osenton boomer destiny; leading the u.s. through the worst crisis since the great depression...

BOOMER DESTINY:LEADING THE U.S.THROUGH THEWORST CRISISSINCE THE GREATDEPRESSION

Tom Osenton

Library of Congress Cataloging-in-Publication Data

Osenton, Tom.Boomer destiny : leading the U.S. through the worst crisis since the Great Depression /

Tom Osenton.p. cm.

Includes bibliographical references and index.ISBN 978-0-313-35604-9 (alk. paper)

1. Financial crises—United States. 2. United States—Economic conditions—21st century.3. Baby boom generation—United States—Economic conditions. I. Title.

HB3722.O84 2009330.973’092—dc22 2008045516

British Library Cataloguing in Publication Data is available.

Copyright © 2009 by Tom Osenton

All rights reserved. No portion of this book may bereproduced, by any process or technique, without theexpress written consent of the publisher.

Library of Congress Catalog Card Number:ISBN: 978–0–313–35604–9

ISSN: 2008045516

First published in 2009

Praeger Publishers, 88 Post Road West, Westport, CT 06881An imprint of Greenwood Publishing Group, Inc.www.praeger.com

Printed in the United States of America

The paper used in this book complies with thePermanent Paper Standard issued by the NationalInformation Standards Organization (Z39.48–1984).

10 9 8 7 6 5 4 3 2 1

http://www.praeger.com

To Curran and Matt—my own Gen Xer and Millennial—who inspire me to want

to make a difference every day.

Contents

Introduction vii

1. A Legacy Not Yet Written 1

2. Repeating Cycles in American History 21

3. The Gathering Storm 37

4. Boomer Spring: 1946 to 1964 57

5. Boomer Summer: 1965 to 1984 71

6. Boomer Autumn: 1985 to 2004 87

7. Boomer Winter: The Next American Crisis—2005 to 2024 107

8. The New New Deal 123

9. Rising to the Occasion 141

10. The Boomer Grid 161

11. Boomers’ Will 177

12. Boomer Legacy 189

Notes 193

Index 203

Introduction

Life grants nothing to us mortals without hard work.

—Horace

As I was finishing this book during the summer of 2008, I honestly felt asthough I was drafting an early-warning about a looming secular crisis some-where out there on a three to six year timeline. Virtually all of the social andeconomic components that I researched—the sub-prime mortgagecrisis, the oil shocks of 2005 and beyond, the Dow’s unsustainable ride to14000, the further maturation of an already mature U.S. economy—sug-gested that the underlying fundamentals of the patient’s health wereindeed NOT strong.

Like a comprehensive history and physical performed by the good folksat the Mayo Clinic or Massachusetts General or Johns Hopkins, all thesymptoms were there foretelling a difficult stretch ahead. What surprisedand unnerved me most was the speed at which conditions metastasized.Suddenly, instead of writing about a future crisis, I was writing about ahere-and-now crisis. That’s the bad news. The good news—if there isany—may very well lay in the fact that if the crisis arrived faster, we maypass through it faster. Like the cold and dark days of winter, the faster weget through them, the faster we get on to the hopeful spring thaw.

Over the course of about a year while writing this book, I experienced atleast four power outages due to a variety of natural and unnatural reasonsthat simply stopped me dead in my tracks. One particular severe thunder-storm knocked out electrical power for two days in the neighborhood.Although that might not sound like much of a hardship, the experiencereminded me just how dependent we are on electricity as a resource centralto our lives. After just four hours without power, I was essentially transported

back to 1860, lacking all of the modern conveniences that we take forgranted today. As dusk approached and my batteries ran out, I was unableto use my laptop, my cell phone, my Kindle, or my iPod. I was unable tocall anyone, email anyone, text anyone, or use instant messaging (IM) tocontact anyone.

As the sun went down, I lit candles and realized that I couldn’t cook dinnerwith my electric stove or microwave, and besides, almost everything in therefrigerator was already ruined. No television, no movies, no music—justcandle light, books, pen and paper. All that was missing was the log cabin.

By Day 2, I started to realize just how much we rely on electricity, howmuch we take it for granted, how angry we get when it goes out, and howangry we get when we call the power company demanding to know exactlywhen power will be restored. In my house, I couldn’t even make that callbecause the telephone runs on electricity. And now I was beginning tosmell, because I couldn’t take a shower: the hot water heater ran on—yes—electricity. Even driving downtown to get coffee and a bagel was not anoption because the stores didn’t have power either. Life as I knew it hadstopped—just as in the sci-fi cult classic The Day the Earth Stood Still whena flying saucer lands in Washington, D.C., and neutralizes all electricity.That scared me as a 10-year old, but it scares me even more now.

When the electricity finally came back on after more than 48 hours, thefirst thing I did was take a shower. Then I cleaned out the refrigeratorbefore getting back to work on the computer, something that many of usrely on every day for work and play.

What became clear to me during those 48 hours was that we live eachday incredibly close to the edge of a world that is very different from theone in which we grew up. This is a world of shortages, not excesses; a worldof limited choices, not unlimited choices. A world of less, not more. In thewords of cartoonist Walt Kelly’s comic strip character Pogo: “We have seenthe enemy and he is us.” That comic strip ran almost 40 years ago and it’sstill true today. Now it is up to us to change that to help save the AmericanDream—not for us, but for our children and grandchildren.

Why I Wrote This Book

My last book, The Death of Demand, explored the growth of the Americancorporation over the second half of the twentieth century. Although somelooked at it as a doomsday book, others saw it for what it was—an aca-

viii Introduction

demic study of growth rates and the impact on a corporation’s initiativeswhen growth rates begin to slow, as they have for all corporations thatwere around just after WWII. It was a study of the advent of reengineer-ing or cost-cutting—activities that didn’t even exist in the 1950s, 1960s,and 1970s during which time America’s corporate infrastructure was builtup in large part because of the arrival of 76 million baby boomers. It wasa study of the deconstruction of the infrastructure of America’s blue chipand blue hair corporations.

After reading William Strauss and Neil Howe’s groundbreaking workGenerations: The History of America’s Future, I realized that the economicdownturn for companies such as General Motors has not only been com-ing for a long time, but is part of a repeating cycle of American historythat goes back to the very beginning. Suddenly, my last book made muchmore sense. History tell us that America experiences a major crisis every80 years, and with a mature economy that is made up of mature sectors,mature industries, and mature corporations, it is rapidly approaching theeightieth anniversary of the day that marked the beginning if the lastAmerican crisis—Black Tuesday, October 29, 1929. The RevolutionaryWar was followed 80 years later by the Civil War, itself followed 80 yearslater by the Great Depression and World War II. Now as we approach80 years since Black Tuesday and face an array of challenges never beforematched in American history, it becomes our responsibility to preparefor the coming crisis of the new millennium. So the sociologically bentBoomer Destiny was born as a natural extension to the economically bentThe Death of Demand.

The Baby Boom generation has yet to distinguish itself as more than justthe self-centered, materialistic consumers that they have come to be per-ceived as. Yet like FDR’s Missionary Generation—the senior leaders of thelast American crisis—Boomers, led by Boomer President Obama, have achance to write an entirely new ending to the legacy they will leave over thenext 10 to 15 years as the senior leaders of the coming American crisis.

One last reason that I wrote this book - I care deeply about the world wewill be leaving to our children and grandchildren. It doesn’t look anythinglike the world we entered, and the prospect of being the first generation inAmerican history to leave the country in worse shape than we found itshould frankly shame all of us into action. We have been called as a gener-ation to save the American Dream—not for us but for our kids; and thereis no greater gift that we can possibly give them.

Introduction ix

A Few Words to Historians and Sociologists

I must express my sincere appreciation to the gurus of generations—the lateWilliam Strauss and the very generous Neil Howe. It was upon their thesesthat this book was built, and without them, this book never could havebeen written.

Second, there are different schools of thought on the precise definitionof generations—many of which were coined by Strauss and Howe—andthe time span that identify each. Sociologists and historians, for example,might define the Boomers as those born between 1943 and 1960, althoughpop culture says the Boomers were born from 1946 to 1964.

Because the essence of this book does not turn on a generation’s precisedate of birth, I have taken the liberty to standardize the time-definitionof generations into neat 20-year spans. These 20-year spans also roughlycoincide with the duration of each of Straus and Howe’s social turnings.For example, FDR’s Missionary Generation was born from 1865 to 1884which coincides with the 20-year First Turning high of the Great PowerCycle. Dwight Eisenhower’s Lost Generation was born roughly from1885 to 1904 which coincides with the Second Turning awakening of theGreat Power Cycle. JFK’s GI Generation was born roughly from 1905 to1924 which coincides with the Third Turning unraveling of the GreatPower cycle. And John McCain’s Silent Generation was born roughlyfrom 1925 to 1944, which coincides with the Fourth Turning crisis of theGreat Power cycle. Those were the four generations born during theGreat Power cycle. Boomer Barack Obama, on the other hand, was partof a generation that was born at the beginning of a new cycle—duringthe First Turning high of the Millennial cycle. The following are the nineAmerican generations that are widely discussed in this book, along withtheir date of birth and the specific turning during which those birthsoccurred:

• Missionary Generation—born 1865 to 1884—High• Lost Generation—born 1885 to 1904—Awakening• GI Generation—born 1905 to 1924—Unraveling• Silent Generation—born 1925 to 1945—Crisis• Boomer Generation—born 1946 to 1964—High• Gen X Generation—born 1965 to 1984—Awakening• Millennial Generation—born 1985 to 2004—Unraveling• New Silent Generation—born 2005 to 2024—Crisis• New Boomer Generation—born 2025 to 2044—High

x Introduction

Please understand that I mean no disrespect of the nuances of the study ofsociology or history or of generations. But this standardization seemed likethe best method for me to tell my story.

One of the difficulties in writing a book about the U.S. government is thatyou need to be equipped with a calculator that adds, subtracts, multiplies,and divides in at least the tens of trillions. That’s 13 zeroes. A trillion lookslike this: $1,000,000,000,000. And after writing this book, I wondered if youbecome desensitized to large numbers if you work for the U.S. government,because now when I look at $1,000,000,000—one billion dollars—it doesn’tlook that huge anymore.

Lastly, I have offered up some suggestions in the latter part of the booknot as definitive solutions but more as thought starters for all Americans toponder as we seek to fix the great country that we all love. My objective isto encourage us to look at old problems in new ways—for example, thesuggestion for a Boomer Resource Grid that I detail in Chapter 10. This issimply an idea designed to demonstrate the potential power of a genera-tion and how—with a little organization and creativity—the Boomer gen-eration can make a huge impact on the world it leaves behind.

Boomer Destiny was written as an appeal—a manifesto—for the gener-ations now alive in America. I hope you enjoy the book, and I wouldwelcome any questions or ideas that you might want to share. Just send mean email at [email protected] and I’ll gladly reply.

Acknowledgments

I first want to thank the amazing Miss Em. It would be impossible for meto thank you enough, Emilie, for all you’ve done to make my life better.Thank you also from the bottom of my heart for helping me think throughand shape the book that I wanted to write. Without your help, it neverwould have gotten done. Thank you so much, Em, for all that you do.

My sincere thanks to John McCabe for his time and keen eye and writingexpertise at each step in the process. Thank you so much, John.

Enormous thanks to my editor Jeff Olson who has an incredible eye anda great sense of the world in which we live. Jeff, thank you for helping meto make this book better in every way.

Thank you to all my Millennial students who taught me much over thelast three years.

Finally, to the late Don Murray, who helped me so much in the earlystages of thinking through this book: nulla dies sine linea.

Introduction xi

mailto:[email protected]

Chapter 1

A Legacy NotYet Written

Life is a series of collisions with the future; it is not the sum of what we have been,but what we yearn to be.

—Jose Ortega y Gasset

Winning the election was not nearly as difficult as the task that lay aheadfor the newly elected president of the United States. The laundry list ofchallenges was daunting, exacerbated by the prior administration’s lack ofurgency and action. A flagging economy, unemployment, an uneven distri-bution of wealth, the threat of bombings on Wall Street, immigrationconcerns, millions living beyond their means, a crumbling infrastructure,natural disasters, and weakening aggregate demand—all of it happeningon the heels of a decade of prosperity.

Although this may sound like the agenda for a newly elected BarackObama in 2009, these were the challenges of the day for a newly electedFranklin Delano Roosevelt (FDR), as he stood on the steps of the U.S.Capitol and was sworn in as the 36th president on March 4, 1933. He hadjust turned 51 years old, and he already knew what he was getting himselfinto. After all, he had been governor of the state of New York when thestock market crashed in 1929; when the Depression picked up speed, hisstate was particularly hard hit. The new chief executive was no stranger totough times; taking over the reigns from Herbert Hoover in mid-Depressionwas no big deal for the optimistic FDR.

But sometimes it takes a little more than just a “rah-rah” attitude and a lit-tle elbow grease to turn a nation around. Make no mistake about it—FDR’s“can-do” attitude helped serve as the glue to rally a nation. But it also took agreat deal of time, patience, resources, hard work, and luck, as well as the will-ingness of multiple generations of Americans to adjust their expectations andattitudes and to sacrifice selflessly by working together for the common good.

Standing there on that cold and overcast Saturday morning in 1933,did FDR fully comprehend the enormity of the challenge that layahead? More than 13 million Americans were out of work. Many of thenation’s banks were closed. More than three years after the crash of1929, the Dow Jones Industrial Average was still down more than 80percent from pre-crash levels. A deepening depression would drag onthrough his first two terms. As chief executive, he would live throughPearl Harbor, D-Day, and the Battle of the Bulge yet would never per-sonally experience U.S. victories on V-E or V-J Day. How could he haveknown, while listening to Hail to the Chief for the very first time as pres-ident, that, in just a little more than a decade, he would have conqueredthe vast majority of the challenges that were before him only to die atthe age of 63?

This is FDR’s legacy as well as that of his peers of the MissionaryGeneration—mostly born in the years immediately following the CivilWar. It was the destiny of the Missionary Generation to serve as the wisesenior advisors to the mid-lifers of General Eisenhower’s Lost Generation,who, in turn, served as the managers of the young adults of LieutenantKennedy’s GI Generation. These three generations of Americans workedtogether to overcome the last prolonged crisis in American history. For 16long years, through a deep depression and a world war, Americans pulledtogether to overcome long odds and unimaginable suffering.

It was Albert Schweitzer who said, “One truth stands firm. All thathappens in world history rests on something spiritual. If the spiritual isstrong, it creates world history. If it is weak, it suffers world history.”

Something quite spiritual happened in the years following Black Tuesdayand the Wall Street Crash of 1929. Three different generations of Americansteamed up to muscle through the most challenging times since the CivilWar. It was a bitter and painful time for America, but the country pre-vailed. “If we had no winter, the spring would not be so pleasant,” wroteseventeenth-century American poet Anne Bradstreet. “If we did not some-times taste of adversity, prosperity would not be so welcome.”

Just about 80 years ago, America was served up a heaping helping ofadversity: a Wall Street crash that triggered the Depression, a 1937 reces-sion that slowed the recovery, and then a four-year World War. Yet evenwith 16 years of uncertainty and self-sacrifice, the United States eventuallymade its way through a very long, very cold winter and onto a new andprosperous spring of hope. And, when it did, it welcomed the arrival of anentirely new generation of Americans. Baby boomers, or Boomers—thelargest generation in American history—ushered in a new seasonal cycle,

2 Boomer Destiny

and life in America was good. But, as with all seasonal cycles, spring doesn’tlast forever. And neither does summer or autumn.

Déjà Vu All Over Again

As the first decade of the twenty-first century draws to a close, the UnitedStates finds itself in uncertain times once again, facing many of the samechallenges that FDR faced in the 1930s and 1940s. The economy is weak-ening, with record budget deficits and skyrocketing national debt. Theworking class is underpaid, underinsured (healthcare), underfunded(retirement), and overextended (credit). Services such as public schools,hospitals, and police and fire departments are all overstressed by budgetcuts and the legal and illegal inflow of immigrants. Add to the equation thethreat of domestic and international terrorism, as well as the ever-presentpossibility of a natural disaster, and America today is arguably facing achallenge that is at least equal to if not greater than the threat that existedin the years leading up to the Great Depression (see Table 1.1).

Certainly the United States has always had its share of challenges,regardless of the era. But the current alignment of significant socioeco-nomic challenges has never been greater or capable of adversely affectingso many. These challenges may not result in a Depression, but the problemsthat they create certainly will require the cooperation of several genera-tions of Americans and more than just a few years to fix.

During the 1930s and 1940s, America slogged its way through a double-barreled crisis that included financial disaster and a world war. Onceagain, America finds itself in the same precarious position it experiencesevery 80 years or so—on the brink of crisis. Increasing unemployment, apull-back in consumer spending, a costly war, a mature economy, weaken-ing demand, and the slowest GDP growth since the 1930s all add up to aninevitable period of pain and adjustment.

During the 1930s and 1940s, there was high awareness of and sensitivity tothe overconsumption of natural resources. Because most Americans did notyet own an automobile, demand and consumption of gasoline were notmajor issues. But by 2000, unbridled postwar commercial success brought theUnited States to the edge of saturation. When there are 40 million more reg-istered vehicles than licensed drivers in the United States, it is difficult to sellcars—even with employee discounts. When the percentage of U.S. homeown-ers is relatively flat for decades because of responsible lending standards, ittakes irresponsible lending standards to increase the universe of homeowners.After pushing the edge of the envelope for more and more growth, the United

A Legacy Not Yet Written 3

States arrived at a very dangerous destination—one that negatively impactedthe economy as much as it did the environment.

