The Saeculum Decoded
A Blog by Neil Howe
Apr 232010
 

I’m always amazed at all of the interesting ways the moral rectitude of Boomer (born 1943-1960) comes back to bite them.

A couple of random examples:

  • We once wanted to protect the freedom and privacy of college-age youth (and inspired FERPA and other legislation to ensure this).  Now, guess what, we’re angry that we—as parents—have been stripped of our God-given right to see our kids’ grades and health records.
  • We once believed that society would function better if everyone were a bit less inhibited about sex—and more transparent about what they do as leaders.  Then came Bill Clinton and Monica Lewinski, which nearly persuaded Boomer-dominated Congress to impeach a President for being a bit less inhibited… and a bit more transparent.

All of this brings to—enough silly preamble—my latest example: The “scandal” at Goldman Sachs.

I would wager to say that, back in the 1960s and 1970s, nothing infuriated Boomers more about how the American economy was run than the idea that powerful greasy old men, dressed in oversize pin-striped suits and hidden away in smoke-filled rooms, essentially made all the strategic decisions about where capital would flow and (therefore) what would be produced and consumed.  These anonymous titans, from their “commanding heights,” claimed they exercised prudent and responsible judgment, but their very paternalism just infuriated us more.  We wanted to blow it all up.

And guess, what?  We succeeded.  The ascendancy of Boomers as voters and leaders since the late 1970s has coincided with a radical deregulation of our economy, especially in those areas, like investment and finance, where trusted “fiduciaries” were supposed to take care of others.  In the new Boomer world, the market was the great leveler and everyone was liberated to take care of themselves.  Today, you buy and sell on ebay as you wish, you invest your 401(k) money as you wish, you purchase and liquidate hotels or firms as you wish, and you can even invent new financial instruments (this brings us to derivatives) to gamble or hedge or arbitrage against any event you wish.  Goldman Sachs, run by G.I.s back when Boomers were young, was your typical “investment bank.”  It was supposed to watch out for the rest of us and steer capital accordingly.  Now Goldman Sachs, run by Boomers, is no longer really an investment bank at all.  It’s just a hedge fund and its purpose is to make money, just like everybody else.  And let’s face it, because everything is deregulated and competitive, there’s no real money to be made in investment banking anymore any way.

And now we’re shocked that GS set up a derivative that it sold to clients on both the long and short side?  That it didn’t warn these billionaire speculators that they might lose money?  And that they, GS, might be taking the other side of that transaction?  (We’re not talking about widows and orphans here.)  This is crazy.  Boomers set up this new world.  Many Boomers have made billions off it.  And, so be it, other Boomers should be allowed to *lose* billions off it.  Yes, a deregulated hands-off financial system may make it easier for the next Steve Jobs and Bill Gates to get start up funding (something that wasn’t easy for them back in the “bad old days”).  But it also makes it easier to lose vast amounts of money on bad bets.

You can’t have it both ways.  Nothing infuriates Americans more than the idea that, for these very rich 50- and 60-somethings, we’ve privatized risk on the up side but socialized risk on the down side.

Boomers should stifle their shock.  It’s like being bothered by the sight of Bill Clinton caught with his fly open.  Boomers have taken America all the way here on that whole long crazy trip of theirs.  And now they have to accept the consequences.

In the longer run, Samuelson’s final question looms large: “But if Wall Street can’t control itself, someone else will.”  Prediction: Come the next First Turning (the High), some new institution (maybe a new government agency, maybe some new business cartel) will be in charge.  Which means that, come the next Second Turning (Awakening), the young [Prophets] of that era will have something to rage about.

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  • crocodilechuck

    Sorry, in this case you've missed the point:

    http://www.ritholtz.com/blog/2010/04/10-things-

  • damnyankee

    Oh no no no….

    Your much to kind.

  • Karen

    I'm several chapters into Generations, still trying to wrap my brain around it and its implications. Even a partial understanding is affecting how I see things. For instance, I read a magazine blurb today about a scientific study where people were given social situations (some personal, some sociological) and asked about solutions. Older (Boomer) generation participants were more likely to compromise and see things from all sides, leading the study to conclude that age brings interpersonal wisdom. Maybe, but how much is due to generational personality differences and how did the researchers own generational personality affect the outcome of the study? That never would have occurred to me before. I'm a little overcome and have many questions. I'm so glad you're talking about this online!

