by Victor Davis Hanson<\/p>\n
PJMedia<\/em><\/p>\n The World We Don\u2019t Question<\/strong><\/p>\n I\u2019ve witnessed two of the most radical developments in my lifetime the last four years \u2014 changes far greater than those brought on by the massive new increases in the national debt, the soaring gas costs, the radical decrease in average family income, the insolvent Medicare and Social Security trajectories, or the flat housing market.<\/p>\n One is the fact of less than 1% interest rates on most savings (well below the rate of inflation), and the other is an epidemic of 20-something unemployment. All that is\u00a0the new normal<\/a>\u00a0[1].<\/p>\n Why Save?<\/strong><\/p>\n The hallmark advice of retirement planning was always to scrimp, save, and put away enough money to make up for retirement\u2019s lost salary, increasing medical bills, and the supposed good life of the \u201cgolden years.\u201d If a couple had saved, say, $300,000 over a lifetime (again, say, putting $500 away each month for 30 years at modest compounded interest), then they might expect a so-so annual return at 5% of about $15,000 a year on their stash, or about $1,250 per month.<\/p>\n In other words, perhaps Mr. and Mrs. Retiree could find enough with Social Security to live okay and pass on the principal to their kids. But well aside from the fact that many Americans have been laid off, taken pay cuts, lost home equity, had their 401(k)s pruned, or had to take care of out-of-work relatives, there is no 5% any more on anything, not even 2% or in most cases 1%. Saving money means nothing really in terms of return, only the realization that inflation eats away the principal each year.<\/p>\n To earn a decent return, the retiree has had to wade into bonds, stocks, and real estate buying and selling, with all their attendant risks that loom larger after 65. The old American idea of receiving a fair so-so interest on a little money in the savings account vanished. And no one seems to care.<\/p>\n The Federal Reserve perhaps had its reasons to keep interest rates low, given the massive spending, 2008 collapse, and the anemic \u201crecovery,\u201d but whatever the purported aims, the policy is not working. Yet cheap money proves to be no stimulus, even at rock-bottom interest rates. Firms don\u2019t seem to think that near-zero interest (and the banks now have a rather scandalous margin between what they charge for ordinary loans and what they pay in interest) balances out the new anxiety over tax hikes, more regulations, and spiking energy costs. (Did Obama believe that employers simply existed to pay ever more taxes for his growing technocracy to redistribute?)<\/p>\n In classical Roman Republican terms, near-zero interest (and calls for \u201ccancellation of debt and redistribution of property\u201d) represented a vast transfer of wealth from those who saved to those who owe. Imagine a contemporary version of Catiline yelling, \u201cIf elected, I promise we won\u2019t pay those SOB one-percenters any more than a third of a percent on their not-pay-their-fair-share stashes.\u201d At least that way we might have known what we were dealing with.<\/p>\n The Really Lost Generation<\/strong><\/p>\n Few seem to note that those who receive nothing on their retirement savings don\u2019t retire so easily. And when they don\u2019t retire, jobs don\u2019t open up \u2014 which brings us to my next observation:\u00a0the lost generation<\/a>\u00a0[2] of those between 21 and 30, who at various ages and periods came into the workplace the last four years. Many have 8% plus student loans. I doubt half of those will ever be paid off, given the epidemic of unemployment in this cohort.<\/p>\n Unemployment rates of those 16-24 are now officially over 50%. Even the cohort between 16 and 29 suffers from 45% unemployment. In short, in four years\u00a0we have become Europeanized<\/a>\u00a0[3]: young people with no jobs who are living at home and putting off marriage and child raising \u2014 a \u201clost\u201d generation in \u201climbo,\u201d etc. etc. They may have a car, borrow their parents\u2019 nicer car for special occasions, watch their parents\u2019 big screen TV, and have pocket change for a cell phone and laptop by enjoying free rent, food, and laundry, but beneath that thinning technological veneer there is really little hope that they will ever be able to maintain that lifestyle on their own in this present day and age. Meanwhile, just like some Middle East tribal society, \u201ccontacts,\u201d \u201cnetworking,\u201d and \u201cpull\u201d are the new gospel, as parents rely on\u00a0quid pro quos<\/em>to offer their indebted, unemployed (and aging) children some sort of inside one-upmanship in the cutthroat job market.