During the 1930s and 1940s, immigration was a significant issue in theUnited States. National origins quotas greatly restricted immigrants fromentering the United States and, in some cases, banned entire nationalities,such as the Chinese, from entering at all. Legislation from the late 1920seffectively ended the mass migration that had been common in thenineteenth century. In the 1990s and 2000s, immigration is once again acentral issue, but this time the focus is on the growing number of immi-grants living in the United States illegally—either by overstaying their orig-inal legal entry or by crossing the border illegally.

The alignment of a host of once-a-century social and economic challengeshas been quietly forming over the last quarter century. And, even though

4 Boomer Destiny

TABLE 1.1. Constellation of ContractionWhat was will be again. The times may change but the issues remain the same

Issue 1930s and 1940s 1990s and 2000s

The Economy Depression Slowest GDP GrowthSince Depression

The Environment Over-Consumption of Global WarmingNatural Resources

War World War II Iraq War (5 Years and(3 Years 8 Months) Counting)

Trade Protectionism/ Trade DeficitCollapse of Intl. Trade

Working Stagnant StagnantClass Wages

Federal Budget Deficits from Record Deficits1931–1946 from 2003–2009

National Debt Increased 15-Fold Tripled fromfrom 1929 to 1945 1990 to 2007

Healthcare National Health 47 Million WithoutInsurance Defeated Healthcare Coverage

Housing Lack of Affordable Sub-Prime MortgageHousing Bubble

Security Anarchists Bomb Terrorists Attacks of 9/11Wall Street

Immigration National Origins 20 Million UndocumentedQuota Workers

Wildcards Dust Bowl, Drought, Great Hurricane Katrina,Okeechobee Hurricane Fires, Floods

there has always been an ambitious agenda of issues facing the United Statesat almost any point in its nearly 235-year history, there have certainly beenthose rare moments when a unique convergence of challenges is so concur-rently significant that it simply causes the dam to burst.

The last American crisis was filled with dramatic events, such as the rareattack of the U.S. mainland, a Wall Street crash, and a long and painful warthat ended with the use of nuclear weapons. Now America again faces adaunting list of challenges that are fundamentally not that much differentthan those of 80 years ago. America prevailed in 1945 and lived to seeanother spring—one of the greatest in U.S. history—and it will prevailagain. But now, as then, the United States must endure a winter season thatwill challenge multiple generations and beg for truly inspirational new lead-ership with the guts to make difficult decisions at the risk of popularity.

Gone however, are FDR’s Missionary Generation, Ike’s Lost Generation,and most of JFK’s GI Generation—the triumvirate that helped the UnitedStates through the last American crisis. Instead, a new line-up of genera-tions has formed—one that has the aging Silent Generation (born1925–1944) moving out of the role as senior leaders and into its senioryears. Moving into the role as senior leaders of American society over thenext 20 years will be the largest, most written-about, most marketed-togeneration of all time: the baby boomers.

The timing is such that Barack Obama’s Boomers are becoming seniorleaders of American society at the beginning of an American crisis—justas Benjamin Franklin did as a member of the Awakening Generationthrough the crisis of the American Revolution, as Abraham Lincoln did asa member of the Transcendental Generation through the crisis of the CivilWar,1 and as FDR did as a member of the Missionary Generation throughthe last American crisis—the Great Depression and World War II. Thoseare big shoes to fill and big issues to conquer. Besides being the largest andmost conspicuously consuming generation of all time, who are theBoomers? Are they up to the task of leading the country through the nextAmerican crisis?

Boomer Bio

We have heard the basic statistics a thousand times: 76 million Boomerswere born during an 18-year period from 1946 to 1964—the largestgeneration in American history (although the Millennial generation, bornfrom 1985 to 2004, came quite close in size). But no generation comes closeto the prolific output of American women on an annual basis: in 1957—the


peak birthing year for Boomers—4.3 million Boomers were born during atime when the U.S. population was only 150 million. Now, more than50 years later, it is still the case that U.S. women have never birthed 4.3 mil-lion babies in one year—even with a total population at more than 300million, more than twice that of the late 1950s.2

Boomers were the first generation in history to gain notoriety as childrenbecause of the sheer size of the generation. Historically, it has taken timeand experience for a generation to make its mark. The GI Generation—thegeneration that Tom Brokaw calls the Greatest Generation—made its markas the rising adults who fought and died during World War II. This was thegeneration of young people who, returned to the United States after somuch time and suffering, and started to turn out “victory babies” in recordnumbers.

In the 18 years prior to 1946, the number of live births in the UnitedStates averaged 2,687,000 per year. In the 18 years following World War II, that average jumped to 4,215,000 births per year, or an addi-tional 1,500,000 babies per year until 1964. That amounts to an incre-mental 27 million Americans added to the U.S. population from 1946 to1964,3 or nearly one-half the size of all of Generation X, born from 1965to 1984.

So the Boomer Generation was first known for its size. Second, it wasknown for the economic opportunity that its size created. And, later in life,when Boomers joined the labor force, no other generation could spend likethe Boomers—quite possibly as a means of self-remuneration as the self-centered, narcissistic generation that happily traded quality of life hours forstandard of living hours—in building what they deemed a “better” life.

Constellation of Expansion

In the years immediately following World War II, a unique alignment ofconditions and events provided a recipe for dynamic economic growth inthe United States. First, three generations of Americans who had sacrificedso much for so long—through a depression and a world war—couldfinally get on with their lives. At last, FDR’s generation had done its part inmanaging Eisenhower’s generation, which, in turn, pulled the strings of theobedient grunts from JFK’s generation. These generational cohorts werespent, and, when their pent-up demand was finally unleashed after the war,it didn’t take much to spark a new wave of expansion in the UnitedStates—the first since the Roaring Twenties.

6 Boomer Destiny

Second, the birth of more than 76 million Boomer babies created newdemands for basic food, clothing, and shelter. Birthed alongside the Boomerswas the American Dream—with the help of the GI Bill, which provided low-interest loans to cover college tuition, new homes, and new cars.

Third, with the war effort behind them, Americans turned theirinnovative juices to the development of dozens of new household goodsand appliances—all designed to make life a little easier for the postwarAmerican family.

The arrival of Boomers created the single largest demographic segmentin history—a real boon for marketers such as David Ogilvy (Ogilvy &Mather) and Bill Bernbach (Doyle Dane & Bernbach), who opened theirad shops in 1948 and 1949, respectively, and made Boomers the mostmarketed-to generation in history. And that pursuit of trillions in discre-tionary dollars from this massive balloon of consumers continues today, asthe Boomers march through time toward retirement. From manufacturersof medications for erectile dysfunction and osteoporosis to retirementcommunity developers and cruise line operators, Boomers still representan enormous opportunity for marketers.

As soon as GIs returned stateside in late 1945, maternity wards acrossthe United States started to swell. The country was euphoric. A photo of anunidentified sailor kissing an unidentified girl in the middle of TimesSquare captured the spirit of the times on the cover of LIFE Magazine. Evenpregnant moms got into the act by painting the message “Kilroy was here”on their bursting bellies as they were wheeled into the delivery room. Theboys were home—and with them came a recipe for explosive growth thathad been bottled up in Europe or the South Pacific for nearly a generation.

The 1950s and 1960s ushered in more new consumer product categoriesthan any other time in U.S. history. The parade of images and pitches wereall designed to take advantage of the sudden upsurge in demand. For whiterteeth, there was Pepsodent toothpaste (“You’ll wonder where the yellowwent”). For a cleaner feeling, there was Dial soap (“People who like peoplelike Dial”). You could fill up your new Chevy at your local Texaco station(“You can trust your car to the man who wears the star”). Those peskyinsects spoiling your weekend get Raid insecticide (“Kills bugs dead”). Ifyou had a hankering for green beans, there was Green Giant vegetables (“Inthe valley of the Jolly Ho Ho Ho Green Giant”). When you had too muchof those green beans, well, then there’s Alka-Seltzer antacid (“Plop plop, fizzfizz, oh what a relief it is”). When you’ve failed at scrubbing out stains inyour shirts, it’s time for Wisk detergent (“Ring around the collar”).


Literally hundreds of new products and new product categories thatnever existed before were introduced during the Boomer birth years. And,if spreading the word about a new product was a problem, it wasn’t aproblem for long in postwar America. The arrival of network television in1949 provided the final piece of the puzzle that helped create a remarkablegrowth anomaly over the second half of the twentieth century. The great-est mass marketing tool of all time provided marketers with instantaneousaccess to millions of hungry Americans with a powerful appetite forconsumption. For the first time ever, local television stations across thecountry aligned with one of the three New York-based television networksin order to transmit a common signal to millions of households across thenation.

This unique combination of events and conditions helped hundreds ofcompanies—such as Procter & Gamble, General Foods, and Kellogg—successfully pitch their products to millions of American families, right inthe comfort of their own living rooms. As a result, an American economythat had been idling for more than 20 years finally gained momentum,thanks in large part to the arrival of the Boomers (see Fig. 1.1).

“The times, they were a changin’” and the U.S. economy was just onemeasure of that change. Real Gross Domestic Product (GDP) grew bymore than two-and-a-half times over the course of the 20 years immedi-ately following World War II (1946–1966): from $1.5 trillion in 1946 toclose to $3.9 trillion in 1966.4 The postwar expansion was on, and forgrowth the sky was the limit.

Raised by Mom . . . and Dr. Spock

Boomers largely grew up in one-income households—with mom at homeand dad at work—characterized by American author Philip Wylie as The

8 Boomer Destiny

+

Pent-up

demand4 Million

GIs returnhome —

unleashes yearsof pent-up

demand

Newdemand76 Million

baby-boomerscreate

immediate newdemand

Newproducts

Dozensof new

products/newproduct

categories

Networktelevision

Mostpowerful

mass-marketingtool inhistory

Greatestperiodof GDP

growth inU.S. history

++ =

FIGURE 1.1. Constellation of ExpansionConditions for growth were ideal from 1946–1964.

Sons and Daughters of Mom in his 1971 book of the same title. Predominantlyengaged in the full-time career of raising children and making a home,many Boomer moms were guided by the philosophies of pediatricianBenjamin Spock.

Dr. Spock’s 1946 book The Common Sense Book of Baby and Child Carewas timed perfectly with the very beginning of the baby boom and was anattempt to counterbalance many of the rigid traditions of conventionalpediatrics of years gone by. Dr. Spock’s essential appeal to new mothers—and there were record numbers of them—was more like advice from anold friend rather than a definitive rulebook on appropriate child-rearing.

“Trust yourself,” said Spock, whose book was second only to the Biblein sales. “You know more than you think you do.”5 The controversialSpock was viewed by many GI dads as too liberal. But GI moms had a dif-ferent take on the theories of the good doctor. GI dads looked at Spock assoft on discipline, which helped create a “good cop, bad cop” scenario inmany Boomer households. When mom was forced to, however, she coulduse the threat of dad to keep Boomers in line until dinner time: “Just waituntil your father comes home” was a common refrain in the 1950s, 1960s,and 1970s. It was this dynamic that helped shape an entire generation ofindependent thinkers who often questioned authority—seeing in theirfathers, as well as their mothers, what they didn’t want to become whenthey grew up.

Spock’s philosophy emphasized the individual and the need for flexibilityin raising children. This liberal and tolerant focus on self-actualizationencouraged mothers not to worry too much about spoiling the child.Labeled by many of his critics as “the father of permissiveness,” Spock laterreflected that his original intent was to emphasize mutual respect betweenmother and child, not just one-way respect from mother to child. In the 1998edition of Baby Care, Spock addressed the issue, saying that the parents mayhave misinterpreted the original intent of his message: “Parents began to beafraid to impose upon the child in any way,” explained Spock.6

By 1998, the youngest Boomers were already approaching the age of 35, so,if mom had misinterpreted Spock’s intent, it was way too late to do anythingabout it. The die had been cast on the most indulged generation in Americanhistory. The extent of Benjamin Spock’s role in that indulgence will forever bedebated—but what can’t be debated is this: in the span of just one generation,parenting habits and behaviors radically changed and resulted in the hard-wiring of a new generation of American children who would behave like noother in history.


Wanting for Nothing

If there ever was a period in recent American history when mothers hadthe time and the luxury of practicing a more patient and liberal meansof child-rearing, it was during the 20 years following World War II.Those born during an economic expansion were simply parented differ-ently than those born when times were tough. Parents of children bornduring good times rarely worried about basic needs; instead, they weremore focused on ensuring that their children received a great education,as well as helping them adapt socially. But children born during an eco-nomic contraction often had to fend for themselves for very basic needs.During the Great Depression, thousands of young people wrote directlyto the First Lady—Eleanor Roosevelt—telling their personal stories ofdesperation and asking for money, clothing, and even bicycles so thatthey could more easily get back and forth to work. A 16-year-old Mass-achusetts girl sent an appeal for some money to help make payments onthe family’s refrigerator:

Nov. 30, 1937 Springfield, MassDear Mrs. Roosevelt,

I am a girl sixteen years old. Last May I beg [sic] my father to buy an electricrefrigerator for mother on Mother’s day. We had talked about buying onewith her. She thought it was not a very wise thing to do, because we could notafford to pay cash. I wanted it so very bad [sic] that my father bought it. Heagreed to pay monthly payments of seven dollars and twenty two cents. Whatmother had said proved to be right. For two weeks after we bought therefrigerator I took sick with a serious kidney ailment which confined me tomy bed from May twenty until Nov. twenty-second. I am just recoveringfrom a delicate operation. I came home from the hospital Nov. eighth andmy father was layed [sic] off after working for the railroad fifteen years. Manya girl of my age is hoping that on Christmas morn they will find a wristwatch, a handbag, or even a fur coat. But my one and only wish is to havefather and mother spend a happy Christmas. Mrs. Roosevelt I am asking ofyou a favor which can make this wish come true. I am asking you to keep upour payments until my father gets back to work as a Christmas gift to me.Though father worked part time for quite a while we never lost anything forthe lack of payments. If the refrigerator was taken away from us father andmother would think it a disgrace.

10 Boomer Destiny

I close hoping with all my heart that my letter will be considered. Mrs.Roosevelt you may rest assure [sic] that I have learnt [sic] my lesson.

I am respectfully yoursJ.B.Springfield, Mass7

The childhood of most Boomers bore little resemblance to J.B.’s. Boomersmay have been the first generation of Americans who did not wake up eachmorning painfully aware of how little they actually had. Boomers grew up ina fully equipped house, with all of the now-standard appliances—washers,dryers, telephones, televisions, toasters, record players, and a car in thegarage. They were the first generation in American history to wake up earlyevery Saturday morning to watch cartoons, while eating sugary cereals in asafe and secure environment of plenty. For Boomers, Leave It to Beaver wasmore than a popular television show—it was truly art imitating life.

On the other hand, many of the parents of Boomers—and certainlythe grandparents of Boomers—grew up at a time and in conditions thatrequired great sacrifice. The most basic needs, such as food, clothing,shelter, and safety, were, in many cases, completely lacking. Otherhuman needs, such as love, a sense of belonging, the building of self-esteem, and the desire to lead a fulfilling life, were mostly left unad-dressed for families such as those that lived in makeshift tents in NewYork’s Central Park around 1930—the most southern area of the parkthat became known as Hooverville in mock homage to the incumbentpresident at the time.

Boomers grew up in an environment bursting with opportunities thattheir parents never had, which helped them gain confidence early on abouttheir feelings and choices. And, as Boomer children grew into the youngadults on college campuses across the country, they were not shy aboutmaking their voices heard.

Anti-Establishment Boom

Boomers were the rising adults of a society in turmoil during the 1960s andthe 1970s, and their self-confidence pushed back against the many injusticesof the times. Boomers were quick to rally behind the disenfranchised—mostnotably African Americans during the 1960s in the American South wherecivil rights were egregiously violated. Boomers also took up the fight against


the war in Vietnam, although it’s possible that not all of their motivationswere purely altruistic. Boomers certainly did not like to be told what to do,and, when the military draft lottery was reinstituted in 1969, it provided anadded incentive for healthy American males aged 18 and over to want to seean end to the war in Vietnam. It was the first time that the lottery had beenused since early in World War II; consequently, the first draft included allAmerican males born between 1944 and 1951. Normally, the oldest drafteeswere sent into battle first, but, under the lottery system, draftees would betaken based on the order in which birth dates were selected randomly, like alottery.

At its headquarters in Washington, D.C., the Selective Service System setup a huge drum with little capsules inside, each corresponding to the 365(or 366 in a leap year) birth dates. Typically, a member of Congress wasasked to select a capsule and read off the birth date contained therein. In thecase of the December 1969 draft, Representative Alexander Pirnie (R-NY)pulled September 14 out of the drum as the first birth date. This meant thatU.S. males born on September 14 in the years 1944 through 1951 would bethe first to be called up for active duty—a certain ticket to the jungles ofSouth East Asia. As it turned out, there were only three drafts during theVietnam War, and they involved only Boomers born in 1953 or before. Withthe advent of an all-volunteer military, starting in 1973, the dynamicchanged for the Gen X and Millennial generations, which may in part helpexplain why the Iraq war was not nearly as actively protested on collegecampuses.