    Here are two to start: I don't understand how Boomers, a spiritual awakening generation, have also become so self-serving. Aren't they supposed to be the Gray Champions for the next secular crisis? Yet they are orchestrating policy to serve their generation at the expense of younger ones, and botching what they have control of now. I have little hope, and planning for my retirement accordingly, that I'll see medical or social security benefits from the government in my old age because the Boomers are going to bust us. BTW, in case you can't tell already I'm a GenX.

    According to the pattern, we are approaching (in?) the next secular crisis that the Millennials will be key to solving, right? Do you think that crisis will be related to technology and the looming environmental crisis? Regardless, how does the tech boom, which occurred after you published Generations, play into the pattern?

    • dsohigian

      @karen – Generations is an excellent book, but I would also suggest reading
      “The Fourth Turning” which focuses more on the cycles of history. In that
      book you will find a section at the end that has “scripts” for the various
      generations. These are meant as guidelines for how the generations should
      act to achieve the best outcome in the cycles. Your example of the Boomers
      as Grey Champions is a good one – but the question is whether the Boomers
      can overcome their self-centered tendencies in elderhood and do what is
      right for society as a whole. Only time will tell.

  • Karen

    Also, referring to chapter 13 of Generations (yes, I skipped ahead), how likely is it that Boomers didn't “restrain themselves” but precipitated an early crisis with the War on Terror? Do you still feel that means the “risk of cataclysm [is] very high?”

    And I still don't get how the Boom generation previously defined by “free love” and “openness” you now describe as “moralistic” in midlife. How did they make that shift?

    Thanks! (I'll go look at the chapters I skipped to see if they answer some of my Boom questions too.)

  • Brian Rush

    It’s a mistake to regard any generation as a monolith, Neil, particularly ours. When have we ever been in full agreement about anything as a generation? To refer to your “silly preamble,” no, Boomers did not once want to protect the freedom and privacy of college-age youth and then later become intrusive parents. Some of us, when young, did the one. OTHER Boomers, in midlife, did the other. No, Boomers did not pursue sexual freedom when young and impeach the president for it in midlife. Again, that was different sets of Boomers. (President Clinton himself belonged to the first set, and quite obviously still did so in midlife.) Hippies did not become yuppies. Draft-card burners did not become Tea Party types. We’re a whole bunch of people — that’s where the term “baby boom” comes from, remember? And there’s very little you can say that will be true about all of us.

    Similarly, it is wrong wrong WRONG to identify those responsible for the current financial scandals with those who objected to the “greasy old men” calling all the shots back in the Awakening. Back in the Awakening, those Boomers who are now responsible for the scandal didn’t want to blow it all up, they wanted to BE those greasy old men, and now they’ve succeeded at that ambition.

  • bakingjan

    As Billy Preston said back in '73..

    “I got a song ain't got no melody, I'ma gonna sing it to my friends… (repeat)
    Will it go 'round in circles? Will it fly high like a bird up in the sky? (repeat)

    I got a story ain't got moral, let the bad guy win every once and awhile… (repeat)
    Will it go 'round in circles? Will it fly high like a bird up in the sky? (repeat)

    I got a dance ain't got no steps, gonna let the music move me around… (repeat)
    Will it go 'round in circles? Will it fly high like a bird up in the sky?” (repeat)

    • Karen

      That sounds like the show LOST. LOL! Of which I am a big fan.

  • You are right on, Neil. I guess the “shock” that Boomers experience has to do with their ideological personality. It seems they, in general, lack the self-awareness to do some critical self-reflection and see that their ideological mood-swings end up erecting political institutions that last longer than these mood swings.

    It's like so much self-medication to make themselves feel as if they've solved the problems. But as a Gen X member tired of the left-right game and the incumbent monopoly that keeps growing government without taking the time to drill down deep to the roots of the crisis of the moment (in this case, GS fraud accusations), I am eager to see our generation aggressively displace the boomer mentality and the ideological media environment it has created.

    I have kids I want to handoff my country to in a shape that is better than this one, and I am ready to accept a 20 year grind to sort out the results of the boomer mood swings, but I am no longer willing to accept the ideological left vs. right narrative that has been erected to support these mood swings.

    Too much is at stake. No pun intended, but consider this a stake in the ground. Boomers have no more right to ruin the world than any other generation. So it's time a new perspective, a new narrative, and a new set of technical capabilities come to the fore to address the new crises that emerge moving forward.

    Alright, done with my rant. (but if you want to read more, come to http://adeolumen.com/)

    On a positive note, I am glad to be here reading your thoughts as they unfold. There are far too few voices like yours in the mix. I pray yours gets more amplified as we proceed.

    • dsohigian

      @Mark You represent Gen X very well indeed!