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Posts Tagged ‘Young People’

I’ve written a couple of times about a disturbingly large share of young people support statist economic policies.

A good example can be seen in this polling data from the Pew Research Center (relevant data circled in red).

Christopher Ingraham wrote about this survey in the Washington Post.

According to the Pew Research Center, 39 percent of adults younger than 30 support the view that people whose personal fortunes exceed $1 billion “is a bad thing,” while 16 percent say billionaires are good for society. …These attitudes were likely sharpened by the Democratic presidential campaign, which at one point pitted a multibillionaire (Mike Bloomberg) against a socialist senator who says that billionaires shouldn’t exist (Bernie Sanders)…the Pew data…suggest that young Americans are concluding that billionaires have amassed their wealth “through their rigging of the tax code, through legal political bribery, through their tax avoidance in shelters like the Cayman Islands, and through lobbying for public policy that benefits them privately.” …“The billionaire class is ‘up there’ because they are standing on our backs pinning us down,” Giridharadas said. …Among respondents 50 and older, just 15 percent say billionaires are a bad thing.

This is depressing data, just like the views of America’s young people in the GIEM survey I wrote about recently.

Some of them don’t like capitalism and wealth even when they’re beneficiaries.

The New York Times has a report on “socialist-minded millennial heirs” who want to use the money they inherited to undermine free enterprise.

“The wealth millennials are inheriting came from a mammoth redistribution away from the working masses, creating a super-rich tiny minority at the expense of a fleeting American dream that is now out of reach to most people,” said Richard D. Wolff, a Marxist and an emeritus economics professor at University of Massachusetts Amherst…he has been professionally arguing against capitalism’s selling points since his teaching career began, in 1967, but that his millennial students “are more open to hearing that message than their parents ever were.” …an individual act of wealth redistribution does not, on its own, change a system. But these heirs see themselves as part of a bigger shift, and are dedicated to funding its momentum. …In short, this means using their money to support more equitable economic infrastructures. This includes investing in or donating to credit unions, worker-owned businesses, community land trusts, and nonprofits aiming to maximize quality of life through democratic decision making, instead of maximizing profits through competition.

Here are three examples from the story.

Sam Jacobs has been…trying to gain access to more of his $30 million trust fund. At 25, he…wants to give it all away. “I want to build a world where someone like me, a young person who controls tens of millions of dollars, is impossible,” he said. A socialist since college, Mr. Jacobs sees his family’s “extreme, plutocratic wealth” as both a moral and economic failure. He wants to put his inheritance toward ending capitalism.

Rachel Gelman, a 30-year-old in Oakland, Calif., who describes her politics as “anticapitalist, anti-imperialist and abolitionist.” …“My money is mostly stocks, which means it comes from underpaying and undervaluing working-class people, and that’s impossible to disconnect from the economic legacies of Indigenous genocide and slavery,” Ms. Gelman said.

Pierce Delahunt, a 32-year-old “socialist, anarchist, Marxist, communist or all of the above,” has a trust fund that was financed by their former stepfather’s outlet mall empire. (Mx. Delahunt takes nongendered pronouns.) “…I think about intersectional oppression,” Mx. Delahunt said. There’s the originally Indigenous land each mall was built on, plus the low wages paid to retail and food service workers, who are disproportionately people of color, and the carbon emissions of manufacturing and transporting the goods. With that on their mind, Mx. Delahunt gives away $10,000 a month, divided between 50 small organizations, most of which have an anticapitalist mission.

There’s certainly nothing wrong with giving away one’s inheritance.

Since I’ve (sadly) never inherited any money, I haven’t had any reason to ponder the issue, but one of my dreams would be to use a windfall of money to help finance school choice so poor kids could escape failing government schools.

Needless to say, I wouldn’t finance anti-capitalist groups, like the folks described above.

But I’m digressing. Let’s return to the issue of misguided young people.

In a column for Law & Liberty, Professor John McGinnis offers suggestions about how to rescue them from statism.