Boomers protested the Vietnam War in a big way and in prime time oncollege campuses across the United States, desperately trying to find waysto end the pointless conflict and killing in Southeast Asia. Vocal and often-times violent protests in the late 1960s created an “us versus them” tensionbetween Boomers and the predominantly GI generation establishment.The establishment for Boomers was essentially their parents, schooladministrators, bosses, the government, and pretty much anyone else whowas over 30 years old.

As the 1970s dawned, most of America had become tired of fighting awar that had taken more than 58,000 American lives8—many of themBoomers—for reasons that were not entirely clear. The draft ended in1972, and, by the spring of 1975, the United States was completely out ofVietnam and Nixon was out of the White House—signaling that changewas in the wind for Boomers. The Boomers were beginning to enter theworkforce, most of them with a college degree that many of their parents

12 Boomer Destiny

never received. Boomers now owned a shirt and tie and, in recordnumbers, poured into the civilian workforce for the balance of the 1970sand into the 1980s.

The 1970s had it all—a war, an oil crisis, a deep recession, the resigna-tion of a president, Republicans and Democrats in the White House, ahostage crisis, and the 200th birthday of the country. Change wascertainly in the air as the country struggled to find a rhythm. As the 1980sdawned, the focus of the United States was off Southeast Asia and on theMiddle East—a focus that would stay with the country well into the newcentury. Presidents from the GI generation dominated the White Housefor all of the 1960s, 1970s, and 1980s—seven straight presidents, includ-ing the 40th president of the United States, Ronald Reagan.

Deficits and DINKs

“It is morning again in America.” The line was from one of PresidentReagan’s re-election television commercials in 1984. The rare 60-secondcommercial spoke about record employment levels and low interest andinflation rates. What it didn’t talk about was dramatically escalatingbudget deficits and the national debt. “Why would we want to return towhere we were less than four short years ago?” asked the commercial.Maybe because budget deficits caused the national debt to nearly triple ineight short years?9 It’s easy to create the illusion of good times when thebill for those good times is passed from generation to generation. Like hisgreat skill as an actor, Reagan’s good times of the 1980s were more fantasy than reality.

A videotaped interview with editorial staffers of the Reno (Nevada)Gazette-Journal in January 2008 created a bit of a firestorm for late-waveBoomer and democratic presidential candidate Barack Obama when heidentified with President Ronald Reagan—an odd comparison, especiallyfor an African American candidate for the U.S. presidency. “Ronald Reaganchanged the trajectory of America in a way that Richard Nixon did not, anda way that Bill Clinton did not,” Obama was quoted as saying, attemptingto compliment Reagan for his “sense of clarity, optimism, dynamism, andentrepreneurship.”10

What critics heard was that Obama was crediting a Republican presidentwhose record on civil rights and the working class was less than stellar.Reagan did change the trajectory of America—particularly in the areas offiscal and monetary policy. Only months after Reagan took office, the


economy slumped into a serious recession, with unemployment topping10 percent. Reagan turned to supply-side economics—the “build it andthey will come” strategy for economic expansion—as a strategy to turn theeconomy around.

The ushering in of supply-side economics brought with it the return ofsignificant deficit spending—effectively borrowing from the future—theKeynesian theory that worked 40 years before but had outlived its effective-ness, because it assumes that future growth will pay for today’s programs.In the process, during Reagan’s tenure, the United States went from the world’s leading creditor nation to the world’s leading debtor nation.The president also cut the top income tax rate from 70 percent in 1980 to28 percent by the end of his second term, thus solidifying his reputation asa friend of the wealthy and the privileged.11

By 1982, the generation of people who had gained a reputation asindulged, narcissistic brats were now all adult brats. With the oldest in theirmid-thirties and the youngest just 18 years old, Boomers began to getserious about the future. Many of them turned in their tie-dyed T-shirts forBrooks Brothers’ suits and a chance to join the top 1 percent of wageearners. Whereas the parents and grandparents of Boomers had just lookedfor jobs, Boomers expected to build careers. They also expected to do bet-ter materially than their parents. For the most part, they did and they mayvery well be the last generation for some time to do so. But they did it at acost—a cost that required most of them to trade quality of life for anincreased standard of living. The American home didn’t quite resemble theCleaver’s or the Nelson’s anymore.

It was around this time that the term “Yuppie” appeared in pop cultureand on Madison Avenue, describing young, upwardly mobile professionals.Yuppies were Boomers with plenty of discretionary income, and it wastheir coronation as Yuppies that forever solidified this generation as con-spicuous consumers—especially the segment of the population known asDINKs—dual income, no kids. Strong Boomer women emerged bettereducated than their mothers and grandmothers, in touch with their ownself-worth and desiring to seek their own career paths. Add to the equationthe fact that the United States experienced the most significant period ofreal estate appreciation in history from 1950 to 1980, and suddenly theAmerican Dream got a whole lot more expensive.

Even though Boomers have certainly done better than their parentsmaterially, they have not accomplished it without tradeoffs. There can be a

14 Boomer Destiny

downside to a relentless focus on improving one’s standard of living. Inmany cases, Boomer-led households required two incomes just to be ableto afford the bigger house and the second or third car. And the generationthat was raised by mom had children later in life, children who, most likely,were raised by someone else’s mom. This greatly changed the dynamic inthe home—how the children were nurtured and by whom. Whether in asingle-parent or a two-parent household, Boomers blazed the trail in estab-lishing a new norm—most parents worked full-time in order to afford a“better” life.

The two-income household became requisite to fund a lifestyle thatwas otherwise unattainable with one income. In many cases, Boomerscreated a much higher standard of living than that of their parents orgrandparents, but it was often at the expense of major aspects of thequality of their lives—those measures that defined the lives of their par-ents. Gone were the days when dad—and now oftentimes mom—werehome every night for dinner. Instead, the lion’s share of the 168-hourweek was gobbled up by sleep, work at work, work while commuting,work at home, and then a weekend consumed with unfinished errandsand travel to multiple soccer games before everything started all overagain on Monday morning. Many Boomers found themselves runningin an all-out sprint of no defined distance with no defined finish line.But on they ran, through good times and bad, in no particular directionwith no particular destination in mind, applying the Olympic motto—Swifter, Higher, Stronger—to their need to achieve and accumulate.

Boomer Bust

Beginning in the mid-1980s, many of America’s blue chip corporationsstarted to show signs of maturing, with a slowdown in revenue growth despiteaggressive new product development and both domestic and global expan-sion. As the top line continued to slow, it became clear that, if corporationswere to deliver on Wall Street’s expectations, cost reductions would have toplay a much more important role as a driver of earnings. This was whenAmerican business was first introduced to the concepts of re-engineering:cost-cutting, downsizing, rightsizing, gains in productivity. By any name, theinfrastructure that American business had aggressively built up to handle thepostwar expansion—largely caused by the arrival of the Boomers—neededto get smaller.


Re-engineering became a buzzword of corporate culture in the late1980s and into the 1990s. What was first viewed as a one-time, cost-efficientcleansing soon became a permanent corporate initiative. After a few yearsof squeezing out the obvious inefficiencies, two things became quite clear:(1) re-engineering was here to stay and (2) future efficiencies would morethan likely be paid for with human capital. And a good portion of thathuman capital came in the form of Boomer jobs. By 1985, Boomers rangedin age from 21 to 39 and made up close to one-half of the U.S. labor forceat the time.

According to New York Times economic reporter Louis Uchitelle,more than 30 million Boomers lost their jobs12 as part of aggressive re-engineering efforts by maturing U.S. corporations—especially publiccorporations. Boomers were the first generation in history to enter alabor force that was actively downsizing the infrastructure that it hadbeen building up since the end of World War II. And no one perfectedthe skill better than General Electric’s (GE) own “Neutron Jack”Welch—quite possibly the single individual responsible for moreBoomer job loss than any other chief executive in history because of hispenchant for buying companies with large numbers of employees andconsolidating a smaller number of them into the GE culture. GeneralElectric’s strategy paid off handsomely for its shareholders, and Welchbecame a Wall Street darling. The real irony was that GE’s earningsbonanza during the 1990s was paid for—at least in part—by the liveli-hoods of many Boomers. Welch’s acquisition strategy could be likenedto performance-enhancing steroid use by professional athletes in themid to late 1990s. Corporate “juicing” certainly worked for Jack, but notso much for the company he left behind. Ever since a 3-to-1 stock spliton May 8, 2000, GE’s stock has languished, losing more than 50 percentof its value—even when accounting for dividends—during the roughestdecade for the industrial giant since the 1980s.

Certainly not all Boomers were victims of the epidemic of downsizingduring the 1990s. Many Boomers flourished during the “go-go” days thatsaw the introduction of the World Wide Web and, along with it, an Inter-net Bubble that went as fast as it came. It was also a time of rarified air forthe Dow Jones Industrial Average (DJIA), which more than quadrupledduring the decade—from 2810.15 on January 2, 1990 to 11,497.12 onDecember 31, 1999. Just to put that in perspective, in order for the Dow tomake a similar move during the first decade of the 2000s, it would have toclose at more than 47,000.00 on December 31, 2009—highly unlikely since

16 Boomer Destiny

the Dow retreated by more than 25 percent over the first nine years of thedecade (2000–2008).13

As the new millennium dawned, the oldest Boomers were approaching60 years old, and marketers shifted their focus from “What can we sellBoomers in mid-life?” to “What can we sell Boomers in old age?” Thegeneration of people who grew up as the rising adults with a reputation oftrusting no one over 30 was now turning twice that age, with conventionalretirement age within striking distance. But would a generation that waswired like no other before it view retirement in the same way as theirparents did?

Boomer Life Cycle

In 100 years, the entry of the Boomer into American society will doubtlessbe viewed as quite the anomaly: more than 76 million babies, born in just18 years, with a population half the size of the United States today—thatphenomenon is very unlikely ever to occur again.

Boomers follow the same life cycle as any other creature of nature.They are born, they grow, they mature, they decline, and they die (see Fig.1.2). More than 76 million were originally born in the United States and,over the course of seven decades, not only has that number failed todecrease, it has actually increased because of legal immigration. There arenow more than 78 million Boomers in the United States (probably wellin excess of 85 million, counting undocumented workers), which onlyadds to the complexity of developing solutions in a world with dwindlingresources.

As infants, the Boomers arrived in record numbers during the post-war expansion. As rising adults, they learned how to shop, and theybecame an economic tour de force, the most sought-after demographicsegment in history. In mid-life, they were productivity machines, think-ing nothing of spending 60 hours in the office and working another 20hours at home and on weekends. As seniors, they will continue to playan important role in society. However, their consumption levels willcontract and, with attrition, slowly lose their impact on an economythat is already on the wane. Ultimately, by 2050, most Boomers will begone—a distant memory of yesteryear—when Wally and the Beavercame home from school with Eddie Haskell and Larry Mondello for somecookies and milk. But it may be a little early to write the obituary on thisgeneration.


The Boomer drive to get ahead helped create enormous productivitythrough the 1980s, 1990s, and into the 2000s. Now, as more and moreBoomers turn 60, they begin to plan a life beyond their conventionalcareers. Some will certainly retire and stop working altogether. But it’s farmore likely that we haven’t heard the last from this generation. Boomersare very unlikely to go quietly—and that might be a good thing.

Replacing Boomers in the labor force will largely be members of the Gen Xand Millennial generations—people who learned that they don’t want tobe married to their work the way that their parents were. Instead, youngergenerations more often view work as a means to an end—not the enditself—and, consequently, they will likely forge very unconventional careerpaths that may involve a number of companies and perhaps even a varietyof industries. The result in the economy may be a drop in productivity—as the driven Boomers are replaced by generations more focused onbuilding a more balanced quality of life centering on family, home, andcommunity, rather than on work as their parents did.

Boomer Seniors

A 2005 study by the Met Life Mature Market Institute14 found that aboutone-third of all Boomers were “planning a second career during their GoldenYears.” The members of a generation that defines itself as having a “feeling ofyouthfulness and optimism” expect to work longer than their parents did,

18 Boomer Destiny

Childhood

Youngadulthood

Midlife

SeniorLeadership

Senioryears

FIGURE 1.2. Boomer Life CycleBoomers helped build the economy in more ways than one since 1950. Theywill be hard to replace.

with many creating second or third careers around their passions and specialinterests. Most do not view retirement as a time to withdraw abruptly fromworking life as their parents did. Instead, an entire cottage industry hasemerged just to help the aging Boomer transition from a conventional careerbefore retirement to another career after retirement.

Boomers are now rapidly moving toward elderhood and toward the lastphase of life—a phase that will in no way resemble the phenomenal periodof growth in their first phase of life. By 2006, a majority of Boomers werealready 50 or older and eligible for membership in the American Associationof Retired Persons (AARP). Today, more than 10,000 Boomers per day areturning 60. Boomers will live longer than their parents, and those whomake it to 65 can expect to live at least to the age of 83, according to theU.S. Bureau of the Census. So, for the generation as a whole, there is plentyof life left. The question is this: what will they do with the life that is left?

The decision to continue to work beyond the age of 65 will be a matterof choice for some Boomers. For others, it will be a matter of necessity—especially if they intend to maintain the standard of living to which theyhave grown accustomed. But one selfish motivator that Boomers collec-tively share may play an increasing important role in driving them to makea much larger contribution to the future of America than they ever couldwith the purchase of Viagra, an oceanfront condo in Boca, or a platinummembership in the Hair Club for Men. Boomers are beginning to thinkseriously about the world that they are leaving to their children and grand-children. It certainly bears little resemblance to the world into which theyentered. And it may very well be these concerns that finally motivateBoomers to take action based on someone else’s needs. And, in the process,Boomers may get a chance to write a final chapter of their storied existencethat no one expected.

Boomers’ Rendezvous with Destiny

As the first decade of the new century draws to a close, what many call themost selfish generation of all time is staring its own mortality square in theface. The largest generation—even with a continuous inflow of Boomerimmigrants—will also start to shrink in number over the years ahead, andone can only wonder how the epitaph will read on this generation’s head-stone once this generation is gone.

When FDR took office in 1933, little did he know that in 12 short yearshe would successfully lead the United States through the worst American


crisis since the Civil War. Little did he know that he and his generationalcohorts would write an enduring legacy in a little over a decade’s time thatwould change the course of American history. After FDR’s first term inoffice, unemployment was still at 18 percent and the country was still in thedepths of the Great Depression. In his acceptance speech at the 1936Democratic National Convention in Philadelphia, Roosevelt brilliantlycaptured the essence of his time in American history with a call to actionfor a generation: “There is a mysterious cycle to human events. To somegenerations much is given. Of other generations much is expected. Thisgeneration has a rendezvous with destiny.”

The president, of course, was easily reelected for a second term in 1936—despite a persisting Depression—and used this proclamation as a rally cryfor the difficult nine years ahead. In many ways, FDR’s call to arms serves asa timeless reminder to those who find themselves leading a country in cri-sis—as Abraham Lincoln did and Benjamin Franklin did before him. Now,it serves as a reminder to a generation that grew up trusting no one over 30.

Like it or not, the generation that invented the phrase “shop ’til youdrop” is now facing a new reality for the limited number of years that theyhave left on this Earth. Unfamiliar with a world that puts civic duty aheadof self, the Boomer generation—with its new Boomer president—nowstands precisely where FDR stood almost 80 years ago—in front of anAmerican people who are on the verge of a crisis, desperately hungry forleadership, and with their final legacy yet to be written.

How will that legacy read when the crisis is over? Who will be its primaryauthor? America is about to find out.

20 Boomer Destiny

Chapter 2

Repeating Cycles inAmerican History

Excess generally causes reaction, and produces a change in the opposite direction,whether it be in the seasons, or in individuals, or in governments.

—Plato

A pine cone falls to the ground and sheds its seeds. The seeds germinateand grow into seedlings, then into saplings, and eventually into matureadult trees, which bear fruit in the form of seed-filled pine cones, which, inturn, fall to the ground and start the life cycle of the pine tree all over again.Birth, growth, maturity, death—it is a common life cycle that is all aroundus. We see it in our families—children take cues from their older brothersand sisters, who, in turn, are guided by their parents, who, in turn, care fortheir aging parents.

We also see it in our economy—a continuously rolling cycle fromexpansion to peak to contraction and trough, and expansion again. We seeit in the products that we consume—from their celebrated introduction torobust growth to frustrating maturity to inevitable decline.

We see it in the seasons—spring bursts forth with new life, signaling thebeginning of a new cycle of life. A maple tree produces chlorophyll to helpnew leaves grow. The leaves reach maturity under the summer sun, untilautumn’s cool temperatures slow the production of chlorophyll and theleaves turn orange and yellow and fall to the ground. In winter, the maplesleeps a temporary sleep until warmer weather awakens it from slumber inspring.

Besides the sequential and progressive nature of each cycle, anothersimilarity is the subtlety with which each phase evolves and blends into thenext. Like the frog in the pot of water whose temperature slowly rises one

degree at a time until the frog boils to death, so, too, do we experience thetransition from one phase of a cycle to another.

