45 and COVID-19

Gen-X, Y, and Z are cleaning up the mess left by you selfish baby boomers–here’s a history lesson for a certain dear one who claims to know history:

“How baby boomers became the most selfish generation”

“Time and time again difficult decisions have been pushed off for later, and complicated social issues have been relegated to something that the unforgiving “invisible hand of the market” can fix.

It has all been to our detriment. And it is all our parents’ fault.

The baby boomers who have controlled this country since the 1980s are a selfish, entitled generation. It is not your imagination, and it didn’t come out of nowhere.

This is a short review of the ideas that made them that way.”

“The defunct economist in this case is Milton Friedman, who persuaded a generation that selfishness was the natural state of humanity and that selfishness ultimately would lead to the best possible society, when all the empirical data shows exactly the opposite: that people are capable of prosociality and that pro-social societies do better,” Lynn Stout, a professor of economics at Cornell, told me in an interview.

Toward the end of the 1960s and in the early 1970s, Friedman was the champion of a school of thought in economics called neoclassical theory.

According to this theory, every human action is motivated by selfishness. As such, all humans can be motivated into doing anything as long as there is an economic incentive for it. In fact, no one does or should look out for the good of the collective — corporations should worry only for their shareholders and not for their workers or their customers, for example. Individuals should think only about their own bottom line. It’s all that matters to them really, anyway — the me, here, and now.

It took some work for this ideology to become mainstream, though, because Americans didn’t always think this way.

From the 1920s to the 1960s, corporations were expected to take care of their workers and their communities. And citizens were encouraged to do the best for their country. Taxes were high, workers were well paid, the middle class was built, and America prospered.

historical marginal tax rate for low and high income earners
Check out tax rates when America was “great.”

But there were stumbles, and Friedman and his ilk took advantage of a major one in the 1970s: When the US abandoned the gold standard and the price of oil exploded, neoclassical economists blamed regulation for the country’s economic malaise.

Protections for workers were undone. Unions were busted. And serious politicians started to argue that cutting taxes for the rich would benefit everyone, as those cuts would encourage the wealthy to spend more money that would “trickle down” to the rest of the populace.

Former New York Times executive editor Bill Keller put the results of this ideology in a perfect paragraph back in 2012:

“In 1962, we were laying down the foundations of prosperity. About 32 cents of every federal dollar, excluding interest payments, was spent on investments, only 14 percent on entitlements. In the mid-70s the lines crossed. Today we spend less than 15 cents on investment and 46 cents on entitlements. And it gets worse. By 2030, when the last of us boomers have surged onto the Social Security rolls, entitlements will consume 61 cents of every federal dollar, starving our already neglected investment and leaving us, in the words of the study, with ‘a less-skilled work force, lower rates of job creation, and an infrastructure unfit for a 21st-century economy.'”

Neoclassical economic theory is behind all of this. It was behind the draconian budget cuts of the Reagan administration that also came with tax cuts for the wealthy. It was behind the Bush tax cuts, too. It was also behind Clinton-era banking deregulation, namely the end of the Glass-Steagall Act, which sowed the seeds of the financial crisis. It is behind the growing wealth gap that has dragged our country down — politically and economically — for decades.

“The neoclassical theory of everyone acting selfishly does not get you to peace and prosperity,” Stout told me over the phone. “The way societies prosper is by cultivating conscience.”

Neoclassical economists believe that the private sector does things better because the incentives are more selfish. S0 why not let the private sector handle everything — even the most vital of human needs?

Here’s why: The incentive theory doesn’t really work when the people being served are not also the people paying for the service. This is the case in education (taxpayers pay, but students learn). This is the case with healthcare (insurers pay the bulk, but patients decide when to see a doctor).

In a selfish system, ultimately the payer’s needs supersede everything else. We’ve seen this play out brutally in the case of incarceration. For-profit prisons have been such horror that the Justice Department decided to phase them out.

For-profit colleges have also been a disaster; last year the Department of Defense said it would no longer allow service members to use its funds to attend the University of Phoenix, the country’s largest for-profit college owned by the Apollo Education Group.” – written by Linette Lopez on Nov 30, 2016