…young voters are America’s future, and even if a few years in the workforce brings some greater political wisdom, many people still stick with their youthful paradigms unless some political shock disrupts them. For those who would try to change the mind of this generation (and the following one), it is important to understand how our education, occupational licensing, and entitlement policies are driving them to socialist views which break sharply with America’s political traditions of liberty. …It is not surprising that this structure prompts some young people to demand that the government pony up money for them… More generally, why not vote for radicals in the hope of shaking up the system on the assumption that it can’t get worse for them than it is now? …The classical liberal alternative is clear: reduce the transfers from the young to the old and eliminate those unnecessary barriers to career entry that privilege incumbents.

Here are the reforms that Prof. McGinnis believes would make young people more favorable to liberty.

Reform of the universities thus must be a priority. But it is very difficult. …they are getting worse by the decade if not by the year. Alternative institutions are probably the only answer. …Online education will allow for new challengers to rise, ones who are not as likely to be wedded to political correctness as the incumbents.

…our entitlement structure is currently designed to take from the younger generation and give to the elderly. Social security is a pay-as-you-go system. And given that social security is not actuarially sound, most of the current elderly will get more than they pay in. It is the payment of the young that makes up the difference. Medicare too is a government program from which the elderly benefit at the expense of the young.

The costs of occupational licensing also fall disproportionately on the young. Of course, that burden occurs in part because their elders already have their licenses. But more importantly, the barriers to entering many occupations have grown more expensive over the years.

Since I’ve written about the failures of higher education, the need for entitlement reform, and the downsides of licensing, I obviously have no reason to disagree with any of his suggestions.

But there’s something else that’s needed, especially when you contemplate the Pew data cited at the start of today’s column.

Supporters of free enterprise need to go after cronyism. And not just because the economy will perform better, but also because it’s morally offensive for people to line their pockets thanks to government coercion.

Indeed, half of the main message to young people (and everyone else) should be that honestly earned wealth is great, because that means (as Walter Williams sagely observed) someone accumulated lots of money by serving the needs of others.

And the other half of the main message is that it’s bad to have rich people who obtain loot with subsidies, handouts, protectionism, and other forms of cronyism.

P.S. Before giving up and wondering if young people are simply too stupid to vote, watch this video showing that young people reject socialism when they understand the implications.

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Redistribution has a corrosive impact on both ends. Recipients are harmed because they get trapped in dependency, and workers are harmed because taxes discourage productive behavior.

Yet young people seem susceptible to this ideology, even when they are among the main victims.

While it might be tempting to shrug and assume they’re hopelessly clueless, this video shows young people are quite capable of grasping why redistribution is a bad idea.

I’ve previously shared a similar video, as well as a couple of written versions of this redistribution challenge.

In this case, though, we have some additional analysis.

Here are some excerpts from the accompanying article.

…for the first time ever, more young people say they’d prefer to live in a socialist country over a capitalist one. Whether it’s free healthcare, free college tuition, or universal basic income, students around America increasingly support higher taxes on the wealthy in order to pay for these progressive policies.  But would they support similar policies if they had skin in the game? …Campus Reform‘s Cabot Phillips went to Florida International University in Miami to test the waters on a “Socialist GPA” policy in which students with higher GPAs would be forced to “spread the wealth” and give some of their GPA points to students with lower GPAs. Despite the overwhelming number of students who initially said they’d support socialist policies, few agreed to go along with such a plan.

Interestingly, the students actually are quite perceptive when they apply incentives in their own lives.

“I’ve lost a lot of sleep so I don’t know if that would be fair,” one student said, while another answered no because “I like, study all day for my grades.” Yet another student, after expressing her support for socialism in America conceded, “I guess it would be kind of hypocritical for me to say no.” Another student, trying to justify his refusal to abide by such a policy, said, “you study for your grades, and they reflect how much time you’re studying.”

As a wonky economist, the first thing I wondered about is how young people would react if they were asked about a small amount of redistribution (say 1/10th of a point of a GPA) compared to a large amount of redistribution (a full point of GPA).