Many cycle shifts are so subtle that they often go unnoticed until wellafter the fact. It’s like celebrating your birthday—even though the calendarsays you’re a year older, you feel no different than you did yesterday. TheEarth is constantly in motion, but it is so large that we can’t feel its movement.Similarly, measuring the morphing of other entities, such as economies orthe seasons, can be extremely difficult. It’s no different with the changesthat occur in society over a number of years. Everyone knows what wemean when we say “back in the sixties.” That phrase represents a unique erain U.S. history. Almost like a photograph, “the sixties” conjures images ofbeads and peace symbols, helicopters and napalm, and Jimi Hendrix,wearing a headband and playing “All Along the Watchtower”: “There mustbe some way out of here . . .”

The change from one season to the next is usually not a dramatic one.Over time, spring morphs gradually into summer, and, even though thecalendar might say that it’s spring, the temperature might suggest other-wise on a blustery day in April. Similarly, a growing business morphs intomaturity over the years, or a child moves through adolescence and growsinto a young adult, and we barely notice until an event—a graduation, awedding, a funeral—shakes us from the hypnotic state of our daily lives.

It can often take months—sometimes years—for the economy to movefrom an expansion into a contraction, and, more often than not, thechange can only be accurately identified well after the event. Let’s look atthe last complete economic cycle in the United States that included a reces-sion. Beginning in the first quarter of 2000, real GDP grew at 2.6 percentand reached a peak in the second quarter of 2000 at 4.8 percent growth.1 Itwasn’t until after the results of the third quarter of 2000 that economistsrealized that the economy was cooling and had probably peaked during thesecond quarter of 2000.

22 Boomer Destiny

TABLE 2.1. Cycles

Cycle First Second Third Fourth

Seasonal Cycle Spring Summer Autumn WinterEconomic Cycle Expansion Peak Contraction TroughBusiness Cycle Introduction Growth Maturity DeclineHuman Life Cycle Child Young Adult Mid-Lifer SeniorSocietal Cycle High Awakening Unraveling Crisis

With first-quarter 2001 GDP growth posted at –0.6 percent, it was notonly clear that the peak had been reached, but that the economy was nowin contraction. But, because results had been negative for only one quarter,it was not yet clear whether or not the economy was officially in recession.Then second-quarter 2001 results confirmed that the economy was indeedin recession: GDP growth was announced at –1.6 percent for the quarter.Although it was clear that the economy was in recession in the secondquarter of 2001 (well before 9/11, by the way), what was not clear waswhether or not the recession had bottomed out. One quarter later, withGDP results still negative and the country still in recession, the economyshowed signs of expansion by moving out of the trough and back towardpositive growth and a brand new economic cycle.

In this scenario, confirmation of the precise status of the economy wasdelayed at each 90-day gateway. The first question is this: was the economycontinuing to expand? That question was not answered until 3 monthsafter the fact. The second question is this: was the economy in recession?This question wasn’t answered until at least 6 months after the economyappeared to be contracting.

The gradual transition between one phase of an economic cycle and thenext is no different than the behavioral shifts that occur in our society. Wewere unable to see the 1960s coming, and only in retrospect did we recog-nize the decade’s unique turbulence. But on closer study, maybe the socialupheaval of the 1960s was not so unique after all—and neither are devas-tating wars or economic expansions. Just like the seasons, there appears tobe a rhythmic and sequential progression from one societal era to another.From a time of expansion, to a time of upheaval, to a time of decline, and,ultimately, to a time of crisis—a syncopated pattern in American historycan be traced back to the very beginning of the Republic. Not only does ithelp us better understand the past, but it also helps us predict the future oflife in America.

Societal Cycles

The concept of the societal cycle was introduced by historians WilliamStrauss and Neil Howe in their best-selling book Generations: TheHistory of America’s Future, a book that Newsweek called “a provocative,erudite and engaging analysis of the rhythms of American life.”2 InGenerations, the authors present an exhaustive and compelling case,viewed by sociologists and historians alike as the seminal work on the

Repeating Cycles in American History 23

topic of groups of people of common age, common experiences, andcommon attitudes.

This societal cycle parallels that of the seasonal, economic, business, andhuman life cycles, beginning with a period of expansion (spring), followedby a period of awareness and growth (summer), then a period of maturity(autumn), and finally a period of decline, or even death (winter), beforespring returns (see Table 2.1 on page 26).

Strauss and Howe (S and H) call each of these phases in the cycleturnings—and each turning lasts about 20 years or so before morphinginto the next turning. And, like so many other cycles in nature, turningsoccur in four phases: the First Turning represents a period of expansion ora High; the Second Turning, a period of Awakening; the Third Turning, aperiod of Unraveling; and the Fourth Turning, a period of Crisis. Together,all four turnings complete a full cycle, which usually lasts between 80 and100 years, although there is some evidence to suggest that the cycle isbecoming compressed mainly due to technological advances in transporta-tion and communications.

Generations and Life Stages

Just as there are four phases to a full societal cycle, there are fourgenerations—each in a different phase of life—that make up the active coreof society during that cycle. Each life phase is represented by one generationfor the length of the turning—roughly 20 years—after which time a newgeneration begins to arrive, replacing the last generation of children.Similarly, the last generation of children begins to move up to replace thelast generation of young adults, which in turn replaces the mid-lifers whichreplace the senior leaders of society. Concurrently, the senior leaders of soci-ety move out of an active work role and into either conventional retirementor oftentimes into a voluntary support role. At any given time, these fourdifferent generations occupy one of each of those four life stages:

• Childhood: Children are the dependent offspring of those in young adult-hood or mid-life. In 2010, the generation occupying this life stage in thegenerational constellation will be the New Silent Generation—those bornfrom around 2005 to 2024.

• Young adulthood: Young adults play the role of the rank and file—the work-force. In 2010, the generation occupying this life stage in the generationalconstellation will be the Millennial generation—those born from around1985 to 2004.

24 Boomer Destiny

• Mid-life: Mid-lifers play the role of managers of the young adults in society.In 2010, the generation occupying this life stage in the generational constel-lation will be Generation X—those born from around 1965 to 1984.

• Senior Leaders: Senior leaders play the role of the wise and seasoned men-tors of society, providing wisdom and guidance. In 2010, the generationoccupying this life stage in the generational constellation will be theBoomers—those born from around 1946 to 1964.

Marketers and researchers have long used labels to describe the habitsand behaviors of the demographics of prospective customer segments.Terms such as the Pepsi Generation, the Me Generation, and even the labelsGen X and Gen Y are inventions of pop culture and are intended to makeit easier to identify and sell to the “consumer du jour.”

Each generation is far more than a collection of people bound by com-mon birth dates. Every 20-year turning in American history can be charac-terized by a distinct and identifiable mood—a predominant parenting style,and a prevalent set of attitudes and behaviors, according to S and H.

In any given cycle, there are four unique birthing locations that coincidewith each of the turnings, and, because the mood of the country and theevents of the day are so significantly different from one turning to the next,each generation is nurtured differently than the last. The nurturing stylesof parents through the turnings effectively train each generationdifferently—to expect a lot, to expect little, to ask questions, not to speakuntil spoken to.

Age Location

Strauss and Howe were the first historians to introduce the theory that agelocation—the era during which a generation is born—greatly shapes ageneration’s personality, based on two critical behavioral components:

1. How they are nurtured by their parents during childhood; and2. When they experience their first major “social shock”—either during an

Awakening or during a Crisis.

These markedly different experiences have an enormous influence inshaping the generation’s early behaviors and attitudes. Table 2.2 identifiesthe timing of the arrival of each of the last five American generations byturning; from left to right, FDR and the Missionary Generation cohortswere born from around 1865 to 1884 during the expansion High just after


the Civil War. Dwight D. Eisenhower and the Lost Generation cohorts wereborn during an Awakening. Then JFK and the GI Generation cohorts wereborn during an Unraveling. John McCain and the Silent Generationcohorts were born during a Crisis. And, finally, Barack Obama and theBoomer Generation cohorts were born during a High, which started thecycle all over again.

Age location also determines when a generation experiences the two majorsocietal shocks that will occur during the cycle. These alternating major socialshocks coincide with the Second Turning (Awakening) and the Fourth Turn-ing (Crisis). The last such social moment in America was the Awakening ofthe 1960s and 1970s, when young adult Boomers and civil rights activistsof all ages vocalized their discontent with the establishment on the campus ofKent State and in the streets of Chicago and Birmingham.

The other type of social moment is a Fourth Turning—a Crisis—duringwhich selfishness grows in importance and institutions begin to breakdown. The American people thirst for real change. The last Americaninstance of a Crisis was the devastating 16-year-period that coupled theGreat Depression with World War II.

Every generation experiences an Awakening and a Crisis at some pointduring its own life. However, not all generations experience the same socialmoments during the same life phase. And, more important, not all gener-ations experience two social moments as adults. Only two of the fourgenerations experience major social shocks as adults during the cycle.

Born during a High

A generation that is born during a High enjoys the unique perspective ofexperiencing its three adult phases of life during the Second, Third, andFourth Turning, respectively. Such generations are the only ones who live

26 Boomer Destiny

TABLE 2.2. Age Location: Obama Born during a High, McCain Born Duringa Crisis

Born during Born during Born during Born during Born duringFirst Turning: Second Turning: Third Turning: Fourth Turning: First Turning:High Awakening Unraveling Crisis High(Spring) (Summer) (Autumn) (Winter) (Spring)

FDR Eisenhower JFK McCain ObamaThe Missionary The Lost The GI The Silent The Boomer

Generation Generation Generation Generation Generation

the complete cycle in order—from the First Turning through the FourthTurning.

A generation that is born during a High will experience two socialshocks in adulthood—the first as young adults during an Awakening—when younger generations question the motives of older generations. ForFDR and the Missionary Generation, this meant rebelling against the prac-tices of selfish big business during the 1890s. For the Boomers, this meantrebelling against the GI Generation establishment that was responsible forthe war in Vietnam and civil injustices at home. For both generations,experiencing an Awakening as young adults had an impact on the way inwhich they viewed and reacted to events for the rest of their lives.

Generations born during a High experience an Unraveling as mid-lifeadults, and they become senior leaders during the second shock—theFourth Turning Crisis. Experiencing life in this order provides unique skillsthat are necessary to manage a Crisis later in life. These generations arriveon a High and go out as seniors, just after a Crisis. Sadly, FDR didn’t quitemake it to the end of the Crisis, dying 4 months before V-J Day and the endof World War II. The Boomers will go out just after serving as the seniorleaders of society during a Crisis. The Boomer Generation—like theMissionary Generation before it—will write the final chapter of its storiedexistence, as FDR did during a Crisis. Will Obama be its author?

Born during an Awakening

A generation that is born during an Awakening will experience only onesocial shock in adulthood. Such generations become the young adultsduring an Unraveling, mid-lifers during a Crisis (their first social shock),and senior leaders during a High. For Eisenhower and the Lost Generation,this meant experiencing the first social shock as mid-lifers during a Crisis.Eisenhower lived more than half of his life before he experienced his firstsocial shock—the Great Depression and World War II.

Eisenhower’s Lost Generation was sandwiched between two high-profile generations—the Missionary and the GI Generations. John McCain’sSilent Generation—sandwiched between the GI Generation and the BoomerGeneration—was similarly viewed, in some ways, like the second child in afamily of three. The first child gets lots of attention, because the novelty ofhaving a child is new. The third child gets special attention as the baby of thefamily. Consequently, the second child is often “silent” or “lost.” Generationsthat fall into this category include the Lost Generation and Generation X.


Born during an Unraveling

Like those born on a High, a generation that is born during an Unravelingwill also experience two social shocks in adulthood—but in oppositeorder. Such generations become the young adults during a Crisis, mid-lifersduring a High, and senior leaders during an Awakening.

A generation born during the Third Turning Unraveling, (the GI andthe Millennial Generations) experiences its first social shock as youngadults during a Crisis. For the GI Generation, after spending childhoodduring the dark days of the Great Depression, millions in this generationshipped off for Europe or the South Pacific—many never to return. Sucha generation is forced to grow up quickly and deal with a severity ofchallenges that none of its constellation mates have ever experienced.Generations that fall into this category are the GI Generation and theMillennials.

Born during a Crisis

Similar to a generation born during an Awakening, a generation bornduring a Crisis will also experience only one shock in adulthood. Suchgenerations become the young adults during a High, mid-lifers during anAwakening, and seniors during an Unraveling. Members of this generation,similar to their Awakening counterparts, live more than half of their livesbefore encountering the first social moment.

The Silent Generation’s John McCain was born during a Crisis (Depres-sion, World War II), was a young adult during the good times of a High;started to move into mid-life during the turbulent 1960s and 1970s, andserved as a senior leader of American society during from the mid-1980sto present. Technically, he is in the process of moving out of that role andinto years when one typically disengages from an active role in the day-to-daymachinery of American society.

Authoritative and Permissive Parents

Another important element in shaping a generation’s personality is theprevailing nurturing philosophy of the time. Parenting styles, like genera-tions, come in several different flavors, depending on the mood of thecountry and the turning. A child born during the Depression—such asJohn McCain—is parented very differently than a child—such as BarackObama—born during a time of prosperity and growth. In 1966, psychologist

28 Boomer Destiny

Diana Baumrind established her widely recognized theory of the threeprototypical parenting styles, which lines up perfectly with the rotatingnature of generational personalities: permissive, authoritative, and author-itarian styles fit perfectly along the tightening (authoritarian) to loosening(permissive) spectrum that alternates every other generation.

Authoritarian parents put limits and controls on their children, usuallyin line with an absolute set of rules. Authoritarians use strict discipline andoftentimes punitive consequences in response to their children’s behaviors.Permissive parents, on the other hand, are usually open, warm, and affec-tionate with their children and often indulge their children’s wishes, acqui-escing to their desires. Permissive parents are driven by a reluctance todisappoint their children and often allow them to make significant decisionsautonomously, before they are mature enough to handle such decisions.Authoritative parents fall somewhere in the middle and usually engagetheir children in a discussion about right and wrong.3

A generation born during a Crisis is nurtured very differently than ageneration born during a High. Consider the difference in parenting stylesbetween the Silent Generation children living through a sacrificial contrac-tion period during the Crisis of the Great Depression of the 1930s and theBoomer children living through a robust expansion period during the 1950s.Although basic survival needs were foremost in one period—the strugglefor food, clothing, housing, and safety—parents in the other periodworried little about making do. Parents of Boomers were able to lookbeyond basic survival needs to more advanced levels of development.

The parents of FDR’s Missionary Generation parented in a relaxing way,whereas Missionary Generation members parented in just the oppositeway—with tighter control of their children. The parents of Eisenhower’sLost Generation relaxed their parenting styles even further 22 years later,raising children in an underprotective manner. The parents of JFK’s GIGeneration started to change the momentum of the pendulum of nurture,as they began to tighten the reins on their offspring. Finally, parents ofJohn McCain’s Silent Generation completed the full swing of the pendu-lum from the permissive side to the authoritative side, as they nurturedtheir offspring in an overprotective manner, according to S and H.

Similarly, Boomers were born during a High, and parents that had beennurtured by the strictest means relaxed their own parenting habits whenthe largest generation of all time arrived. This type of nurturing fosteredan inquisitive and often rebellious personality in the Boomers. When facedwith the Boomer Generation’s first social event—the Awakening of the


1960s and 1970s—instead of running down to the local draft board to signup, Boomers almost universally rejected the injustices that prevailedduring the time—from the war in Vietnam to segregation in America’spublic schools. The coming-of-age Boomers would have none of it andchallenged the motives of the GI Generation senior leaders—especiallythose individuals whom former President Eisenhower (Lost Generation)warned against in his famous “Military Industrial Complex” speech to thenation as he left office in early 1961.

John McCain’s bid for the White House in 2008 was extraordinarilydifficult—especially given the fact that Boomers had already inhabited theOval Office for four terms, or 16 years, by 2009. The odds were historicallyagainst McCain, for two reasons: (1) The Silent Generation is the onlygeneration in American history never to have produced a U.S. President;and (2) only twice before had Americans elected a president from a gener-ation older than that of the incumbent, and, in each case (Zach Taylor andJames Buchanan).

The Last Four American Cycles

To demonstrate that history does indeed repeat itself, let’s look at the lastfour cycles in American history:

The Revolutionary Cycle lasted about 90 years, from 1704 to 1794, and culmi-nated with the Fourth Turning Crisis—the Revolutionary War.4

The Civil War Cycle started with the First Turning, in the years immediatelyfollowing the end of the Revolutionary War, and ended with the FourthTurning—in the form of the Civil War from 1861 to 1865. The Civil WarCycle lasted approximately 71 years (1794–1865).5

The Great Power Cycle started with the First Turning High, in the years imme-diately following the end of the Civil War, and ended with the FourthTurning Crisis that included both the Great Depression and World War II.The Great Power Cycle lasted about 80 years (1865–1946).6

The Millennial Cycle, the current American cycle, started in the years immedi-ately following World War II, with a First Turning High (1946–1964), aSecond Turning Awakening (1965–1984), and a Third Turning Unraveling(1985–2005). America then entered the Fourth Turning Crisis of theMillennial Cycle around 2005, which is expected to last until about 2024.7

All four cycles started with a period of expansion, followed by a periodof social consciousness, and then a period of weakening institutions andselfish individualism, which ultimately lead to a Fourth Turning Crisis.

30 Boomer Destiny

Even though most of the Fourth Turnings in American history haveresulted in serious economic hardship, to one degree or another, all of theFourth Turning Crises have included a prolonged and costly war. The Rev-olutionary War, the Civil War, and World War II each resulted in a defini-tive and painful conflict that was not only conclusive but changedAmerican life forever. Can war ever be conclusive again?