<\/p>\n Note that as a poor substitute for a job, we institutionalized something called the \u201cinternship.\u201d The best I can tell (I get weekly barrages of inquiries from young people wanting to \u201cintern\u201d), you would enjoy the work of free workers who in exchange for their uncompensated labor gather skills and influence that translate at some nebulous date into real work. How odd that the government that fines an employer who does not duly pay proper overtime wages is not interested in the tens of millions of youth who are working largely as Spartan helots.<\/p>\n These new realities fall heavily on the young male. Traditionally, he was in charge of taking charge \u2014 working two jobs to acquire enough to seed a marriage and family or buy a house, striving to be the protector of the household, and accruing experience in his late twenties that would translate into needed promotions in his thirties that would later on pay for braces, kids\u2019 camp, and college tuitions. The new model for the next generation is to cobble part-time work together, intern, occasionally draw on unemployment, send out resumes hourly, and hope for something to turn up (preferably in government, state or federal). We all witness the reality behind these statistics firsthand. When we travel we see more and more older people at work, often well into their 70s. I know 50 or so young offspring of friends, relatives, and associates who are desperately trying to find work.<\/p>\n Some other symptoms: There is a new\u00a0backlash at colleges<\/a>\u00a0[5], which habitually lie to students about the value of their degrees and care more that their offices of diversity are staffed well and their vice provosts for external relations are hitting all the necessary conferences \u2014 at least far more than they worry that their tuition increases have yearly soared well beyond the rates of inflation. The federal government, of course, has masked such excess with subsidized loan-sharking. I asked some young people recently what their various (and all had confusing loan \u201cpackages\u201d) \u201csubsidized\u201d student loan interest rates were. Most said between 6 and 9% (as their parents get .25% of their own savings).<\/p>\n I don\u2019t know where this all leads. The aging baby boomers are not going to have the retirements that they envisioned, and their children are not going to have the good jobs their baby-boomer parents enjoyed. The more I talk to those my age (58), the more I hear that they are madly trying to save money, buy an extra house, get a good used car \u2014 all for their children who may not otherwise ever have a savings account, a home, or reliable transportation. The ancient wisdom was always \u201cdon\u2019t spoil your kids,\u201d \u201cno one helped me after 18,\u201d and \u201ckeep it up and they will never fend for themselves.\u201d All true.<\/p>\n But these days, the game has changed somewhat \u2014 or rather been downscaled: the PhD is not being hired for anything other than part-time teaching; the JD is reduced to the law library gofer; the freshly minted MD is the equivalent of a salaried, high-paid nurse; the credentialed high-school teacher is subbing; the engineer is a draftsman; the carpenter is cobbling together home repair mini-jobs.\u00a0The new plum job<\/a>\u00a0[6]? Landing one of those federal or state regulatorships, inspectorships, or clerkships, which are paid for with borrowed money,\u00a0produce little, and grow as those they audit and fine shrink.<\/p>\n In other words, we are seeing the proverbial chickens coming home to roost in an economy that has run up $16 trillion in debt,\u00a0regulated its way into paralysis<\/a>[7], hounded the private sector, and demonized profit-making. The strange thing about the 2008 disaster was not just that hand-in-glove with Wall Street banks Freddie Mac and Fannie Mae created a huge real estate bubble and then watched it pop (one inflated through private speculation and government-backed sub-prime loans), but that the blame went not to the intrusive, incompetent federal government or even to a Goldman-Sachs-like bundler (a firm from whom\u00a0Obama got more campaign money<\/a>\u00a0[8] than did any other prior presidential candidate), but to the vague \u201cprivate sector\u201d \u2014 as if the well-driller or timber man had somehow collapsed the economy. The result was that Obama\u2019s medicine from 2009 onward was\u00a0worse than the original disease<\/a>\u00a0[9].