In August 2019, The Atlantic published an article entitled “Millennials Don’t Stand a Chance”, in which Annie Lowrey says that due to over a decade of economic evisceration caused by a falsely generated “bull market” based not on fundamentals but political manipulation has sapped Millennial earning capacities and forced them into poverty, and that while they survived the recession of 2007, they fiscally cannot survive another major recession.
The next recession—this year, next year, whenever it comes—will likely make that Millennial disadvantage even worse. Already, Millennials have put off saving and buying homes, as well as getting married and having babies, because of their crummy jobs and weighty student loans. A downturn that leads to higher unemployment and lower wages will force Millennials to wait even longer to start accumulating wealth, making it far harder for them to accumulate any wealth at all. (Compound interest is magic, after all.) Their trajectory, already terrible, might get even worse. (source)
This analysis, while it may sound bleak, is very true. Millennials were hit very hard by the 2007 recession, and coming of age at a critical time, the generation was forced into a deadly cycle of low-wage and dead-end jobs amid an ever-expanding labor pool and declining job pool.
The first major economic boom happened after World War II and lasted until the mid-1960s. Then there was the decoupling of the US dollar from the gold standard and the liberalization of trade in 1973 that lead to the mass expansion of credit, which allowed for the image of wealth to be generated without increasing actual wealth. There were minor recessions along the way, such as the crash of ’82 and the panic of ’87, and even the dotcom bubble of ’00. However, the basic point of constant credit expansion allowed the US to run up a giant bill on the promise that it could be paid back in the future.
However, as with all things, all bills have to be reckoned with. The fact was that the debt grew to such a point there was going to be no way to pay in back- something reached years ago -but with that also came an economic evisceration with a veneer of prosperity to cover up the social rot.
That rot broke through in 2007 with the economic collapse resulting in the TARP bailouts. It exposed that most of the claimed wealth in the US was not there, and as a result, wages had to be significantly lowered and a lot of jobs had to cease to exist. However, instead of allowing companies who took out a lot of debt to go into bankruptcy and die a natural death, TARP allowed them to be sustained indefinitely at the bill of the government, socializing losses while at the same time privatizing gains.
However, this did not deal with the rot. It was still there, artificially sustained by the government, who assumed the debt liability for the companies. This did not help the economy, but encouraged more risky loan practices as well as did not address the issue of natural economic deflation, which would have been a painful but necessary way to repair the US debt situation.
Instead, the US worked as hard as she could by printing money to suppress the inevitable economic consequences. It was a classic case of “kicking the can down the road”. This benefitted very wealthy stockholders, and generally people who were already established, such as the Boomers and to a far lesser extent, Gen X. Millennials, however, got the ‘short end of the stick,’ as they could neither earn enough money to pay their bills, nor could they save any money because of the constant expenses they were besieged with.
Lowery warned that another recession would destroy the Millennials because if they were not eviscerated enough, any further impoverishment would permanently prevent almost all of them from ever advancing to the position of the Boomers or Gen X.
Unfortunately, the next recession was only a matter of time, and it is this recession now that the same author says is going to be the ‘big one’ that will be the end of the Millennials.
Put it all together, and the Millennials had no chance to build the kind of nest eggs that older generations did—the financial cushions that help people weather catastrophes, provide support to sick or down-on-their luck relatives, start businesses, invest in real estate, or go back to school. Going into the 2008 financial crisis, Gen Xers had twice the assets that Millennials have today; right now, Gen Xers have four times the assets and double the savings of younger adults.
Millennials now are facing the second once-in-a-lifetime downturn of their short careers. The first one put them on a worse lifetime-earnings trajectory and blocked them out of the asset market. The second is sapping their paychecks just as they enter their peak-earnings years, with 20 million kids relying on them, too. There’s no good news in a recession, and no good news in a pandemic. For Millennials, it feels like there is never any good news at all. (source)
It has been reported that 5 of 8 Millennials at least, and likely higher for Zoomers, support socialism. These numbers are inevitably going to rise as the COVID-19 coronavirus induced economic crisis, regardless of what one does or does not believe about how the crisis came to be, will engender out of anger.
One cannot have masses of people who have been stripped of their wealth in front of their eyes that will be at peace and not demand radical solutions to their problems, whether or not they make sense.
One is witnessing the impoverishment of the Millennials, but also a revolution taking place toward socialism- it does not matter the type (national or international) -but that the people, as their belief in God declines and their anger at society grows, they will demand answers and a ‘new system’ to address their plight, for economic instability almost always precedes political instability.
The Millennials and Zoomers will feel as though they have nothing to lose because when there is no sense of a future, and one has a plausible entity upon which problems can be blamed, they will not cease to try and claim what was both taken and “taken” from them.
Be ready, because the intentional refusal to deal with the debt pendulum, so far pulled in one direction, will violently swing to the other direction.