demand both expanded apace, the price relatively stable and low. Until the Arab oil embargo of 1973, and the later panic in 1979 due to the Iranian crisis. The result was an effective and dramatic increase in the *real* cost of oil to the US, since it now had to hand over an increased quantity of goods and services to pay to import foreign production. Domestic fields were becoming exhausted. New ones (Prudhoe Bay) more expensive to develop.

In an energy based society such as ours, (almost) all inputs can be traced back to the energy needed to support them. Thus the size of the economy can be measured in terms of energy consumption, and this is measured in terms of energy input. This instead of dollars. With this understanding, the inverse of the EROI, the energy return on (energy) investment, is the portion of the real economy which must be devoted to the extraction of energy. Only the remainder of the economy is available not only to providing services to society, but also to investment and maintenance.

For EROI, see: Energy, EROI and quality of life
Check out: Fig. 1 The Net Energy Cliff

greg said...

Continued from previous comment:

Now: From about 2004, supply has been constant, but until the 2008 crisis, demand increased, driving up the price. Demand and price then crashed with the recession, increased with the recovery, and recently spiked again, and is now again depressed.
The question is why is the price, and demand, now (relatively) depressed.

We return to the short answer, considering the gradually decreasing EROI, that is, a gradually increasing average real cost of extraction.

So: We have two different measures of accounting in an economy: Energy accounting, and money. Is the price in money necessarily a faithful measure of the real cost, in energy, of energy production?

Why should it be? Instances where monetary price does not reflect cost, real or even merely monetary, are common occurrences. Is the current energy market one of them? In particular, we ask: “How can we subsidize energy production?

Well, we can’t. When we subsidize something, we divert real resources from elsewhere in the economy to the production of the subsidized good. We decrease the nominal cost, and therefore the nominal price at which the good may be offered for profit. However, the real cost must be greater than if the good were produced without the subsidy. So when we subsidize the real cost of energy, we are merely increasing the real cost of production. (Note: Subsidizing production is not to be confused with subsidizing the capitalization of production.) That is, we are worse off than if we let the price reflect the real cost of production.

However, we can still manage to increase quantity produced, and depress price. Especially if we also depress demand. Remember, those resources transferred to subsidize production can only come from one place: The remainder of the economy, where a portion of those resources would have gone to maintain and capitalize the infrastructure which supports the economy, the infrastructure which also enables the consumption of oil.

How much is the subsidy? Well, according to:
the world formally spends about $400 billion, one way or another subsidizing fossil fuel production. (The US, formally, a mere $25 billion.) Given an inelastic demand curve, this can result in a dramatic reduction in price.

But there are other mechanisms of subsidy. For instance, consider the US trade deficit in goods. All those goods, if made in the USA, would require energy inputs, and concomitant infrastructure, for their production. Just as agricultural imports can be regarded as water imports, the importation of goods can be regarded as energy imports.
So energy supply is increased, while demand is contracted.

Further, the production cost of fracking, while recently improved, is still above the current market price of oil. (Externalization of costs also represents a form of subsidy.) This production has been financed in large part by massive quantities of debt. This debt represents an enormous effective subsidy, much, much larger than the formal subsidies provided the fossil fuel industry, especially those debts, (and they represent a substantial fraction,) which will never be repaid. Considerations of the relative discount rates of oil and money, also suggest the actual effective subsidy is much greater. (The discount rate of a non-renewable resource should probably be considered at most zero, and more likely negative, since all current consumption necessarily implies less ultimately available in the future, likely coupled with an increase in demand.) And as above, these debts represent demand transferred from the larger real economy to support the production of energy.
Infrastructure neglect is also an effective subsidy.

To be continued.

greg said...

Continued from previous comment:

My guesstimate of a price that reflects the real cost, everything I can think of considered, of oil is somewhere well over $100 per barrel. The difference between that and what we actually pay we are passing to the future, our own and that of our descendants. It is a price we will begin to pay when the delusion live under ( and which requires an input of real resources to sustain,) can no longer be sustained.

So, sometime around or, actually before1980, the leaders of society decided to pursue their own narrow and what may ultimately prove to be ephemeral gains, rather than look after the enduring interests of their society. The actual process of their choosing the consolidation of power has been noted elsewhere. (Consider also eg the Exxon climate data suppression scandal.) They propounded an ethos to justify their actions, and geared up their media to convince society of the rightness of those actions. And the people, for their part, got to live beyond their means, splurging on underpriced energy, their political acquiescence purchased with their own futures, and that of their descendants. Most of them. So now society is in a hole, 30 years and many trillions of dollars of squandered resources and mal-investment, with an economy ill-adapted for a future of costly energy.

Going to post this to my blog, too. Hope that’s OK.
OK. Questions? Issues?

Myrtle Blackwood said...

Re: "Remember, those resources transferred to subsidize production can only come from one place: The remainder of the economy, where a portion of those resources would have gone to maintain and capitalize the infrastructure which supports the economy, the infrastructure which also enables the consumption of oil...."

'Mal-investment': the creation of infrastructure that enables the consumption of oil and other fossil fuels.

Whilst oil might currently be subsidised, in Tasmania (at least) water is over-priced.