Generation Screwed: Why millennials are facing the scariest financial future of any generation since the Great Depression
Denninger writes as if the millenials just emerged out of nowhere as some defective, utterly foolish cohort a few tens of millions in number, like their parents and grandparents had nothing to do with it, like the cycles that seem to have naturally influenced human history (think The Fourth Turning) for a long time aren't real, like the 3 E's have nothing to do with it.
At one level, we're all to blame. At another, none of us are – the problem is so much bigger than us.
Denninger offloads all of the blame onto an entire generation that doesn't include him. How convenient if you don't want to look closely at yourself and your beliefs that have ossified over a life time.
Denninger is a crank, so his presentation is likely to be really abrasive – he's a terrible persuader – but he has some very specific suggestions on how to improve things, and many of them make sense to me.
For instance, I think Denninger's suggestion that we "reform" healthcare by forcing the hospitals to have price lists that apply to everyone (kinda like every other industry is required to do – you don't get charged varying prices for your tee-shirt at Macy's depending on who is paying for it) is a fantastic idea. It won't fix things by itself, but life becomes a lot easier for the cash buyer, because they don't get gouged at a time when they aren't exactly able to comparison-shop.
Having been a cash "healthcare buyer" in other countries where hospitals have price lists, and where these questions are relatively routine – it was incredibly disturbing when taking my mom to a hospital in America. I asked what the price for something was, and it caused quite a stir. You aren't supposed to ask about prices. If I were stronger, I would have stood there and said "we aren't going anywhere until I get a price list for these procedures." After all, we're paying for it! But you know – with sick mom in tow, you aren't exactly in the best position to execute a free market protest. So Denninger is advocating for "consumer protection" in healthcare.
Likewise, his point – also about healthcare – is that if as a society we want to cover pre-existing conditions, funneling the money first through insurance companies is just stupid. "Libertarian" Denninger is arguing for single payer – because in his analysis, its way cheaper than the system we have now. It was the most logical, common-sense, non-political argument about the issue that I'd ever seen.
He's a smart guy, and has interesting things to say, but he is definitely a crank, and so you need to apply a filter to what he's saying so you can extract the value. That's what Tom meant when he talked about "style."
Aloha! Instead of the more well known “sh_t happens”!
As a 20 something in the 1970s I was told to work hard and save! Every generation gets some amount of “flawed” advise, because CHANGE HAPPENS! I pity those who took that advise to heart and saved as much as they could. Now they get $26 a month for their efforts from banks. So now babyboomers have to work longer and millennials have less jobs available.
The flaw of the article is that when prices rise everyone suffers in some manner, not just the younger generations. If you sell your house with the $2mil door knob in Malibu in order to down size you’re stuck having to pay 30% in taxes and then buy a condo with a $1mil door knob and $1500 a month association dues and $2000 a month property taxes if you want to enjoy living in the same area. If not you move to Texas and buy the $500k door knob and you wear a cowboy hat and boots and give your beach towel, tennis racket and mai tai to Goodwill! Then you wave goodbye to your neighbors and friends because they won’t line dance! No way!
If you stay in Malibu your $5 Mediterranean salad in the 70s is now $30! Rising prices force babyboomers to work longer, so the job market and upward mobility to the higher exec jobs is limited for millennials and Gen Xers so long as the babyboomers stay in their jobs longer.
Bottom line is “government”! Government has always been corrupt. It is the nature of government because that is the nature of humans. We compete against government for resources. We compete against government for our paychecks. It is US vs THEM! They need more of your paycheck throughout your lifetime not less. Either government grows and prospers or “we” do. So far government WINS!
In my time the government con jobs was Vietnam, something tangible and real. In this era it seems like intangibles rule government cons … like climate and socialism and gender and pc! If you hold those things dear then your government will be more than willing to make sure you are taxed the proper amount to remain in servitude for a lifetime. Debt is their weapon!
My advise to Millennials? QUESTION AUTHORITY … no matter if it is your government or your college professor or your favorite blog! There are no experts. There is no savior. There is only you and a vastly changing world that cares not for your feelings! Every generation has faced the same challenges from very similar changes.
One personal note. I have found that there are Millennials with awesome work ethics but that was a long wait. Perhaps it is just more of the same. Youth is always unstable and rebellious. As I have heard “youth is wasted on the young”! But that’s not news either!
FWIW: Millennials often shoot their own foot, by getting a college education in a career that is not in demand (ie Liberal Arts) or a career for an industry that is in decline as Technology, Automation or Outsourcing progress such as legal. Millennial are also too pre-occupied with Social media, smartphones which almost makes them unemployable. The only places I see employed Millennials is in retail jobs.
