Much has been made recently about the October cover story in The Atlantic that essentially implores baby boomers to save the economy.
“The Boomers’ Last Chance,” reads the headline on the magazine’s cover. Below that is this ominous, yet somewhat hopeful subhead: “They Ruined Everything, But Can Still Be The Greatest Generation.” The story that appears inside, written by Michael Kinsley (himself a boomer), is actually titled, “The Least We Can Do.”
And the least boomers can do, according to Kinsley, is help significantly reduce the national debt through an estate tax.
Kinsley’s plan, however, is to have the estate tax reach more people—“essentially anyone who inherits any significant amount of money”—at a lower rate than the old estate tax. According to Kinsley, the “once-and-future estate tax” is redistributive and imposes too high of a tax rate—up to 45% on estates worth more than $3.5 million in 2009—and raised too little money. He calls his proposal the “Boomer Tax.”
Kinsley’s plan has its detractors. The economist and University of Texas professor James Galbraith unleashed what can only be called a smackdown on Kinsley in a rebuttal posted to The Atlantic’s website this week. In a piece headlined, “Why We Don’t Need to Pay Down the National Debt,” Galbraith essentially accuses Kinsley of “intellectual laziness.” He “chose to waste our time on a topic he hasn’t troubled to learn the first thing about,” Galbraith writes. For one, he takes Kinsley to task for basing his predictions on the growth of the national debt using data from the Congressional Budget Office, which Galbraith accuses of using unreasonable estimations for the growth of short-term interest rates. He also says that the estate tax “must impose high rates on great fortunes” and should “leave ordinary working people alone.” In other words, Kinsley’s idea for spreading the tax around to more people is flawed, according to Galbraith. The estate tax, he writes, “has been a spectacular success” because it encourages donations to churches, hospitals, universities and other non-profits.
So maybe Kinsley’s plan has merit, maybe it doesn’t. But the bigger point to his piece is that boomers should exit stage left into retirement by making a significant contribution to society. His article, it should be noted, is partly a call to service and partly a defense of the boomer’s legacy. Moreover, Kinsley appears to harbor some bitterness about the fact that his parent’s generation has been dubbed “the Greatest Generation.” They are revered for winning World War II and then coming home and building America into an unmatched prosperous global superpower. Oh, and they also defeated Communism. Meanwhile the boomers, Kinsley writes, made such social movements as environmentalism and feminism “so deeply a part of middle-class culture that the terms themselves seem antiquated.” He says that boomers “created the technological revolution that revived capitalism.” Kinsley also makes it clear that boomers paid both publicly and privately for their parents to retire “in greater comfort that they themselves can reasonably expect.” It’s in this last part that Kinsley tries to transfer the blame for the country’s economic woes from the boomers to “The Greats.” Basically, Kinsley says that the Greatest Generation stuck future generations with an economic mess because of all their entitlement programs that they never paid enough for but think they deserve.
Though Kinsley makes a spirited defense of the boomers and portrays them as potential saviors of the economy rather than the greedy leeches who ruined it, the problem facing his generation when it comes to the legacy question is whether the bad will eclipse the good. History is no doubt filled with conflicted legacies. For instance, there are those who argue that Lyndon Johnson could have gone down as a great president had it not been for the Vietnam War. The Civil Rights Act of 1964, the Voting Rights Act of 1965, Medicare and Medicaid, these are all massive social policy initiatives that Johnson pushed through. But the tarnish that Johnson’s legacy suffered because of Vietnam—think of the “credibility gap” that became his undoing—forever diminishes his major accomplishments in the minds of many Americans.
And so it is with the baby boomers, a generation that has no doubt often been a force for good in this country. Are they really to blame for pushing the country’s economy to the brink? The simple fact of the matter is that the Wall Street collapse has the boomers’ fingerprints all over it. When you look at public enemy list from Wall Street’s great fall, it is littered with baby boomers. Joseph Cossano from AIG. Charles Prince from Citigroup. Dick Fuld from Lehman Brothers. Even Lloyd Blankfein, whose Goldman Sachs company has now been famously dubbed the “great vampire squid wrapped around the face of humanity,” by the journalist Matt Taibbi, is a boomer. Whether Kinsley likes to admit it or not, the Greatest Generation will not be held culpable for America’s economic woes. In fact, if there are any entitlement programs Americans generally seem to agree on it is Social Security, Medicare and Medicaid. Trying to pin the country’s troubles on “The Greats’” embrace of these entitlements is flimsy at best. The reality is that the boomers are heading into retirement with the weight of the economic collapse on their shoulders, fair or not.
History will of course have the final say on what the boomers’ lasting legacy will be. But if one had to take a guess, it’s going to be one of great contradictions. It was a generation that had so much promise, accomplished many great feats, but ultimately led the country down a destructive path as it rose up the income ladder and took over the seats of power on Wall Street. Like President Johnson, whose transformative social policies often take a back seat to his malfeasance in handling the Vietnam War, the successes of the baby boom generation may one day be eclipsed by the destruction they left behind on Wall Street.