

The War on the Young - limist
http://mises.org/daily/4040

======
Alex3917
"Young people today will most likely become the first generation in US history
not to surpass their parents' living standards."

I sat in on a talk that Frank Luntz was giving last night. Everyone else in
the audience was 40+, well educated, all at the top of their fields. When
Frank asked them how many thought their kids would have a better standard of
living than they did, only 6 of the 120ish people in the room raised their
hands. Frank's comment was, "If you're all in the top 1%, imagine how the rest
of America feels right now."

~~~
marciovm123
This is correct if you consider "better standard of living" to mean "better
standard of living relative to rest of the world". In terms of actual
consumption and productivity, young people in America will have far richer
lives then their parents, because the exponential increase in technology we
see every day is creating wealth at a ridiculous pace. Our parents did not
have iPods, cell phones, e-mail or social networks (facebook, hacker news).
Try living without any of these for a day to see how "rich" your parents were
at your age; who knows what will be around 20 years from now?

We take these things for granted and don't consider them "making us richer"
because they are widely accessible, and people have a tendency to consider
themselves rich only when they are richer then their neighbors.

~~~
markbnine
Ugh. Equating technology with wealth is extremely naive. Standard of living
refers to cost of food, housing, health care, etc.

~~~
abstractbill
Even if technology isn't _equal_ to wealth, technology certainly drives down
the costs of food, makes modern housing more comfortable and safe, and expands
the number of ailments that are treatable by health care.

~~~
jimbokun
Read Michael Pollan's "In Defense of Food" for a more nuanced look at the
relationship between "technology" and food. One of the reasons "food" is
becoming cheaper is due to eliminating much of the nutrition and through
ignoring the externalities of environmental costs.

The improvements in health care seem to be offset more and more by our poor
food, sedentary lifestyles, and fractured relationships.

Maybe technology has made it cheaper to build a house, but that seems a wash
as the dominant cost of housing is the property on which it is built.

In general, yes, technology improves our lives. But can not solve every
problem in and of itself, and can exacerbate underlying problems if misused.

------
asnyder
While interesting, some aspects of the article are misleading or meant to
incite. For example, the section talking about student aid mentions the
current administration's plan to increase student aid, but fails to mention
the proposal of doing away with the bank subsidies completely and thus
providing more aid instead of lining the pockets of bankers
([http://www.whitehouse.gov/the_press_office/President-
Obama-M...](http://www.whitehouse.gov/the_press_office/President-Obama-Meets-
with-Family-Struggling-with-College-Costs/)) contradicting the counter point
to his argument.

~~~
kiba
Won't this increase the demand for college education, thus allowing colleges
to raise their price even higher?

~~~
asnyder
I don't know. Perhaps. However, with the current economic conditions I would
think that many that attend school under normal conditions might not be able
to attend without aid.

I'm sure we can look at the numbers and come up with a conclusion.
Furthermore, there are many city and state institutions that have tuition
caps. In this situation I would expect more students to result in better use
of existing resources or the creation of more city and state institutions.

~~~
BearOfNH
_I'm sure we can look at the numbers and come up with a conclusion._

A long, long time ago I read an article comparing the increase in the cost of
college education vs. the published inflation rate. They were roughly the
same. Really. But this was a long, long time ago...Camelot.

After student loans came into existence this rough equality disappeared and
the cost of an education rose faster than inflation. Economically, that makes
sense. Subsidize something (education) and you get more demand. With a
somewhat inelastic supply of colleges, the price goes up.

Of course correlation is not causation. Many other reasons can be cited as
well. But once upon a time college, while still expensive, only kept pace with
inflation.

------
run4yourlives
>Young people today will most likely become the first generation in US history
not to surpass their parents' living standards."

I'm pretty sure that was Generation X. Myself at 35 being on the tail end of
that group; we're hardly "the young".

~~~
papaf
Myself at 39, educated above but living below my parents standards. I'm not
complaining since I'm very happy, but it is interesting that my generation is
already experiencing this drop.

House prices and a competitive job market are the main forces keeping my
standard of living lower.

------
DenisM
Look at the big picture: the aging of the population means that the eldery
must enslave the young, or they will have nothing to eat when they are old and
infirm. Long-term savings is a fictitious concept - nothing we produce today
will be of any use 40 years later so when you are old you will depend on the
young to provide your food. When that happens you better have a way to compel
them to part with fruits of their labor. Saddling the young with debt seems to
be the current retirement plan for the old. It ain't just about bankers.

~~~
hga
DenisM is talking about the principle that present consumption must come out
of present production. Yeah, there are some things that are neither consumed
nor depreciate quickly, like houses ... but who's going to pay grandma's
property taxes? To repair or replace her furnace? Replace her hip? Etc.

Note that DenisM uses food as his example and try to find his meaning instead
of the few exceptions.

