What the Wall Street Journal is missing

If you’ve read my novels or keep up with me on Facebook, you know that I’m interested in pretty much everything, and that includes economics and finance. I get the Wall Street Journal primarily because it has extraordinary book coverage. There’s a daily column with reviews of nonfiction that I often find useful (background reading for whatever I’m working on) and half a dozen pages of book reviews on weekends.

That’s a glorious thing in a world where so many newspaper book sections have been downsized or jettisoned entirely. Publishers used to support book sections with advertising but after the 2008 crash, they  pulled waaaaay back on publicity budgets. That seemed self-defeating to me at the time and still does. It’s easy to blame “competition for the entertainment dollar” for falling sales, but movie studios often spend as much on advertising as they do on the production itself.

Helpful hint to publishers: people can’t buy something if they don’t know it exists.

Anyway, this morning there was a long, bemused article in the WSJ wondering why China’s woes are affecting the U.S. stock market so much, despite the fact that only about 1% of our exports go there. And the fall in oil prices should benefit us, but consumers are not doing their part. What’s going on? Why aren’t people spending money?

Okay, Wall Street Journal, I’m going to explain it to you. It’s generational. It’s Boomers and Millennials, the two hugest generations in history.

It never ceases to amaze me that the people in charge have failed to anticipate the impact of the Baby Boomers’ natural life cycle. Our mothers were giving birth in hospital corridors because they were having so many post-war kids, the available obstetrics units couldn’t accommodate them all. Five years later, every school board in the country was shocked — shocked! — when a bazillion five-year-olds showed up for the first day of kindergarten.

Look around you. Nearly every grammar school in the country was built in 1957, but were they ready for us when we got to high school? Nope. I graduated with a class of 860; we had to be split into two shifts to fit into a building that was hopelessly under-sized for the army of teenagers that was advancing on life. We had 3600 students at Glenbard East and this was in a town of 20,000! I swear to God, the reason that chemistry completely defeated me was that I had to take the class at 7 A.M. when I was nearly  comatose. All I remember is, There was this chart…

So. Why is the economic engine sputtering just now? First, let’s look at the senior Russells (m. 1970). Don (b. 1949) retired last year. Mary (b. 1950) works at home. Oil prices are mostly a spectator sport for us. Our mortgage is paid off. We saved aggressively and invested carefully for 45 years, but we are done buying stock and bonds. We have a well-balanced portfolio. We’re standing pat for now, but fair warning: we’ll start selling when we turn 70 and have to take the minimum required distributions from our IRAs.

Don’t count on us, Wall Street.

Don and I don’t need furniture. We don’t need dishes. We don’t need rugs. In the past decade, we inherited our parents’ households and ended up with at least three of everything you can imagine. Don kept some of his father’s tools (made of heavier steel than most modern cars). I’ve kept a few Pyrex storage containers and some fun old bowls that remind me of Blanche (b.1914), but as a writer and as a householder, I LOVE to edit. Don still buys computer stuff, though not much else. From now on, Boomers will be purging, not acquiring.

Don’t count on us, China.

In the meantime, the American economy has been eating its young. It’s turned education into a profit center, not a public good necessary to produce an informed citizenry. Many young parents who’d like to be saving for their kids’ education are still paying off their own student loans. They live in a gig economy and rarely know what their income will be in six months. They can’t qualify for mortgages, so they can’t build wealth the way earlier generations did. This has driven some Millennials toward the Tiny House phenomenon. 

The junior Russells are Millennials. Our son (b. 1985) and daughter-in-law (b. 1987) are statistically unusual in being well-married (2008) and well-launched. (Who knew that the movie biz would be one of the few industries to get through the Great Recession without being gutted? Dumb luck.) Anyway, they live near Hollywood in a small condo and they don’t want more STUFF either.

Like millions around the world, my daughter-in-law and I are joyous declutterers who worship at the feet of Marie Kondo (although I refuse to fold underpants because, honestly, you’ve got to be kidding). Nobody in business should be unaware that Kondo’s book The Life-Changing Magic of Tidying Up is an international mega-blockbuster. To KonMari is now a verb. Once people have KonMari’ed all the depressing crap out of their homes, they’re loathe to full the space up again. They become much more resistant to buying new things.

If you’re selling STUFF, you’d better be thinking about that.

And it would behoove entrepreneurial Gen Xers to get out in front of the Millennial generation. The “echo boom” is, predictably, the largest in history. Study the series of rolling economic booms and busts that have been triggered by the life cycle of those born in the decade after World War II. That’s your market for the next fifty years.

There are also opportunities if you anticipate what Boomers and Millennials both want. Tiny houses appeal to downsizing Boomers as well as cash-strapped Millennials, but my daughter-in-law and I have the same fantasy. We dream of a family compound with a house for the younger Russells and their (still theoretical) children, and a small but separate place (converted garage maybe?) for the older Russells in the back of the property, with a fenced-in yard where dogs and kids can meet in the middle.

If I were in construction, I’d start looking at three-generation design options.

I think robot cars will be a good bet, too. I am now and always have been a lousy driver. Currently, Don is “driving Miss Mary,” but we are eagerly watching the development of self-driving vehicles. I think there’s going to be a huge demand for them among Boomers. Bonus: Millennials won’t have to argue with Dad about giving up the keys or worry about Mom crashing into a store front.

