I just finished reading a very good article in The Atlantic about how the Boomers have shifted upward social mobility to a backwards slide for younger Americans. The author aptly points to government interventions like stricter zoning rules for housing, increased legal requirements for relatively unskilled work, high incarceration rates, high student loan debt and the increased tax burden that inevitably goes with the expenses these government policies necessitate, as the root causes of the problem. I have to hand it to you Lyman Stone. Fantastic job of identifying the root causes of economic struggles of Gen X'ers and younger. I do have some commentary on what was mentioned in the article, however, because I think that you're too generous to the Boomers.
Zoning and Land Use Regulations
First off, Lyman characterizes Boomers as having "reasonable" concerns about the policies that they've either started or expanded upon, but I disagree, and here's why. It's not "reasonable" to expand zoning laws. Zoning laws basically make it illegal to do what you will with your own property. This isn't now, nor has it ever been acceptable behavior in civilized society. It's a form of unprovoked violence and aggression against people doing peaceful things. You can't tell someone they aren't allowed to build a tall building because it will ruin your view, or tell them they can't build more than one residential structure on their lot to "preserve the character of the neighborhood". That's like forcing men not to wear pink because you think it's too feminine or legally prohibit women from participating in competitive sports because it's too masculine. Like zoning rules, these practices should be frowned upon in society because they attack individuals' right to self-determination.
Still worse is the reason behind the zoning laws. They're not really about these aesthetic concerns after all, which in and of themselves aren't so bad. They're really about barring competition by newcomers in local housing markets. People who already own property enact these rules to keep their own property values high, not by investing in and improving them, but by preventing others from adding new housing, by force I might add. If people really wanted to improve their neighborhoods, they could peacefully invest their time and money in their own properties, not bar newcomers from doing the same.
Increased Education and Licensure Requirements for Work
The next unreasonable crime that Boomers have expanded upon in society is the subsidizing of education while escalating the requirements needed to participate in various job markets. Similar to the zoning and land use regulations, they interfere by force with the individual's right to self-determination in what type of work they do. Also similarly, they use force to prevent participation by newcomers in order to protect more established individuals from competition.
Something also not mentioned by Lyman in the article, but I thought was relevant to this discussion, is the age at which one is even eligible to work has increased well into adulthood. Unless you work on a farm, as a younger teenager, you're legally prohibited from work, and even as you get into the mid-teens, you're limited in the number of hours to way below anything practical for both employer or employee. I know from my own personal experience in New York State over 20 years ago, the government's prohibition of me to participate in the work force as a teen severely set me back financially as I entered college and then the work force. Without assistance from my parents, there's no way I could have payed my own way well into my 20's, and since my parents were of modest means, the going was pretty tough. This problem has escalated for teens coming up on the world today and the rules are more restrictive and numerous. These kinds of laws, again, serve to interfere by force with a person's right to self-determination and keep younger competitors out. Coupling these laws with increased education subsidies and requirements further infantilizes the youth of our society by extending the time before they even start work to half a decade into their adulthood in cases of people with bachelor's degrees.
Furthermore, people with graduate degrees, an increasingly necessary credential, spend their biologically most productive mental and physical years sitting in lecture halls listening to some professors drone on about what's going to be on a test, rather than learning to actually contribute to society in some productive way. It's no wonder that they usually don't find jobs when they graduate. They're not qualified to do actual marketable work, and might never be because their prime learning years are over, all because the authorities (mostly the boomers nowadays) in their lives kept them from participating in society through coercion and manipulation, and therefore preventing young people from deciding how their own lives should go. This is an incredibly horrific situation and it will get precipitously worse as these effects become more pronounced and the older, more competent workers leave the workforce for health reasons.
Over two hundred years ago, Adam Smith wrote his economic treatise, Wealth of Nations. In it, he lamented the lack of mobility between professions that had been put in place by various forces in society at that time. During that time and the time that followed, many of these inhibitions were released from people in North America and Europe, and this, among other things, increased human freedom to such a degree that it led to the greatest expansion in human wealth and well-being in the history of mankind. We are all continuing to reap the benefits of this release from economic tyranny. With these recent prohibitions on career mobility we've started back down the treacherous road towards the human bondage and squalor that most people lived in before Smith's Wealth of Nations was written. If we continue, we are setting society back at least a couple hundred years of progress in the arena of labor freedom.