~~~
DenisM
_present consumption must come out of present production_

yes, that's the starting point of my argument, thank you for phrasing it
clearly. The next step is that future demand for durable goods is not a good
savings mechanism for a number of reasons:

    
    
      1. The demand isn't large enough for a whole generation of people
      2. Those goods have to be stored and maintained, which is 
         costly and eats into the savings
      3. It may unpredictably lose value due to technological
         innovation, and if you made a poor bet you will starve
         when that happens
     

Therefore the premise of my argument is that the idea of long-term savings is
fictitious.

Absent that there are only so many way to defuse the demographic bomb:

1\. Saddle the young with debt by enticing them to spend beyond their means.
Later they are compelled to pay via social norms and coercion of the state.

2\. Collude on ownership of a crucial scarce resource such as land or oxygen.
Collusion is likely to kill the economy very quickly though.

3\. Make more babies. Costly in the short term, especially given that anyone
who is making babies is also under the opression of debt, and the more babies
the more crushing that debt is.

~~~
hga
You're welcome; it's not my phrase, just something I picked up in discussions
of this issue.

Although I should also mention "The Last Fool" concept. Those long-term
savings won't be fictitious _if_ you aren't the last fool left with them, i.e.
you find another "fool" to sell them too.

But as you note that's a very iffy thing, certainly not something you should
bank on, so to speak.

(Hmmm, you left out the Soilent Green option ... it's already being discussed
by "serious thinkers". And there are less unpleasant ways to abrogate explicit
and implicit promises to older generations.)

~~~
DenisM
Suppose I am in my prime years. Should I help design the social system that
opresses the young or the old? I will never be young again... and so the
Soylent Green option is not workable! The young are pretty much doomed, the
only question is as to the exact mechanism of oppression.

Alternative to debt burden would be oppressive taxes, but this has bad side-
effects as well:

1\. Taxes are not as discriminating against the young as situation dictates
(debt is _very_ discriminative)

2\. People actually feel angry when money is taken from them via taxes. They
are a lot less angry when they willfully spend themselves into debt. They even
feel guilty when they can't pay. Bottom line is that it's easier to enforce
because voluntary compliance is so much higher and political resistance to
"pay your debt" is harder to imagine than to "pay high taxes".

3\. Taxes depress economic development, while debt increases it (at the
expense of the boom-bust volatility).

So I don't really see any realistic alternatives to the debt burden.

There is a very remote hope that technology brings us basic necessities too
cheap to meter so that we don't have save for retirement. But that's really
out there.

~~~
hga
No argument with the above, except ... if you aren't paying into the fisc, you
just might find that your posture is not so great. In Jerry Pournelle's
CoDominion future history "Taxpayers" were in a class _way_ above those who
lived in "welfare islands".

I wouldn't assume our current political order survives this looming mess
(heck, many including me argue it didn't survive the Civil War or FDR).

------
jsm386
_Young people today will most likely become the first generation in US history
not to surpass their parents' living standards._

I've seen this phrase, in various versions, in lots of places over the past
few months. Is this a new proposition, or was the idea floated (incorrectly)
during the Great Depression or the 1970s oil crisis/stagflation downturn?

~~~
DanielBMarkham
This is a new idea. The current generation is the first generation that
everybody thinks will not do as well as the preceding one.

During all of the economic problems of the past, polls consistently shown that
people, as bad as things were, expected their kids to have a better financial
life than their own. This is no longer true.

~~~
shawndrost
Citation?

~~~
DanielBMarkham
Can't easily find the historical evidence, but here's the current data:
[http://pewresearch.org/pubs/311/once-again-the-future-
aint-w...](http://pewresearch.org/pubs/311/once-again-the-future-aint-what-it-
used-to-be)

Note that the data is different depending on whether you ask "will children do
as well as their parents?" or "will _your_ children do as well as their
parents?"

------
kiba
Even with those massive disincentive against me, I still dream of changing the
world through my games and getting rich in the process.

------
mark_l_watson
Good article, as usual for mises.org (I credit their material a few years ago
for motivating me to get out of the stock market).

I am in my 50s, and one of my common little rants is how selfish my generation
and the next older generation is. My children and my young grandchildren will
indeed have to pay for our collective excesses. Really unfair.

I believe that it is human nature to care for younger generations, so the
current wave of selfishness is really sick and unnatural behavior. Two
generations of gluttons.

