Sunday, February 27, 2011

Boomers Redux

It ain't easy being a Boomer.  From Tom Brokaw to Barack Obama, chastising the Baby Boomer generation is a national pastime.  We're vain.  We refuse to grow up.  We're irresponsible.  We were bad parents.  We're selfish.  We had everything handed to us on a silver platter.  We're druggies.  We're techno-impaired.  I thought about linking these stereotypes but couldn't choose from the thousands of references.  Even Obama,  technically a Boomer himself, has been adamant about distancing himself from our generation and wrote in The Audacity of Hope:
“In the back and forth between Clinton and Gingrich, and in the elections of 2000 and 2004, I sometimes felt as if I were watching the psychodrama of the baby boom generation — a tale rooted in old grudges and revenge plots hatched on a handful of college campuses long ago — played out on the national stage.”
So as is my occasional wont, I thought maybe we should actually look at the facts.  What's true about Baby Boomers -- good and bad -- and what is pure myth?

The Basics (See 2006 US Census data)

  • We were a big bubble of births after World War II, though not as great a birth rate as before World War I.  The birth rates had been declining and we were the uptick.  We're still a heck of a lot of Americans, about 26% of the population.  (Check this cool graphic)
  • 65% of us are married, the highest proportion of any current generation.  We also have the highest proportion of divorces (17%).
  • 58% of us are college educated and 29% have a bachelor's degree or higher.  We are the most educated generation.
  • 11% of us are military veterans, while more than twice as many (23%) of the previous generation were.
  • 75% of us own our own homes.
The Ugly Facts about Boomers

There are certainly some nasty trends that we Boomers have to own.  We don't save like our parents' generation and we are guilty of abusing our too-easy credit cards.  While our parents learned from the Great Depression of their childhood to put away for a rainy day, we grew up in a time of plenty and held more optimism for the future.  We were such a giant bubble that K Street (the advertisers) couldn't pander enough to us.  We were the first generation bombarded with advertising for breakfast cereals, toys, make-up, cars, clothing, beer...whatever our age group might indulge.

We were also the convenience food generation.  My mother's total purchases of TV Dinners over her lifetime was maybe 50 for a family of 6.  Like her mother before her (well not exactly, my grandmother was a great cook), my mother prepared meals from scratch using mostly wholesome ingredients.  Though many of us Boomers have been faithful to the natural food movement of the 1970s, others succumbed to the over-packaged, over-processed faux food marketed to us.  Convenience foods, restaurant meals and junk food took increasing chunks of our families' diets.  But to be fair to my Boomer sisters, most of our mothers didn't hold full-time jobs and then come home to a hungry family.  Most women of the Greatest Generation were housewives.  Cooking's a simpler affair when you have time to plan it.

We were the first generation to experiment with marijuana, LSD and other illicit drugs en masse.  Sure, reefers had been around but few of my parents' generation tried them.  But then Timothy Leary (one of them) gave us the gift of getting stoned and we were off to the races.  Not all of us but more than half tried illicit drugs at some time and a few never weaned themselves from them (the government reports that about 6.3% of Boomers still use illegal drugs).  Of course, our use was handily eclipsed by the generations that followed. 

On the other hand...

But there is also much to celebrate about our generation.  When economists praise the exceptional productivity of the American worker, they're talking about us.  We are the workaholic generation, those who donate free overtime to our bosses, are committed to our jobs and take pride in our work.   We were twice the workforce of previous generations (adding women to the labor pool) and gave more time to our jobs than previous generations of workers.  Baby Boomer women have the distinction of inventing the tug-of-war between work and child-rearing.  According to Forbes Magazine, we are also the most active entrepreneurs, even in the high tech industry.

Yet because there were so many of us, we struggled competing for jobs and college.  I remember applying for teaching jobs early in my career where employers had hundreds of applicants to choose from.  By the time I was an administrator looking to hire, the pool of applicants had shrunk and I rarely had more than 10 or 15 applicants for a position.  The same held true for college admissions.  Selective colleges were able to raise their standards and take the cream of the crop because we were so plentiful.  By the 1990s, the colleges were competing with each other for top students' attention.  All this competition affected our confidence and we felt privileged to even have a job, driving our hard work.

