A SECOND COMING OF AGE

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Bob and his pals stand around the pool admiring the emergent power of Bob's willy, as an amused Mrs. Bob fairly swoons with enthusiasm, and not a little pride. Woody wars are upon the land. Viagra led the parade as Bob Dole brought erectile dysfunction from our bedrooms into our living rooms and kitchens. Since the launch of Pfizer's Viagra, we have had prime-time introductions to Glaxo's Livitra and Lilly's Cialis. A cavalcade of unappealing Boomer men assault us as they seek to rediscover the sexual prowess of their 20s while their sensitive significant others offer nodding encouragement.

I recall some years ago the launch of Alberto-Culver's FDS (as in: Feminine Deodorant Spray). This product's design complemented growing public acceptance of unsightly blood stains in your daily wash with admonishments about the social risks of vaginal odor. As an adolescent, I tried not to let commercials for the product shape my sexual attitudes, but I do recall, with some amusement, my sisters' discomfort. FDS introduced us to the commercial possibilities of evolving social trends in the FDS case the rise and exploitation of feminism in the workplace. Whether or not the product ultimately succeeded, it broke new ground by paying homage to the growing power of women.

It should be no surprise then, that the zipper effect [*] should welcome us to the age of the aging Boomer consumer. Because Boomers have clung to their youth so long; because no one in marketing wanted to disillusion them about their denial over aging and because it is politically useful to curry their favor, the emergence of Boomers into the autumn of their lives has been long in coming, but short on wide recognition of the dramatic consequences that a generation of aging, self-centered, self-serving and long-lasting idiosyncrats will have on our social landscape.

The present election is surely about Boomer politics (and religion, but I will get to that elsewhere). Iraq, the war on terror [] , the anti-entitlement movement, like Viagra, and its cousins (and, not-coincidentally, Vaginagra [?] is on its way), are harbingers of an emerging conflict between the interests of the young and the old. The numbers should chill the spines of social planners and futurologists everywhere.

While headlines continue to suggest a shared vision of a technocratic, networked, youthful connected future of spiritually profound, justice-based, caring, diverse and peace-loving global tribalists, a big problem is creeping up: Greed, class and a fault line across generations. There are 75 million Americans over the age of 50 according to Census 2000. Of these, 20 million are Boomers. And, there are 55 million Boomers between 41 and 50. In any case, 75 million Boomers made it past their halcyon, rock-charged, drugged, Vietnam, crazy '80s youth and young adulthood, and have begun to arrive at the sunset of their lives. (There are those who wish the National Traffic Safety Council, Ralph Nader and seatbelts had never been invented.)

These Boomers vote as a bloc. They understand the principle of self-interest. They are similarly distributed throughout the globally developed economies. They are ready for battle. Instead of condoms in their mess kits, they have Viagra.

Consider trends in longevity in the Greatest Generation, the last of whom are now into their 60s. They are also lasting a long time, just not as long as the Boomers will. There are now 34 million Americans over 65 and 1.5 million Americans over the age of 90. Roughly 300,000 of these are over the age of 100. This is more people over 90 or 100 than in all of American history put together. And these people are already flexing their class muscles. Just try to amend any provision within Social Security, health care for the aging or attempt a school, fire or police bond initiative. You will discover that protection of the interests of older people is job No. 1 in American electoral and budgetary politics.

Consider, for a moment, that when emerging senior Boomers were junior Boomers the 72-and-out rule was in place. This idea, borne in times of Biblical prophecy, held that everyone would die by age 72, with rare exceptions granted for the purposes of a wise and caring God. Social Security based itself on the actuarial validity of this principle.

At the same time, asset taxation schemes that might have disproportionately taxed aging, less vigorous asset pools have never been contemplated. Inheritable assets were supposed to change hands every two generations. But, this transitive asset exchange process is unlikely to happen in any foreseeable term.

Those 75 million over-50s hold roughly 90 percent of America's $44 trillion in liquid assets. If autumnal Boomers follow true to form, they'll grow more conservative in their investment practices, they'll aggressively assert their entitlement rights and they'll be more defensive in expressing their social obligations to the generations that will (one can only hope) succeed them. Furthermore, if Boomers hold true to form, they are likely to spend the vast percentage of those assets on travel, leisure and their pursuit of an eternal woody. The kids will get thanked in the wills.

Some results of the woody wars are already in: You may have noted the magnitude of the gap between young and old in Dean versus Bush. Dean's issues were with Bush's pro-aging policies. The Bush tax program, sponsored as it is by a Dallas group of oil and real estate gazillionaires called the Committee of 100, clearly offers new asset protection to Boomers unheard of in their grandparents' lives. These tax advantages include relief from capital gains risk (long calculated into their portfolios), relief from inheritance tax risk, relief from dividend taxes, maintenance of the oil depletion allowance and a host of benefits for those who prudently manage their cash by volume.

But this is the first effect: A tax bill so profound that it puts cities, states, kids in school, the U.S. Treasury and municipal and county bond authorities at risk. The second was the senior drug subsidy bill. The third will be making these policies permanent. And there is more to come much more. Over the next 20 years, FICA limits will be expanded to 20 percent or more of gross income and payment ceilings will be lifted. Cities will be abandoned by asset pools, heading for warm climes to the South.

