What the meltdown means to me, a Gen-Yer
Filed under: Recession
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While watching the financial world basically go to all hell, I feel like a zebra running from a lion in the hopes that he'll snatch someone else in the herd. I've only been in the workforce for a couple years, and like me, most people my age probably dodged a few major bullets recently. I didn't buy property coming out of school, I didn't make risky investments, and most of my retirement is in my 401(k). While my 401(k) took a hit, I wasn't going to touch it until retirement anyway. Thankfully, my friends and I aren't affected as directly as the over-30 crowd, but we still face a shaky economy, credit isn't as readily available, discretionary income is diminished, and jobs are harder to find.
One of my friends started working for Freddie Mac about a year ago, and they gave him a $10,000 stake as a signing bonus. Needless to say, that bonus has all but disappeared while Freddie Mac's CEO walked away with millions. As a side note, my friend is in the process of recruiting for the company at college campuses; I can't imagine how tough that has to be right now.
Some of my friends work freelance and feel lucky to even get work at all now. One of my friends had to move back in with his parents, and nearly all my friends live with several roommates, myself included. Only one friend of mine owns her own place. The American Dream seems farther out of reach than ever.
As odd as this may sound to some, one safe bet I've made during these times is going against the word of Ben Bernanke, the Chairman of the Federal Reserve. Basically if he recommends something now, I'll rush to do the exact opposite. For example: a few months ago, he was telling people to sell their gold. Naturally upon hearing this, I bought a good amount of it as a hedge against inflation and-God forbid-a recession or depression. Literally the next week, the value of gold shot up in the double digits. My only regret is that I didn't buy more when I had the chance; now it's tougher to come by.
When Bernanke pushed this bailout, people were saying we may avoid recession and it would help Main Street USA. Based on my previous observations of Bernanke's judgment recently, and other factors, I was against it, no matter what flowery promises may come with it. Now that it has passed, recession is almost certain and the Dow sank by 800 points on Monday. If the bailout hadn't passed the House and Senate, the market definitely would have taken a hit, but for a shorter time, and people would have blamed the "Nay" voters for getting us into a big mess. Now we're in a much deeper hole and it's going to take longer to get out now. I'd much rather bite the bullet and get it over with than try to make more mistakes in the hopes that we'll come out better on the other side.
There is no reasoned debate anymore, only rushed fear-based decision making. I've never seen such biased news coverage about anything in my life. Even AOL, my employer, ran a poll last week (after the House rejected the first version of the bailout bill) that didn't say something neutral like "What do you think of Congress' decision to refuse the bailout?" Instead, it read "Who do you blame more for the bailout bill's failure to pass in the House?" Unbelievable. This problem is the shame of the American media just as much as those who gave out risky loans. With an uninformed public, our democratic republic cannot work.
I didn't mean for this to turn into a rant, but I'm pissed off that my generation has to pay for the foolhardy mistakes of my elders. People are getting hurt, and I don't want us to repeat the 1930's. My generation has enough on our hands that we need to fix.
Read how the financial crisis is affecting other WalletPop bloggers.
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Reader Comments (Page 1 of 2)
10-09-2008 @ 6:15AM
Mike said...
It wasn't your elders that took out a 30 year mortgage on a ten dollar cup of coffee at Starbucks every time they put the purchase on plastic.
From where I stand your elders spent too much money buying your generation junk. Standing in the cold to fight over whatever the latest piece of crap was offered up durinf the holidays that you had to have.
You will like a depression. It is the true meaning of doing more with less.
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10-19-2008 @ 10:53PM
Randy said...
Your right Mike, The greediness of CEO's and consumers buying more house than they every needed stands at the top of the list for our money problems today.
10-09-2008 @ 7:52AM
savannah said...
It is unfortunate that blame has to be put on the elders. I guess we could all use that as an excuse for what has happened in all our lives. Instead of blaming, maybe we should all work together to try to help each other. I agree with Mike that each generation has required more and more to keep them "amused", and unfortunately, parents have bought alot of that on credit. Instead of being emo, maybe all generations should quit whining and actually take some action to improve things. Or, we could just sit around and feel sorry for ourselves and blame our elders...
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10-09-2008 @ 8:44AM
Susan said...
Pointing blame! You have been a voter for 8 years now, I would think you are part of the problem not a victim. I would like to see everyone stop wasting time looking to blame and fix the problem. I sure hope Wall Street and Washington will be able to do this.
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10-09-2008 @ 11:56AM
Martyn said...
