Why Don’t Millennials Want Nice Houses Like Jim Messina’s?
An article that first appeared in The Atlantic two years ago seems to be getting some recent attention again. Maybe it’s because the absurd premise of Millennials being The Cheapest Generation keeps warranting derisive reminders that Millennials aren’t buying shit because they’re fucking broke. Instead of acknowledging that, we get crap like this:
In a bid to reverse these trends, General Motors has enlisted the youth-brand consultants at MTV Scratch—a corporate cousin of the TV network responsible for Jersey Shore—to give its vehicles some 20-something edge. “I don’t believe that young buyers don’t care about owning a car,” says John McFarland, GM’s 31-year-old manager of global strategic marketing. “We just think nobody truly understands them yet.” Subaru, meanwhile, is betting that it can appeal to the quirky eco-conscious individualism that supposedly characterizes this generation. “We’re trying to get the emotional connection correct,” says Doug O’Reilly, a publicist for Subaru. Ford, for its part, continues to push heavily into social media, hoping to more closely match its marketing efforts to the channels that Millennials use and trust the most.
All of these strategies share a few key assumptions: that demand for cars within the Millennial generation is just waiting to be unlocked; that as the economy slowly recovers, today’s young people will eventually want to buy cars as much as their parents and grandparents did; that a finer-tuned appeal to Millennial values can coax them into dealerships.
Perhaps. But what if these assumptions are simply wrong? What if Millennials’ aversion to car-buying isn’t a temporary side effect of the recession, but part of a permanent generational shift in tastes and spending habits? It’s a question that applies not only to cars, but to several other traditional categories of big spending—most notably, housing. And its answer has large implications for the future shape of the economy—and for the speed of recovery.
There should be an entirely different assumption here, but it would be too troubling for the people who want to sell cars and houses: Millennial buying behavior reflects their reality of debt and service-sector job opportunities serving lunch to smug Baby Boomers who were born into opportunity and decided to tear the whole thing apart then blame the kids.
Some of the recent reactions to this article include a post featured on Moyers & Co. by Donovan Ramsey, who has this to say:
It’s not about smart phones, selfies or social media. Millennials aren’t making some of life’s biggest purchases because we’re broke. As James Carville might say, “it’s the economy, stupid.”
Reading the money pages of popular publications as a millennial can be infuriating. Every other article seems to stumble through clumsy speculation about my generation’s financial decisions, as if they’re so mysterious.
A recent article for The Atlantic calls millennials “The Cheapest Generation” and expends more than 2000 words to explain “why Millennials aren’t buying cars or houses, and what that means for the economy.”
“The largest generation in American history might never spend as lavishly as its parents did — nor on the same things,” it reads. “Since the end of World War II, new cars and suburban houses have powered the world’s largest economy and propelled our most impressive recoveries. Millennials may have lost interest in both.”
The word “debt” appears only once throughout the entire piece.
Closer to home, Dan Brooks chimed in with a post pointing out that Christmas is over and work still sucks:
Merry Kristmas, Kombat! kids. The holiday is over, but sloth persists. There is no Combat! blog today, because I need to re-metabolize insulin and do a little paying work. Fortunately, the rest of the internet continues apace. If you’d like to become enraged, the New York Times is hosting a Room For Debate on whether it’s smart for millennials to delay adulthood. Nearly all the respondents acknowledge that young people aren’t getting married and buying houses because the job market is terrible and real estate prices are absurdly high, but they go on to suggest that a generation is opting out of adulthood anyway. While we’re characterizing whole generations, I’m going to say that it’s a very Baby Boomer thing to be born into the best economy in American history, wreck it, and then damn your children for not wanting to own homes and work high-paying jobs. Those of you who like your broad statements a little more quantitative are encouraged to consider the four charts the defined the economy in 2014, including the alarming convergence in assets of the wealthiest .1% of Americans and the “bottom” 90%. Can you believe that 90% of this country opted out of getting rich? Neither can I.
Always the optimists, Zerohedge has a guest post about how we just enjoyed the last Christmas in America and another about the destruction of the Middle Class nearing the final stage. From the first link the author offers a little recent historical perspective on how we’ve gotten through the last few decades with energy and technology:
The economic stagnation, despite various stock market rallies and false starts, essentially lasted 10 years, from 1973 to 1982.