So we worked harder but saw less for it.  Real income when many of us entered the workforce in the late 1970s and 1980s stagnated.  The assault on unions in the 1980s directly affected us and the pensions and health care our parents' generation took for granted began disappearing.  From a high of 26% union membership in 1960, the fall to 12% today had real consequences. (See The Final Relic of the American Middle Class)

When I look back at the significant social programs and benefits of my lifetime, they tended to target either our parents' generation or our children's.  The GI Bill, Social Security and Medicare became more and more generous as politicians courted our parents' votes. Special Education, Title IX, the School Lunch program, Title I and active and project learning all came after we graduated high school.  Few social programs targeted our age group, a curiosity given our enormous size.  What we did get were Pell Grants and the Peace Corps. We responded by going to college and creating lives of service.

Like many Boomers I'm an avid volunteer, active in four community non-profits currently.  Though I'm now retired, I have been a volunteer and community participant all my life.  On every board I serve and in every volunteer cadre I participate in, nearly every seat is occupied by a Boomer.  We actively seek diversity on our Boards and recruit younger members, but they rarely last long.  Baby boomers have the highest rate of volunteerism of any generation.  We grew up marching against a foolish war and participating in (or admiring from the sidelines) the Civil Rights movement and other major social movements of our youth.  For many of us, an obligation to stay involved, participate and share in the work of building a community is in our fiber. 

Now as Boomers approach or enter Retirement, we are chastised for our potential to bankrupt Social Security and Medicare.  Yet since Reagan, our contributions every year have paid for the benefits our parents received -- substantially more than their lifetime contributions.  (See Social Security and the BoomersThe fund has $2.5 TRILLION in reserve.  Our deposits into these funds will carry us until 2043, when I doubt there will be too many of us left.

One of the reasons I think few of us Boomers defend our honor is because of another label we've been tagged with:  Whiners.  Some day maybe we'll be missed and heralded.  For most of our lives, we've been maligned.  There.  The whine and nothing but the whine.

Well, one more thing.  Our music was the grooviest..

Friday, February 18, 2011

The Final Relic of the American Middle Class

Government bureaucrats.  Overpaid government workers.  Pensions bankrupting state coffers.  Can't fire bad teachers.  Public workers shouldn't have unions.

I haven't heard a lot of praise for public workers these days.  Now with the news from Wisconsin, the resentment against public workers has reached its predictable conclusion.  Essentially, it's an attack on unions.

Labor unions were never welcomed by big business and violence marked much of early labor history.  Union leaders were demonized early on.  In the 1940s and 1950s they were associated with Communists.  But gradually workers gained rights and union membership grew from the 1890s through the 1970s.  It then began a decline that continues today.

1920:  12%
1930:    7%
1940:  16%
1950:   25%
1960:   26%
1970:   23%
1980:   21%
1990:  16%
 2000:  13% 
  2010:  12%  

While there appears to be a decline as early as the 1970s, union membership actually increased but the rate of entry of young baby boomers into the workforce eclipsed the gains.  (Young workers are the least likely to belong to unions.) Then Ronald Reagan fired the Air Traffic Controllers, breaking their union in 1981.  That was a pivotal point in popularizing anti-labor sentiment.

Even more telling is the make-up of union membership today.  Only 7% of private sector workers belong to labor unions while 36% of government workers do.   What has changed?  Several things.

American jobs have been decimated by the "free trade" movement.  Manufacturing specifically has few remnants left in the US.  Manufacturing made up 53% of the US economy in 1965.  By 2004, it contributed just 9%.  That's a substantial fall.   When factories closed shop here and moved to China or elsewhere, 80% of the jobs lost were union jobs.  What's left of union work in America are public sector jobs.  So far, the anti-labor crowd hasn't figured out how to outsource government.  But give them time.

At the same time, the difference between what the typical Fortune 500 CEO makes and what the average worker makes has grown astronomically.  From the 1960s through the 1980s, CEOs made 30-40 times more than workers did.  Then came the demise of middle class manufacturing jobs, deregulation of various money-making schemes, cuts in upper income tax rates and the latest anti-labor movement.  In 2001, the typical CEO made 525 times more than his workers. 525 times more.  And worker pensions and medical benefits, once the mainstay of middle class employment, have eroded in the past 30 years.

So who is to blame?  Why, those public school teachers with their health and retirement benefits of course.  In our rural area, median household income is just $35,000.  Compare this to the average teacher salary of $60,000 and the discrepancy is stark.  What's rarely published though is a comparison of salaries for jobs requiring a master degree.  Only 14% of Josephine County adults hold a bachelor's degree or higher.  The earnings of that portion of the population are not available.  But the generalized comparison is made frequently with the end conclusion that teachers (and all public workers) are overpaid.