This selfishness is on personal, corporate, and government levels. The worst
is starting unnecessary wars on credit, but the general blame trickles on
down.

~~~
kingkongreveng_
You generation is screwed, too. Social security net revenue went negative this
year. You'll never see a dime. Medicare will also be bankrupt much sooner than
anyone thinks.

Only the "next older generation" has made out on these ponzi schemes.

~~~
mark_l_watson
You are right about the next older generation getting even a better deal, but
I am not complaining on my own account: when I graduated from college in the
1970s, it was really easy to buy a home, and generally have had an easy life
style.

I have to admit to a bit of a morbid fascination about the economy: I expect
that in the USA that local governments will go bankrupt, the federal
government will devalue the dollar to get by, etc. Thing that I have no idea
about: will this happen in 1 year, 10 years? ...

------
jsz0
I just don't get libertarians. They're great at pointing out problems but
never seem to offer realistic solutions. No doubt most of these issues he
raises are valid concerns however what's the alternative? The free market will
magically fix everything? We know from the Great Depression and in more recent
times the free market is only concerned about maximizing profits for
themselves. The government may not be supremely efficient at running some of
these things but at least we have a say in the process. Most of the issues he
cites exist because the free market failed people in the past and there was
public outrage over a government that allowed it to happen.

~~~
Semiapies
_I just don't get safety freaks. They're great at pointing out dangers, but
never seem to offer realistic solutions. No doubt many of the activities they
criticize are harmful, but what's the alternative?_ Not _hitting ourselves
with hammers and_ not _walking barefoot on rusty metal and hoping that our
bodies will somehow magically avoid trauma and tetanus?_

Seriously - in the real world, a perfectly valid way to solve a problem is to
stop doing the thing that causes it. Why the defensiveness because a
libertarian pointed this out?

~~~
bwh2
The author complains about Medicare, Social Security, student loans, and the
War on Drugs. Whether or not you agree with those programs, do you think it's
practical to just stop them? While I agree with many libertarian sentiments, I
rarely find a libertarian argument that even attempts to explain a transition
process.

~~~
Semiapies
A better question might be "Do you really think it's practical to _continue_
them?", but to answer you: yes.

As for transition processes, to be blunt, many random libertarians online
don't bother discussing them because they know it will probably never come to
that. If you want good discussion of such things, places like the Mises
Institute and Cato.org ( _full_ of policy wonks) would be good starting
points.

~~~
bwh2
For instance, I don't think that continuing the War on Drugs is practical. But
I recognize that ending it is a gradual process, not an overnight one. It's
entirely impractical in many regards (economic, social, political) to just
stop the War on Drugs overnight. In my opinion, people who are going to
complain about something should offer some practical alternative.

~~~
Semiapies
Ah, so you completely ignored my post beyond that question. Fair enough, I'll
return the favor:

 _"people who are going to complain about something should offer some
practical alternative"_

Meh. When the overwhelming majority of the public does not believe that things
like the war on drugs _are_ destructive programs that should be stopped, why
waste time on trying to satisfy the rare person who says he already agrees,
but demands we all have a presentation on a detailed
decriminalization/legalization scheme decades before it's even worth talking
about?

~~~
bwh2
I don't advocate having a detailed decriminalization scheme, but an overview
or outline would be nice. To that end, I think identifying clear steps, as
opposed to a strictly ideological argument, is a good way to convince the
overwhelming majority that the change is necessary and good.

But of all those examples, the War on Drugs is probably the easiest to "just
stop," so to speak. Putting an end to Social Security overnight means that
grandparents around the country won't have any source of income. That's a good
example of where just ending a program overnight seems impractical to me.

To address your previous point, I have spent some time on Mises before, not as
much Cato. But not enough time on either to really comment about specifics on
their proposals or lack thereof. I suspect the reasoning you presented is
probably accurate, at least in some part.

~~~
Semiapies
_"I think identifying clear steps, as opposed to a strictly ideological
argument, is a good way to convince the overwhelming majority that the change
is necessary and good."_

Not sure where anyone made any "pure ideological arguments", especially since
this is a thread off a very consequentialist blog post...but no, having a plan
doesn't convince people that action is necessary or desirable.

Plans are what you discuss after people generally agree that change must
happen; the public at large doesn't _want_ most changes libertarians are
interested in, so trying to sell them on how to carry out those changes is
hugely premature.

------
maurycy
Good article.

I'd add one more bit, though: it's not between youth and old; it's between
risk takers and risk avoiders.

The last thing the majority dreams about is risk. So the gov takes care and
tries to minimize the risk. The minimum wage, enormous benefits for not very
innovative public workers, interest rates' manipulation etc.

Of course, if you minimize the risk you also minimize the social mobility.
It's hard to get a reward, without risk.