The malaise had a happy ending: huge new oil fields were discovered in Alaska, the North Sea, West Africa and elsewhere, ushering in a renewed era of cheap, abundant petroleum. President Reagan re-set Social Security for a generation and introduced a lower taxes, higher permanent deficits ideology that is now accepted as the only possible way to sustain the Status Quo: deficits don’t matter, even when they reach the trillions, because our good friends the Gulf Oil Exporters and Asian exporters will buy all our debt forever and ever, keeping interest low forever and ever.
(And if they drop the ball, then the Federal Reserve prints money and buys trillions of dollars of Treasury bonds. Sweet! We don’t need any external buyers, just the Federal Reserve creating money out of thin air.)
Then the U.S. created and launched two revolutionary technologies which both created new wealth around the globe: the personal computer (microprocessor and cheap RAM) and the Internet (TCP/IP, Ethernet, and the commercialization of Tim Berners-Lee’s World Wide Web with free browsers) spawning the generation-long boom of the 1980s and 90s.
Those “saves from stagnation” were one-offs; there will be no more supergiant energy finds, nor any equivalents of the Internet expansion cycle.
That’s just an opinion, of course. Maybe the next technological breakthrough will be in energy. I’m still hoping there is some value in this planet that will motivate a more evolved species of extra-terrestrials into intervening because this house of cards can’t stand forever.
The other piece posted at Zerohedge comes from Tom Chatham via Project Chesapeake and does such a great job framing the ongoing financial crisis in a succinct, easy to understand manner that I’m going to repost most of it here:
The events of the past few months seem astounding when taken in all at once. The plan to destroy the U.S. dollar and the American middle class is moving at an ever increasing speed.
At the recent G20 meeting the nations agreed that bank deposits would no longer be considered money. These bank deposits become the property of the banking institution and as such can be used any way the bank wants. This means that any money you deposit in a bank now is no longer yours but makes you an investor in the bank and subject to lose that money if a banking crisis takes down the bank.
The spending bill just passed by congress makes the American taxpayer responsible for any derivatives loses that banks may suffer. These derivative holders now have first priority when any funds are paid out and depositors are relegated to last place. FDIC insurance will have to pay out these funds but it has no where near enough money to pay the more than 300 trillion in losses that will be suffered in a banking crisis. That means any depositor has little hope of getting anything back. In order for depositors to get anything back massive money printing would have to take place making any payout amount to only pennies on the dollar.
And if you don’t think there is any danger of a banking crisis in America you may want to keep in mind that the Treasury Dept. has recently ordered $200k worth of 72 hr emergency kits for dispersion to every major bank in America. These are known by many as bug-out-bags and are used to support individuals when disaster strikes and they have to care for themselves for the first few days of crisis.
New legislation now gives pension plans the ability to cut benefits to pensioners in the future making the future welfare of these people uncertain. They say it is necessary to prevent these funds from going bankrupt. It will “apply to multi-employer pensions, where a group of businesses in the same industry join forces with unions to provide pension coverage for employees. The plans cover some 10 million U.S. workers,” You may be happy to know this will not affect congressional pensions, as long as they are funded by the taxpayers.
The sanctions being placed on Russia are beginning to destabilize the world in many ways. The sudden drop in oil prices will send ripples through many foreign nations and cause an already tense situation to become highly flammable. It seems this is what is wanted to provoke a new world war and hide the complicity of bankers and politicians in the coming destruction of the economy.
For the past few years those elite with knowledge of the coming monetary destruction have been putting their fiat dollars into any hard assets they can find. The recent record prices paid at auction for collectables is just one more indication that those in the know are moving into hard assets as fast as they can to preserve their wealth.
This diversification includes precious metals and land as well. I believe when there are no more metals or suitable properties available for purchase, these entities in control of this game will pull the plug and let everything collapse. Those holding fiat paper, electrons or other paper promises will be devastated as those assets evaporate into thin air.
You may feel some security knowing you have a good job but among the deposits that disappear will be billions in commercial accounts that belong to businesses. When these businesses lose this money, many will likely close destroying many jobs in the process. This will send ripples through the transportation, production and distribution system when it happens. In an economy made up of 70% consumer spending, this will be fast and devastating to those with few resources to fall back on when it happens.
There are three lessons that many people will learn in the coming months. If you do not have it already you may not be able to get it. If you do not have it physically in your hands you do not own it. If you cannot protect it you will not have it for long.
Maybe we should look on the bright side, the terrorists didn’t stop America from watching “The Interview” so good things are happening. And some people, like UM graduate and Obama toadie, Jim Messina, are helping the economy by buying a 2 million dollar house through some anonymous trust.
Kids, if you want to have nice things like your parents, try and be more like Jim Messina.