<\/p>\n Oh, one other thing. We don\u2019t see any more of those funny, though obnoxious, bumper stickers with the words \u201cWe are spending our children\u2019s inheritance\u201d on huge Winnebagos as they zoom by. Perhaps that\u2019s because there are not so many inheritances any more or the children (now in their late 20s) are inside the Winnebago on vacation with their parents. Or maybe the parents sold the Winnebago and are working at Starbucks.<\/p>\n Finally, where does all this lead? To a great deal of pressure and expectations upon a Mitt Romney, whom a growing number of people seem willing to entrust with the remedy to Obama\u2019s Hellenic malady. The more Obama tsk-tsks saving the Utah Winter Olympics or creating a Bain Capital, the more the strapped public may say\u00a0\u201cbring it on.\u201d<\/a>\u00a0[10]<\/p>\n URLs in this post:<\/p>\n [1] the new normal:\u00a0http:\/\/sultanknish.blogspot.com\/2012\/08\/everything-is-fake-now.html<\/a> \u00a92012 Victor Davis Hanson<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" by Victor Davis Hanson PJMedia The World We Don\u2019t Question I\u2019ve witnessed two of the most radical developments in my lifetime the last four years \u2014 changes far greater than those brought on by the massive new increases in the national debt, the soaring gas costs, the radical decrease in average family income, the insolvent […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":"","jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[11],"tags":[12,42,243,244,242,1052,67],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p466Sb-7D","jetpack_likes_enabled":true,"jetpack-related-posts":[{"id":2433,"url":"https:\/\/victorhanson.com\/wordpress\/obamas-paradoxes\/","url_meta":{"origin":473,"position":0},"title":"Obama’s Paradoxes","author":"victorhanson","date":"August 19, 2011","format":false,"excerpt":"by Victor Davis Hanson National Review Online Consider the myriad paradoxes of the Obama age. Unprecedented government borrowing is out of control, unsustainable, and finally causing financial markets to panic. Yet we are told that the necessary cutting ahead will further stall the stalled economy. We went from $9 trillion\u2026","rel":"","context":"In "Commentary"","block_context":{"text":"Commentary","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/obama-administration\/commentary-obama-administration\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":486,"url":"https:\/\/victorhanson.com\/wordpress\/eating-americas-seed-corn\/","url_meta":{"origin":473,"position":1},"title":"Eating America’s Seed Corn","author":"victorhanson","date":"August 31, 2012","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services As gas prices climb back toward $4 a gallon, the Obama administration \u2014 facing a tough re-election campaign and rising Middle East tensions \u2014 is once again considering tapping the Strategic Petroleum Reserve. For years, administrations have bought and stored oil for emergencies,\u2026","rel":"","context":"In "America's Future"","block_context":{"text":"America's Future","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/americas-future\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":171,"url":"https:\/\/victorhanson.com\/wordpress\/a-nation-of-takers-hurtles-toward-the-fiscal-abyss\/","url_meta":{"origin":473,"position":2},"title":"A Nation of Takers Hurtles Toward the Fiscal Abyss","author":"victorhanson","date":"December 14, 2012","format":false,"excerpt":"by Bruce Thornton Frontpage Magazine The on-going negotiations over avoiding the tax hikes and spending cuts we call the \u201cfiscal cliff\u201d are simply the latest act in a farce of self-serving political denial. For decades now both parties have overseen and nurtured the expansion of the entitlement state all the\u2026","rel":"","context":"In "Bruce S. Thornton"","block_context":{"text":"Bruce S. Thornton","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/our-contributors\/bruce-s-thornton\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2754,"url":"https:\/\/victorhanson.com\/wordpress\/bush-did-it-bush-didnt-do-it\/","url_meta":{"origin":473,"position":3},"title":"Bush Did It! Bush Didn’t Do It!","author":"victorhanson","date":"June 13, 2011","format":false,"excerpt":"by Victor Davis Hanson National Review Online During the 2008 campaign Barack Obama ran more against lame-duck President Bush than against his Republican opponent, John McCain. The campaign is now long over, and yet President Obama