How the complex and challenging economic dynamics will play outover the next 20 years is anybody’s guess. The length and depth of U.S.engagement in Iraq, a potential expansion of that engagement in theregion, and/or the unforeseen necessity of the use of U.S. troops else-where around the world will have a great impact on the economics ofthe Crisis.

The Last American Cycle—The Great Power Cycle

The last complete four-phase American cycle was the Great Power Cycle,which began in the days following the Civil War and lasted almost precisely80 years until World War II officially ended on V-J Day—August 14, 1945.The First Turning High of the cycle that started after the bloodshed of theCivil War was characterized by major economic expansion and unprece-dented innovation from 1865 to 1905.

This period of innovation may have been the greatest in the history ofhumankind, simply because of the magnitude by which many of the inven-tions changed the day-to-day lives of Americans. It dramatically changedlife for all social classes in America. The transcontinental railroad, thetypewriter, the telephone, the phonograph, the automobile, electricity,the electric motor, the mass production of steel, the radio, and the airplanewere just some of the amazing inventions that were introduced over a40-year-period following the Civil War. Consider the enormous impact ondaily life in America when it became possible to type a letter, speak on thetelephone, listen to recorded music, and light the homes and streets withelectricity, all for the very first time.

The Great Power Cycle lasted about 80 years, and, during that period,America experienced two Depressions (1893 and 1930), two battles withinfluenza, and two world wars. It was truly a period of monumental inno-vation, including the introduction and use of a weapon that still threatensour very existence—the atomic bomb. In terms of human behavior, it wasnot significantly different than previous American cycles with respect tohuman needs, wants, successes, and failures.


The Last American Crisis

The five-year bull market of the mid-1920s resulted in a five-fold increasein the DJIA.8 This unprecedented run-up caused a speculative boom,encouraging many thousands of working-class Americans to jump on thewealth-creation bandwagon—many borrowing money just to buy stockfor the first time ever, similar to the day-traders of the late 1990s. Thecredit-driven economy of the 1920s helped fabricate growth and createdan economic bubble that was simply unsustainable—not unlike theInternet bubble of the late 1990s and the more recent subprime housingbubble.

The Crisis at the end of the Great Power Cycle was very long and verydifficult and included a Depression, a recession (in 1937), and a world warthat involved nuclear weapons. Most economists look at the Crash of 1929as the spark that ignited the powder keg that sent America into the GreatDepression and, ultimately, World War II.

Stocks increased by more than 70 percent from September 1927 toSeptember 1929—which would have been the optimal time to sell. Somepeople did sell. Some waited and lost everything. Overproduction in thehousing and auto industries created a surplus of goods that Americanswere just not buying. And when businesses started to default on loans,which, in turn, helped cause the ultimate failure of hundreds of banks, themoney supply sharply dropped. America was broke and looked for a sacri-ficial lamb: U.S. President Herbert Hoover was the likely candidate, withNew York Governor, FDR, his likely successor.

Franklin Delano Roosevelt managed the crisis from his wheelchair inWashington, Hyde Park, Campobello, and Warm Springs, Georgia until hedied on April 12, 1945—less than a month before the war in Europe ended.With his indelible legacy, written over the course of the final years of theFourth Turning, FDR passed the torch to a new generation of seniorleaders at the dawn of a new spring—his legacy complete. The Crisis wasover and a new generation of Americans started to fill the maternity wardsacross the United States. The Boomers had arrived.

The Current American Cycle—the Millennial Cycle

The current four-phase American cycle started in the days immediatelyfollowing World War II with the First Turning of the Millennial Cycle, sonamed because it would bridge America from one millennium (the 1000s)to the next (the 2000s).

32 Boomer Destiny

The first quarter of the Millennial Cycle was characterized by 20 years ormore of dramatic expansion, coinciding with the arrival of the Boomersfrom 1946 to 1964. Then the mood of the country shifted during thesecond quarter, as the vague U.S. involvement in Vietnam turned into afull-scale war in 1965. The country’s Boomers protested both the war andthe deplorable civil rights violations at home. The third quarter witnesseda weakening of the institution and a strengthening of the individual. Selfish-ness was suddenly in style, from the mid-1980s through the 2000s.

The United States is still in the early years of the Fourth Turning of theMillennial Cycle, which started sometime around 2005, sparked by thegreed-driven desire to expand U.S. homeownership beyond its naturallimits. Sure it would be wonderful if everyone in the United States owneda home—but when the percentage of Americans owning homes hasremained constant for more than 40 years (around 65 percent since themid-1960s) one might say it had reached a saturation level. Increasing sucha statistic that has been established by the free markets for more than fourdecades across millions of homeowners requires a change in the rules. Andif a change in the rules involves a relaxation of standards, there will be aprice to pay. There is a reason that 65 and not 70 percent of Americans owntheir own homes. And it was a powerful desire to artificially grow thissector that set off a series of events that have led us to a crisis.

We often think of single events as the cause of crises: the shot heard‘round the world at the Battle of Lexington and Concord in April 1775;the Confederate attack on Fort Sumter in April 1861; the stock marketcrash on Black Tuesday in October 1929; the Japanese attack on PearlHarbor in December 1941. These are the events that make it easier for usto pinpoint the quintessential spark that triggered the outbreak of chaosand panic when in fact there were many smaller events that led up to thefinal straw. Some were economic in nature (Stamp and Tea Acts, BlackThursday, and Black Monday). Some involved social injustices (FugitiveSlave Act of 1850).

For the current American crisis certainly the sub-prime mortgage melt-down will be viewed as the defining event that toppled the first domino.But a concurrent event—one that ultimately shifted to the back burnerafter mid-summer 2008—was the oil shocks that caused gas prices to reachrecord levels in 2008. And even though gas prices subsided in the fourthquarter of 2008, the retail price at the pump had still increased more on apercentage basis than any other decade since the 1950s. The underlyingreason: world-wide access to easy oil peaked in 2005.


Hubbert’s Peak

In 1956, American geophysicist Dr. M. King Hubbert predicted that U.S. oilproduction would peak around the late 1960s and early 1970s and thenstart on a course of decline—forever! Although many in the scientific andenergy industries dismissed his assertion as unnecessarily dire, it turnedout that Hubbert’s prediction was stunningly accurate: U.S. productionpeaked in 1970. “The end of the oil age is in sight,” said Hubbert in aninterview in the June 1974 issue of National Geographic.9

Later, in response to remarks made by Exxon executive David Nissen,Hubbert articulated a future to which we are now remarkably close:

There is a difference and more fundamental cost that is independent to themonetary price (of oil). That is the energy cost of exploration and produc-tion. So long as oil is used as a source of energy, when the energy cost ofrecovering a barrel of oil becomes greater than the energy content of the oil,then production will cease no matter what the monetary price may be.10

In other words, as soon as the cost to find and refine a barrel of oilexceeds the price that can be charged for that barrel, oil as a source ofenergy is over. Although experts agree that new sources of oil exist, to findand extract the oil may actually be so cost-prohibitive as to cause the priceof crude to increase rather than decrease over the long term. Also, world-wide oil demand has never been higher, with a spike in consumption inChina and India that may take decades to abate. The oil shocks of 2005 mayultimately be viewed as the final straw that set in motion the simple law ofdemand and supply, pushing the cost of petroleum-related products everhigher. These conditions were only exacerbated by greedy speculators of oilfutures who artifically drove up the cost of oil in 2008.

In 1973, member nations of the Organization of Petroleum ExportingCountries (OPEC) ceased exporting oil to the United States and othernations as a way to penalize those countries that supported Israel. A groupof Arab states, led by Egypt and Syria, were locked in battle with Israel overthe land that was captured by Israel in 1967 during the Six-Day War. Thebattle was known as the Yom Kippur War because it started with a surpriseattack on Yom Kippur—the Day of Atonement—the most solemn andsignificant of all Jewish holy days.

The embargo not only resulted in higher gas prices in the United Statesbut also created severe supply shortages and long lines at the pump. Theprice of a gallon of gas increased from an average of 36 cents a gallon in1972 to an average 59 cents per gallon in 1976—nearly a 50 percent

34 Boomer Destiny

increase.11 The oil shocks of recent years have had a similar impact on theprice of gas, but for a different reason. This time the issue is about a long-term supply, not a short-term supply. It is altogether likely that the finitesupply of global oil will continue to cause gas prices to increase for theforeseeable future, with virtually no plausible rationale for a rollback in gasprices on the horizon. People in the United States have had a habit ofbelieving that inconveniences—such as the increased price of gas, electricalblackouts, or restrictions on watering the lawn—are temporary events.And, although, so far, they have been, there’s no guarantee that they willremain that way.

The Next American Crisis

October 29, 2009, will mark the eightieth anniversary of Black Tuesday. Ifhistory is any guide, the United States is already in the early years of thenext American Crisis and the worst days are still ahead of us.

Not unlike the last American Crisis, the early transitional years areoften characterized by erosion and decline, economically and systemi-cally, and slow evolution into a palpable and measurable malaise.Consider the major issues facing America as the first decade of thetwenty-first century comes to a close: immigration (both legal andillegal), Social Security, Medicare, terrorism, the environment, the budgetdeficit, the trade deficit, the farm deficit, generous subsidies, growingunemployment, inflation fears, as well as the threat of natural disastersand pandemics.

Over the next 20 years, presidential administrations will certainly havetheir hands full. The U.S. government has so overspent its way into the redthat it may take our children, our grandchildren, our great-grandchildren,and our great-great-grandchildren to pay it off, if ever. Just the interest onthe national debt in recent years has amounted to more than $1 billion aday, or a total of $430 billion in 2007 alone.12

The hole that we have created is frighteningly deep, and most econo-mists, including the last two chairmen of the Federal Reserve—AlanGreenspan and Ben Bernanke—believe that the United States will beunable to grow itself out of this mess. The numbers are so large that mostcommon calculators cannot handle simple computations of the misuse oftaxpayers’ money. History suggests that we are headed for a rough ride, andit will require the cooperation of multiple generations of Americans to getus through the ride.


36 Boomer Destiny

The Gathering Storm

During the last American Crisis, FDR’s Missionary Generation teamedwith Eisenhower’s Lost Generation and JFK’s GI Generation to moveAmerica successfully through a very long and difficult winter.

The GI Generation is mostly gone now, its youngest members nowapproaching 90 or older. The Silent Generation has served as senior leadersof a society during an Unraveling—a society that has little or no confidencein its leaders, little or no savings in the bank, and little or no reason to beoptimistic about the future.

Boomers are on deck to slide into the role of senior leaders during aCrisis. The last generation to do so was FDR’s Missionary Generation.What do we know about that generation, its character, its makeup, itsupbringing? Can we predict how the Boomers will behave as senior lead-ers during a Crisis? How will Generation X members behave as mid-lifers during a Crisis? How will members of the Millennial Generationbehave as the young adults of a Crisis? Who will become the BoomerGeneration’s FDR, Gen X’s Eisenhower, the Millennial Generation’s JFK,and the New Silent Generation’s John McCain?

Historically, multiple generations have teamed to overcome majorcrises: FDR’s generation did it, Abe Lincoln’s generation did it, and nowBarack Obama’s generation has to do it. Boomers are moving to centerstage as the leaders of an American society that needs serious fixing. Thequestion is this: will they create world history or suffer it?

Chapter 3

The Gathering Storm

Without a struggle, there can be no progress.

—Frederick Douglass, Abolitionist

Never have the conditions for severe weather in the continental UnitedStates been better. Over the course of recent decades, the indicators haveonly intensified, and scientists look to global warming as the primaryreason for conditions that have not only yielded a record number ofhurricanes but also an increasing severity to those hurricanes.

In a 2006 National Bureau of Economic Research (NBER) paper, Yaleeconomist William D. Nordhaus offered four critical insights into thechanging behavior of severe weather, based on a major study of the economicimpact of hurricanes in the United States in recent years:

1. There appears to be an increase in the frequency and intensity of tropicalcyclones in the North Atlantic.

2. There are substantial vulnerabilities to intense hurricanes in the Atlanticcoastal United States. Damages appear to rise with the eighth power ofmaximum wind speed.

3. Greenhouse warming is likely to lead to stronger hurricanes, but theevidence on hurricane frequency is unclear. We estimate that the averageannual U.S. hurricane damages will increase by $8 billion at 2005 incomes(0.06 percent of GDP) because of global warming. However, this numbermay be underestimated by current storm models.

4. The year 2005 was a particularly rare case, involving four specific conditions:(a) a record number of North Atlantic tropical cyclones; (b) a large fractionof intense storms; (c) a large fraction of the intense storms making landfallin the United States; and (d) an intense storm hitting the most vulnerablehigh-value region in the country.1

Dr. Nordhaus suggests that current conditions certainly favor anincrease in frequency and intensity of hurricanes in the years ahead. Inother words, the prospect of another Katrina—or worse—is not only realbut likely. Given the experience of the United States in recent years in deal-ing with the economic and human loss caused by tropical storms, we arenow painfully aware of the consequences of ignoring such early warnings.Although it’s not possible to prevent another Katrina—short of reversingthe impact from global warming—it is possible to take the warnings moreseriously and to mobilize more rapidly to protect human life and infra-structure well in advance of the storm hitting landfall. We now know that,if we ignore these warnings, we do so at our own peril—we are hoping forthe best and sometimes experiencing the worst.

An Economic Early Warning

Rarely do we get a heads-up in advance of catastrophic events. Caraccidents, heart attacks, and power failures mostly happen rapidly andwithout warning. When it comes to the economy, we hope for the best;when things go off track, we rely on the government to step in and fixthe problem.

Our understanding of the cause and effect of economic shocks is moreoften gained retrospectively, well after the event—which, in some ways,helps minimize public fears. It’s like being on vacation in the Caribbeanwhile there’s a record snowfall at home—by the time we get home, thesnow has been plowed and life is back to normal.

It is difficult to ignore the ominous clouds on the horizon in America—not necessarily clouds of a depression, but certainly signs that a storm islooming offshore. The severity of that storm is anybody’s guess. Will it justbe a tropical storm or a Category 5 hurricane? But, as with the seasons, oneblending into the next, we know that autumn has been turning into winterand some experts—even optimists inside the government, who have accessto “economic Doppler systems”—suggest that a winter storm is headingtoward us and that we’d better start to pay attention.

Like the meteorologists who brief the nation in advance of naturaldisasters, Americans have been consistently receiving warnings about thelong-term consequences of runaway entitlement programs and mountingnational debt. The government’s former top accountant, David Walker,spent the better part of a decade preaching the gospel of fiscal responsibilityto whoever will listen across the United States. As the country’s controller

38 Boomer Destiny

general, it was his responsibility to watchdog the government’s books, andthe numbers that Walker has seen for sometime now are “all big and allbad.” Walker firmly believes that the United States is on an economic paththat is not only unsustainable but also may bankrupt the country unlessserious action is taken soon.“I will argue that the most serious threat to theU.S. is not someone hiding in a cave in Afghanistan or Pakistan but ourown fiscal irresponsibility,” Walker told CBS’s Steve Croft in a 60 Minutesinterview on March 4, 2007.2

Walker says that, although the future commitments from entitlementprograms such as Social Security are unsustainable, they pale in compari-son to the liability associated with Medicare. “The Medicare issue is fivetimes greater than Social Security,” says Walker. And it was actually madeworse in 2006 when the president and Congress added prescription drugcoverage to Medicare. According to Walker, “The prescription drug bill wasthe most fiscally irresponsible piece of legislation since the 1960s.”3

The Medicare Prescription Bill that was signed into law by PresidentBush on December 8, 2003, added an additional $8 trillion in futurecommitments to a program that was already underfunded by $15 to $20trillion. Walker simply dismisses anyone who believes that the UnitedStates can grow its way out of this fiscal challenge, and he is not alone inthat assessment. Even Federal Reserve Chairman Ben Bernanke agrees that“economic growth alone is unlikely to solve the nation’s impending fiscalproblems.”4

“We are mortgaging the future of our children and grandchildren at arecord pace,” said Walker. “And that is not only an issue of fiscal responsi-bility, it’s an issue of immorality.”5

Walker resigned his post as Controller General on March 12, 2008when he became President and Chief Executive Officer of the Peter G.Peterson Foundation where he continues to advocate for fiscal responsi-bility in the nation’s capitol. One of the foundation’s first projects was theAugust 2008 release of the documentary I.O.U.S.A.: One Nation. UnderStress. In Debt.

The warnings are all around us, yet we refuse to take serious action. Wehave jeopardized the attainment of the American Dream for future gener-ations, and we have no one to blame but ourselves. We are responsible forthe mess that we are in, yet we are incapable of mobilizing. The trackrecord on our inability to act before disaster strikes is very clear. It usuallytakes an event to galvanize us: the Crash of 1929, Pearl Harbor, September 11,Hurricane Katrina—but only after the fact.

The Gathering Storm 39

Economists Agree

Economists mostly agree that, even though there were a number of earlywarning signs in the years leading up to the Crash of 1929, virtually no onepredicted the coming of the Great Depression. Many were lulled to sleep bythe bull market of the 1920s and assumed that any slowdown in theeconomy was simply temporary. Because virtually no one predicted it,nothing was done to prevent it. Some experts say that the Federal Reservemay have actually improved conditions for contraction by limiting themoney supply in advance of the Great Depression. Inaction on the part ofthe Fed only undermined public confidence and added to the hysteriawhen it stood on the sidelines and watched as banks—one after another—failed in 1930.