~~~
joe_the_user
Oddly enough, the post-WWII generation did much better than the present
generation without being notable for risk taking.

I mean, declining education levels, deteriorating infrastructure, and many
other causes might be pointed to for the decline of America. Considering that,
as you say, only a minority is ever going to risk-inclined, the decline of
America can't be chalked up to risk-aversion.

And also, when the health care system declines, the risk of catastrophic
becomes something that an individual isn't very capable of managing.

~~~
hga
That's not a very telling point, since we were the industrial nation least
trashed by WWI, and were considerably strengthened by how the war compressed
say half a century's worth of technological progress into a half a decade.

For example so very many things came out of RADAR R&D ... *including microwave
ovens :-), but also stuff that fed into the Whirlwind computer project (the
first practical computer), etc. etc.

------
efalcao
I think I'm going to start redirecting a portion of my savings to some sort of
a basket of foreign currencies.

If in 10 or 20 years, we don't clean up our act and a huge part of my taxes
are just servicing debt, I'll just move somewhere else. I don't even care if
the taxes are higher in another country; so long as I get good value for my
taxes paid.

------
xenonite
thanks for the article, but it has right the opposite direction than what is
complained about here in Germany.

we complain about the newly introduced Bachelor/Masters system here. We
complain, students will now have less time to study and think about the
problems. Also having to pay more money than before, we say that less people
will go to universities, thus lowering education standards.

------
pmichaud
I think the minimum wage argument was weak, but he's basically right: young
people have a whole bunch of problems to look forward to.

~~~
bwh2
Agreed. I read "Laws dictating the minimum wage and regulating child labor
play a significant role in preventing young people from finding jobs" and
rolled my eyes a little.

~~~
hga
OK, so tell me why we don't have movie ushers anymore.

Price controls _always_ produce shortages; in this case, there's a whole bunch
of jobs companies just can't afford to hire people to do any more because the
total cost of labor is higher than the return. Is this so hard to understand?

Is it a moral position to tell an unemployed youth that if they can't get a
job at $X wage there's better off without one? Have you looked a youth
unemployment rates, especially recently?

~~~
bwh2
Well, first of all, you're using the phrase "youth employment," which I think
is reasonable and fairly normal. The author used the phrase "child labor,"
which I rolled my eyes at because the author is seemingly oblivious to the
negative connotation of that phrase.

Second, I'm not even necessarily in favor of a minimum wage. I just think it's
bogus to blame our current economic woes on the existence of minimum wage.
It's a bogeyman that the right attacks at every opportunity, whether it makes
sense or not.

Edit: Also, you haven't provided any evidence supporting the claim that we
don't have movie ushers because of minimum wage or labor laws. You've just
provided ideological conjecture and arbitrarily placed the burden of proof on
me.

~~~
bwh2
Right, it's legally "child labor." But would you use that phrase in normal
conversation as though it doesn't have an uncomfortable, negative connotation?

~~~
Semiapies
If I were referring to _child labor laws_ in a blog post, as he was, probably.
If I come up with some weasel words for them, anyone paying attention will
pounce on that, suspecting my "real" agenda is to put orphans dressed in rags
on treadmills.

~~~
bwh2
This is kind of my point. I rolled my eyes when the author complained about
"Laws... regulating child labor." You said, "child labor laws," which I would
argue has a significantly different meaning than the authors phrase. But I'm
comfortably agreeing to disagree on the connotation.

Perhaps I would have understood the author's point more had he even bothered
to explain what laws regulating child labor he was talking about and why
they're a problem. Instead, he just skipped that and focused on minimum wage.

~~~
Semiapies
I think that's a fair point; detail on which child labor laws he meant would
strengthen his argument.

------
xenonite
the article says that accepting a low wage will make you independent. I
wouldn't conclude like that. Working with low wages will seldomly enable to
get a better standard.

If you aren't a top performer, you'd have to live forever with those wages.
One job is be enough for a living.

------
emilind
You guys know the mises.org folks are a bunch of racists, right?

------
hristov
Another one of those conservative anti-deficit articles that would have been
very timely if it appeared before the war started, but of course it appears
after the war and the incredible amount of money it is costing us.

Why did I never hear conservatives decrying deficit spending during the Bush
years, when deficit spending ballooned. No, then you had conservatives talking
about how the deficit does not really matter.

