Is the Boomerocracy beginning to crumble?

The Boomers have dominated Western societies, demographically and in every other sense, for half a century. Is their long reign finally ending?

Photo by Jade Masri on Unsplash

The baby boomers are the most spoiled, most self-centred, most narcissistic generation the country's ever produced.
Steve Bannon (Boomer)

Will Generation X and the Millennials do a better job running the world than the boomers have? Let's hope so.
P.J. O'Rourke (Boomer)

Like the 'little emperors' of one-child China, too many Boomers were taught early that the world was made (or saved) for their comfort and enjoyment. They behaved accordingly, with a self-indulgence that was wholly rational, given their situation.
Eric Liu (Gen Xer)

I was recently listening to the always insightful

Louise Perry

on a podcast when she made a throwaway reference to the "Boomerocracy". As regular readers will be aware, I have full-blown Boomer Derangement Syndrome, but I was never clever enough to coin a phrase like Boomerocracy. I like it because it pithily sums up how societies have been run in the interests of those born in the two decades after WWII for the past 50 years.

I won't rattle off a lot of facts and figures about how disproportionately wealthy and powerful the boomers are and how they've consistently leveraged their electoral heft to further their interests at the expense of other generations. I will merely quote, for the umpteenth time, the then Reserve Bank Governor Ian McFarlane's 2003 warning. McFarlane, himself a Boomer, noted, "The young may resent the tax burden imposed on them to pay for the pension and health expenditure on the old… this will particularly be the case if they see the old as owning most of the community's assets."*

Is the political tide finally turning?
John Howard (born at the start of WWII rather than shortly after it) was fond of observing that politics usually comes down to arithmetic. It's not for lack of trying, but the Boomers haven't yet worked out a way to dodge the Grim Reaper's scythe. That means the arithmetic is growing ever more diabolical for the luckiest generation in human history. The oldest boomers are nudging eighty. Come next year, even the youngest will be in their sixties.

There are still a handful of pre-Boomers around, and plenty of Boomers are still alive and, in some cases, still in the workforce. But the large majority of the population and the majority of voters are now Gen Xers, Gen Yers and Gen Zers.

It's also now the case that many of the most powerful roles in societies are held by Gen Xers. (Peter Dutton is a Gen Xer. Albo, born in 1963, just squeaks into being a Boomer but is culturally Gen X. For reasons there isn't space to go into here, both the US and China currently tilt towards being gerontocracies – Joe Biden is a pre-Boomer and Xi isn't that much younger than him. But Hipkins, Macron, Meloni, Sunak, Trudeau and Zelensky are actually or effectively Gen Xers. Some national leaders are still Boomers (e.g. Modi, Putin, Lee Hsien Loong) or even Gen Yers (i.e. Kim Jong Un). But Gen X has finally clawed its way to the top after long being cockblocked by the Boomers and pursued by queue-jumping Gen Yers.

To misquote Gerald Ford, it seems the long historical nightmare of Gen X is over.

Post-boomers are financing the Boomers’ extravagant lifestyles
As I've grown older, I've come to more deeply appreciate the wisdom of the observation, typically attributed to Robert Heinlein or Milton Friedman, that there are no free lunches in life. Generational jostling doesn't always have to be a zero-sum game, but it typically is. Let's illustrate that with reference to housing affordability.

Imagine you're a Boomer who purchases a house in your early twenties for four times your annual income. For the sake of simplicity, let's say you buy a family home for $100,000 and sell it for $1,000,000 a couple of decades later. You sell your home to a childless Gen X couple in their mid-thirties. Both work full-time, but the house's purchase price is still 12X their combined income.

The Boomer has 'won' this transaction, pocketing an enormous capital gain. They are likely to enjoy a prosperous retirement. (In fact, the boomer may eat avocado-on-sourdough café breakfasts, attend concerts, and go on exciting overseas adventures far more often than their children or grandchildren.)