I’m guessing they would realize that the damage of the latter would be more than 10 times the damage of the former – which is exactly the same thing you find when you examine the deadweight losses of ever-higher tax rates.

Two final points.

  • First, many young people don’t understand socialism. They think it’s just a proxy for caring. Or even for being sociable. It’s incumbent on advocates of freedom to help them understand the adverse implications (i.e., redistributing money is just as bad as redistributing GPAs).
  • Second, it won’t be easy to make an ethical appeal to young people if they perceive (and many do) that capitalism is the same as cronyism. Which is why self-styled conservatives (or Trumpians) who support favors for special interests do a lot of damage to the cause of freedom.

P.S. Since they are huge net losers from the current system, young people should be very amenable to a message of genuine entitlement reform.

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In 2016, I posed a rhetorical question about whether young people are so stupid that they shouldn’t be allowed to vote. After all, many of them thought Bernie Sanders would make a good president (of America, not Greece or Venezuela).

Well, maybe we really should increase the voting age. It seems 2016 was not an anomaly. Millennials are dangerously ignorant.

Here’s some analysis from CNN.

Millennials are…bringing a distinctly Millennial approach to policy and governing. And that might include Democratic socialism. Case in point: Alexandria Ocasio-Cortez, the 28-year-old Democratic socialist who won her primary in New York Tuesday in an upset over a 10-term incumbent. More than any other generation before them, Millennials are OK with socialism. A 2016 Gallup poll found 55% of those then aged 18-29 said they had a positive view of it (it’s worth noting 57% supported capitalism and 78% supported free enterprise). …Bernie Sanders’ presidential campaign was instrumental in mainstreaming Democratic socialism.

What’s particularly galling is that young people are pessimistic about their economic future and they’ve decided to blame capitalism for problems that exist because of excessive government!

Millennials’ economic situation also plays a role. …A recent study by the Federal Reserve Bank of St. Louis found Millennials born in the ’80s have a net worth 34% below what was expected. And student debt since 2009 has doubled to $1.4 trillion… For many cash-strapped Millennials in debt, Democratic socialism isn’t radical, it’s a way to fix a system they believe failed them.

In other words, young people want to make Mitchell’s Law a never-ending reality.

Let’s look at another example. Here’s some of what Michelle Goldberg wrote in a fawning column in the New York Times.

…all over the nation, people, particularly women, are working with near supernatural energy to rebuild democracy from the ground up… For younger people who see Donald Trump’s election as the apotheosis of a rotten political and economic system, it often means trying to remake that party as a vehicle for democratic socialism. …Alexandria Ocasio-Cortez, a 28-year-old democratic socialist, shook the Democratic Party by toppling Joseph Crowley, a 19-year incumbent, chairman of the Queens County Democratic Party and potential heir to House minority leader Nancy Pelosi. …the real red wave may be democratic socialism’s growing political influence, especially among young people. …The D.S.A., to which Ocasio-Cortez belongs, is the largest socialist organization in America. Its growth has exploded since the 2016 election… Many of the D.S.A.’s goals, reflected in Ocasio-Cortez’s platform, are indistinguishable from those of progressive democrats. But if the D.S.A. is happy to work alongside liberals, its members are generally serious about the “socialist” part of democratic socialist. Its constitution envisions “a humane social order based on popular control of resources and production, economic planning, equitable distribution, feminism, racial equality and non-oppressive relationships.”

In other words, these cranks are real socialists. They actually want government to own and manage the means of production (“popular control of resources and production” and “economic planning”).

This is a problem for the non-crazy left.

Talk of popular control of the means of production is anathema to many older Democrats, even very liberal ones. …After Ocasio-Cortez’s win, Pelosi denied Republican claims that socialism is ascendant in the Democratic Party. It’s hard to blame her for being defensive, since for generations “socialist” was considered a slur, and it’s one that’s hurled at Democrats indiscriminately.

But young people seem prone to fantasy.

