Those darn boomers. For decades, they've dominated pop culture, politics, the economy and the media, and even now, as they finally edge their way toward retirement, they refuse to let go.
In fact, chastened by the economic downturn, they're refusing to retire.
Felix Salmon points us to a very downbeat assessment of the U.S. economy from former Merrill Lynch top economist David Rosenberg. There's plenty of distressing analysis to ponder in his 2010 outlook, but the most provocative point may be his analysis of how the boomer generation is coping with hard times.
The last time we had a consumer recession in the early 1990s, the boomer population was in their early 30s and they were still expanding their balance sheets. The last time we had a bubble burst in 2001 they were in their early 40s. Now they are in their early 50s, the first of the boomers are in their early 60s, and we are talking about a critical mass of 78 million people who have driven everything in the economy and capital markets over the last five decades. This cohort realize that they may never fully recoup their lost net worth, and yet they will probably live another 20 or 30 years.
So, what is happening, which is at the same time fascinating and disturbing, is that the only part of the population actually seeing any job growth in this recession are people over the age of 55. Everyone else can't get a job or are losing jobs -- there is a youth unemployment crisis in the United States of epic proportions and a record number of Americans have been out of work for longer than six months in part because the "aging but not aged" crowd is not retiring as early as they used to. My contention is that many retirees who took themselves out of the workforce because they believed that their net worth would provide for them sufficiently in their golden years are redoing their calculations and coming back to the workforce to make up for their lost wealth. They are seeking income in the labor market, not because they want to but because they have to in order to satisfy their retirement lifestyles.
There's no stopping the "me" generation. In the '60s they got all the good drugs, in the '70s all the sex, in the '80s all the money, and now, in the waning days of the aughts, they won't let go of all the jobs. It's goes without saying that during the next decade they'll gobble up all the good healthcare.
Felix Salmon looks at this picture and becomes as glum as I've ever seen him:
I'm not optimistic that those of us in the post-boomer generation will be able to rekindle America's historic rates of growth even as the percentage of the population of working age continues to dwindle and the boomers continue to demand the lifestyle to which they have become accustomed.
The point here is that while most recessions are cyclical phenomena, this one could mark a secular turning point -- the beginning of the end of America's hegemony in the global economy and the capital markets. And the turning point has come too early, before the rest of the world has generated enough internal momentum to take America's place.
I am not sure that the end of any "hegemony" is necessarily a bad thing, and it would not surprise me to see China and India fill the leadership gap a lot more quickly than anyone expects. As Rosenberg notes in his dour assessment, the Chinese are already buying more cars, more computers and more big-box appliances than Americans. As the American boomers reluctantly fade, kicking, biting and scratching, there will be a new generation to take their place. Conspicuous, self-involved consumption abhors a vacuum.
UPDATE: A note concerning my despicable boomer hatred.