Blame Wall Street, Not the Baby Boomers

A hemorrhaging economy. A tough and frustrating job market. Downward pressure on wages. Housing out of reach. High energy costs. Government strapped for cash. Questions about our global standing. Wondering about the American Dream.

That describes America all right, but it's the America of the late 1970s and early 1980s, when our country truly did seem to be falling apart.

In our media-centric world it's easy to get caught up in the moment and think that things have never been this bad and our problems are worse than at any time in history.

We like to think that our economic woes are unique to our time, that ours is the first era in which our democracy seems broken, that this is the only time in our history when the next generation may be worse off than the previous generation.

What we need is a little perspective. And a little understanding of who's responsible.

Dial back three decades and America's economy and preeminence seem far more precarious than what we believe it to be today.

Home mortgages hit a high of 18 percent and inflation spiked at nearly 15 percent, eating away at our flattening wages month after relentless month. In 1982 and 1983, unemployment stood at over 10 percent for almost a year. In the late Seventies, gas prices skyrocketed as OPEC held our economy hostage to its production quotas; Americans hoarded gas, unheard of in a time of peace, and idled in line for hours just to fill their tank.

The only major riot of 1979 took place not in an inner city but in the suburban heart of the American Dream, in Levittown, Pennsylvania, where truckers and just plain middle-class Americans torched gas stations and hundreds were sent to jail. Nine states called out the National Guard to quell gas violence. Americans joked at the time that they better take their vacations close to home because there might not be enough gas to get back.

Writing after the Levittown riot, columnist George F. Will observed, "Suburbia's symbol, the cul-de-sac, expresses America's mood on the eve of the 1980s. A cul-de-sac is, after all, just a fancy dead end."

Chrysler needed a bailout to stay afloat, we were driving obsolete and poorly manufactured gas guzzling cars, our industrial base was rusting and rotting, and American workmanship was ridiculed worldwide. Cities and school systems had no money to pay their bills, and New York teetered on the verge of bankruptcy.

Americans were so nervous about their economy that they sought refuge in gold, driving it to what was then a record price of $835 an ounce. Jewelry stores in New York City began to look more and more like Middle Eastern bazaars with people rushing in either to buy gold or to unload whatever they had, which included heirloom jewelry and gold-filled teeth. "They came in with bloody roots and all," reported one jewelry store owner.

In 1978 we learned about the toxic wasteland that was destroying the community ironically named Love Canal, and the Environmental Protection Agency later reported that there were 30,000 hazardous dump sites scattered around the country that were poisoning our land, 1,200 of which posed serious and immediate threats to people's health.

We also had just ended an unjustified and unjustifiable war that sent nearly 60,000 young Americans and millions of Vietnamese to their death. It was a war that exposed official lies and cover ups, followed by one president's personal war against his enemies that ended in his resignation. Our political system seemed broken.

It was a time of doubt, decline, limits, stagflation, and discontent, or as one journalist put it, we had entered an era of "free floating grievance." Seagram's captured the moment in an ad for its gin, "Defy mediocrity," as if drinking their product would make us feel better about ourselves.

The great bulk of baby boomers were in their twenties during these years, trying to grasp adulthood in an America of shattered dreams and shuttered hopes. Contrary to the popular image of boomers living amid constant comfort and prosperity, they instead entered a job and housing market that was among the worst in memory. Indeed history would show that for most boomers, wages have flat-lined since those years, spanning most if not all of their working lives.

The common perception at the time was that boomers would not have it as good as their greatest generation parents did. Missing from the American conversation, wrote a Washington Post reporter in 1979, "is a sense of that boundless hope and optimism one generation has had for the next in this country -- wanting our kids to have it better than we did."

It all sounds quite familiar, doesn't it?

Today there's an entire cottage industry of critics who blame our economic woes and political paralysis on baby boomers. The narrative goes as follows: boomers are a singularly spoiled and selfish generation that is the first in our history to leave America worse off for its kids. "The baby boomers, I believe, have a lot to answer for," said New York Times columnist Thomas Friedman, a constant critic of the boomer generation.

Yet no one blamed the Greatest Generation for our collapsing society in the 1970s, for the decay of our industrial base, for undermining faith in our political system, for creating doubt about the future, or for sending their children off to a brutal and pointless war. Today they are a celebrated generation, their flaws forgotten and their faults overlooked.

If anyone deserves blame for what boomers went through then and what their kids are going through now, it's not any particular generation but rather the captains of industry and finance from all generations whose dedication to bettering our nation is only a byproduct of their dedication to enriching themselves. If we win while they win, great. But if we lose while they win, that's just our hard luck. Somehow they never seem to lose.

Over the last thirty years, the barons of capital have won a great deal while the rest of us simply struggle to stay in place. We've seen a remarkable growth in American productivity in those years yet the only ones benefiting are at the top of the economic ladder. Wages and wealth have stagnated for most of us since the 1970s, yet the rich have gotten vastly richer and income inequality is the greatest since the Depression.

In this grueling recession we're struggling to overcome, the only ones who haven't taken a hit are the lords of finance and the top tier corporate managers whose salaries continue to shatter records. As the Washington Post recently documented, median pay for executives at America's largest companies has more than quadrupled since the 1970s, whereas average worker wages have dropped more than ten percent (all in inflation adjusted dollars).

Or to put it another way, CEOs today make 343 times the pay of average American workers, a stunning increase from 1980 when it was 42 times the average worker's pay. And to drive the point home, the wealthiest 300,000 Americans collectively earn almost as much income as the bottom 150 million Americans.

Whatever else comes of the protests on Wall Street and at Federal Reserve locations around the country, they are posing a challenge to the prevailing ideology in America that unbridled capitalism is the best way to run an economy. Something clearly is wrong with our current version of American capitalism, and it has been for a while. As a nation we must ask how it can be made to work better for the vast majority of the American people.

Now in challenging the economic status quo the protesters may be labeled as present day radicals. Ever since the Reagan Eighties our culture has deemed markets infallible, executives wise, and investment bankers hotshots and geniuses. As a culture we've accepted this ideology hoping that it would lift all boats. But it hasn't.

In fact what's truly radical is not the protest on Wall Street, but the income and wealth inequality that ever since the 1970s has been tearing at the very soul of the American nation.

Originally published on PunditWire and the Huffington Post.