…one recent survey shows that 61 percent of Democrats between 18 and 34 view socialism positively. The combination of the Great Recession, the rising cost of education, the unreliability of health insurance and the growing precariousness of the workplace has left young people with gnawing material insecurity. They have no memory of the widespread failure of Communism, but the failures of capitalism are all around them.

Needless to say, Ms. Goldberg doesn’t list the “failures of capitalism,” but it’s a very safe bet that she’s blaming free markets for problems caused by government (a common theme in US economic history).

No wonder young people are so deeply confused. This is probably what they’re taught in government schools.

But there is a silver lining. Courtesy of Libertarian Reddit, we can enjoy some humor poking fun at Ms. Ocasio-Cortez’s overly earnest form of socialism.

Amusing, but very unfair to religion. After all, we can’t go back in time to confirm details from the bible.

But we can look today at countries like Cuba, Greece, Venezuela, and North Korea to confirm the utter insanity of supporting any type of socialism.

Let’s close with a video from 2013. It’s about Obamanomics and young people, but it’s really about why big government makes it hard for young people to get ahead.

I especially like the explanation of how young people are big losers because of the entitlement state.

Makes me wonder if Ms. Ocasio-Cortez will take the lead on, say, Social Security reform when she gets to Congress?

Needless to say, I won’t be holding my breath.

P.S. Young people aren’t a (totally) lost cause. They may not like capitalism, perhaps because they confuse it with cronyism, but they are sympathetic to “free enterprise.”

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Young people voted for Obama in overwhelming numbers, but the question is why?

As I explain in this interview for Blaze TV, they are being hurt by his policies.

It’s not just that youth unemployment is high. Obama’s policies also are hurting those who found jobs. Simply stated, these “lucky” folks are getting below-average pay.

The Stepford Students?

I specifically explain that academics have determined that those entering the labor market in a weak economy will suffer a long-run loss of income.

Some of you may think I’m clutching at straws because I don’t like Obama, but perhaps you’ll believe the man who formerly served as the Chairman of President Obama’s Council of Economic Advisers.

Here’s some of what Austin Goolsbee wrote several years ago for the New York Times.

…starting at the bottom is a recipe for being underpaid for a long time to come. Graduates’ first jobs have an inordinate impact on their career path and their “future income stream,” as economists refer to a person’s earnings over a lifetime. The importance of that first job for future success also means that graduates remain highly dependent on the random fluctuations of the economy, which can play a crucial role in the quality of jobs available when they get out of school.

Goolsbee cites some research based on the career paths of Stanford MBAs.

Consider the evidence uncovered by Paul Oyer, a Stanford Business School economist… He found that the performance of the stock market in the two years the students were in business school played a major role in whether they took an investment banking job upon graduating and, because such jobs pay extremely well, upon the average salary of the class. That is no surprise. The startling thing about the data was his finding that the relative income differences among classes remained, even as much as 20 years later.

He also reports on what other scholars found for regular college students.

Dr. Oyer’s findings hold for more than just high-end M.B.A. students on Wall Street. They are also true for college students. A recent study, by the economists Philip Oreopoulos, Till Von Wachter and Andrew Heisz…finds that the setback in earnings for college students who graduate in a recession stays with them for the next 10 years. These data confirm that people essentially cannot close the wage gap by working their way up the company hierarchy. While they may work their way up, the people who started above them do, too. They don’t catch up.

Now think about today’s young people. They’re buried in debt, thanks to government programs that have caused a third-party payer crisis. Yet they are having a hard time finding jobs because Obama’s policies are stunting the economy’s performance.

And even if they do find a job, the research suggests they will get paid less. Not just today, but for the foreseeable future.

Yet they gush over Obama. Go figure.

P.S. Goolsbee’s recent columns have been less impressive, perhaps because he feels the need to defend Obama.

P.P.S. I’m not suggesting that young people should have gushed over McCain or Romney. Just that they should view almost all politicians with disdain.

P.P.P.S. I also say in the interview that the government should get out of the housing business – both on the spending side of the budget and the revenue side of the budget. And it goes without saying that I also explain the need to reduce the burden of government spending.

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