The economic principle many learned about even prior to taking college Econ 101 was the law of supply and demand. As we learned, an economic system which is functioning freely, distributes goods and services from a source of plenty to a source of need. In doing so, the prices paid by those in need falls until the supply diminishes. Consequently, those who are still in need may continue to demand more as long as they are willing to pay higher prices to obtain their need. But Boomers did not write this economic reality, we only refined it.
Historically, as the European middle class began to establish itself in the middle ages, permanent housing was demanded and built. Home dwellers demanded initially cheap fuel for heating and cooking as cities grew. The cheapest and most readily available was wood from surrounding forests. The wood was harvested for over 100 years until nearly all forests were denuded. Prices began to rise due to delivery and labor costs. Providers began developing coal as an alternative. Entire industries were established, and residents invested in coal fired heaters, coal lamps and manufacturing. Demand for wood and wood burning equipment fell precipitously. As demand for coal continued to rise, prices increased. Demand forced mines and factories to belch out sickening choking fumes of coal dust and smoke blackening out the sun at times. Citizens died. Demand fell. New resources were developed. Natural gas and petroleum was found to be cheap and available nearly everywhere in the United States of the early 19th century. Demand has continued until now, a barrel is nearly the price of gold in 1950-- $100/bbl.
What all these supply/demand cycles have in common are numbers-- numbers of individuals who demanded their needs be met. In 1946, as all the soldiers, sailors, airmen, marines and coast guardsmen returned from WWII, they created another sort of demand. This one had its root in passion, emotion and love. Biologically speaking, an explosion of genes, DNA and X/Y chromosomes was unleashed which reached its peak by all intents and purpose by 1965. Virtually 20 years of sustained reproduction.
During this 20 year period, nearly 10,000 babies were born everyday in the US. Just the math problem alone portends some issues: 20 years x 365 days = 7,300 days x 10,000 births per day = over 70 million boys and girls. America's population in 1965 was around 190 million. That means boomers made up 35% of the US population. Through sheer numbers, K-12 and higher education facilities, churches, retail shops, transportation systems, etc. all seemed to explode in order just to meet the demand of Baby Boomers. Businesses flourished as they tried to anticipate the needs of such a large segment. Stock markets surged on constantly positive growth projections and profits earned by growing demand.
Through normal mortality and four regional wars-- depending on how one counts, Boomers make up less than 50.8% of the total US population. As such, Boomers have lost some clout in our ability to drive prices down through demand for its goods and services through numbers. What services and goods were once provided by government and business interests as anticipated needs now must compete with younger and younger generations of our kids and grandkids. Those groups, though perhaps not expressed through the same demands, have nonetheless affected prices on goods and services now also being provided from international markets as well. This further diminished a Boomer demand effect.
Now reaching retirement-- that long sought after golden egg was found to be cracked like Humpty Dumpty. All the king's horses and all the king's men left to cater to another crowd that includes emerging middle class numbers in China, India, Brazil and others. Boomers are like the last passenger at the terminal who's left behind because all the other seats were filled.
Markets, home prices, pensions have lost value. It's as if the forests of western Europe, once believed inexhaustible, are now denuded and absent whole species of woodlands. The value that Boomers planned on using to support their golden years has been lost. Investment bankers and stock manipulators saw the plunge in productivity coming as Boomers left the marketplaces. They took their wealth and in so doing wiped out Boomer's, Mellenials, Gen-X'ers and others with them. Now Boomers can't even use the wealth they had to influence the markets and resources they demand. They seem to be at the mercy of those in other countries. As in Europe of the middle ages, Boomers, like those who could only burn wood for heating their homes, are being forced to change and adapt at a point in their life in which stability and tranquility were fundamental objectives.
The most many Boomers can now expect is to work part time until the golden years turn into the senile years. The big problem is that numbers and wealth that used to drive productivity and markets to respond to Boomers' needs are now less and less available. Many went out of business in the recession that started in 2007. We see the plight of many Boomers who now against their wishes live a life of lowered expectations.
What Boomers want now is to find the security they thought their accumulated wealth and numbers had earned. Like the citizens of London in the 1500's, however, who learned that what was once believed as constant and inevitable, was transitory and temporary. Move on or move aside. Our numbers no longer drive supply. Boomers will need to be engaged in a process to reinvent themselves and can look forward to a more active life unlike that of our parents-- whom many Boomers are now caring for.
