Reply to Wow! Anyone else listen to the Diane Rehm Show today?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I don't know. My DH was in financial services so we got hit with the earliest wave of this crap and it basically bankrupted us in our 40s. We know we will work until we're 70, at least, if we ever retire. But, I was also born into foster care, was very poor during my childhood, graduated college in a recession ('91), took years to find that first job, and have basically struggled to put food on the table for most of my life. None of this is news to me. I say all this only to show that I'm no pollyanna who lives in some fantasy land.

Yet, I still think the gloom and doom talk about the economy is hyperbolic and unrealistically pessimistic. America has a LOT going for it, as do Americans. We have much better incomes than most of the world, we're the best market in the world, and we have an unparalleled capacity for innovation and entrepreneurialism. Plus, our competitor nations are aging much harder and faster than us, and we are far better at integrating immigrants, which gives us an external source of labor that most other aging economies don't have.  In the long run, we are really in a good position.  Yes, we need to improve education (especially grade inflation, IMHO), but there's too much looking at our weaknesses and not enough looking at our strengths, again IMHO.

In the short term, I think that what happened is that we all forgot that the economy doesn't always grow, we spent too much on consumer debt, and now we're in a phase where we're all knocking that debt out. Once we get into a better equity position on our homes (paid equity, not market) and with our credit cards, I think things will get better. The private sector is creating jobs (it's the government job losses that drag those numbers down), which I think is very important.  Also, the private sector has been squeezing blood out of a stone in terms of productivity per hour, and will have to start hiring at some point. It will be temporary work, but as businesses realize they can afford the "extra workers" things will calm down. I see a few more years of anemic growth (2-3%) as people knock debt out and businesses adjust their workforces, but I think we will return to a better equilibrium point much sooner than many people might think given how dark it sometimes feels now.  [/quote]

I admire your resilience, but ... your points about our incomes, our market, etc., are mostly backwards looking and IMO do not account for the fundamental shifts in the world economy, including that we produce very little now, we have very poor math, science and engineering education and workforces, the jobs being created are not those that will sustain long term growth, etc.

I'm much more pessimistic than you.  I think we're pretty well fucked for a long time to come, at least for millions of current and formerly middle class people who will struggle for years for any semblance of the life many of us have been lucky to lead.  I'm lucky, I'm close to retirement and well funded with stable employment and I count my blessings daily, but the extent of the disclocation and misery around us, and to come, is just staggering to me.

[/quote]

Be as pessimistic as you like. But don't confuse your emotional state with the state of the world. Without giving too much away, because it might identify me and because I think your pessimism is coloring your views in a way that means I won't get listened to if I did lay out the full case, suffice to say I study this stuff all day every day and have for decades. There are certainly things to worry about in the LT trends - like how we're going to pay for the health care of the baby boomers, particularly when they are in their final 5 years of life and demanding extreme medical measures, which is very expensive - but there is also plenty of strength in the long-term picture, mostly that never gets reported. For example, your point about STEM education. Did you know that we're graduating 4 times the number of STEM grads that we did in the post-Sputnik era - which people think is some kind of golden age for science - and that scores on national tests are at an all time high and have been improving (or at least staying the same) for four decades? I know that's not the mainstream narrative and you probably won't believe it, so I encourage you to look at the numbers yourself.  Look - there can also be a kind of "bubble" of negativity that feeds on itself and makes it all seem scarier and worse and never-ending than it is. Just like in the good times, when people think the gravy train won't stop, people have a hard time seeing the end of the bad times too. That's just the nature of the human psyche.

Bottom line, I think that no one yet knows what Gen Y can do because they are still at the beginning of their working years and the economy has given them a whopper of a negative position from which to start. But, they are a very energetic, smart, and creative bunch and I think they are going to reshape the country and the globe. Yes, it's true that we won't have the lead we had in post WW2 when the rest of the world was in shambles and we had an enormous head start because we weren't, but I think it's a bit of boomer arrogance, frankly, to doom us all to lives of stagnation and awfulness just because our future doesn't look like your past. [/quote]

Agree 100%.  Stop reading newspapers and reading the internet for your economic info, people.  Here's something that I believe, and pessimists won't, but check back here in 10 years and I will bet my house that I'm right:  With the boomers retiring, by 2020, just about everyone who wants a job will have one, at high wages.  Now, these wages will actually be inflationary, which will stink for some people, but will be excellent for others.  (Those of us with fixed rate mortgages, for example).  By 2025, we will be incentivizing immigration to get all the people we need, and will be competing for the top talent of other countries with incentive packages to get them to come here.[/quote]

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