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Aftershocks

Review: ‘The Theft of a Decade’ by Joseph C. Sternberg

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May 26, 2019

History is only possible in hindsight; it is therefore only now, as that cohort approaches middle age, that it becomes meaningful to do history of the Millennial generation.

The Theft of a Decade, by Wall Street Journal editor Joe Sternberg (b. 1982), is a solid early contribution to this genre, if limited by its lens. Sternberg is a business writer, and so he is naturally interested in the economic prospects of his generation. These, he argues, have been stymied by the eponymous "theft of a decade": the period between 2008 and 2018, which the much-maligned Baby Boomers have "stolen" from their Millennial offspring.

How, exactly, can this be so? As Sternberg tells it: Baby Boomer voters and leaders were integral to a series of policy decisions that directly benefited their generation at the expense of future ones. Sternberg dutifully drags out old saws about debt financing of entitlement programs, or the Ponzi-scheme structure of Social Security. But he also draws on more interesting cases, from mortgage structure to trade policy, to make the point that society has become tilted toward the old and away from the young.

Nowhere is this more apparent than in Sternberg's discussion of the Great Recession, central to the book. In this account, the root of the crisis came in the late 1980s and early 1990s, as the homeownership rate among young people—then meaning Boomers—dropped slightly. In response, government began to build the subprime mortgage apparatus that would eventually bring down the economy, an apparatus that was only added to by Boomer policymakers like successive HUD secretaries Henry Cisneros and Andrew Cuomo.

The resultant collapse is the most obvious impact of Boomer decision-making on Millennials' economic well-being. Younger Millennials experienced foreclosure, while their older peers entered the job market mid-recession, a reality linked to lower lifetime wages.

These negative effects persist. Even in spite of our higher education levels, fewer Millennial men are employed than older generations were at our age—partially a reflection of greater time spent in school, but also of a weaker job market for young people. The Millennial homeownership rate is similarly depressed, especially as Boomers continue to hoard the limited housing stock.

Although it has its benefits, the generational lens sometimes gets in the way of Theft of a Decade's analysis. It is not clear why many of the trends Sternberg identifies are not better described as age effects (older people taking wealth from younger people) or period effects (everyone in the '90s made the same bad decisions about subprime mortgages) rather than cohort effects. In general, the 25-year-groups that define generations encapsulate a great deal of heterogeneity, so stories about these groups are likely to obscure important factors.

This said, insofar as Sternberg has chosen a cohort perspective, he aptly identifies and unpacks a key determinant of the Millennial cohort's experiences. Theft of a Decade works just as well as a story of how the younger half of the population circa 2008 (who all happen to be categorizable as Millennials) have had to live with the aftershocks of the biggest crash since the Great Depression.

Aftershocks is an apt term inasmuch as the impacts of the recession have spanned at least the decade Sternberg discusses. For young people circa 2008, there were obvious immediate effects: foreclosure and unemployment. Then there were the medium-term effects: lower wages and lifetime earnings, higher barrier to homeownership, and a jobless recovery that increasingly sees workers shunted into the benefit-free gig economy.

But there are long-term effects too. As I recently wrote, the U.S. fertility rate has declined steadily since 2007, stubbornly continuing to drop even as the economy has rebounded—a baby-less recovery. Among those who follow this issue, there is a real debate about whether the decline is a product of economics or culture. On the one hand, childcare and housing expenses have soared, and Americans routinely name cost as a major reason for having fewer or no kids. On the other, the cost of childrearing has actually fallen as a percentage of income; giving parents money seems to have only a limited effect on fertility; and culture clearly has a major impact on our childbearing behavior.

Delayed fertility is concurrent with, and almost certainly a product of, a whole suite of delays among the young adult cohort now mostly comprised of Millennials. Median age at first marriage continues to rise as people grow pickier about their partner; homeownership is increasingly uncommon even in one's 30s; and young people are even having less sex (thanks largely to lower marriage rates).

These changes, which are most apparent among the Millennial cohort, are a product of economic conditions, but also reflective of an increasing "culture of caution," as young people grow ever more chary in their choices about marriage, childbearing, and generally what path an adult life should take. In fact, economics and culture are two sides of the same coin: how we make decisions about our values is never untethered from, but in fact integrally related to, our experiences of material reality.

Even for decades after the Great Depression, those who lived through it preserved spendthrift behaviors learned in that turbulent time. (Well into old age, my grandmother remained in the habit of saving and reusing teabags.) Economic shocks are cultural phenomena—they shape not merely the market we live in, but the way that we behave with relation to risk, spending, and all the rest.

All of this is to say that even if Theft of a Decade's generational warfare lens is not the most useful, the book’s vantage point on history means it provides insight into the way that the post-Great-Recession cohort has both chosen and been forced to live its life. The novel life-course choices Millennials make are revealed not merely as a product of culture or of economics, but of both, insofar as each is intimately linked to the other.

Is that reality the product of Baby Boomer decision-making? Sure, as much as it is the product of myriad other forces—no major social shift is monocausal. But what matters is not who did the thieving, but the insight that Millennials now live as if we have been the victims of an armed robbery: poorer for the experience and distrustful of a world in which it might happen again.

Published under: Book reviews