The cost of College education is risen because of gov't interference, by making it easier for Students to get loans and also making them not discharable in bankruptcy. Colleges had poured billions into there campuses and providing luxury accompidations & services comparied to previous generations. When I visited my college it has completely been transformed. Every classroom building was completed gutted and redone with fancy trim & flooring, and most of the buildings had a coffee shop offering $5 lattes.
I don't think the older generations will fare much better. Few Boomers have sufficient retirement savings, and are dependant on gov't entitlments to get by. I see Boomers working well into their mid to late 70's because they cannot afford to retire.
I very much doubt the debt will be paid. Central banks will simply continue to print money to float the system until people loose confidence in currencies. Many Boomers/Gen-X that have pensions are likely to be rudely informed their pensions plans will be unable to honor their promises. I doubt anyone that is alive today will get a free pass that avoids pending hardships.
" I think Denninger's suggestion that we "reform" healthcare by forcing the hospitals to have price lists that apply to everyone"
The issue is that unless the consumer is paying the bill there is no reason for the consumer to care about the costs: The OPM (Other people's money) syndrome. If the Health Ins. company is paying the bill than it really doesn't matter to the Patient how much it costs.
The Other issue is lack of personal reponsiblity to take care of themselves. In the US, the Obesity rate is approaching 40% of the population. The Majority of people drink too much, eat mostly processed foods, and take prescriptions in order to combat their poor health habits.
In my opinion we are already past the point of no return do to the poor state of heath of most of the population. You can't fix 30-50 years of poor health habits, the damage is already done. Odds are that the current Healthcare system will collapse in the next few years as health Ins premiums become unaffordable for the middle class. A household making about $53K/year isn't going to able to pay $30K+ per year health ins. premiums. Companies that are mandated to provide health ins are likely to outsource, automate and shift workers to part-time to avoid healthcare costs, which in some cases are now starting becoming higher than salary costs for lower wage workers.
My guess is that the US will end up with a single payer health care systems that will cap costs by delaying treatment (ie waiting lists) and denying expensive treatment, similar to European & Canada does. I recall reading a news story a couple of years ago that a double leg amputee was denied an electric wheel chair because the gov't health dept didn't think the patients conditions (amputation) was permenant. In the UK, Recovered patients are delayed being discharged up to six months since it cheaper for a healthy patient to occupy a hospital bed than its to emit an another patient that needs an expensive medical procedure.
As the Most interesting man (not Denninger) may say in future commerials: Stay healthy my friends!
Right now, its simply not feasible for people to walk in and pay cash for their medical care. Its just asking for personal bankruptcy, because the hospitals charge the absolute highest prices to walk-in "customers" and normal people have zero negotiating leverage. Its really obscene. And the healthcare industry is the only "product" where this is permitted. Even auto-repair shops are required to give you an estimate before they fix your car. Not hospitals.
Hospitals can simply present you with whatever bill they like – with whatever prices they decide to charge you – once everything is said and done. There are no "list prices"!! This is fair in what universe? Cars are treated better than people!
Do we imagine the insurance companies like this state of affairs? You bet they do. All us middle-class people are all required to have insurance. We just can't take the risk because of the structure of the system. Its utterly perverse.
Other countries are not like this. Of course they have waiting lists for expensive procedures, but remember, they serve their populations for 1/2 the costs that we pay. And everyone is covered. And normal things that happen in daily life get taken care of. People don't live in fear.
All the horror stories you read about – who benefits from these stories? I'm guessing that some number of them are constructed by the healthcare industry, who absolutely do not want their gravy train cut off. And we just keep falling for their propaganda. Cui bono? Them, of course.
Overall, other nations have longer lifespans than ours, healthier populations, and better outcomes. The numbers suggest that the stories you talk about do not represent the vast majority of outcomes from such a system.
The "general public" is better served by such a system. Certainly if you have an "interesting problem" you are probably screwed. But most of us don't have interesting problems, we have normal ones. And right now, it is costing us 18% of GDP to get those problems covered – twice the price paid elsewhere.
The free market only works if consumers have choices. If people could still pay cash for services and get charged "normal list prices", a lot of us would roll the dice and do so. This would force the insurance companies to be more competitive. They would no longer have a captive audience – which they certainly do now.