Herbert Hoover certainly paid the price for being in the wrong place atthe wrong time. After just one term in the White House, America votedhim out and Franklin Delano Roosevelt in to take on the most significantset of challenges in the history of the country.

In their annual report issued in June 2007, the Bank for InternationalSettlements (BIS)—one of the world’s most prominent financial institu-tions—issued a warning that identified a host of concurrent economicconcerns that may put the U.S. economy at risk in the coming years:

The attention of financial markets first focused on the U.S. subprime mort-gage market, but the underlying issue is much broader . . . The householdsaving rate in the United States fell for a time into negative territory, assluggish wage growth failed to provide adequate support for a sharp increasein consumer spending and residential investment. Easy credit terms, espe-cially in the mortgage market, encouraged both higher debt levels and higherhouse prices. The latter, in turn, provided both the collateral to justify morelending and the perception of increased wealth to justify more spending.6

It was this vicious cycle that caused the BIS serious concern, especiallythe swelling of credit and the creation of bubbles that policymakersassumed would correct themselves over time. The BIS pointed to thefailure of this strategy as a major factor in contributing to the depth andbreadth of economic slowdowns in both the United States in the 1930s andin Japan in the 1990s. The vast buildup of debt and investment during theboom years enabled “sowing the seeds for more serious problems furtherahead,” in BIS’s view—this well in advance of the Bear Stearns collapse inthe spring of 2008 and the summer failure of California-based Indy Mac.

40 Boomer Destiny

Optimists say that the relatively small number of bank failures is far lessthan that of the Savings and Loan crisis of the late 1980s and early 1990snot to mention the 10,000 or more banks that collapsed from 1929 to1933.7 However, years of bank consolidations dramatically changed themetrics by which banks are historically measured. In 1930, a bank wasmore often just one bank. Today, because of years of aggressive consolida-tion, a bank could represent thousands of banks creating a concentrationof unprecedented activity and assets as well as risk. The U.S. government’sseizure of Government-Sponsored Entities (GSEs)—Fannie Mae andFreddie Mac—signaled in September 2008 that the sub-prime mortgagecrisis was much bigger than officials first thought. Fannie and Freddie—the twin towers of the mortgage banking industry—fell clearly in the “too-big-to-fail” category and in order to avoid a systemic meltdown, the U.S.government stepped in and placed the nation’s largest mortgage financecompanies into a conservatorship. The move guaranteed that the morethan $5 trillion in mortgage debt that the companies owned or con-trolled—more than one-half of the country’s mortgages—would becomethe responsibility of the American taxpayer.

After rescuing Fannie and Freddie, the bleeding only continued for thebalance of what became Black—or perhaps Red—September:

• September 15• Lehman Brothers files for bankruptcy• Bank of America absorbs Merrill-Lynch

• September 16• U.S. government provides $85 billion bailout of insurance giant AIG

• September 19• Treasury Secretary Paulson proposes $700 billion Wall Street bailout plan

• September 25• Washington Mutual collapses – largest bank failure in American history

• September 28• $700 billion Wall Street bailout bill is passed

• September 29• Citigroup acquires banking operations of Wachovia

By the end of September, confidence that the U.S. government was ablefinancially to rescue any entity was rapidly fading, as its own overall debtapproached $10 trillion—certainly on the way to the newly established$11.3 trillion debt ceiling approved as part of the $700 billion Wall Streetbailout. The U.S. government’s mounting credit indebtedness to foreign


nations such as Japan and China “is a further worrisome sign for many,”according to the BIS. While there’s no doubt that a national debt thatexceeds $11 trillion is certainly “worrisome,” isn’t it possible that thesecountries might at some point themselves either be unable or unwilling toloan billions of dollars to the dreadfully managed U.S. government? Someexperts think that may not actually be a bad thing.

Brother, Can You Spare a Trillion?

It is really quite an amazing fact that 60 years after the United States all butdestroyed their country, the Japanese has become the largest foreign holderof U.S. treasury securities.8 In early 2008, Japan owned one-quarter of thetotal debt borrowed by the U.S. government in order for it to meet itsfinancial obligations beyond the revenue collected through taxes from itscitizens and corporations.

The concept of borrowing money in order to pay for something now,only to pay it back over time, is certainly a common one. The purchase oflarge-ticket consumer goods such as houses and cars most often requires aloan from a local bank or other lending source. But, when the total amountborrowed grows so exponentially, interest on the debt alone can exceedmore than a billion dollars a day—three times the cost of the Iraq War.

From 2001 through August 2008, debt held by the public has increasedby more than 60 percent—from $3.39 trillion to more than $5.48 trillion—because of an epidemic of budget deficits.9 And the top is nowhere in sight.In fact, the 2009 fiscal budget assumed a deficit in excess of $400 billion inadvanced of Red September’s bailouts. Based on the administration’seleventh-hour bailout of eight years of failed fiscal policies, it’s altogetherpossible that we will see a $1 trillion annual budget deficit before we see abudget surplus again.

With annual outlays for all government programs about to exceed $3 trillion per year10 for the first time ever, continued runaway spending islike pulling the pin on a grenade, handing it to our children, and thenrunning away. They stand to inherit the biggest financial liability in thehistory of humankind, with not even a whisper as to how we might reducethis devastating liability. The recent path to these lofty sums is often difficultto fathom unless it is put into terms that we can all understand.

Let’s reduce the U.S. government to relative terms: it is a family of fourin the year 2000, with a household income of $100,000. In relative terms, itwould have a total debt of $280,000, which includes, for example, the

42 Boomer Destiny

mortgage on the family home. Here’s how the financial scenario unfoldssince 2000:

• In 2000, with an income of $100,000, the household paid all of its bills andhad a surplus of $10,000, which it put into savings for the children’s collegeeducation.

• In 2001, the household took a pay cut at work (Bush tax cuts) to $98,300, yetit still managed to pay all of its bills and save an additional $5,000.

• In 2002, the household takes another pay cut (tax cuts) to $91,500, but thistime, it spends more than it takes in by $7,800, and is forced to eliminate halfof its savings to make up the difference.

• In 2003, the household takes yet another pay cut (tax cuts) to $88,000 andspends $18,641 more than it takes in. It is forced to wipe out all of its savingsand takes out a loan to cover the overage, adding to its overall debt, whichnow stands at about $290,000.

• In 2004, the household gets a pay increase (personal investment gains andincreased business earnings) to $92,800. It spends $20,377 more than it takes inand, once again, borrows to cover the overage, adding to its overall debt,which now stands at about $310,000.

• In 2005, the household gets another pay increase to $106,400. It spends$15,717 more than it takes in and, again, borrows to cover the overage,adding to its overall debt, which now stands at $325,700.

• In 2006, the household gets another pay increase to $119,000. It spends$12,253 more than it takes in and, again, borrows to cover the overage,adding to its overall debt, which now stands at $337,950.

• In 2007, the household gets another pay increase to $127,000. It spends$7,998 more than it takes in and, again, borrows to cover the overage, addingto its overall debt, which now stands at $345,950.

Now consider the ride that this household has taken since 2000:

• It increased its income by 26.8 percent.• It increased its expenses by 52.6 percent.• It increased its total debt by 60 percent.• It wiped out all its savings in the children’s college fund.

Why is it that, if we look at this as an American household, we areshocked—yet when the same irresponsible behavior is perpetrated by thegovernment with our money, we just shrug our shoulders? Unless this ficti-tious household gets its expenses under control soon, it may end up wheremillions of other American households end up each year—in bankruptcy.


Sadly, this scenario has played out in many American households thatare trying to keep pace by spending beyond their means. The U.S. govern-ment has not been fiscally responsible during the 2000s and, worse, hasbeen a poor example to the American public as a model for running itsown financial affairs. The reliance on credit as the way to pay current obli-gations has been greatly abused and certainly played a role in the collapseof many financial institutions in the years and months leading up to thelast American crisis. Some fiscal discipline is required soon—not only forthe U.S. government but for many of its citizens as well.

Economic Hurricanes Offshore

Although most economists agree that it is very difficult to predict goodtimes or bad, we have already learned that history has a way of repeatingitself over and over again. Every 80 years or so, the United States is facedwith a crisis of epic proportions—crises that have become the most histor-ically significant in the nation’s history.

Why do we choose not to deal with the elephant in the room? Is itbecause it’s easier to ignore than to deal with it? But it’s difficult to arguewith the former Comptroller General of the United States or with the plainfacts from history:

• Eighty years after the American Revolution, the United States was in themiddle of another major crisis: the Civil War.

• Eighty years after the Civil War, the United States was in the middle of yetanother major crisis: the Great Depression and World War II.

• Eighty years after the Great Depression and World War II the United States findsitself on the brink of still another crisis triggered by subprime mortgage lendingpractices that artificially grew the universe of homeowners in the United States.

While it’s a fact that every 80 years the United States finds itself in a history-altering crisis, it’s important to understand virtually all social and economiccycles have increasingly been compressed over the last 250 years, largelydriven by technology. From transportation to communications, the timefrom expansion phase to crisis phase is shrinking and with it the distancebetween crises. When measured from the end of one crisis to the beginningof the next, major crises in the nineteenth century occurred every 80 years,in the twentieth century every 70 years, and now in the twenty-first centurythere is plenty of evidence in 2009 that we are in yet another major crises,just 60 years since the end of World War II.

44 Boomer Destiny

History has warned us. Economists have warned us. Even agents of thegovernment itself have warned us. Now the question is this: what will wedo about it?

America’s Vital Signs

It’s impossible to deny the fact that, at the end of the first decade of thetwenty-first century, the United States faces a confluence of some of themost formidable challenges in history. If the United States were to see aphysician for its annual physical, frustrated doctors would be looking at anaging, stressed-out soul who is overweight, living well beyond its means,getting little exercise, little sleep, eating poorly, worrying about retirement,and concerned about its children’s futures. The prognosis would not bevery good, and the physician’s orders would include strict adherence to anew and healthier lifestyle. Brewing offshore is a storm which—like a heartattack waiting to happen—is gathering strength and moving toward land-fall. The storm is a formidable one, made up of two dozen or more smallerstorms that together could cause permanent damage unless serious actionis taken soon.

The sobering health report would look something like this:

• U.S. Economy’s Rate of GrowthReal GDP has been growing at an ever-decreasing rate since the 1960s when itgrew at 4.44 percent. U.S. GDP grew at 3.26 percent in the 1970s, 3.07 percentin the 1980s, 3.11 percent in the 1990s and less than 2.50 percent for the firsteight years of the first decade of the twenty-first century11—the slowest averageeconomic growth rate since the 1930s. There is no getting around the fact thatthe U.S. economy is mature and it becomes incumbent upon us to figure outhow to make a mature economy work—not pretend that it doesn’t exist. Oneof the economy’s largest industries—the auto industry—has been shrinkingsince 2001. Automakers in the United States have been losing market share toimports for decades and, since 2001, have essentially sold fewer cars each year.There’s no end in sight for this death spiral. One of America’s proud old indus-tries is officially in meltdown and will never be the same again. Industry growthhas slowed to such a degree in recent years that even the import automakersexperienced negative growth—for the first time ever—in 2008—when Toyotalost more than $1 billion. This underscores Bernanke’s belief that the U.S. econ-omy will not be able to grow its way out of its significant fiscal problems.

• EnergyWith the cost of crude oil at record levels, the impact on the U.S. economy isboth wide and deep. With average gas prices approaching $5.00 a gallon in


the summer of 2008, Americans have certainly felt the pain at the pump.Another important factor that has been widely ignored is that many expertsbelieve global oil production peaked in 2005. In other words, world oilproduction stopped growing in 2005 because the most accessible oil sourceshad all been located by that point. Even though additional sources exist, theywill be harder and more expensive to access, which will only put moreupward pressure on the price of crude and ultimately gas.

The impact of fuel prices goes well beyond the pump, however, and mayultimately begin to cause retail prices across the board to increase. Thetransportation industries have been extremely hard hit by the oil shocks.Truckers who haul everything from fruit to fashion have been impacted, ashave other delivery services, as well as the commercial airlines. It’s likely thatoil and gas prices will stabilize in the months leading into the 2008 election,but they may begin to again move upward as a new administration settlesinto the White House. Even if gas prices were to retreat to an average $2.10a gallon by the end of 2009, real gas prices in the U.S. will have increased ata higher rate during the first decade of the 2000s than any other decade inhistory—more than the 24.9 percent increase during the 1970s. It isremarkable how Americans breathe a psychological sigh of relief when gasprices dip below $3.00 a gallon. After being exposed to per gallon prices inexcess of $4.00 per gallon in 2008, $3.00 a gallon seems like a bargain. His-torically, it is not.12

• Government Receipts and OutlaysGovernment outlays (expenses) have outpaced receipts (revenue fromtaxes) by 2 to 1 since 2000. Outlays increased from $1.789 trillion in 2000 to$2.730 trillion in 2007—a 52.6 percent increase. Receipts, on the other hand,increased by only 26.8 percent during the same period—from $2.025 trillionin 2000 to $2.568 trillion in 2007. Since 2002, close to $2 trillion dollars havebeen added to the national debt through three quarters of 2008.13 Midwaythrough FY 2008, the Office of Management and Budget (OMB) projected a$389 billion deficit for 2008 and a record-breaking $482 billion deficit for FY2009, topping the previous record of $412 billion in 2004.14 From this per-spective alone, the Obama administration will inherit a country that is in theworst financial condition in U.S. history.

• National DebtThe national debt is the amount of money owed by the U.S. government toits creditors in the form of treasury bills, notes, bonds, U.S. savings bonds,and so on. According to the Bureau of the Public Debt, as of October 2008,the U.S. government owed over $6.1 trillion to creditors.15 During March2008, the government made principal payments of $376 billion, as well asinterest payments of $8.56 billion. However, the government borrowed anadditional $450 billion during the same month and therefore ended the

46 Boomer Destiny

month with a public debt balance of $5.33 trillion. The interest alonerequired to service the debt is in excess of $1 billion a day—or more than$430 billion in 2007.16

• Employment/UnemploymentThe manufacturing base in the United States continues to shrink, as moreand more products that historically were “Made in the USA” are being madeelsewhere. The loss of U.S. jobs has also been exacerbated by a dramatic dropin the volume of sales of domestic automobiles, causing the closing of anumber of U.S.-based plants.

The U.S. economy experienced steady job losses in 2008, with unemploy-ment increasing to 7.2 percent in December—the highest jobless rate sinceJanuary 1993. Close to 3 million jobs were lost in 2008—in the single largestdrop since the end of World War II.17

• InflationAlways the double-edged sword, inflation was kept in check for the betterpart of the first eight years of the new century. Inflation fears are groundedin the theory that too much is not good and neither is too little. Often,inflation can be a sign of a strong economy, when companies look to takeadvantage of an increase in demand in order to add to profits. But very lowinflation can have the opposite effect by slowing demand—causing furtherdownward pricing pressures that ultimately have a negative impact on acompany’s profit margins, which may lead to layoffs or, worse, bankruptcy.If consumer prices increase too much, that too could slow demand asconsumers defer shopping decisions. Inflation concerns heightened in2008, when the price of crude oil kept rising and, along with it, the averageprice of a gallon of gasoline, which increased dramatically—about thesame in relative terms as it did during the Oil Crisis of 1973, when muchoil from the Middle East was cut off from the United States in retaliationfor America’s support of Israel. The Consumer Price Index (CPI) hintedthat higher energy costs started to show up across the economy—when theindex topped one percent in June 2008 for the first time since September2005.18

• Social Security and Retirement FundingIn fiscal year 2007, the CBO projected that the federal government wouldspend approximately $2.7 trillion (about 20 percent of the GDP) on all pro-grams. The CBO estimated that about 46 percent of that budget would fundU.S. major entitlement programs—in the Social Security Administration(SSA) and the Department of Health & Human Services (HHS). Althoughthe challenges around fixing Social Security are significant, they pale incomparison to the potential financial disaster created by Medicare and itsprescription drug component. Not only is the number of participantsincreasing more rapidly than in the past, but so is the overall cost of healthcare.


If revenue inflows to these programs do not increase at least as fast as theprogressive costs, the result is likely to create further pressure on the budget,only adding to the national debt.

An under-the-radar issue related to retirement is the Employee RetirementIncome Security Act (ERISA) from the mid-1970s, which may have helpedcreate its own bubble of sorts. Workers are rapidly moving toward retirementwithout a whole lot to show for their decades of work. In 1974, ERISA wassigned into law and effectively eliminated an employee’s automatic right tobenefits; instead, it placed the onus on the employee to sign up for healthinsurance and retirement plans voluntarily—the birth of the 401(k).