Good grief...congress caused the problem. It is called unintended consequences. Sure there is a dose of greed, there always is but the wholesale stupidity of so many legislators with their associated lust for power who encouraged the private sector has succeeded where war and pestilence has failed.
I ask you when you blame Wall Street, who made a $0 down loan possible? Not Wall Street, there is no money in it. Not the President, it is not his pervue. Not the Banks, they were litigated against if they didn't.
The blame most certainly should be placed, fingers pointed and petty careers ended. Alas, those who should receive the most scathing criticism are the very ones who are looking to place the blame.
It is hard to blame the poor who saw the opportunity to own twice what they could afford. It is hard to blame the realtors who encouraged the poor to buy the unaffordable. It is hard to blame the banks for writing the mortgage, they were after all available.
There is a quirk of human nature. If during a period of shortage (say a fuel shortage) you open a single gas station and put up a sign that says "Free gas", some people will take only what they need but most will take all that they can get and screw the others.
The Legislature created that "Gas Station" and over the years they finally made the sign "Free Gas". What did they expect would happen?
There has been a massive re-write of history here, so beware offering up Wall Street as the fallguy.
As I said, "Good Grief".
10-09-2008 @ 8:48AM
Bruce Watson said...
Ian-
And fix it all, we shall. Thanks for your perspective; although I'm a fair bit older than you, I have many of the same feelings. There's nothing quite like paying for somebody else's greed to make you think seriously about revolution!
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10-09-2008 @ 11:56AM
Belle said...
"Let he who is without sin cast the first stone." What about YOUR greed?
10-09-2008 @ 10:46AM
A.D said...
I actually agree with you, I am 23, and I believe it was the Boomer generation that started this mess.
Me first, me first.
I want that bachelor's degree and will take out loans that I probabaly can't pay off, even though all my friends are getting undergraduate degrees and thus making them as useful as high school diplomas.
I want that house/condo for $300,000, but I only have $100,000.
I want that $40,000 truck, but I can barely afford the gas.
Nowhere is this seen most than in my Chicago... vacant new condo developments built on the site of former blue-collar apartments.
Most of my friends from college still live at home with their parents, lucky to have a job after months of interviews. The few I know who live on their own have mommy and daddy helping with $500 rent (and this is with a roomate or two.)
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10-09-2008 @ 10:46AM
Kathy said...
you generation y-ers are such spoiled little brats. I'm 41 and when I grew up we had NO CELL PHONES, COMPUTERS, or the latest VIDEO GAMES/SYSTEMS. our parents didn't bend over backwards to give us every little thing we wanted Try living without your fancy stuff that you really think you need but in reality dont need at all. Yes I have a cell phone and a computer now, and I understand that yes in todays world you do need a cellphone and/or a computer, but you dont need the most newest, coolest, expensive one do you? Try saving up your money each week(or paycheck) and then buy it. Hell that's what I did growing up. And you kids getting credit cards while your still in college? What the heck is that about? That is why the credit market froze in part. So shut up and ride it out. Dont eat out as much and dont buy so much junk, you really dont need it do you?
Just like Mike said You will like a depression. It is the true meaning of doing more with less
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10-09-2008 @ 3:00PM
Joshua said...
hi kathy, well I would just like to point out something that i read recently about credit card companies and colleges.. so that perhaps you will be better informed and less angry at individuals who only want to better themselves in our free market capitalistic cut throat society.. Colleges have actually made deals with credit card companies and banks to advertise on campuses and sign up students to help with there scholastic necessities such as laptops and cell phones and all of the other needs. Reason being to make money off of busy, multi-tasking, financially ignorant students with over draft fees, late fees and other surcharges that break the mark in billions of dollars every year. I believe the root of our problem is the idea of money being everything in this world. It lies within our humanity and lack of it. It shrouded in politics, business schemes, foreign affairs and our own simple day to day greed to be the envy and to enjoy the chance at complete comfort.. I myself quit felt I had school to work and pay my amounting debts in hopes to start fresh and return to school in a few years. I am 21 and never got help from mommy and daddy, I am self reliant, pay my rent and my bills and struggle every month just to buy basic groceries and i am slightly upset that you think everyone taxes the credit infrastructure with technology purchases. have you forgotten the 4 trillion gwb has unjustly spent? do you remember our surplus during clinton.. I was just a kid, but those were good years.. anyway it will take a while to mend the problems of the bush administration, we as a people just need to put the blame on the back burner and unite in a common goal.. help your neighbors, help your friends, you never know you may need help too someday..
10-09-2008 @ 10:50AM
Irving Davis said...
