Generation Zero: An Obnoxious Repeat Of GenX
As someone who graduated from college in 1992, I remember vividly the downcast economic outlook for me and my fellow graduates. Those who entered the real world in 1974 and 1980 no doubt faced similarly bleak futures.
"Generation X" was the blanket adjective foisted on college graduates of the early ‘90s period, and with the U.S. economy still on weak footing following the 1990-91 recession, conventional wisdom said my supposed crowd had menial labor of the clothes-folding variety to look forward to, and that we wouldn't live better than the relatively well-to-do parents who had conceived us. Complaint music that chronicled my generation's despair emerged from Seattle, and many members of GenX, though fierce in their unwillingness to conform, did just that in their rush to grow the symbol of the era: a goatee.
There was even a movie released in 1994 meant to give voice to this semi-youthful angst called Reality Bites. Starring the beautiful Winona Ryder, hippie poseur Ethan Hawke, and the annoying Janeane Garofalo (clothes folder at the Gap), the third-rate film did big box office with frustrated GenX-ers seemingly looking for comfort and excuses amid depressed economic times. The film's message was pretty basic: young adult achievers were heartless and dim, while dignity could be found in individuals who moved from job to job while spouting anti-capitalist philosophy as doors hit them on the way out.
Call it a contrarian indicator if you will, but almost in concert with Reality Bites' release the U.S. economy took off. The reasons for the rebound were pretty basic. Thanks to a Republican takeover of Congress in '94, gridlock in Washington ensued such that spending fell (are you hearing this Paul Krugman?), and with the reduction in spending more capital was made available to the productive private sector.
In 1997 a president (Clinton) not as disdainful of wealth creation as many in his Party signed a capital gains rate cut that reduced the penalty on investment success from 28 to 20 percent, and most stimulative of all, the arrival of Robert Rubin to the U.S. Treasury brought with it policy in favor of a strong dollar. The latter protected the investors tautologically necessary for growth, and with greater certainty that their investment returns wouldn't be eviscerated by mercantilist tinkering that always reveals itself in the form of currency debasement, the economy soared.
As for Generation X and its prior embrace of crunchy poverty, it went capitalist - in a big way. Not content to simply measure up to the economic status of their parents, GenX-ers blew past them financially on both Wall Street and in Silicon Valley.
Due to a strong dollar that boosted investment suddenly taxed less by Washington, an Internet boom took place out west largely authored by Generation X, and the latter was financed by GenX-ers who learned to love Wall Street. I was at Goldman Sachs at the tail end of this boom, and so fearful was Goldman of losing talent to the Silicon Valley gold rush that the firm instituted now laughable programs such as a "coolness committee" meant to keep employees in the fold (casual dress every day one of the most embarrassing "cool" benefits to emerge), along with increased stock options showered on individuals just a few years removed from perpetual, entitled adolescence.
Fast forward to the present, if we ignore for a moment the panhandling, wasted and criminal endeavor that Occupy Wall Street has become, underlying it is the basic slovenly, slacker ethos that prevailed a little less than twenty years ago. With newly-minted college grads having entered a cruel, somewhat job-free world, they've trained their sights on the alleged Millionaire's Club that is Wall Street. Wall Streeters are rich, diploma-rich twentysomethings are not, and because they're not, capitalism is once again a dirty word to a new generation of graduates; this one "Generation Zero."
What's remarkable is how very much the commentariat has once again fallen for this most unoriginal of poses. Though he should know better, Washington Post columnist Robert Samuelson nearly repeated word-for-word the musings of commentators back in the early ‘90s when he recently scribbled that "A specter haunts America: downward mobility. Every generation, we believe, should live better than its predecessors", but "For young Americans, the future could be dimmer."
Of course we've heard all of this before, and the simple answer is that we hear it every time Washington tacks in the wrong policy direction such that economic growth declines. Quite unlike the mid ‘90s when capital gains taxes and spending fell alongside a rising dollar, today government spending continues to hit previously unseen levels, capital gains taxes are set to go up in 2013, and the strong dollar necessary so that job and wealth-creating investment will reveal itself continues to test new lows.
Youth surely is an ass, college-graduated youth even worse, but the angst which underlies the protests of the latest lost generation is somewhat real. Though a job and success should never be thought of as birthrights, the simple truth is that "Generation Zero" is the latest one to suffer the ineptitude of our political class; its protests misdirected at a Wall Street that unquestionably should not have been bailed out. Washington is, as always, the miscreant here, and as taxpayers we've been bailing political profligacy out all of our working lives.
The good news is that at least if history is any kind of indicator, present policy from Washington so inimical to growth will eventually reverse itself, and with it, the fortunes of our latest "lost generation." The latter will quickly discover its love of capitalism, and will likely eclipse Generation X's economic fortunes in the process. After that, policy will eventually move in the wrong direction as prosperity invariably makes us flabby, but what's unknown is if tomorrow's Samuelsons will be as easily gulled by the policy errors that inevitably foster the next angry generation.