still seems haunted by the ghost of his predecessor. Last week, for example, he\u2026","rel":"","context":"In "First Term Policies"","block_context":{"text":"First Term Policies","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/obama-administration\/first-term-policies\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":509,"url":"https:\/\/victorhanson.com\/wordpress\/are-we-doomed\/","url_meta":{"origin":473,"position":4},"title":"Are We Doomed?","author":"victorhanson","date":"August 25, 2012","format":false,"excerpt":"by Victor Davis Hanson National Review Online Sometimes societies find themselves in pernicious cycles in which the perceived medicine seems worse than the known disease. The Roman satirist Juvenal lamented the ill effects of free food and free entertainment for the masses (\u201cbread and circuses\u201d) in part because he knew\u2026","rel":"","context":"In "Budget"","block_context":{"text":"Budget","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/politics\/budget\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4086,"url":"https:\/\/victorhanson.com\/wordpress\/the-tab-comes-due-in-2011\/","url_meta":{"origin":473,"position":5},"title":"The Tab Comes Due in 2011","author":"victorhanson","date":"January 17, 2011","format":false,"excerpt":"by Victor Davis Hanson Tribune Media Services Jimmy Carter, Bill Clinton, and both the elder and younger George Bush all found the third and fourth years of their presidencies harder than the first and second. The nation and the world tired of speechmaking. The novelty of a new commander in\u2026","rel":"","context":"In "First Term Policies"","block_context":{"text":"First Term Policies","link":"https:\/\/victorhanson.com\/wordpress\/ahref=\/index.php\/categories\/angry-reader\/categorylink\/a\/obama-administration\/first-term-policies\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/473"}],"collection":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/comments?post=473"}],"version-history":[{"count":3,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/473\/revisions"}],"predecessor-version":[{"id":475,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/posts\/473\/revisions\/475"}],"wp:attachment":[{"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/media?parent=473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/categories?post=473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/victorhanson.com\/wordpress\/wp-json\/wp\/v2\/tags?post=473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nNo more. We have become emasculated Italians, our economy ossified and socialized to such an extent that few are taking risks to open new businesses in Illinois, build a pipeline across Nebraska, plant a 600-acre irrigated field, or open a timber mill or mine in California. Only so many of the unemployed can land a government job monitoring delta smelt populations or suing to shut down another power plant. In other words, I don\u2019t think Barack Obama at the convention this week is going to be bragging too much about \u201cmillions of new green jobs,\u201d more subsidies to Solyndra clones, another stimulus, keeping the deficit at $1 trillion plus, another federal takeover, more juicy details about Obamacare, higher taxes on the greedy, another gas lease denied, or yet more pipelines tabled. He may wish\u00a0to continue all that<\/a>\u00a0[4], but he surely won\u2019t wish to tell us so.<\/p>\n
\n
\n[2] the lost generation:\u00a0http:\/\/www.nationalreview.com\/articles\/314936\/war-children-mark-steyn?pg=1<\/a>
\n[3] we have become Europeanized:\u00a0http:\/\/pjmedia.com\/eddriscoll\/2012\/02\/10\/forget-occupywallstreet-whos-up-for-occupying-moms-basement\/<\/a>
\n[4] to continue all that:\u00a0http:\/\/www.chequerboard.org\/2012\/09\/barack-obama-please-give-me-a-mulligan\/<\/a>
\n[5] backlash at colleges:\u00a0http:\/\/pjmedia.com\/eddriscoll\/2012\/07\/02\/silicon-graffiti-glenn-reynolds\/<\/a>
\n[6] The new plum job:\u00a0http:\/\/chicagoboyz.net\/archives\/6677.html<\/a>
\n[7] regulated its way into paralysis:\u00a0http:\/\/www.nytimes.com\/2012\/09\/03\/us\/in-california-banning-bonfires-and-library-napping.html?_r=2&hp&utm_source=buffer&buffer_share=cf58f<\/a>
\n[8] Obama got more campaign money:\u00a0http:\/\/www.nationalreview.com\/articles\/229592\/obama-and-goldman-sachs\/michelle-malkin<\/a>
\n[9] worse than the original disease:\u00a0http:\/\/pjmedia.com\/instapundit\/149984\/<\/a>
\n[10] \u201cbring it on.\u201d:\u00a0http:\/\/www.nationalreview.com\/corner\/315724\/1980-not-2004-campaign-victor-davis-hanson<\/a><\/p>\n