I've been management for the past 13 years and not part of any union.  I've certainly shared frustration on occasion over the difficulty of disciplining or removing union-protected staff.  But the means were still there and I did remove some.  (More important is how we hire, not how we fire.  See:  Wrong Focus)  And I sometimes question whether professionals like teachers should have a union or a professional organization like doctors and lawyers.  (Most doctors and lawyers aren't employed by entities as large as school districts.)  I have my concerns.  But I've also seen administrators remove good teachers for political or personal reasons, good teachers whose unions couldn't protect them.

Beating up on government work is in fashion.  I get that.  But could we spend just a tenth of the energy addressing the problem of private sector work and compensation?  In 1992, Ross Perot warned of the "giant sucking sound" when American jobs left for Mexico if NAFTA passed.  He was right.  The demise over the past 20 years of private sector work and wages is our most serious issue.  If we continue placing the target on unions and encouraging factories to close up shop and move to China or Mexico, the middle class will shrink still further.

Instead, let's take the burden of providing employee health care off of employers.  Let's remove tax incentives for shipping your business overseas.  Let's actually support small businesses (most so-called "small business" programs direct payments to larger firms).  Let's reinvest in our infrastructure.  Let's restore some tariffs and so-called trade barriers.  And let's not attack the last bastion of the American middle class.  I'm embarrassed to say it but it's the folks who work in government.

Monday, February 14, 2011

Let ME Balance the Budget

Not long ago, the New York Times published an interactive piece allowing readers to choose from a menu of options to reduce the deficit and balance the budget.  I wasn't the only one who walked away from the exercise thinking balancing today's budget shouldn't be so hard.  Granted, there are legions of special interests to contend with.  But that's only in DC, not in my living room.

So if balancing the budget with fairness and commitment to values matters, it can be done.  We need to cut $400 billion by 2015.  Here is how I would do it.

Entitlement Programs
  • $100 Billion:      End the cap on Social Security contributions, currently at $106,000.  It's 6.2% for me (I don't make that much).  It should be the same rate for you.
  • $36 Billion:    Tighten eligibility for Social Security Disability benefits.  I personally know many who are collecting these benefits unduly.  This would cut 20% and could be phased in, after an initial spending increase to reevaluate current claims.
  • $10 Billion:   Negotiate drug prices with pharmaceutical companies as part of the Medicare prescription drug program (at about $61 Billion per year).  This presumes a 16% savings on Medicare drug purchases.
Military and Defense

  • $117 Billion:   Begin drawing down forces in Afghanistan.  This is already America's longest war -- ever -- with no end in sight.  At $117 Billion per year, we should be completely out in 6 months.
  • $50 Billion:   Complete pull-out from Iraq.  The combined cost of these two unnecessary wars has exceeded $1 Trillion.  Wonder why we have this deficit?
  • $20 Billion:    Cut recruitment costs in half.  This number is based on Army figures ($20b) and presumes an equal amount for the other branches combined.  The increased signing and retention bonuses should phase out with the wars and the absurd wealth of trinkets and gimmicks to recruit high school students need to be replaced with the sort of professional recruitment every other industry uses.
  • $100 Million:   Eliminate drone strikes.  These are assassination tools and crude ones at that.  They are losing the "hearts and minds" of victim populations, not to mention the nasty business of political assassination.  I couldn't find an actual annual cost, but at $4.5 Million each and 166 strikes just last year, this seemed a VERY conservative estimate.
Discretionary Programs 
  • $31 Billion:   End ethanol subsidies.  This is what we are paying oil companies to add ethanol (and give us less gasoline).  There is no environmental or energy policy reason for continuing.  If the 10% ethanol content in your winter gasoline reduces your mileage by 10%, why not just give you less gasoline and skip the ethanol entirely?
  • $15 Billion:  End subsidies to the "big five" crops:  corn, wheat, soy, cotton and rice.  These subsidies are making our diets worse and concentrating agricultural power in just a few large grain producer hands.  If we want to subsidize food, let's look at fruits and vegetables and reinvigorating family farms.  In fact, the elimination of these subsidies may just free up some corporate land for those family truck farms.
  • $0 Billion:  Shift 20% of the $42 Billion we spend on highways every year to develop high speed rail and other public transportation systems.  Not a short term deficit reduction but a long term investment.
  • $14 Billion:  Eliminate earmarks for pet projects of particular Congressmen.
  • $50 Billion:   Restore the estate tax to Clinton era levels, in line with taxation on earnings.
  • $226 Billion:   Eliminate all of the Bush tax cuts.  Restore income taxes to Clinton era levels.
  • $34 Billion:  Tax capital gains and dividends at the same rate as wages.  I see no reason why those of us who work should pay twice the taxes of those who make their money from day trading.  This number is based on the Obama estimate of $11.3b for raising from 15% to 20%, multiplied times three (for an average rate of 30%).  Actually would be still higher for upper income taxpayers.  (See The Truth about Taxes)
Total Impact on Deficit in 2015:  $703.1 Billion

Since my proposals nearly double what we need to balance the budget, throw some towards paying down the national debt, some towards your favorite programs and don't do one or two of my suggestions.

