Wallet Watch

I’m still searching for a real theme for this blog as evidenced by the hodgepodge of topics I’ve been posting on. But increasingly I’d like to write about the generation I’m in and the in between years that we’re in, brought on by the fact that the economy has made it harder to attain the traditional markers of adulthood — moving out, a job with good benefits, and having enough to get married. This economic uncertainty brings with it many challenges, including indebtedness. I think it certainly applies to anyone born after about 1980.

But what do you call this generation? Generation Y makes sense, it’s the one after Generation X. The millennials is widely used, but makes us sound like beings from outer space. I like this candidate from blogger Matt Yglesias for a good name — Generation Trail, because we’ve all been forced to play Oregon Trail at some point.

I’m a big fan of the Judd Apatow films and the spinoffs from the cast and writers of those films — including Knocked Up, Superbad, the 40 Year-Old Virgin, and Forgetting Sarah Marshall. I think the films go a long way to show the arrested development of the boys stuck in mens clothes. Inevitably hapless and dirty-minded, they end up showing their soft-side, and the movies are about the transformation of lazy twentysomethings into more responsible adults. I think the leading example is Seth Rogen’s part in Knocked Up, where he plays a burned-out pothead, who is forced to grow up when he finds out he is going to be a father.

As I’ve discussed with friends, I think these movies will define the millennial generation and the “odyssey years” between adulescence and adulthood. The latest installment of these films is “Role Models” coming out this weekend (although it’s not an Apatow film, the premise sure feels like one). But this movie review in the New York Times, titled “Those Darn Kidults! The Menace of Eternal Youth” makes me wonder about how these films are perceived:

Judd Apatow neither wrote nor directed “Role Models,” the newest entry in the increasingly worn-out “boys will be babies until they are forced to grow up” school of arrested-development comedies. But he might as well have. Directed by David Wain (“Wet Hot American Summer”), it follows the silly misadventures of two flailing Peter Pans who are forced to do community service to avoid jail time.

While the lead characters in these films need to necessarily be unambitious, it seems that the “odyssey” period between adulescence and adulthood — where these characters are stuck — is because the characters chose, and prefer, to have no responsibilities.

As I’ve written in past posts, I think the “odyssey years” is due more to the fact that the markers of adulthood — moving out of home, a good job with benefits, marriage — is more difficult to obtain because of changes in the economy. While the millennials in Apatow films are not the first generation to differ from their parents’ expectations, I think they are the first to experience such a long period between adolesence and adulthood, brought on in part by the economy.

I think it would be tough for the next of this series of movies to illustrate how economic conditions keep their characters stuck in this phase, which has produced so many good movies. But I think it would go a long way to show that many young adults living in a “Peter Pan” state of existence are doing it in part because there’s fewer pathways to adulthood now than there’s ever been.

Generation Y is in a perilous economic condition: by the time we enter the workforce, we’re saddled up with so much student loan debt we could be paying 15 percent of our income to service it. Incomes for workers haven’t risen since the 1970s, and our jobs are less likely to offer full health benefits and a good retirement plan. Baby boomers — and specifically conservative boomer lawmakers — have made sure that the safety net that keeps our wages, health care, and education secure has been shredded.

That’s why I think that Boomer journalists — including the writer of this Wall Street Journal piece “The Next Bailout: Your Adult Children?” — are misinformed about the economy when they portray Gen Y as “kids” whose “moms and dads will face tough questions about whether to bail [us] out.”

We’re not kids waiting for our mommies to come tend to us again. Rather, we’re workers contributing to near-record high productivity, but facing more economic uncertainty than boomers ever had to face. Some of the jobs that college prepared us for don’t exist any more, and we have fewer tools to mitigate the damage. Boomers didn’t have to deal with the predatory credit cards, mortgages, and checking accounts that we do, thanks to a de-regulated financial system, where one late payment means that my lender jacks up my rate to 30 percent. 

But based on the literature out there, this WSJ writer is indicative of how the boomers portray us:

Similar to questions about the overall economy,” many parents are wondering, “Should I bail my kid out? Or let him claw his own way, let him fail?” says Bruce McClary, a credit counselor for ClearPoint Financial Solutions, a nonprofit Richmond, Va., credit-counseling service.

…

But student-debt worries are “going through a lot of people’s minds right now,” says Robert Allen, a Downington, Pa., father of three young adults in their 20s who have all taken student loans. “Children are coming out into one of the worst job markets God ever made and lugging with them all this debt.”

Two of Mr. Allen’s three children succumbed to credit-card pitches on campus and took on $700 each in debt very quickly. After scolding the lenders — “Haven’t you credit-card people taken enough money from innocent young people already?” — the Allens made the large initial payment demanded by the credit-card vendor. Then, they required their children to step up their work hours and split remaining payments 50-50. “They have to have some skin in the game” to learn responsibility, Mr. Allen says.

…

“You can make speeches and say, ‘I’m going to let you handle this yourself and you’ll pay the consequences,” says Mr. Allen, an ex-Marine who works two jobs. But for parents who have co-signed the loans, “that’s stupid … because the minute they start taking water on their credit, you’re coming up in the gunsights” of creditors.

Not all of us are need coddling from our parents like these examples. If she interviewed a Gen Yer for her article, she might know that Gen Y is making its own financial decisions, albeit in a much more complex environment, and asking our parents for advice. And the intergenerational transfer of wealth isn’t new — what’s new is that the boomer’s policymakers have so shredded the safety net that we’re going to need our inheritance now to get by. Moreover, it’s obvious the WSJ’s audience doesn’t reflect reality. Not all of us have rich parents that can give us a “bail out.” Moreover, 20 percent of us our foreign-born, who likely aren’t used to parental largesse.