Well here we are once again in the grips of a major melt down. My grandfather and grandmother wo lived thru the depression in the 30's did not have much. But they survived it. Back then it was a simple live. Food, shelter, and clothing the basic substance for survival. Life continues to move forward. The past is a reminder and a warning of what not to do either in the present or the future. This human race has made some very bad descions that are not conducive todays way of life. Credit is a tool to be used wisely, failure results in disaster. I have read many articles about our currently electronic world. We are now connected 24/7 why? Some articles state that the average household has approximately $20,000.00 worth of electronic devices why? People are in hock up to their eyeballs why? We have taken a tool and have almost broke the backs of the american people. This is a proplem we created, we also have banks who disregarded certain aspects of the business and hane made some shady deals. Now wall street is up and down because the people who control it that is what they want. People want to get rich quick why? Wall street is not for the middle class. I am a middle class person working on my future and my families. Curently I have lost $60,000.00 in stocks bonds and securities. It took 9 years to build and nano seconds to loose it. I am pulling the rest of the money out of the banks because I do not want to loose whats left. I can no longer trust a system that has lied. This problem is everyones problem. The "I want it now" syndrome caused this mess. The heads of all of these companies who have lined their pockets just prior to failure need to loose it all. They need to come down to this level and feel how it feels to be squeezed.
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10-09-2008 @ 11:05AM
Jim said...
The U.S. economy is the strongest in the world because we spend with the greatest glee. Everyone I know is caught up in a cycle of spending and debt. The amount of credit card debt is incredible, draging much of individual earnings into interest payments for things that can hardly be considered necessity. We have been sold the idea that we need to own huge homes and piles of stuff.. the latest TV, new cars every few years. Through the perspective of those few still alive that lived through the Great Depression, we are all living in a fool's paradise. At the base of much of our current predicament are two things. Easy credit, in the form of credit cards, and the advertising that has created in us the belief that we need to have everything to be happy. To see what is reasonable, look at life before 1970. To see where we may be headed look at life before 1900, and add the efficiency and advantage of the infrastructure we have established since. When America stops spending, China will stop building coal fired power plants. We have been the engine of outrageous consumption. It's time to get real.
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10-09-2008 @ 11:43AM
Dara said...
Another spoiled brat and whiner
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10-09-2008 @ 2:14PM
Mike said...
This has been a good topic, all from the whiner. First things first. You who call this kid a Baby a$$ whiner. SHUT UP! His views are just as right yours. Every one here is to blame. Any one here who votes is to blame for not making educated votes and letting this country get out of control.
Jim,
First we do not have the strongest economy or we wouldnt be in this mess.
Irving,
You are a 100% correct about the "I want it now" syndrome.
Dara,
Your generation is just as much to blame about wanting material istic things. Much bigger things than a new Ipod every year and the latest fashions. For example, a new car evry two to five years. Over compensating, huge houses.People havn't changed much over the years, materialistic ideas have changed.
Martyn,
Good grief is right. this kinda falls back into the bad voting comment. The "Free Gas" sign is correct. More people will take more than needed. More realisticly everyone would if they knew no one was looking.
Susan,
Just because he has only been voting 8 years dos not make his votes less intelegent. I know people who are going to vote for McCain just because OBamma is black. They have been voting years before me. You were just talking about "Pointing Blaim" , and hopefully Wall Street and Washington will quit and fix the problem. You sound like your right up in the blaim pointing mix.
Savana You are 100% correct, and also its not just the genaration y'ers who want to much. What about the generation X'ers who failed to discipline or educate the gen y'ers. All I am saying is "like father like son", and "Like Mother like daughter"
10-09-2008 @ 11:46AM
Jim said...
My mother grew up during the Depression. As a child, my entertainment was determined by my creatvity and my friendships with neighborhood kids. We had few toys and simple expectations. Everyone walked to school. Every morning and afterschool the streets were awash with children walking to school. Families had one car. A family of four lived in a two bedroom 900 sq ft house. I walked home for lunch everyday starting in 1st grade and let myself in with my key. Obeseity was not a childhood disease. In fact there was not a single fat child in my class. We were not bored. The streets were filled with kids on bicycles or playing ball games and hide and seek at dusk. Today there are no kids on the street. No bicycles, no ball games. All replaced by TV's and video games. Parents drive their children everywhere in gas guzling SUV's. We squander our resources and in doing so endanger ourselves, all around us and the lives of our children. We are unprepared for difficulty. Used to paying others to maintain our homes/cars/equipment. Specialized in our training so that if we should lose our jobs, we will have no way to support ourselves. A simple life is so much richer. The smallest things have greater value. Life was full and real, uncluttered with the trappings of compulsive spending, because there was no such thing as a credit card. Everything purchased was saved for. As a consequence the things we bought had some real value. I am getting more insulation for my attic for Christmas this year. Hopefully I will still be able to afford heat in the winter of 09/10. The OPEC oil embargo of the mid 70's should have been a wake up call. Instead we have squandered our opportunity to develope alternatives in favor of making the oil companies richer, and that we have done. Where will they spend their fortunes? I wonder.