How about you?  How would you balance the budget?

Saturday, February 5, 2011

Paul Bunyan, Pecos Bill and Ronald Reagan

Paul Bunyan dug the Grand Canyon and built Mt. Hood.  Pecos Bill rode a tornado and used a rattlesnake as a lasso.   And Ronald Reagan rescued America from big government and defeated the Soviet Union.  American heroes are as mythological as Greek or Roman ones.  The media is once more trumpeting Ronald Reagan on his 100th birthday.  This isn't the first 24-hour Reaganfest but it is time for a reality check. 

Heroes are appealing and myths are mighty.  None of the facts below are likely to leave so much as a scratch on Reagan's teflon monument. 

Republicans have Forgotten...
1967:  As governor, Reagan raised California taxes by 30% of the general fund, a modern record.
1967-1975:  Reagan raised government spending in California by 177%.
1981:  Reagan's first year in office marked a reversal in deficit spending in America.  After falling sharply from 1945 until 1981, the national debt as a percentage of GDP rose under Reagan from 35% to 55% by the end of his term.
1981-1989: Reagan signed 15 tax measures into law as president.  4 were tax cuts.  11 were tax increases.
1982:  Largest peacetime tax increase in US History, $100 billion over 3 years
1986:  Largest corporate tax increase in US History, $120 billion over 3 years
1981-1992:  Under Reagan and Bush Sr., the national debt quadrupled from $1 trillion to $4 trillion.
1991:  The breakup of the USSR was due to internal forces, a succession of short term leaders, Gorbachev's reforms, an economic crisis, an unpopular war in Afghanistan and possibly Chernobyl.  Crediting Reagan is popular in a country that believes the US must be responsible for everything but in reality his only contribution was overspending on defense, a minor factor.

Democrats have Forgotten...
Late 1940s:  With his acting career drying up, Reagan offered up the names of many Hollywood associates (competitors?) to the McCarthyites. 
1966:  Reagan declared that the Civil Rights Act of 1964 was a mistake. He advocated repeal of California's anti-discrimination law, stating "If an individual wants to discriminate against Negroes or is his right to do so."
1980:  Reagan's campaign negotiated a DELAY in releasing the American hostages from Iran until after the election.  In exchange, the secret flow of weapons to Iran began within days.
1981:  Reagan attracted Southern Democrats to the Republican party by calculated appeals to white racism.
1981:  In his first year, Reagan fired 12,000 air traffic controllers and broke their union. He also appointed anti-union members to the National Labor Relations Board, this though he had not only been a union member himself but president of the Screen Actors Guild.
1981-1989:  138 corrupt Reagan Administration were convicted, indicted or under investigation for felony charges, a record that will hopefully stand for a long time to come.
1983:  Payroll (Social Security and Medicare) taxes on all workers and employers raised from 9% to 15.3% over 6 years.
1986:  Reagan's Iran-Contra scheme was discovered.  Reagan's administration violated its own arms embargo and sold weapons to Iran, using the proceeds to illegally arm the Contra rebels in Nicaragua

1988:  Revelations that President Reagan based many of his presidential decisions on astrology, including the selection of Bush as his VP and signing an arms treaty with the Soviets.(Reagan consulted prominent astrologers regularly since at least the 1940s)
1989:  Reagan doubled defense spending during his presidency, a prime contributor to deficit growth in his terms.

In the 2010 election, Republican candidates were comical in their competition to win the "heir of Ronald Reagan" competition.  Even Obama quoted Reagan and seemed to strive for the most-Reaganesque ribbon.  Prospective Republican party chairs were fielded a question last month that asked their "favorite Republican other than Ronald Reagan", needing to preempt the predictable responses.

On the NPR show "This American Life", elementary students on a tour of the Reagan Library do a role play of Reagan's decision to invade Grenada in 1983.  The rigged scenario is an endorsement of this much-maligned decision to invade the tiny island.  The justification?  Grenada might have joined with Cuba and Nicaragua and attacked the US.  I say bring it on, Grenada.  We've got Paul Bunyan and his ox, Babe.