Boomers had it much better. College wasn’t nearly as expensive, and Pell Grants and other educational supports easier to find. After college, lower-skill jobs with good incomes were more readily available. Labor unions made sure that wages were tied to productivity, and that jobs came with good health care and retirement plans. Unemployment insurance was much stronger for times when you were out of work.

I realize that this post makes me sound like an angry, entitled young person. But, given that the government and the economy gives us far less support than the boomers for our education, health care, and retirement, I’m with those who say Gen Y hasn’t asked for enough. And I’m hoping someday we’ll might be able to express that to the boomers.

I’d like to take a break from the seriousness of this blog (if it can be called that) and focus on a trend I’ve noticed: our nation’s stock traders seem to be showing some real emotion. I’ve always wondered if each trading floor comes with its own photographer to take pictures at just the right time. Sometimes I like to imagine that I’m the only contestant in a caption contest. Other times I just like to comment on them. Here are some of my faves:

Hands-on-head: A classic trader look.

She went with a variation of hands-on-head: HAND-on-head.

 Our nation’s great Media showed us images from around the world so we know that global traders are also emotional. Hands-on-head is also popular in India.

He’s having a bad day obvi. He should have stocked his satchell with advil. Ouch.

“How was work today hon?”
“Oh, the usu. Just stared off somewhere with my hands on my mouth.”

Our economy may soon be at the point where its o.k. to steal things if you need to, so as far as I’m concerned, these guys should help themselves to what’s left inside that Budweiser truck.

Here’s my ultimate fave: the vom shot. Don’t vomit, bro.

Barney Frank not only serves as a capable Chair of the House Financial Services Committee, but also have entertaining skills. Deflecting the claims that he somehow was to blame for Fannie and Freddie’s demise, he made this appearance on the O’Reilly Factor. While O’Reilly started self-destructing, Barney managed to sneak in the line “Your stupidity gets in the way of rational discussion.” I’m going to try to use that in convo more often.

If the video player doesn’t embed in your browser, link here.

This one really gets me fired up: the conservatives — the same ones who have had the presidency from 2001 to 2008 and the Congress from 1994 to 2006, when most bad lending happened — are blamed a 1977 anti-discrmination law for getting us into the financial mess that now requires a $700 billion bailout. They’ve also desperately blamed Fannie Mae, Freddie Mac, and immigrants for getting us into this mess. Media Matters has a terrific page collecting the TV clips, radio clips, and columns where these bogus claims were made.

A couple of things come to mind. First is the sheer boldness of the false claims of the conservatives on this one. Here are two great rebuttals on why CRA has nothing to do with our current problems, as well as additional background. But to summarize: first, CRA has been in place since 1977, and most bad loans weren’t made until the late 90s and this decade. So somehow it took CRA 30 years to totally push us over the edge into needing a $700 billion bailout. Second, the obvious point is that CRA only covers depository institutions — aka banks and thrifts — and does not cover nonbank mortgage companies. During the height of the subprime years, it is estimated that nonbanks — not covered by CRA — made 75 percent of subprime loans made. Nice try.

The next thing that comes to mind is how forceful conservatives have been in making the case. This viral video that blames CRA, impressive for all the production and effort that went into it — had nearly half a million views. (I could spent several blog posts pointing out all the false claims in it.) And a Wall Street Journal op-ed by Russell Roberts, a George Mason professor, uses some pretty flimsy facts to make the case against CRA, Fannie and Freddie. Although its laughable that Roberts, in his own blog, says that the case is still “a work in progress” to see if the case is “sturdy or just suggestive.”

This terrific video rebuttal against the conservatives from the op-ed page of the Detroit Free Press finally leaves you feeling justified.

This guy is handsome. It was produced pre-bailout though, so a lot has changed.

Yesterday was a beautiful day in the DC area here, so I went canvassing for my favorite presidential candidate with a friend in Manassas, Virginia. The town of Manassas could conceivably be flipped to blue in a state that has been polling more blue every week. The enthusiasm was very palpable by the 60+ volunteers that showed up to the campaign office, and a supporter’s van in the parking lot with a high quality paint job with the candidate’s slogans, logos, and taglines.

Anyways, towards the end of my four-hour route going door-to-door, I overheard a woman sitting the fron porch of her apartment, complaining to someone on the phone about her son’s credit card company who had suddenly raised their rates. I thought that this was the ultimate fortuitious situation, given my presence with a knowledge of credit card debt and my long day of making the case for my candidate. When I approached her she was still on the phone so I just pointed at my campaign material and smiled. But I didn’t get the reception I’d hoped for: she pointed out the sign down in the courtyard that said no solicitors and told me to get out before someone called management. Oh well.

Also what I missed writing about during my hiatus: the nerdy wonk inside me got excited any time a politician mentioned rising credit card debt in a speech during the Republican and Democratic national conventions. To my informal count, Former President Clinton and Senator Obama both mentioned rising credit card debt.

What I’ve thought was most poignant is how Obama lists credit card payments among the many mounting economic pressures that families are facing today. See this ad that came out right after the bailout of Fannie and Freddie (wow, that seemed like a long time ago). From the ad:

It’s hard to pay for gas and groceries, and if you put it on a credit card, they probably raised your rate.