Wednesday, June 24, 2015

Karl du Fresne: Greedy baby-boomers? I'm not so sure


Is there anything less edifying than a debate between generations about who had it tougher? Judging by a barely civil clash on TV3’s The Nation recently, probably not.

TV3 lined up three “millennials” – members of Generations X and Y, born after 1980 – against three baby-boomers. 
The younger cohort was out to prove they had been disadvantaged by political and economic changes over their lifetime. The boomers, predictably, weren’t having a bar of it.

Great. As if there weren’t enough divisions already in society, we now have people of my generation and those of my children’s generation snarling at each other over who got the worse deal.

The catalyst for this clash was a newly published book,
Generation Rent, by Wellington economists Shamubeel and Selena Eaqub. In it, the couple suggest that inflated property prices mean that in time, only the children of home owners will be able to afford houses of their own.

The result, they argue, will be the emergence of a new “landed gentry” that threatens to create a class system similar to that of Britain.

I’m not sure that the Eaqubs (who are themselves millennials) are suggesting this was all a deliberate plot to rob their generation of its inheritance, but Shamubeel Eaqub does say it’s the result of tax and banking policies introduced while people of my age were in charge. So to that extent perhaps we’re to blame, even if there was no malevolent intent.

The Eaqubs are not the only ones suggesting the playing field is tilted against their generation. TVNZ’s Sunday morning political programme,
Q+A, recently interviewed a New Zealand Rhodes Scholar, Andrew Dean, about his new book Ruth, Roger and Me. 

Dean has no doubt where the blame lies for the supposed burdens heaped on people of his age. As the book title suggests, it’s all due to the radical economic reforms promoted by Roger Douglas and Ruth Richardson in the 1980s and 90s.
  

What people like Dean seem to resent most is the student loan scheme, which required them to borrow money for tertiary education that was previously available more or less free of charge.

But as was pointed out on
The Nation, the payback for indebted students is that their qualifications open the way to higher-paid jobs. And Dean omitted to mention that since 2001, those student loans have been interest-free – which means people like him have been subsidised by taxpayers like me. (Doubly subsidised, in fact, because student loans come nowhere near covering the full cost of a tertiary education). 

But all that’s irrelevant, because ultimately there’s little point in trying to compare one generation’s woes, real or imagined, with another’s.

The world changes. Nothing is fixed or constant. One age group might be advantaged in some respects but suffer in others. It’s swings and roundabouts.

My parents were both intellectually bright but had no prospect of a university education. My father had to leave school when he was 15. He obtained his engineering qualifications by studying in his own time. 

I don’t recall them belly-aching that we were better off than they were. On the contrary, they were grateful their children were able to grow up unaffected by war and the Great Depression.

Similarly, my generation shouldn’t resent the fact that our children are in many ways better off than we were at the same age. That’s progress and we should welcome it.

But since people like Dean are making an issue of supposed inter-generational unfairness, perhaps it’s time to point out a few home truths.

For a start, I would say that the millennials have much higher expectations than my generation did. They expect to live in bigger, flasher houses, own better cars and have state-of-the-art home appliances.
 

They routinely eat out (once a rare treat, reserved for special occasions) and they take overseas holidays. They enjoy infinitely greater social freedom, having benefited from reforms – such as homosexual law reform – that their elders pushed through. 

The society they live in is less regulated, less censorious and more vibrant. They have more choice in how they live.

Financially they’re better off too. The government takes far less of their income in tax and the interest rates they pay on their mortgages are a mere fraction of what they were in the 1970s and 80s. 

The problem, of course, is that they don’t know this. They didn’t live through those times so have no grasp of the many ways in which they’re better off.

Would they swap their 21
st century lifestyle for that of the 1970s if they realised what life was like in a strike-plagued, inflation-ridden, over-regulated, monochromatic and conformist society? I doubt it.

I realise I’m starting to sound like the characters in the famous
Monty Python shoebox-in-the-road sketch who compete to tell the most far-fetched story about how hard their lives were, but my generation didn’t start this squabble.

Perhaps I can suggest terms for a truce. If people like Dean stop whinging about being hard done by, people like me might stop banging on about how his generation has never had it so good.

Karl du Fresne blogs at
 karldufresne.blogspot.co.nzFirst published in the Nelson Mail and Manawatu Standard,.

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