Now do you finally believe baby boomers are the most selfish generation?

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  • Recent gyrations in the stock market are telling Wall Street to be worried about the future.
  • That is because, thanks to bad economic policy, we are stealing from the future to give to those who have money in the present.
  • Thanks mum and dad.

I like to call the Masters of the Universe at night, after the market has closed, the dust has settled, and the gains and losses realised during the day have crystallised into some kind of truth about where the market is headed.

And last night, amidst the terror of the last few days and an avalanche of policy news out of Washington, I had a break through with one of them.

“Can you finally admit that your generation is insanely selfish,” I asked the billionaire on the other side of the line.

“Yeah, I guess you’re right,” he said gradually.

He had to admit it. We had just gone over his analysis of why the stock market has been puking. Here it goes: After last week’s $US500 billion budget deal was announced – along with the $US2.1 trillion deficit it will create by 2027 – a new paradigm was created. “It’s a crazy amount of money they’re spending. The market doesn’t how to handle it,” he said. “These Republicans sure do like to spend money.”

Spending like this in peacetime is unheard of. This spending coupled with a weak dollar, growth, and tax cuts, sets us up for raising interest rates. It sets us up for major volatility. It sets us up for extreme pain in the event of a downturn because our debt and deficits will explode, possibly grinding our economy to a halt.

What it doesn’t set us up for (not in the least) is the future. And that is why baby boomers are the most selfish generation.


More fun news from Washington. Now that we’re looking at the budget, it turns out this tax cut is going to cost us more than we thought.

From the Washington Post:

“[The budget] projects that tax receipts will be $US314 billion lower in 2018 than it forecast last year and almost $US400 billion lower in 2019. The White House even projects that tax receipts will be $US200 billion lower in 2027 than forecast last year, even though it had promised that the plan would fully pay for itself by then.”

Of course, this is with the completely unreasonable growth projections of eight years of 3% GDP growth with only mild inflation and just two recession years. Any economist will tell you it’s the height of delusion, and it’s all so this generation can sack the future to ensure that those who already have, have even more in the present.

Everything your parents (especially the Republican ones) told you about fiscal responsibility was a convenient lie. Millennials, go buy yourselves some Supreme on eBay, treat yourself to all the avocado toast you can find, go cop all the sneakers you desire. Nothing matters. If there is a future we’ll be broke in it anyway.

You see, what my source fears, and what the market now has to factor into its great collective consciousness, is something like what happens when you give a five year-old all the candy in the world and then try to figure out when they will pass out after the sugar rush.

This is what the market is in the process of trying to come to grips with – the fact that we’ve foolishly, selfishly, recklessly set ourselves up for a moment when we will (eventually) crash.

A history of entitlement

It would be unfair to blame this mess entirely on the Trump administration and its atrocious economic policy. Indeed, this selfishness has been a feature of the baby boomer generation since the 1970s. It’s just that now, in what is likely some of the generation’s last gasps in the seat of power, they’re really doing their worst.

They learned it from an economist named Milton Friedman. Toward the end of the 1960s and in the early 1970s, Friedman was the champion of a school of thought in economics called neoclassical theory.

According to this theory, every human action is motivated by selfishness. As such, all humans can be motivated into doing anything as long as there is an economic incentive for it. In fact, no one does or should look out for the good of the collective – corporations should worry only for their shareholders and not for their workers or their customers, for example. Individuals should think only about their own bottom line. It’s all that matters to them really, anyway – the me, here, and now.

Slowly, we are learning another way. Behavioural economists like Richard Thaler, who won the Nobel Prize in economics last year, see humans differently and are slowly convincing the world that this highly logical selfishness is not what motivates humans. Instead, they say we are predictably irrational creatures who sometimes value values over dollars. It’s a nice way to think about individuals, it’s an even better way to make policy for society.

It sounds like something Bill Clinton referred to it in his acceptance speech for the Democratic Party’s presidential nomination in July 1992:

“America was the greatest nation in history because our people had always believed in two things – that tomorrow can be better than today and that every one of us has a personal moral responsibility to make it so …

“Of all the things that [then Republican President] George Bush has ever said that I disagree with, perhaps the thing that bothers me most is how he derides and degrades the American tradition of seeing and seeking a better future. He mocks it as the ‘vision thing.'”

It isn’t vision Bush was mocking, it was the future. At least, that’s what the market is telling us. This short sighted entitlement has even the Masters of the Universe – who will benefit more than most – turning in their GOP “fiscal conservative” cards and worrying about their great-grandkids. And they should do all those things.

We’ve been saying that baby boomers are the most selfish generation for some time. Now do you believe us?

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