But to return to Heinlein/Friedman's melancholy observation, the Boomers' good fortune comes entirely at the expense of the Gen X couple. Expensive housing is great for Boomers, which is why they’ve spent decades punishing any politician sincerely committed to making housing more affordable. (As Bill Shorten discovered in 2019 and Albo may find in 2025.)

But expensive housing isn't great for anyone who doesn't already own one or more properties. The Gen X couple in the hypothetical example above has almost certainly delayed marriage and childrearing because of the cost of housing. They may have had to continue living with their parents well into their twenties or possibly even thirties. They've almost certainly had to study and work hard from a relatively young age to qualify for the middle-to-high-income jobs that facilitate property ownership. And though they've scored something of a victory – they are now solidly bourgeois homeowners rather than disreputable renters or 'adultescents' still living with their parents – it may be a Pyrrhic victory.

The best-case scenario is that they will just be burdened with a huge mortgage they will still be paying off when they reach retirement age. (The possibility exists that they will also be able to realise a significant capital gain on the property. But with birth rates plummeting and the world deglobalising, it's unlikely that real estate prices will skyrocket the way they did between circa 1980-2020.) And there is always the possibility of something going wrong. What if one of the Gen Xers either loses their job or wants to take time out of the workforce to raise children? What if the couple breaks up? What if one or both parties simply miss out on many valuable life experiences – including but not limited to parenthood – because most of their income is going to paying off a $800,000 mortgage?

Straws in the wind    
I could spend a long time listing the ways in which the interests of Boomers and post-Boomers diverge. But I'll end by illustrating how smart operators on both the Left and the Right are preparing for a world where the Boomers can no longer veto any policies they don't like.

The Australian, the house organ of Australia's reactionary Boomers, recently ran an article (paywalled) entitled "ALP fights to spread the wealth to Gen Zs'. The tl;dr version of the article, written by Geoff Chambers and Greg Brown, is that the Australian Labor Party's (ALP) Left faction will “push a radical new youth-focused policy agenda at national conference that redistributes intergenerational wealth, removes health levies [on those who don't take out private health insurance] and pauses indexation on higher education loans".

No doubt, the Labor Left's collective mind has been concentrated by the Greens increasingly gunning for the ever-growing demographic of twentysomething and thirtysomething renters. Union leaders and conference delegates accept that, after losing the unlosable election in 2019, there's no appetite to revisit negative gearing and capital gains tax arrangements. But they hope to levy new taxes on property investors and redistribute wealth "among the asset class and non-asset class".

There's some new thinking going on on the Right as well. In a recent AFR article (paywalled) entitled '‘Productivity is policy for the young'’ Jason Falinkski and Tim Wilson – both comparatively youthful Liberal Party politicians who found themselves exploring external career development opportunities after last year's federal election – assert, “It is younger generations who suffer as complacent Baby Boomers refuse to see the point of growth-driving productivity reforms”.

Liberal Party politicians being Liberal Party politicians and the AFR being the AFR, there was a lot of focus on bringing down high marginal tax rates and removing protections for workers, as well as a whack at the Hard Left – "the Greens exploit the next generation's legitimate resentment over rising rents and proposes irrational neo-Marxist solutions".

But, hey, at least there was an acceptance that post-Boomers have legitimate grievances and possibly even an acknowledgement that tax cuts and further deregulation of the labour market will not entirely address those grievances. At one point, Falinski and Wilson even quote Peter Costello (a Boomer), who avers, "Low [national] debt is a youth policy… what can you do for young people? We can give them a society where all they have to do is pay for their spending, not pay for their spending and our spending."

Such a society might just be about to start coming into being.      

*If you're part of Gen X, Y and Z and want to learn more about just how self-obsessed and selfish the Boomers have been, I'd recommend reading Bruce CannonGibney's A Generation of Sociopaths: How the Baby Boomers Betrayed America.