High Incarceration Rates
I think this is the most ironic of all the government policies that the boomers have reined down upon our society, because it is due to a persecution against a cultural norm that they themselves ushered in; the drug culture. Yes, the very people who "expanded their minds" with recreational drug use in the 1960's and 1970's, went on to persecute their own children and even their own for participating in those recreational activities. Almost all of the non-violent "criminals", and nearly half of all inmates incarcerated today are there specifically because of some sort of participation in what are called "drug offenses".
Voluntarily consuming chemicals or herbs for recreational purposes is a peaceful activity. I don't mean peaceful in the sense that all of these activities are beneficial, or that the people consuming the drugs should be anointed as saints. I mean peaceful in that they aren't acting in aggression towards any other human being when they consume the drugs.
It follows then that any transactions of such substances are also peaceful activities. Adults with full knowledge of the risks associated with recreational drug use are not committing a crime when they purchase drugs. And so dealers who sell these drugs to them are also not committing a crime when they sell these people the drugs. Obviously drug dealers aren't exactly known for being the most peaceful people in the world, but this is specifically because government prohibition creates the black market for these predators to function within. If normal people were legally and publicly able to sell drugs without fear of persecution, these predators wouldn't have a business model and their power would be gone.
What this means is that our government has roughly quadrupled the incarceration rate and as of 2008 has been spending $41.3 billion per year to persecute people for a peaceful activity. Let that sink in for a moment.
While Nixon started the "War on Drugs" and some of the laws were written even before his time, the Boomer generation doubled down on and expanded the drug war to absurd levels during their tenure of political power. I remember Ronald and Nancy Reagan on TV when I was kid selling the idea to the American public, and everybody cheering them on, "rah rah!" There is nothing "reasonable" about these atrocities. The cost in dollars and especially human lives is immeasurable at this point. In my opinion, it is the single worst crime against humanity that our government has ever committed, and that's really saying something. The United States, as a result, has a higher incarceration rate than all other countries including North Korea. That's not a contest I'm excited to be winning at, and I think most Americans would agree. The economic cost to the rest of us is only a secondary consideration, as the human cost is so incredibly enormous here. Again, the Baby Boomer generation owns this problem currently, because as their power has begun to wane, younger people are luckily voting to repeal these draconian practices, finally. Hopefully we do away with the concept of "illicit substances" altogether at some point.
High Debt Burden
Our high debt burden can be directly linked to government policy by itemizing the most costly sources of debt and the policies surrounding them. Every time I look closely at government policy relating to the things that increase in cost over time, there is always a policy to be found that has helped to cause the problem, or is the sole cause.
Let's start with education costs, since these ones effect young people more, and increasingly so. The government very heavily subsidizes higher education via student loans, financial grants, research grants and more. When the government subsidizes these things, it hides the cost to the end consumer because they don't see the price that it actually costs, they see only the price of what they pay out of pocket initially. Since student loans are deferred during attendance, students don't even see the price of these either until they're all done and it's too late for many to see how it will effect them. When people don't see the price, the cost of something has no effect on their purchasing decisions, and so market forces that would normally keep costs in check disappear altogether. This is a problem that repeats again and again every time I look at it. You hide prices, and costs go up, without fail.
Then there's housing costs. During the last financial crash of 2008-09, precipitated by the subprime mortgage crisis, the government bailed out the banks by using direct loans and payment along with buying up all of the mortgages via entities Fannie Mae and Freddie Mac. The financial correction that occurred during that time was a necessary one because the cost of housing had spiraled out of control due to speculation. When people found that they couldn't make their mortgage payments after they were granted these subprime loans with zero down payment, en masse, down tumbled the financial house of cards as well. This is as it should be. We don't want housing to be uncontrollably expensive, and we don't want people to spend more than they earn while saddling taxpayers (everyone else in society) with the debt of their mistakes. We want people to enjoy a higher standard of living with less money, or at least that's what I want for myself, so I think everyone else deserves it too.
The government seems to disagree with the notion of affordable living, because they propped up the bubble to keep housing costs very high and protected the big lending institutions who gambled in that market from paying for their mistakes. Coupled with the zoning laws mentioned earlier, housing costs are even more ridiculous than at the former market peak in most markets, and so we're worse off than ever, or at least young people are. So once again, the government used coercion (through taxation and spending) to hide the true cost and prop up high prices for an asset. Hmm, I see a pattern forming here. The Boomers pretty much own that entire debacle, and we're all continuing to pay the price for it, whether we know the true cost or not.