Historically, as the European middle class began to establish itself in the middle ages, permanent housing was demanded and built. Home dwellers demanded initially cheap fuel for heating and cooking as cities grew. The cheapest and most readily available was wood from surrounding forests. The wood was harvested for over 100 years until nearly all forests were denuded. Prices began to rise due to delivery and labor costs. Providers began developing coal as an alternative. Entire industries were established, and residents invested in coal fired heaters, coal lamps and manufacturing. Demand for wood and wood burning equipment fell precipitously. As demand for coal continued to rise, prices increased. Demand forced mines and factories to belch out sickening choking fumes of coal dust and smoke blackening out the sun at times. Citizens died. Demand fell. New resources were developed. Natural gas and petroleum was found to be cheap and available nearly everywhere in the United States of the early 19th century. Demand has continued until now, a barrel is nearly the price of gold in 1950-- $100/bbl.
What all these supply/demand cycles have in common are numbers-- numbers of individuals who demanded their needs be met. In 1946, as all the soldiers, sailors, airmen, marines and coast guardsmen returned from WWII, they created another sort of demand. This one had its root in passion, emotion and love. Biologically speaking, an explosion of genes, DNA and X/Y chromosomes was unleashed which reached its peak by all intents and purpose by 1965. Virtually 20 years of sustained reproduction.
During this 20 year period, nearly 10,000 babies were born everyday in the US. Just the math problem alone portends some issues: 20 years x 365 days = 7,300 days x 10,000 births per day = over 70 million boys and girls. America's population in 1965 was around 190 million. That means boomers made up 35% of the US population. Through sheer numbers, K-12 and higher education facilities, churches, retail shops, transportation systems, etc. all seemed to explode in order just to meet the demand of Baby Boomers. Businesses flourished as they tried to anticipate the needs of such a large segment. Stock markets surged on constantly positive growth projections and profits earned by growing demand.
Through normal mortality and four regional wars-- depending on how one counts, Boomers make up less than 50.8% of the total US population. As such, Boomers have lost some clout in our ability to drive prices down through demand for its goods and services through numbers. What services and goods were once provided by government and business interests as anticipated needs now must compete with younger and younger generations of our kids and grandkids. Those groups, though perhaps not expressed through the same demands, have nonetheless affected prices on goods and services now also being provided from international markets as well. This further diminished a Boomer demand effect.
Now reaching retirement-- that long sought after golden egg was found to be cracked like Humpty Dumpty. All the king's horses and all the king's men left to cater to another crowd that includes emerging middle class numbers in China, India, Brazil and others. Boomers are like the last passenger at the terminal who's left behind because all the other seats were filled.
Markets, home prices, pensions have lost value. It's as if the forests of western Europe, once believed inexhaustible, are now denuded and absent whole species of woodlands. The value that Boomers planned on using to support their golden years has been lost. Investment bankers and stock manipulators saw the plunge in productivity coming as Boomers left the marketplaces. They took their wealth and in so doing wiped out Boomer's, Mellenials, Gen-X'ers and others with them. Now Boomers can't even use the wealth they had to influence the markets and resources they demand. They seem to be at the mercy of those in other countries. As in Europe of the middle ages, Boomers, like those who could only burn wood for heating their homes, are being forced to change and adapt at a point in their life in which stability and tranquility were fundamental objectives.
The most many Boomers can now expect is to work part time until the golden years turn into the senile years. The big problem is that numbers and wealth that used to drive productivity and markets to respond to Boomers' needs are now less and less available. Many went out of business in the recession that started in 2007. We see the plight of many Boomers who now against their wishes live a life of lowered expectations.
What Boomers want now is to find the security they thought their accumulated wealth and numbers had earned. Like the citizens of London in the 1500's, however, who learned that what was once believed as constant and inevitable, was transitory and temporary. Move on or move aside. Our numbers no longer drive supply. Boomers will need to be engaged in a process to reinvent themselves and can look forward to a more active life unlike that of our parents-- whom many Boomers are now caring for.
No comments:
Post a Comment