Beware Former Central Bankers Telling You To Work More
Hard work is fundamental to our continued existence and advancement as a species. I would never devalue the importance of hard work, particularly when combined with intense passion and drive, which leads to extraordinary technological progress and soaring artistic creations. Nevertheless, my ears perk up whenever I hear an older person lecture millennials about how they need to work more just to have a reasonable chance at a retirement compared to generations that came became before.
Yet that’s exactly what happened when I read an article published at Politico by 75-year old Alicia Munnell, an academic who also worked for the Federal Reserve Bank of Boston and the U.S. Treasury Department under Bill Clinton.
She seems to understand the problem. She notes:
That’s all true, it’s her unimaginative, and quite frankly, offensive conclusion about what’s to be done that I take issue with. She writes:
Let’s take a step back and dig deeper. She accurately acknowledges millennials were screwed by being born at the wrong time in history. To summarize, an entire generation graduated from college as indentured debt servants and were then thrust into a Hunger Games economy characterized by stagnant real wage growth. Worse, whenever systemic forces resulted in periodic crashes in our fundamentally unstable ponzi economy (which millennials played no role in creating), older generations responded by focusing their energy on ensuring their stock and bond portfolios were inflated back to life.
Remarkably, this basic reality that younger generations were handicapped due to the short-sighted decision making of older generations seems to have no bearing on her analysis of what’s to be done. While millennials may in fact need to work to 70, this doesn’t address the current situation, nor does it deal with the fact that the contemporary social/economic paradigm is dominated by rent-seeking activities more accurately defined as corruption and fraud, which leads to unimaginable wealth for an unscrupulous few, and scraps off the table debt serfdom for everyone else.
Older generations can’t provide solutions for the youth because that’s the sort of lazy thing they come up with: work more. Moreover, successful academics with stints in government and central banking are almost always status quo loyalists and will never concede that paradigm level change is in order. Young people must actively help shape the world they’ll be living in longest, yet when you look at Congress it looks like an assisted living facility.
This is a serious problem, because older people who’ve benefited from the status quo their entire lives will naturally support a propagation of the status quo. That’s the last thing we need right now. I don’t mean to pick on Alicia specifically, I highlight her article to demonstrate a larger point. That the policy solutions being offered for our ills are just repackaged versions of the same old stale solutions that’ve been recycled over and over again for the past 50 years. This is partly why it feels like nothing really changes no matter who you elect. It’s because those who have the power and money to influence policy tend to be comfortable, unimaginative types who strongly support the status quo.
Nevertheless, it remains a total certainly that younger generations will ultimately define the future based on their values and life experiences. Considering how poorly the current paradigm worked for them, it’s a nearly a lock that the manner by which our society and economy work will be fundamentally altered in the not too distant future. The millennial embrace of Bitcoin and crypto assets is merely a preview of the sort of earth-shattering changes coming as an entirely new generation starts to dominate culture.
“Work till you’re 70 and things could turn out ok” doesn’t resonate or inspire anyone. Our current paradigm is a corrupt carcass of a social and economic system kept on life support by those who benefit from it, and no one’s more aware of this fact than the youth.
It’s impossible to know exactly what will come next, but it’s a safe bet we’re on the precipice of enormous change based on an imminent turning of the generational cycle. Whether it leads to a better or worse world will depend on the level of consciousness we bring to it. The world is ours to create, let’s not screw it up.
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