The third biggest cost for most Americans is healthcare. We started out with a relatively decentralized market economy in healthcare, similar to any other labor market. Yes, doctors are simply providing a service, and so it should be up to the consumer to decide who, how much, and the quality level that they are comfortable with.
The first strike against that market economy was taxation. The income tax that was instituted about a hundred years ago started to push us in the direction of costly healthcare. You see, healthcare payments were exempted from income tax, and in order to do an end-run around this cost, employers were forced to pay their employees through health insurance by paying for it directly, thus remaining competitive in their ability to retain workers. This serves to hide the cost of the insurance quite a bit because the actual employees never see the payments being made by employers, they just see the benefits.
Now the Boomers weren't responsible for this or other things like extreme levels of licensure to allow medical professionals to function, but they do own the Affordable Care Act. Instead of getting rid of the income tax and all of the other regulations that were obviously escalating the price of health insurance/healthcare; they decided to use force to require that all people buy health insurance, whether they can afford it or not. Not only is this a beautiful example of Orwellian Doublespeak, it's also economic fascism. Economic fascism, originally made popular by names like Mussolini and Hitler, is the blending of government mandates with privatized enterprise.
The reason economic fascism is so dysfunctional is due to a very simple mechanism. It serves to privatize profits while socializing risks. By requiring everyone to purchase the product and enforcing the mandate using the state, the government eliminates the risks associated with being in that business. The cost of enforcement and customer retention, of course, is socialized and everyone is required to pay for it through taxes. The profits, however, are wholly in private hands. The taxpayer who pays for the enforcing doesn't get any of the profits. It all goes to the private enterprise. There you have economic fascism, our current system of healthcare. Congrats Boomers! You've emulated the worst humans in history with this one!
Future Debts and Obligations
I don't have much to say about this other than the fact that the future debt obligations look understated to me. Most projections of this nature make lots of assumptions to keep things relatively simple, but that's not how it works in the real world. Things often change, and when it comes to government debt, interest rates are a key one. If interest rates go up by even a few percent, to numbers that are still historically low, the government entities in this country would almost instantaneously and simultaneously become financially insolvent. Like in most Boomers' personal lives, their government policies are such that they cost more than the tax base is reasonably able to pay. At some point, not if, but when interest rates climb, kaboom! There goes the whole ponzi scheme, and guess who isn't going to pay for any of it? That's right, the Boomers. It's going to be the rest of us left to clean up that mess, because the Baby Boomer generation will be mostly too old to do anything about it.
Conclusion
Lyman finishes his article by stating how simple it is to fix these problems. He says "If the problem is too many senseless rules, then the solution is obvious. Strict licensure standards can be repealed. Minimum lot sizes can be reduced. Building-height ceilings can be raised. Nonviolent prisoners can have their sentences commuted." While on the surface those things are really simple, good luck with that. Libertarians have been trying to do this for half a century now, and nobody is listening. There are too many powerful entities, again mostly controlled by the Baby Boomer generation (although that's thankfully beginning to change), that will suffer if these simple changes are made, and so people will not vote to make these necessary changes. That's how our system works. The powerful groups rule, and the rest of us pay for their mistakes.
What I'd like to conclude instead is the real solution to all of these problems in my mind's eye. It is philosophical in nature, and I think it is a concept that is universally understood and accepted by society on a non-intellectual level. It is the concept of non-aggression. The Non-Aggression Principle, or NAP, applied to every facet of our systems of governance would immediately wipe out almost all of the ills of our modern society. We no longer suffer from scarcity, but we continue to harm each other using institutionalized aggression, and eliminating that will eliminate every one of the problems I talk about here. The Baby Boomer generation can atone for their sins by adopting the NAP en masse, and apply the standards we use in all of our voluntary relationships to every facet of our society. It's their opportunity to make up for a lifetime of political mistakes. I'm not holding my breath though. Barring some revelatory experience by an entire generation, we'll probably all just have to wait for them to blow the whole thing up in their continued ineptitude, then pick up the pieces and build it stronger, but here's hoping.