The Cheapest Generation

I should send this comment to my parents and grandparents the next time they berate me about why I'm not planning on owning a home any time soon and would rather rent and/or mooch off them for as long as possible.

Send them the median income / home value ratios too.

I think the boomers qualify as the most irresponsible generation in history, especially in the USA. Now half of them have no retirement savings and are getting old, fast. Guess who's going to pay for it.

Obviously you should get a fixed-rate mortgage. When interest rates "go" you will have insanely cheap mortgage while inflation drives up the price of your house.

That said, I suggested buying as much house as you can afford, not for how much they are willing to lend you. That will be different for everyone.

I own a beater car even though I could pay cash a new car if I wanted to. One reason is that cars are expenses, not assets, so there is no reason to spend more than you have to for the transportation it provides. Spending money on a nice car is just about one of the worst financial decisions you can make.

The other reason I own a beater is that I live near a major city and can take public transit to and from work. If my car is going to sit in front of my house most of the time, why pay for a nice one?

Public transportation is much better near cities, and the Millenial generation is the most city-bound American generation ever. Americans in general are migrating to cities, and young people more than most. I think the article grossly underplays the importance of this demographic trend.

I would bet this is a major factor in declining car ownership, AND home ownership--since it is so much easier to find reasonable rent near a city. In small towns and even many suburbs, there are typically few rentals, so you have to purchase if you want to live there. Real estate tends to be more affordable there too.

This is exactly what both the left and the right are propagandizing the middle class to do: lower expectations. In some cases, it means lowering our expectations to below those of our parents.

Think about that for a minute.

Find me a corporation or an entrepreneur who thinks like this. Imagine a CEO saying this to shareholders and the board:

"We didn't make our goals this quarter, and many in our industry also showed reduced sales numbers. It is clear that we need to reduce our expectations. Next quarter's numbers will be lower, and shareholders are just going to have to take a loss."

He'd be out on his ass the next day.

Related to this is the idiotic garbage that the working class are fed by the media: that they should hate people who make good wages and agitate to cut those other peoples' wages down to be in line with their own.

Again, find me a corporation that thinks like this. Apple is currently worth more than Microsoft. Is Microsoft thinking "how can we make them make less money?!?" No. They're thinking "How can we grow? How can we make as much money as Apple is making?"

Unbelievable.

You realize that you're being sold into fiefdom on the feudal "lands" owned by the financial industry, right?

Edit: I'm not a socialist. I'm a capitalist.

Part of capitalism is negotiation. The American middle and working classes have been fed this ridiculous line of baloney that capitalism is a magical hands-free machine that will elevate their standard of living if they do nothing. It doesn't work that way, as every businessman and entrepreneur understands. You have to negotiate. You have to push. They push, and you push.

Studies have shown that the ideal point in negotiation is often precisely where both parties feel a bit, but not too, unhappy. Right now the rich and corporate interests are rolling in it, happy as clams, and everyone else is suffering. That's because one side is pushing and the other side is not.

So how do workers and professionals (whom I count as workers... the white/blue collar distinction is increasingly meaningless) push?

The old way was unions, but that's definitely shown its age. We need some new ideas.

Lowering our expectations is not a particularly productive idea.

Edit 2: I also think using government to push is fair game.

Why? Because the rich and corporations do it. They take corporate welfare, bailouts, special infrastructure investments, government contracts, and benefit hugely from publicly funded R&D.

But they want you to refuse to use the government as a lever because... it works!

So capitalists really ought to be socialists, at least for now. Only give up a lever in a negotiation if the other party on the other side of the table also gives up that lever. The rich want you to be principled libertarians while they munch at the government trough.