Posted on 04/12/2017 11:25:05 AM PDT by Lorianne
Where's the growth going to come from as the dominant generation makes less, borrows less, spends less, saves more and turns away from long commutes, malls and suburban living and abandons the worship of private vehicles?
If anything defined the postwar economy between 1946 and 1999, it was the exodus of the middle class from cities to suburbs and the glorification of what Jim Kunstler calls Happy Motoring: freeways, cars and trucks, ten lanes of private vehicles, the vast majority of which are transporting one person.
Ol' 55 (freeway cars and trucks) (written by Tom Waits, performed by The Eagles)
The build-out of suburbia drove growth for decades: millions of new suburban homes, miles of new freeways, sprawling shopping malls, and tens of millions of new autos, trucks, and SUVs, transforming one-car households into three vehicle households. Then there was all the furnishings for those expansive new homes, and the credit necessary to fund the homes, vehicles, furnishings, etc.
Now the Millennial generation is turning its back on both of these bedrock engines of growth. As various metrics reveal, the Millennials are fine with taking Uber to work, buying their shoes from Zappos (return them if they don't fit, no problem), and making whatever tradeoffs are necessary to live in urban cores.
Simply put, the natural progression of this generation is away from suburban malls, suburban home ownership and the car-centric commuter lifestyle that goes with suburban homeownership.
Saddled with insanely high student debt loads imposed by the rapaciously predatory higher education cartel, Millennials avoid additional debt like the plague. Millennials have relatively high savings rates. As for a lifetime of penury to service debt--hey, they already have that, thanks to their "I borrowed $100,000 and all I got was this worthless college degree" student loans.
Consider the secondary effects of these trend changes. If Millennials are earning less and already carrying heavy debt loads, who is going to buy the Baby Boom's millions of pricey suburban McMansions. The answer might be "no one."
If vehicle sales decline, all the secondary auto-related sales decline, too. Auto insurance, for example.
Furnishing a small expensive urban flat requires a lot less furnishings than a 3,000 square foot suburban house. What happens to sales of big dining sets and backyard furniture?
As retail malls die, property taxes, sales taxes and payroll taxes decline, too. Many cheerlead the notion of repurposed commercial space, but uses such as community college classes pay a lot less per square foot than retail did, and generate little in the way of sales and payroll taxes.
Financial losses will also mount. Valuations and property taxes will decline, and commercial real estate loans based on nose-bleed valuations and high retail lease rates will go south, triggering significant financial-sector losses.
Retail is already shrinking fast. Look at the store closings--the 2017 number already exceeds the post-financial crisis surge in 2008:
Where's the growth going to come from as the dominant generation makes less, borrows less, spends less, saves more and turns away from long commutes, malls and suburban living and abandons the worship of private vehicles? Toss in the convergence of technology (i.e. a mobile phone does everything) and the answer is growth is being replaced by DeGrowth.
Gordon Long and I explore these topics in our latest video program, MILLENNIALS: A Menacing Metamorphosis:
Student loans are forcing these decisions. When you work at Starbucks are paying $600/month on your loans, you’re not going to have much left over for a quality life.
Interesting. Tuition at my Alma Mater is $2,000 a semester and they need $100k to get a degree.
You are obviously ignorant of student loan payment programs.
http://www.bankrate.com/finance/college-finance/what-to-do-when-you-can-t-pay-student-loan-1.aspx
AND all over the black agitation organizations are complaining that white people are moving back in to the cities that white people moved away from 40 years ago.
Cant blame them for not wanting to live someplace where you have to drive everywhere. especially stores full of the same imported crap that really isnt all that amazing.
Gas + car insurance + maintenance is no joke on the wallet.
Oh sure, you can defer payments if your income is low enough. That doesn’t stop the pile on of interest.
Now, that’s some irony for you!
Student loans got them a job at Starbuck’s? You’re killin’ me!
Exactly, cars are becoming cost prohibitive.
You virtually can’t even work on them anymore.
Most millenials, not all, have absolutely no mechanical inclination either.
The Starbucks employee you cite would have a min required payment of about zilch and balance remaining after 25 years would be forgiven.
That’s true. Many people raised big families in 800 to 1000 square foot houses. The deal was the older kids moved out as soon as they could.
Different lifestyle.
A good deal of their life occurs about 12 inches in front of their nose.
You’d practically have to put your entire life on hold in order to get that forgiveness, because any increases of income above the poverty will be used to determine the rate that you’ll be paying.
That could well be. It will be interesting to see how it plays out.
Broadly, much of this seems to be true. However, this is all fine for young Seinfeld/Friends types, but as people start to marry and raise a family they move out of the city.
What is absolutely criminal is the fact that so many kids — and their parents! — have bought into this college scam and allowed their kids to borrow tens of thousands if not amounts north of $100,00 or more.
The high school educational union establishment places incredible pressure on kids to go to the best college possible — and worry about the money later. The ponytailed college professors and administrative support racket further dupe these kids into thinking they are getting something of value by handing over their lifetime of earnings to them right now through loans.
So the bottom line is that educational cartel has seduced mostly middle-class kids into surrendering much of their lifetime earnings to them. The fat professors and college administrations collect all this lucre through distributed loans and live fat and happy while the college kids have, seemingly unknowingly, signed themselves up for a lifetime of indentured servitude, and often their college diploma is not worth much more than a sales receipt.
The whole scam is immoral and criminal.
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