We are all of us living in fear, clinging to insurance, because we know that the fastest route to bankruptcy is a medical problem if you don't have insurance. The insurance companies LOVE this situation. Their product went from optional, to required. Its great to sell a "required" product. And that's a direct result of hospitals gouging cash buyers – simply because, unlike used car dealers and auto-repair shops, they are permitted by law to do this.
I wonder who it was that wrote the law? I mean – who REALLY wrote the law.
First- as a long time high deductible health insurance user I found out that doctors and clinnics do negotiate lower fees or alternate approaches to treatment if you pay up front. Many act surprised that you want to take this approach but soon are willing to go ask their business manager. Last negotiation saved me $1000. I opted for Xanax over IV sedation.
Second point- I get irritated with all the finger pointing at our up and coming young adults. From my perspective we have hit peak-economy-peak energy-peak environment-etc. In ancient times we see the Huns and other migratory cultures venturing into and toppling much more sophisticated cultures primarily because of climate change. When a top gun culture hits peak as ours is doing then the adaptive and flexible survive. Those who can recast themselves as immigrants within their own culture will find places to thrive. However, those who cast their lot with and appeal to TPTB (who are fully vested in a crashing vehicle) will be shackled to the failing culture. As a member of an older generation I will fail in whatever chances given to me to help if I stay shackled to what worked 30 years ago. Planting new and more reasonable expectations in my own extended family is my most effective path at present.
Being a part time community college lecturer, whose younger students are now coming very close to the age of my oldest grandchildren, I get to discuss life issues with millennials on a fairly regular basis. Teaching at a public institution, my students are not the ivy league, upper middle class snowflakes attending the ultra expensive, elite institutions. Many are veterans trying to get the most education from their benefits, other are years out of high school and already have jobs, children, responsibilities. A fair number are immigrants taking advantage of opportunities their parents never had. Generally they are no different from the twenty to thirty-five year olds of other generations. They worry about the future, but they are focused on paying the rent, advancing in their employment and in creating a place for themselves in this crazy and often unintelligible society.
Our primary and secondary educational system being what it is, many have little sense of history, economics or even politics. In the quest for test scores and quantifiable educational criteria, critical thinking and analytical skills have not been developed. News comes only from twitter or social media. The political world is populated by old people and often seems to be unconnected from daily life. Many have watched their parents suffer from the economic vicissitudes of the last decades without any understanding of why this was happening. Lost jobs, lost retirements, foreclosures have been close and personal family experiences. Wages are too low, rents, real estate, health insurance, new cars, are too high. The combination of these factors has left many of them unimpressed with and somewhat skeptical of the existing structures. Their emphasis turns to getting along and trying to live as best they can. Which is probably not too different from any generation. It should not be a surprise that a number of them, with limited understanding of socialism, look to it as a desirable substitute for the present system.
When the discussion turns to economics and the future I often joke with them that I do not believe I will live to be ninety, even though that is fairly common in my family. I tell them that right now they are naturally focusing on establishing their own lives but that at some point in their forties or fifties they will begin to have a better sense of the world around them and why things are the way they are. Their generation will come into power and will get to examine up close what the prior generations have done. I share my belief that when they discover how we baby boomers have manipulated and f……ked up the system to satisfy our own greed and entertainment there will be a groundswell of support for mandatory euthanasia. They will not be amused with the world we have created for them, nor will they have any desire to forego their own life requirements to perpetually support us in the manner we have come to believe we are entitled to.
That's great to hear that its possible. I've heard otherwise from a family member who paid cash for a hospital visit. He was appalled at the prices he was charged. There didn't seem to be any flexibility.
I certainly couldn't get prices out of the hospital that my Mom was going to.
I guess its a YMMV situation.
"It doesn't hurt to ask."
My only experience with negotiation has been outside of the hospital environs. My last visit there was over 50 years ago when my mother checked me in for birthing. Many do not have that kind of avoidance of hospital stays record. Hospitals are formidibly large operations and often have you over a barrel when you show up at their door.
I have talked to a few who are on the post hospital visit payment plan. Apparently one can negotiate a very longterm discounted payment plan. This is an after the fact deal and probably also involves the loss of an arm or first born child. Nobody has shared all the details.
I also know of more than one young family who ended up declaring bankruptcy as a way to manage health care costs. In that situation a homestead with your savings stashed in your perennial fruit and nut trees is much safer. In this state your primary residence is protected in a bankruptcy.
Negotiation is worth trying. Insurance plans negotiate all the time. As a former boss used to tell us employees:”You won’t ever get something you don’t ask for.” Not always true but it sure applies here.