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10-09-2008 @ 2:36PM
Mike said...
The older generations should have been smart enogh to not buy houses and vehicals vehicals that they cannot afford to keep and maintain, just to switch out to another. The older generations, are to blame for not educating the younger generations. The older generations are at fault for buying the younger generations their unnecessary junk. but the young generations need to quit whining and come to the realization that times are changing and people need to change with it.
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10-09-2008 @ 2:46PM
Gary said...
Most everyone (governent, individuals) has lived way beyond their means for more than 10 years. As a result, of others spending habits, I expected a deep recession, near depression to occur in late 2007.
Our family has been thrifty for the past 20 years.Thankfully, our family does not have to worry about the upcomming recession. We are prepared for the worst.
As my 17 daughter recently said: "Dad you are cheap". My response: "Yes, like my father." Thankfully my mother has savings and investments.
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10-09-2008 @ 3:13PM
Katie said...
It's absolutely amazing how quick people are to judge. Being young does not equate to spoiled and whiney. Many of us, I think, are just a little upset that just as we're starting out and getting things under control a big, huge buck has been passed on to us. Every generation is supposed to make it better for the next, no? My husband and I married young, started out with nothing, and made something of ourselves by going into the military. We've made mistakes (who hasn't?), bought food with credit cards, and were finally able to make college funds for our three children so they could have what we didn't. We've taken the view of make lemonade from lemons, but also that there's no such thing as a free lunch. No one is going to make this life better for you but yourself so take advantage of every opportunity, including this one! Houses are cheap, and if you can afford it, buy one. Stocks are cheap, too! Find those companies that are going out of business (there are plenty) and maybe get some deals there.
This country's money system is based on debt and the ability of our workforce to pay off that debt. America wanted this kind of system, and though it makes us the best in the world, it really sucks when things aren't in balance. Remember too, we're not the only country suffering right now.
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10-10-2008 @ 2:02AM
Jillian said...
Wow -- This articulate blog is just another example of how MY generation is going to pass the buck...
I'm 25 years old, and I just got my first EVER lay off yesterday from none other than Countrywide Financial... Please spare the digs on the company. I was very loyal to them, and while I worked for them was treated very fairly as an employee. The little people have no bearing on the big CEOs. We are just the lemmings that do what we're told.
Everyone is blame for this mess starting from the government for deregulating; to the lenders for being "greedy;" to the originators for not disclosing; to the consumers for not reading what was being signed, and not budgeting.
What is with people these days with drifting over responsibility? Take an introspective look at your own check book and question whether or not you're one of the mentalities that furthered this crisis. I know I am.. I have more in credit card debt than I have in the bank, and student loans beyond belief... I overspend.. Just like the next person.
So am I supposed to point the finger at Visa and yell, "CURSE YOU CREDIT CARD COMPANY FOR PROVIDING ME WITH THIS PLASTIC!" As I cluch my Kate Spade and BMW keys to a car that I should have budgeted better for?
No.. I'm going to stop pointing the fingers at everyone and every institution that has made it possible for me to have the chance to even dream of such nice things (THANK YOU ADVERTISING!), and I'm going to get a new job, accept that I won't make as much and may have to give up my luxuries, and learn the tough lessons of being broke, because that's the American Way (p.s... Iraq has a $70-something Billion surplus... When was the last time we had one of THOSE?!), and I'm going to clean up my own debt and credit... Slowly, but surely... And without a hand out.. And WITHOUT pointing at my parents and "my elders" to blame for my struggles.
And a note to the author, this was a nice way to tell your parents to "Go screw." I hope they remember this well-written blog of yours around Christmas time... Because from the sounds of it, I think a great gift for someone like yourself would be a large monetary gift to some worthy charity -- In your name. I hope that's at the top of your wish list this year.
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10-19-2008 @ 10:51PM
George said...
Jillian
I began reading comments this morning, feeling slightly depressed over our countries ecconomic condition. I am much older than you and for the first time was seriously worried about our countries future and the suffering and hardship that lay ahead for so many. You are a breath of fresh air and if there is enough young people with your attitude and vision we will do just fine. Thank you for helping restore my faith in our countries future.