Although there could be a lot of unintended consequences when the unattended elderly start telling their cars where to take them. “Honey? Your mom is in Chicago again…”

 

 

 

 

19 thoughts on “What the Wall Street Journal is missing”

  1. Spot on Mary. I’m a boomer, born in 1947, and after losing my very dear husband in 2014, i downsized from 3100 square feet to a bit more than 1100. I sold and donated more furniture and household goods than you can imagine and still had way too much “stuff,” so my new basement looks a little like a used furniture store. But that’s just until I start selling and donating again.. A tiny house would not be for me but I’m in the right size house now. I’m fifteen minutes from my daughter and her family. My next move will be to the funeral home, I hope. I can’t tell you the exhilaration of the whole decluttering process. Wonderful. No regrets about getting rid of my mother’s tea cups and other knick knacks that no modern young woman has any interest in. I don’t see myself buying anything much. My car is a 2008 model but it’s in great shape and above all, it’s paid for! Manufacturers and business owners need to open their eyes. They seem to be preparing for a future that will never happen.

  2. Now if you only could persuade the official economists to read, and understand… I need to declutter, and I moved up here with next to nothing just six years ago!

  3. I love this, Mary! You hit so many ol’ flat-headed nails smack on!

    I do get fits of decluttering, except in one commodity: (Guess!)

    Books! In Milwaukee, big-boy big-box bookstores have not completely destroyed the independents. Oh, I may wander through a B&N to browse, even to peruse a few pages, but to buy it’s back to my friendly Boswell Books, one of the descendants of the late, loved, Harry W Schwartz Bookshops.
    And then there are the used-books stores, and my Cathedral’s spectacular Hunger Book Sale, our annual exercise into turning books into bread!

    Getting rid of other stuff leaves more space for stacks of BOOKS!

  4. I can’t share a photo of my folded granny pants? I have never had a tidy underwater drawer until I read Maria Kondo’s book. It gives me pleasure to fold my panties and look at them as if they are brand new. Silly? Yes. Good read about China and stuff. Downsizing can be addicting. We have spent months at a time in a 17 ft travel trailer. It takes a long time to get used to a big house when we are back home.

  5. Did you write to WSJ?

    By the way, about underpants, my mother (85) folds them, I say, “You’ve got to be kidding!”

  6. Re: It’s turned education into a profit center, not a public good necessary to produce an informed citizenry.

    Spot on. Tuition’s out of control. Professors who were once grossly underpaid are commonly grossly overpaid and churning out robots incapable of independent thought. But, heck, maybe that’s the mission.

    And kudos to the rest of your megatrend predictions. Seems right on to me. Signed, Retired Boomer

  7. am the friend of your niece, Mary Dewing. I doubt that neither she nor Dickie have tidied up nor discarded anything, excepting used paper products since Dick retired. If, indeed, she has given the precious rosemauled chest to anyone save ME I shall fall dead by mine own hand. Your books are on my shelves, to stay until the last culling. Mary and I are long of tooth (Iam81), but our short memory seems the only loss. tidy…..harrumph

  8. My copy of “Tidying” is at the library waiting for me to pick it up. I started de-cluttering a couple weeks ago. I love it. Meanwhile, your blog is wonderful! Perk up, WSJ. And I’m going to mimic Patricia above and buy books locally henceforth.

  9. Totally with you and our family replicates yours in almost every way. My author daughter, Holly, and her husband acquire stuff, but it’s mostly throwaway stuff and books and CDs she gets in the mail as a recovering music reviewer. So, there is little money being spent. My wife and I downsized from our house in the city to our 1947 1000 square foot house in the semi-country and we’re getting rid of a lot more stuff than we buy. I, too, like computers and tech, but have found it a lot more practical to buy 3-5 year old used stuff for a pittance than to worry about chasing the latest 0.002% speed improvement or style. I’ve been happy with Office 2003 since 2003 and could care less about updating my software other than for virus protection. I’m three OS versions back on my Mac and probably won’t outlive Windows 7 support.

    We spent a winter in a tiny RV two years ago and I got into rolling all of my clothes to save space in limited storage. I still do that at home now. You can cram and organize a lot of underwear, socks, and handkerchiefs in a tiny drawer if you roll them tightly. 😉

    One of the many reasons I have never been able to get behind most conspiracy plots is that my experience with the ruling class has been mostly hilarious. The majority of corporate CEOs are no smarter than Trump or Fiorina and they are barely able to open the doors to their offices without an assistant, let alone plan something that might happen next week. So, count on them being surprised when the infrastructure changes massively with auto-piloted cars, demographic shifts, and anything resembling technology.

  10. Very good observations Mary. Even applies in my New Zealand (remember ! The home of ‘Season of the Jew ‘by M Shadbolt). Noel

  11. I love your observation about gig economies for student-loan strapped young, eaten by design, it seems, as…a unintended consequence of repeating the mantra “education means a better job”? I’m calling a lot of that expensive “education” more “teaching gig” than “learning centered”, at a time when there are demonstrably so many fewer living wage jobs available on a sustained basis. If anybody over 50 starts talking like under 50’s are actually responding to conditions not of their making, we might get to find out how many thinking Boomers have the compassion to make way for real economic stability. Thanks for being one of them!

  12. My husband folds his and mine. When I do laundry, I fold his for him, but I don’t fold my own. I do sort mine in the drawer by color, however.

  13. Irene, have you clicked on the Sign Up for Mary’s Blog button on the website? I can’t sign you up on my own, but the website will send out automatic notices when something new is published.

  14. YES! We need an economy not based on “stuff.”
    At 59 and 64, my spouse and I have begun (barely) the decluttering. Sold the 1600 sf (I know, small by US standards, but more than we needed) house, giving away much of the furniture before we moved. We are now in a fabulous mid-century modern flat of perhaps 1200 sf and considering the possibility of downsizing still more when I retire (or after the geriatric cats pass on).

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