Although there are scant historical records on the number of workers whohave no pension, no 401(k) savings, and no personal savings, the govern-ment may have unintentionally created a whole new segment of needyAmericans. By making the contributions to retirement plans voluntary,many millions will reach conventional retirement age with Social Security asthe only asset set aside for their senior years, and they will simply be unableto retire. These types of trends have fueled the rise of one of the fastest grow-ing segments in the labor force—men and women 75 years of age andover—which has grown by more than 75 percent since 1998. By comparison,the overall civilian labor force—age 16 and over—has grown by only 10 per-cent over the same period. Even though some of the rapid growth in superseniors’ work habits could be attributed to the desire to continue to stayactive, the trend undeniably suggests that some portion of this segment con-tinues to work out of necessity.19

• EducationThere were a record number of public school students in the United Statesin 2007.20 The system is stressed, in large part, by the higher rates of birthduring the “Millenial Generation” years and by the influx of both legal andillegal immigrants into the public school system. The pre-kindergarten tograde 8 student segment grew by 28 percent since 1985—the fastest growthof all student segments. And increasing numbers of students have not beenthe only challenge. According to the 2006 Progress International ReadingLiteracy Study (PIRLS), conducted in conjunction with Boston College’sLynch School of Education, U.S. fourth graders lost ground relative to theirreading ability compared with other fourth graders around the world.21 Thereport showed that 10 countries were ranked ahead of the United States inthe 2006 study, including the Russian Federation, Hong Kong, and threeCanadian provinces. In the 2001 study, only three countries ranked ahead ofthe United States.

• The EnvironmentThe issues relating to the environment are vast in the United States, and mostare expensive problems to fix. Issues such as air and water quality, climate

48 Boomer Destiny

change, and damage to the ozone layer have mostly been caused by insensitivehuman behavior over a very long period of time. Unfortunately, there is noquick and cheap fix. Because there are no restrictions to automobile ownershipand usage in most parts of the United States, a record 231 million vehicles wereregistered in 2003. With only 196 million licensed drivers, there is now a sur-plus of close to 40 million cars without drivers in the United States—thesecond, third, and fourth cars in households across the United States.22

Although money certainly is needed and can help in the battle to preserve theEarth, stewardship of the environment is much more complicated andrequires the cooperation of multiple generations to change their behavior. Inthe meantime, the reality is that overconsumption only makes matters morecomplex and environmental problems more expensive to fix.

• InfrastructureFollowing the collapse of the I-35W Mississippi Bridge in Minneapolis inAugust 2007, the public received a glimpse into the underreported age andcondition of the massive public infrastructure in the United States—muchof which was constructed 60 to 100 years ago. In its 2004 Conditions andPerformance report, the Federal Highway Administration (FHWA) reportedthat more than one in every four U.S. bridges was either structurally deficientor functionally obsolete.

In terms of the U.S. highway system, the FHWA reported that 15.1 percentof highway pavement was not acceptable—a percentage that has beenincreasing since 1995. Not surprisingly, the significant increase in the num-ber of cars on the highway has only worsened the condition of aging high-ways and bridges. Infrastructure for public transportation in the form ofbuses and rail systems showed that 31 percent of all urban maintenancefacilities for buses were substandard and that 51 percent of urban rail pas-senger stations were substandard.23

• HealthcareCurrently, more than 47 million Americans have no healthcare coverage,according to the Urban Institute. Healthcare is a three-headed monster; the“three Ps” of healthcare in America are payer components (insurance com-panies and government agencies), provider components (hospitals, health-care facilities), and pharmaceutical components (drug companies,pharmacies). Payers manage the complexities of insuring that providers andpharmaceuticals get paid. Issues include both public and private entities,including (1) Medicare, which provides medical and pharmaceutical cover-age for Americans aged 65 and over; (2) Medicaid, which provides healthcarefor Americans who are unable to afford healthcare coverage; and (3) insur-ance companies. Providers have a difficult set of challenges in trying to runprofitable enterprises while managing issues such as (1) getting paid for serv-ices rendered, (2) seeing record numbers of patients in urgent care facilities


and emergency rooms, and (3) honoring Hippocratic Oath issues in han-dling patients without coverage. Pharmaceuticals provide medicationsthrough providers, including pharmacies, and also answer to the Food andDrug Administration (FDA) in navigating the process of testing to ensurethat new medicines are safe for humans—even in the face of mounting pres-sure to get approval for drugs that could have an impact on the bottom linesof publicly owned pharmaceutical companies.

Healthcare is a highly complex issue with a myriad of knowns andunknowns that will take unprecedented cooperation to fix.

• Bankruptcy FilingsBoth business and nonbusiness bankruptcy filings were up sharply in 2007,according to the Administrative Office of the U.S. Courts. Filings reboundedafter a huge drop in 2006 following the passage of the Bankruptcy AbusePrevention and Consumer Protection Act of 2005, which was designed toreduce the misuse of the bankruptcy process. Nonbusiness or personal bank-ruptcy filings—which make up nearly 97 percent of all bankruptcy filings inthe United States each year—were up 37.5 percent in 2007. If growth con-tinues at that pace, the number of personal bankruptcy filings will return topre-abuse prevention legislation levels by 2010.24

• Consumer CreditOverall consumer debt in the United States continued to increase in 2007 toa record $2.46 trillion, or more than 20 percent of the GDP. This figure doesnot include debt associated with mortgages. Consumer credit card debt—which represents close to 40 percent of all consumer debt—also continuedto increase in 2007. The Federal Reserve Bank reported that total revolvingconsumer debt was up close to 10 percent—to $962 billion dollars from$875 billion at the end of 2006. Concurrently, credit card delinquencieswere also on the rise in 2007, with payment delinquencies of 30 days ormore up 26 percent to $17.3 billion. Delinquencies of 90 days or moreincreased by 50 percent, and credit defaults increased by 18 percent to arecord $961 million.25

• U.S. Trade DeficitTrade with China has had a crushing effect on jobs in the United States since2001. The Economic Policy Institute (EPI) estimated that 2.3 million U.S.jobs were lost between 2001 and 2007 as a result of the sharp increase in themanufacture of goods in China for U.S. companies during the period. TheEPI also estimated that workers who were able to find alternative workearned $8,146 less per year than they did before their respective jobs wereoffshored.26

• Food CrisisEven though most people in the United States are concerned about the priceof gas for their cars, a growing number of people around the world are starving

50 Boomer Destiny

because of the dramatic increase in the price of basic foods in recent months.In April 2008, Robert B. Zoellick, the President of the World Bank, said thatthe poor spend as much as 75 percent of their income on food. “In just twomonths, rice prices have skyrocketed to near historical levels, rising byaround 75 percent globally,” he said. The World Bank estimates that the priceof wheat has risen by 120 percent over the past year and that, over the pastthree years, food prices overall have risen by 83 percent. Some experts believethat it is only a matter of time before the trend begins to have an impact onfood prices in the United States.27

• Food QualityA spike in the number of reported cases of tainted imported food continuesto place added stress on the FDA. According to a study released in April 2008by the Trust for American’s Health, there are major deficiencies in the FDA’sfood safety system—and they are getting worse. The study found that onlyabout 1 percent of all foods imported into the United States for consumptionis tested by the FDA. This is especially troubling when more than 60 percentof all fresh fruit and vegetables and more than 70 percent of all seafood areimported. The recent salmonella contamination of tomatoes and jalapeñopeppers in the United States are examples of some of the new challengesfacing the FDA.28

• Water CrisisSome experts believe that the worldwide shortage of potable (consumable)water will become an even more significant issue than the availability andprice of oil in the twenty-first century. The United Nations estimates thatabout 40 percent of the world’s population does not have access to freshwater every day. Experts predict that by 2025 the percentage will grow totwo-thirds of the planet and that access to water will ultimately become areal issue in the United States.

• ForeclosuresIn 2008, a record 3.16 million homes received foreclosure-related notices, up 81percent from 1.3 million in 2007 and quadruple the number in 2006, accordingto Irvine (California)-based RealtyTrac, Inc.29 An additional 1.8 million sub-prime mortgages, scheduled to be reset at higher rates in 2008, helped fuel ajump of 121 percent in U.S. foreclosures in the second quarter of 2008 versusthe same quarter in 2007. As millions of American default on home mortgages,hundreds of banks struggle to remain in business, trying to write new loanswhile writing off old ones. Greedy lenders—supported by the administration’sstated objective to increase the level of homeownership in the United Statesdespite having reached relative saturation decades before—ignited this explo-sive powder-keg, which set off a domino effect in the financial markets world-wide. Historians may well look back on this “event” as this generation’s BlackTuesday in touching off the first major crisis of the new Millennium.


• PovertyAccording to the U.S. Census Bureau’s annual survey, more than 37 millionAmericans were living below the poverty level in 2007—virtually the samenumber as in 1964. Poverty levels are defined as $10,294 annual income fora one-person household, $13,167 annual income for a two-person house-hold, $16,079 annual income for a three-person household, and $20,614annual income for a four-person household.30

• Legal ImmigrationMore than 1 million immigrants become naturalized U.S. citizens nearlyevery year. According to the Center for Immigration Studies (CIS), 1,052,415immigrants became citizens in 2007.31 Legal immigration to the UnitedStates has increased by more than 50 percent since 2000. Because of this, thesize of the Boomer Generation has actually grown since 1964 because of theinflux of Boomer immigrants, which more than made up for the demise ofmillions of the original 76 million U.S.-born Boomers. Consequently, thecurrent population of Boomers in the United States is more than 78 million,which means that the largest U.S. generation in U.S. history will be roughlythe same size in 2011 as it was almost 50 years before, which will onlyexacerbate problems relating to Social Security, Medicare, and Medicaidentitlements.

• Illegal ImmigrationThe CIS estimates that there are approximately 12 million illegal aliensliving in the United States.32 However, because of the size of the challenge, itis extraordinarily difficult to estimate the size of this segment accurately.Illegal immigration is also a multiheaded monster, because it has a direct orindirect impact on so many other elements of the economy, such as labor,expenditures, taxes, schools, hospitals, and public services, just to name afew. It has long been believed that the tax revenue collected from illegalimmigrants exceeded the cost of the services that they use. But a December2007 report from the CBO concluded that the cost of providing services to“unauthorized immigrants” exceeds what they pay in state and local taxes,therefore creating a net drain instead of a net gain to the U.S. economy. Thestudy went on to say that only about one-half of all unauthorized immi-grants pay federal, state, or local taxes, yet some services are still provided tothis population.

• The Wars in Iraq and AfghanistanLast, but certainly not least, in the checklist for America’s vital signs is thewar in Iraq—currently the second longest war in American history, behindonly Vietnam in its longevity. Through the first half of FY 2008, Congresshad approved a total of $700 billion since the war started in early 2003. Theeffort is currently on a burn-rate of more than $300 million a day. And, likemost wars, this one will also keep on spending well after the last troops have

52 Boomer Destiny

left the region. A study by Nobel prize-winning economist Joseph E. Stiglitzestimated that the total cost of the war in Iraq could top $2 trillion.33 Addto this an increasing need to respond to the resurgence of the Taliban andal-Qaeda in Afghanistan, and the United States finds itself funding efforts itcannot possibly afford and that show virtually no direct benefit to theAmerican people.

The preceding checklist of American’s vital signs includes some formi-dable issues that will take a monumental effort in order to begin to mini-mize their negative impact on future generations of Americans.

Wild Cards

America certainly has more than its fair share of economic and fiscal chal-lenges, which may take decades to clean up. Making the chore much harderis the unpredictability of natural disasters such as floods, forest fires,hurricanes, and snowstorms. Munich Re, the world’s largest reinsurancecompany, reported that natural-disaster-related losses exceeded $75 billionin the United States in 2007—much smaller than the record $220 billionin 2005, fueled mainly by Hurricane Katrina and other Gulf Coaststorms.34 Floods and fires—exacerbated by the overproduction of carbonemissions—account for loss of both life and property and have climbedinto the hundreds of billions annually in the United States. Newark(California)-based Risk Management Solutions has estimated the totalcost of damage from Hurricane Katrina as far exceeding $100 billion beforethe dust settles.35

Beyond natural disasters, surprise acts of terrorism or the need toutilize the military in ways and at times that no one can foresee all add tothe country’s financial stress. Because the vast majority of U.S. militaryresources are committed in the Middle East, the United States is withouta tremendous amount of flexibility when it comes to deployment domes-tically or elsewhere around the globe. Its presence in the Middle East putsthe United States at risk in terms of the ability to respond to theunknown. The proactive decision to go to war is one thing, but the abil-ity to react and mobilize militarily based on unforeseen threats or actionsis quite another, one which has been greatly limited. The bottom line isthis: we can’t afford war anymore. The idea of funding $5 billion per yearfor an eastern European missile shield to protect U.S. allies in the regionfrom potential attacks is somewhat Reaganesque in its Star Wars–likeimprudence.


Some wild card disasters are predictable and some are not, but thefrequency and intensity of both kinds of disasters are growing with eachpassing year. This creates the most complex and expensive challenge in U.S.history. This destructive bubble has been consistently pushed forward tofuture generations of Americans who will not have that luxury but insteadwill be forced to deal with it.

State-of-the-Mess We’re In

The task that lies ahead for the next president of the United States is—insome ways—more daunting than the challenges that FDR faced some80 years ago. The reason it’s so daunting is that the issues have become somuch more complicated since the 1930s. The country is more than twice thesize it was in 1933 and approaching three times the size, considering undoc-umented workers. The country essentially starts each year close to half a tril-lion dollars in the hole, given only the obligation to service the nationaldebt—more than 1 billion dollars per day in interest alone. At the same time,the United States fights a war that, like Vietnam, will not end well and willnot improve conditions at home or relations around the world.

For the first time in American history, we may be raising a generation thatwill be unable to say that they lived a life that was better than that of theirparents, at least materially. And that is a very sad fact. The parents of theBoomers did all that they could to help their children enjoy a better life. Theywanted their children to be better educated, and they were. They wanted tohelp their children—financially or otherwise—to have a nice home and agood job without the worries inherent in growing up during a depression ora war. And, in the end, they wanted to leave their children a little nest egg—largely created from the significant equity appreciation in the homes thatthey purchased in the 1950s and 1960s. What will Boomers leave behind as alegacy—financially or otherwise? Right now, the picture is murky at best.

Although much has been written about the impact of vast numbers ofBoomers retiring and putting additional pressure on already overstressedSocial Security and Medicare systems, few have looked at the overallimpact of Boomers stepping out of conventional jobs and income levels atthe age of 65. But that’s only part of the picture. Here’s a look at the fulleconomic impact of the Boomers exiting the labor force:

1. Labor Force Contribution (Quantitative). Purely from a numbers stand-point, Boomers represent the largest segment of workers in the labor force.Replacing them will be difficult because Gen X is a much smaller generation,

54 Boomer Destiny

and, even though the Millennials represent a larger generation, it will taketime for them to gain experience in large numbers.

2. Labor Force Contribution (Qualitative). Boomers represent the most highlyeducated generation in history; they have very deep experience as well aswork and leadership skills. Leaving the labor force along with the Boomersis a vast reservoir of knowledge that will be difficult to replace quickly.

3. Productivity Contribution. Boomers were driven to get ahead and, conse-quently, had no reluctance about working in the office until 10:00 P.M., goinghome for a few hours of sleep, and then getting up and doing it all overagain. Boomers viewed working at home at night and on the weekends assimply part of what was required for them to achieve their goal—a higherstandard of living than their parents. Replacing Boomers in the labor forcewill include two generations that do not view work in the same way thatBoomers did. Gen Xers and Millennials both look at work as a means to anend—not an end in itself. Leaving the office at 5:00 P.M. will more likelybecome their habit—not staying until 10:00 P.M. The economy loses a pow-erful amount of productivity when the Boomers exit.

4. Economic Contribution. Boomers who retire from the active labor force ordecide to channel their energies in more altruistic ways as volunteers will, inlarge numbers, stop contributing to the government by way of income taxesand Social Security, Medicare, and Medicaid taxes.

5. Economic Withdrawal. At the same time that their contribution in to thesystem will slow or stop, Boomers will begin to draw from the system throughSocial Security and other related benefits. Additionally, Boomers are expectedto live longer than previous generations—on average, to age 83 years.

6. Consumption Downsize. The generation that earned the moniker of “con-spicuous consumers” will begin to ratchet down their spending as their chil-dren leave the nest and as many Boomers begin to live on fixed incomes.They will be missed at retail and will be difficult to replace.

Some people that believe that, because Boomers are a relatively healthyand energetic group, they will prefer to continue to work beyond theconventional retirement age of 65. Even though that may be true, theassumption that Boomers will simply stay in income- and tax-generatingjobs might be a huge mistake. Certainly some Boomers will continue aspart of the labor force as they always have. However, a growing number ofBoomers will transition to work situations that allow them to both usetheir skills and, at the same time, to give back to their communities.Although giving has not been their strong suit over the past 30 years,Boomers may surprise many people as they enter elderhood and begin toreflect on a life that could have included much more giving than taking.


56 Boomer Destiny

Saviors of the American Dream?

Boomers have a decision to make. They can run out the clock and leave theUnited States in the worst shape it has been in since the Great Depression.Or they can rise to the occasion and be part of a solution that will ensurea better world for their kids. Boomers already know about living in a timeof more. Now they need to learn—as did their great-grandparents—aboutliving in a time of less.

That will be a tall order for Boomer parents—themselves poster childrenfor excessive living. Will Boomers be capable of providing the wisdom andguidance for their generational constellation mates that will be charged—as the GI Generation was—with providing the blood, sweat, and tears tocarry a country for 20 years?

The Boomer Generation has an opportunity to step up and write a newlegacy for itself over the next 20 years. Boomers are blessed with everythingthat they need to achieve—individually and collectively—what FDR andhis Missionary Generation did during the Fourth Turning of the last Ameri-can Crisis. They have the creativity, intelligence, experience, guts, chutzpah,and that incredible need to achieve that will not fade away easily as theyapproach retirement. Boomers now have an inspired leader to lead them.They also have the time to do what is needed. Now only one questionremains—will they?