Now it is too late, the cat is out of the bag. We need deficit spending just
to keep the damn economy from collapsing, and no politician will have the guts
to just exit the wars.

~~~
TomOfTTB
I don't see this as Conservative as much as it's Libertarian (See the anti-War
on Drugs part for example). From that stand point Libertarians have always
been vehemently against not only the war in Iraq
(<http://www.thegreenpapers.com/Vox/?20030310-0>) but in many cases the one in
Afghanistan as well (<http://libertarians4peace.net/>). Libertarians in
general are non-interventionist in regards to foreign policy.

So I think your criticism is misplaced here

~~~
abstractbill
_Libertarians have always been vehemently against not only the war in Iraq
..._

Certainly not all of them though. ESR is the prototypical Libertarian in my
mind, and has written about how awesome he thinks the Iraq was is/was (for
example: <http://esr.ibiblio.org/?p=651>).

~~~
Semiapies
_"ESR is the prototypical Libertarian in my mind"_

You might pick a more representative prototype. Even someone as iffy as Ron
Paul makes more sense.

But yes, like every single other political group outside of pacifists, you
could find pro-Iraq libertarians. However, the huge majority of libertarians
were vehemently against the war in Iraq. Many of them balked at the war in
Afghanistan.

(Also, a footnote: _Libertarians_ are members of the Libertarian Party,
_libertarians_ are people who have libertarian views.)

~~~
DanielBMarkham
Note: I'm a registered independent and little "l" libertarian.

I supported the use of force in Iraq and Afghanistan based on utilitarian
principles -- I felt (and still feel) that less people will die and less pain
would be inflicted by the use of violence in those areas) I find that the
careful and appropriate use of force by the state does not conflict with my
libertarian views.

So there's another example for you.

~~~
Semiapies
So?

I supported the Iraq war at first, and I was _very_ keenly aware how
thoroughly that put me outside of the libertarian mainstream.

~~~
DanielBMarkham
Perhaps Big L libertarianism, but not the vast majority of independents who
have strong libertarian leanings, I'd bet.

~~~
Semiapies
There is no such "vast majority of independents who have strong libertarian
leanings" outside of LP propaganda, just a small fraction of "independents"
who don't want to admit they consistently vote for one party or the other.

(Oh, yes, and a tiny, tiny fraction of libertarians, some minority of whom
care about the LP.)

~~~
DanielBMarkham
Really? Last I checked both major parties in the states heavily competed for
about 20% of the electorate who self-identified as independents.

Can't comment much on "fake" libertarians, though. I haven't seen much
evidence that they either vote the same way each time or not. It might be that
different candidates draw out different groups of these middle-grounders.

I'm not much on big-L libertarianism, mainly because so many of them are all
over the board on policies, usually taking the core ideas beyond where they
are practical. Libertarianism is best practiced when it has a healthy respect
for the social contract, such as the use of national force on occasion.

~~~
Semiapies
[http://www.themonkeycage.org/2009/12/three_myths_about_polit...](http://www.themonkeycage.org/2009/12/three_myths_about_political_in.html)
Which is not exactly news.

As for "fake libertarians", I really don't know whether you are or not, and
I'm not highly concerned - though many of your lines are reminiscent of the
typical Team Red "if you guys were just a little closer to our ideas, you'd do
such much better" shtick.

The simple truth is that actual, consistent libertarians predominantly opposed
the war. I'm no more interested in historical revisionism on that point than I
am in revisionism on the war itself.

~~~
DanielBMarkham
Nice link. True, but perhaps a little overstated. Independents are who they
are -- if they routinely vote one way or the other I'm not sure that takes
away from their self-identified independent status. Seems like splitting hairs
to me.

I'm not interested in revisionism either, and looks like you've failed to make
any kind of point at all here. I was simply providing another piece of
anecdotal data for your discussion -- which I've done.

------
sganesh
This guy doesn’t know what he is talking about. Mises institute has a bunch of
crackpots that are not respected by actual economists:

<http://motherjones.com/kevin-drum/2010/02/market-economics>

~~~
jwb119
i'm not sure mother jones qualifies as a neutral source either

(despite the quotes from krugman and friedman about biz cycle theory)

~~~
nir
But it is saying something if both Friedman and Krugman agree on this.

~~~
Semiapies
It says they both disagree with the Austrian school's version of business
cycle theory. Even the quoted writer goes nowhere near the dismissal of the
Austrian school attempted in the MoJo piece.

I'm reminded of when you see someone cite a creationist and one evolutionary
biologist's disagreement with another on some detail of evolutionary
mechanisms in order to argue for Intelligent Design.