Boomers will leave a legacy of debt and obligation to their children [] . At the same time, health care will be divided between gerontological services and everybody else. Speed limits will be reduced. Drugs will be legalized for seniors. Aging-farms will dot the landscape. Labor will be concentrated on eldercare services. In fact, if the amount of work that it takes to care for an aging person today remains a constant into 2020, more than 20 percent of the American economy will be engaged in eldercare, and 40 percent of the wages earned by providing such care will go to pay for the care being provided. Yikes!

No one knows how long Boomers will last. They are the first generation to have been universally educated, given access to college, offered antibiotics, inoculated against pernicious diseases, eaten the five food groups with regularity (thanks mom!), slept in warm beds and reared in a house.

But, even before they hit their full seniority, they have already broken through age barriers set by Methuselah. And so have their parents. I assume that 90 percent of the Boomers alive today will see 65. Half of these will see 75. Half again may see 85. Half of these may see 95 and more than 5 million Boomers will, in all likelihood, celebrate their 100th birthday. Better still, Willard Scott may still be around to put their names on the Today show. (Although in deference to the interests of a nostalgic audience, that program will be renamed Yesterday.)

Accept, please, the possibility that these numbers are conceivable. If anything like this holds true, the defined-benefit element of Social Security will cost around $15 trillion over the 30 years beginning in 2010 and ending (mercifully) in 2040. I'd estimate that fungible cash reservoir to fund this would require a bankroll of $10.8 trillion, assuming annual growth of assets in the 5 percent range and peak payouts of about $500 billion a year, distributed over the 40-year span.

Couple this requirement with a reckoning about Boomer Medicare costs. For the sake of discussion, accept that in their last year (really, their last six weeks), the average aging adult absorbs $120,000 in medical expenses. Assume that the average Boomer will pay little of this. Now multiply 120,000 by 75 million and add a dollar sign. In addition, the average 80-year-old burns through roughly (these numbers were first encountered in a private study I did for a pharmaceutical manufacturer) $14,000 a year in health care; the average 70-year-old burns through $10,000 and I won't show you what happens to nonagenarians and centenarians. Whatever the actual bill turns out to be, be assured that its price tag is a huge unaffordable social risk.

As they become more expensive, Boomers will become more politically realistic. Gone already is political support for the quality of education they both enjoyed and supported as young parents. At the same time that support rises to preserve cost-of-living escalators in pension and Social Security payments, support erodes for public service compensation, labor unions and the minimum wage. Cost-of-living escalators have disappeared from municipal budgets. Labor unions have enormous difficulty making their case for higher wages, even as technology drives productivity higher and higher. And the minimum wage: wow. Had cost-of-living increases been applied for the last 40 years (minimum wage law came into being in the mid-'60s for the benefit of Boomer teenagers), the minimum wage would now be $8.50 versus $5.15.

Gone also will be the Boomers themselves. They are heading south of the Mason-Dixon Line. Boomers are searching for communities that offer warm weather, entertaining education, excellent college sports, gated communities, conservative government and great cops. The migration has begun. It is driving new political battles in impacted, non-Florida cities, Florida having already capitulated.

These firefights pit newly arrived Boomers in gated sub-communities against anti-expansionist younger people outside the walls. The issue is development and resources. I live in Santa Fe, ground zero for the clash between the rights of older American's to a delightful second act, and the community's right to adequate opportunity for children, security and a life of quality.

Elections are ugly here. As assets are poured into the housing, care and feeding of retiring Boomers they are withdrawn from engagement in venture capital markets, human services, education, infrastructure development, urban centers and social justice promoting entitlement programs. Here lies the rub: For younger people, the situation is inherently unfair; for Boomers it is the just benefit of their contributions.

It is time to contemplate the uncontemplatable: there is a fault line growing in American, Western and Asian developed economies between those who have triumphed over age and those who are young enough to feel victimized by the consequences. Furthermore, the social and economic institutions that provide benign protection for the ravages, social and personal, of old age are not equipped to manage the coming antagonism. They were all built on the 72-and-out rule.

So it has come to this: woody wars. We live in a time in which marketers, politicians, investors and children of the new oldsters will compete for the interests of Boomers. The competition will be as raw and culturally odd as the late competition for erectile life.

I am often asked what one should invest in. I answer by saying, Follow the trends. In the '40s, you could have done worse than diamonds and mattresses; in the '50s, toys; in the '60s, textbooks and surfboards; in the '70s glassine pipes and lam; in the '80s cars and accounting; in the '90s, golf courses and SUVs; in the '00s, oil and housing; in the next 20 years, catheters and coffins. For sure, this (demographic bubble), too, will pass away, eventually. But before that day comes, we will see a world in which the burden of financing an aggressive older population will fall on the shoulders of a vigorous, oppressed younger population. Uh-oh.

DR. JIM TAYLOR

[*] The zipper effect, by the way, is a marketing hypothesis of mine that holds that any demographic transition will be first commercially recognized for its consequences for mass sexuality. (back)

[] Apropos of the issue here and the war on terror, I have heard that the average Palestinian is under 20, while the average American is over 40. (back)

[?] My (proposed) name for one product of a class of stimulants for enhancing female sexual interest. These are currently being tested. If you want the name, you must pay me. (back)

[] Another of my hypotheses is this: When our children attain a majority in Congress and the White House, they will simply print the national debt out of existence. Although this would entail an Argentine-like period of inflation, they have time and imagination on their side. (back)

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