Chapter 4

Boomer Spring: 1946 to 1964

Making a new beginning is one third of the work.

—an Irish proverb

A little more than 3 weeks after the second of two atomic bombs wasdropped on Japan in August 1945, the Japanese surrendered to the UnitedStates on the deck of the U.S.S. Missouri in Tokyo Harbor on Sunday,September 2. World War II was officially over—and with it a very long,very difficult period of personal and national sacrifice and loss: loss offortunes, loss of innocence, loss of life. What was also over was the 16-yearCrisis which also signaled the end of the Great Power Cycle—a cycle thatstarted with the death of one president and ended with the death ofanother.

Ironically, neither Presidents Lincoln nor Roosevelt lived to witness theculmination of their seminal contributions to American history. Lincolnwas killed just 9 days after the South surrendered at Appomattox—5 months before the signing of the Thirteenth Amendment, which offi-cially ended slavery.

When he died just 30 days before the Germans surrendered on May 8,1945, FDR missed one of the greatest celebrations in U.S. history. In bigcities and rural towns, people came together in the streets, marking the endof a very dark era and welcoming the light of a new spring. During thecourse of the war, movie theaters across the country were often filled withAmericans anxious to watch the newsreels in hopes of the war’s end. Thenumber of movie tickets sold during the war years has never beenequaled—and probably never will be. More than 4.5 billion tickets weresold in 1945 alone, more than three times the number sold in 2007.1 Nodoubt those movie ticket sales were influenced by the fact that television

was still very much in its infancy, but that period in American history alsorepresented an important coming together, both physically and emotion-ally, in communities around the nation.

A Time of Expansion

As one cycle ended, another began—with the First Turning of the Millen-nial Cycle, which ultimately brought the United States into a new centuryand a new millennium. It was a period of optimism and growth—a periodthat continues to build on the coming together of community that wasestablished during the Crisis. The rotting institutions of the past weregone. The focus was now less on the individual and more on communitiesof people—family, church, even work.

With a 16-year Crisis behind it, America was thirsting to move on.Eisenhower’s Lost Generation replaced FDR’s Missionary Generation asthe senior leaders of American society. Many of its members had also livedthrough World War I and the influenza outbreak of 1918. The new turningcould not have come sooner for them, now the leaders of a thriving peace-time America.

Millions of GIs returned to the United States following V-J Day, inAugust 1945, and started the process of reentering civilian life. They madetheir way back to parents, girlfriends and wives, and some to their ownchildren whom they had never before seen. As a result, the demand foraffordable housing was particularly strong in the late 1940s. Taking advan-tage of the need was Long Island developer Abraham Levitt & Sons, whoannounced on May 7, 1947, that it was building a 2000-unit planned com-munity of rental homes for returning GIs and their families. Within a day,more than half of the units had been rented and Levittown was born.

By 1949, the Levitts started to build and sell larger homes, and, for just$98 down and payments of $58 a month, a family could buy a Levittownranch for $7,990. The new ranches came complete with a brand-new 121/2-inch black-and-white Admiral TV set, built right into the wall.2

Low-interest GI loans enabled many couples to purchase their very firsthome, establish roots, and begin a family of baby boomers.

The Boom Is On

On January 1, 1946, at 12:01 A.M., Kathleen Casey-Kirschling was born in aPhiladelphia hospital and was widely regarded as the very first of the morethan 76 million Boomers born from 1946 through 1964. Maternity wards

58 Boomer Destiny

across the United States were bursting, often handling more than 50 percentmore deliveries per year compared to the war years. By the time the 1950srolled around, many hospitals had either expanded or created entirely newmaternity hospitals that were dedicated exclusively to delivering Boomerbabies.

According to the Centers for Disease Control’s (CDC) National Centerfor Health Statistics, in the 18 years prior to the end of World War II, thenumber of births in the United States totaled 46.7 million, or roughly2.5 million babies per year on average. However, the 18 years after the warproduced a record-smashing 75.8 million births, or an average of 4.2 millionbirths a year. That’s an average of 1.7 million more births per year, or a totalof 30 million incremental births over the 18-year-period.3

The rate of population growth after the war exploded, topping 2 percentfor the first time since 1910—an extraordinary year in which the U.S. pop-ulation increased by 1.9 million.4 However, more than half of that 1910gain was attributed to the swarm of more than 1 million immigrants whowere legally admitted to the country that year—about the same number ofimmigrants as were admitted in 2007.5

Mother Knows Best

In the years following the war, the social orientation skewed toward astrong community of support from friends and family. The country hadnot yet sprouted its wings on the interstate highway network, which was tocome later, in the 1950s, under President Eisenhower, so home for newparents of Boomers was more likely in the general vicinity of their ownparents and grandparents.

The family unit was therefore close in more ways than one. Grandparentswere often actively involved in caring for the new arrivals. Dads were typi-cally at work during the day, and moms ran the household. Dinnertimebecame the opportunity for the family to sit down together to discuss theevents of the day—in a world before constant communication with cellphones, e-mail, and text messaging. It was also the time when Boomerswere called to the carpet, now that dad was home. All of the threats madeby mom to “wait until your father comes home” were usually aired at thedinner table, with GI dad holding court.

Grandparents often served as surrogate parents and managed the chil-dren with the strict and inflexible approach that they had used on theirown children. Boomer moms often counterbalanced the militaristic drills

Boomer Spring: 1946 to 1964 59

with a softer, gentler side. Moms were there, ready to indulge the first gen-eration to be born after so much sacrifice, and indulge they did.

Stay-at-Home Moms

The GI Generation moms were, for the most part, stay-at-home moms ina postwar era of new inventions that were designed to make domestic lifea little easier. New washing machines, dryers, vacuums, and a score ofhousehold products were introduced, with the promise of helping keepthat “schoolgirl complexion” (Palmolive soap), or put an end to dentaldecay (“Look ma, no cavities!” Crest toothpaste). These time-saving, life-improving products gave Boomer moms more time and energy to devoteto their children. The GI Generation dads, on the other hand, oozed withtestosterone and the swagger of John Wayne—leftover from the storieddays when good guys won wars and the bad guys were vanquished, which,in many ways, provided a blueprint for American leaders for decades tocome.

It certainly wasn’t the first time that children born in the turning imme-diately following a Crisis were spoiled by mothers who wanted to create aworld that in no way resembled the one in which they grew up. Similar toBoomers, FDR’s Missionary Generation was raised as the indulgedchildren of a First Turning Expansion in the years following the Civil War.

Like the Missionary Generation before them, Boomers were raised as theindulged children following a Crisis—in an optimistic world of possibility.Their indulgence helped give them license—license to their opinions, toquestion authority, to consider their own needs first. In the case of Boomers,they arrived after a particularly difficult Fourth Turning—a very severewinter. The core of the Crisis lasted almost as long as the arrival of an entiregeneration, those from the Silent Generation. Early wave Silent Generationmembers—born from around 1925 to 1930—were often the forgotten chil-dren of the Depression, because some parents ultimately filled their ownneeds first. Young boys were often on their own from a very early age, hop-ping freights cars across the country while panhandling for food and a placeto sleep.

Hierarchy of Needs

In 1954, psychologist Abraham Maslow introduced his now famousHierarchy of Needs,6 which describes the order by which human beings aredriven to satisfy their needs—starting with the most basic physiological

60 Boomer Destiny

needs and progressing to higher needs only after lower needs in the hierar-chy were met. Maslow believed that, when faced with a choice, individualssatisfied the most basic of human physiological needs first—thirst, hunger,and sleep.

Figure 4.1 is a graphic representation of Maslow’s theory. The first fourlevels deal with what he termed deficit needs. According to Maslow, eachdeficit need must be satisfied, starting with the base of the pyramid, beforeadvancing to a higher need.

Boomer moms vowed to raise their children in an environment freefrom worry about food, clothing, shelter, and safety, and they encouragedtheir children to “be all that they could be.” Dr. Spock’s Child Care was bynow a best-seller and had become the de facto source of advice on the mosteffective means of parenting the postwar child. Boomer moms were filledwith optimism for the promise in the lives of their children, who could easilyclimb past the physiological and safety needs and onto those needs based


Self-actualization

Esteemneeds

Belonging needs

Safety needs

Physiological needsFood, clothing, shelter

FIGURE 4.1. Maslow’s Hierarchy of NeedsBoomers expected their basic physiological and safety needs to be fulfilled. Theparents of Boomers—especially moms—were driven to, often obsessed with,building a better life for their children.

Source: Hierarchy of Needs—Abraham Maslow (1954)

on feelings of belonging self-esteem and achievement. The last thing thatBoomer moms wanted was to have their children experience a childhoodlike their own—one of anxiety over the very basics of survival. Boomersgrew up with full bellies, in safe neighborhoods, where the only require-ment was to be home before the street lights turned on.

Strong institutional models were birthed right alongside Boomers andhelped give them a sense of belonging, to a little league team or scouttroop, at a very early age—an experience their parents mostly didn’t have.Although only one-third of adults over 25 in 1947 held a high schooldegree, by the time the youngest Boomer graduated from high school,around 1982, that percentage had nearly tripled.7 Parents of Boomersexpected their children to graduate from high school. And Boomersbecame the first generation in U.S. history to be expected to go on tocollege—something that was a luxury for members of prior generations,who often were expected to begin to work as soon as they could in order topay for their own existence.

As Boomers matured and felt secure that the needs associated with thefirst three levels of Maslow’s hierarchy were met, developing their self-esteem became the next priority. Esteem manifests itself in two ways,according to Maslow—the need for (1) internal respect or self-respect and(2) external respect or respect from others. Satisfying the self-esteem needscan lead to feelings of responsibility, achievement, and confidence. Fromsocial interactions to the Boomers’ first taste of competition and achieve-ment, aspects of self-esteem became the hallmark attributes of the Boomergeneration for decades to come.

It’s not surprising that a generation of individuals whose basic needswere met from the very start might develop as confident, self-absorbedpersonalities who were driven to achieve. Unlike the generations immedi-ately before them, the Boomers have always lived in a world where theneeds of the individual came first. They enjoyed an early life that was freefrom the pain and sacrifice of their parents’ and grandparents’ generations.

Teaming Up with Other Generations

A selfless GI Generation returned from war and started a new life in a newAmerica. Some went to school. Others went directly into business at thebest possible time in the cycle—at the beginning of an expansion. Membersof the GI Generation moved easily into leadership positions in businessesthat were just beginning to take off, with their military duty serving as a

62 Boomer Destiny

decided plus on their résumés. The vaunted Harvard Class of 1949 pro-duced a record number of captains of industry: Warren Buffett, JamesBurke (Johnson & Johnson), Marvin Traub (Bloomingdales), ThomasMurphy (Capital Cities/ABC), and many others like them all entered theworkforce at just the right time and rode a rocket of growth to the top ofthe business world.

The timing could not have been better to enter a business world.Boomers helped the GI Generation achieve remarkable success, creatingnew demand: first, as the largest generation of babies in need of dozens ofproducts old and new; then, as the young adult consumers, with plenty oftheir own disposable income. Boomers obliged by disposing of most of it.

Loyalty Runs Deep

During the First Turning, returning GIs brought their intense sense ofloyalty to their new vocations. Spending 40 years with one company beforeretiring with a gold watch was not at all uncommon. And loyalty was a two-way street in corporate America during the First Turning. Companies suchas General Motors provided generous benefits and pension packages foremployees—through negotiations with the United Auto Workers (UAW)and, to this day, are still paying the price in the form of billions of dollarsof legacy entitlement commitments.

Loyalty was pervasive in American society during the First Turning. Itwas a time when people stayed put—when baseball players wore one andonly one uniform during their entire careers. It was long before freeagency, and provided comfort in knowing that your favorite player mostlikely would be back from one season to the next. Joe DiMaggio (Yan-kees), Ted Williams (Red Sox), Ernie Banks (Cubs), Stan Musial (Cardi-nals), and Sandy Koufax (Dodgers) all played on only one team duringtheir entire careers until free agency appeared during the Second Turn-ing, unlocking the salary flood gates and bidding adieu to a time of inno-cence and loyalty.

It’s a Wonderful Life

It was certainly no coincidence that Frank Capra’s epic film It’s a WonderfulLife was released in 1946. It truly was becoming a wonderful life in Americain the years after the war. The GI Generation welcomed the routine ofgetting up every morning, reading the daily newspaper, and then hustlingoff to work—before returning in the early evening for a family dinner. The


days of bread lines were in the distant past, and Americans were now livingin the land of plenty.

Meanwhile, early wave Boomers (born 1946–1954) and their familiesbegan a lifelong love affair with America’s latest phenomenon—television.As the first generation to grow up with the new medium, Boomers weremesmerized by shows such as The Adventures of Superman, Howdy Doody,The Mickey Mouse Club, and Saturday morning cartoons. Boomer parentscommanded control of the black-and-white television on most evenings,with mom pressing for shows such as I Love Lucy and The Honeymooners,whereas dad gained control for Dragnet, Bonanza, and Gunsmoke.

For many Boomers, Sunday nights were family nights, planned aroundthe 8:00 P.M. time slot, with the Ed Sullivan Show and the frequent appear-ances of Topo Gigio, Senor Wencas (“S’ahright”), Jose Jiminez, and the manbalancing the spinning plates.

It was a new era in two-way communications. Boomers were the first gen-eration of children to grow up with a telephone in every home—somethingthat was a luxury for generations of the past. Families were assigned the samephone number for decades—phone numbers that started with letters insteadof numbers. It wasn’t uncommon for early wave Boomers to call theirfriends by dialing letters that corresponded with numbers. WE4-XXXXor BE2-XXXX. The letters identified a specific town or area of a larger townor city—in this case, WE for an area of Long Island and BE for a suburb ofBoston. In the movies and on television shows, Klondike-5 (translated to 555-) became the prefix that was used to fictionalize a phone number.

It was also a time when anything was possible in America. For example,a California teenager won the Olympic gold medal in the decathlon, as theOlympics returned, after a 12 years hiatus, in a still-recovering London. BobMathias became a symbol of American strength, hope, and opportunity.

Even though life may have been wonderful for many Americans, it wasstill a less than perfect existence for others. Minorities, including womenand African Americans, were still not treated equitably in America. Eventhough Jackie Robinson broke the color barrier to become the first AfricanAmerican to sign a major league baseball contract in 1947, it took otherMajor League Baseball teams, such as the Boston Red Sox, another 12 yearsbefore signing their first black players. The country had “come a long way,baby,” but it still had a long ways to go.

As the 1950s drew to a close, America was growing in more ways thanone. For two years in a row, the American flags in the classroom were beingreplaced with flags that first displayed 49 stars, because of Alaska’s admission

64 Boomer Destiny

to the Union in July 1958, and then 50 stars for Hawaii’s admission inAugust 1959.

An Era of Unwinnable Wars

As the 1950s dawned, U.S. anxiety over the totalitarian behavior of its ally,the Soviet Union, in the final years of World War II reached a fever pitch in1950. Wisconsin Senator Joe McCarthy fueled the anxiety of an impres-sionable nation with a series of paranoid assertions suggesting that com-munism was not only alive and well but thriving in the United States. Thisvery same paranoia helped support a U.S. involvement in Korea in the firstof two failed efforts to contain the spread of communism in Asia. The Viet-nam war would come later.

In 1952, World War II hero Dwight David Eisenhower was swept intothe White House and Harry and Bess Truman just as quickly moved backto Independence, Missouri. Within months of his inauguration, Eisenhowerhad the United States out of Korea, but the United States, this time throughthe actions of the Central Intelligence Agency (CIA), continued to insertitself in the business of other countries, including orchestrated coups inIran (1953) and Guatemala (1954). It was this mentality of “good versusevil,” which the GI Generation embraced, that would linger as part of U.S.foreign policy for decades—in fact well into the new century.

As the Korean conflict ended, inflation fueled a slowdown in the Americaneconomy, and a skittish nation rode out a recession from 1953 to 1954.Although America was on a comeback in 1955, as the first Boomersapproached the age of 10, it hit another brief bump in the long road to1957 with the second recession of the decade.

The number of Boomer births peaked in 1957 at 4.3 million—a numberof births that, more than a half century later, had still not been reached, eventhough the country was almost twice as big. In the same year, the Sovietsscored a major victory against the United States in the “race for space,” whenthey launched the first artificial satellite in 1957. As a result, the U.S. publicschool curriculum would never be the same; a heightened emphasis wasplaced on math and science as a requisite skill set for all children after theSoviet accomplishment in fear that communism might overtake America.

Boomers were, of course, oblivious to the economic ebbs and flowsthroughout the 1950s. The focus for Boomers was more on backyardWiffleball, living lives that resembled those of David and Ricky Nelson orWally and Beaver Cleaver.


Lost Innocence

As the 1960s dawned, 75 percent of all Boomers had already been born,with the oldest entering high school. Most American households nowowned a television set, which helped create a number of other firsts. Familiescrowded around the family TV with their parents to see the first-ever tele-vised presidential debates during the 1960 campaign, with Republicancandidate Richard Nixon, the incumbent vice president, against Democratichopeful Senator John F. Kennedy from Massachusetts. Kennedy’s youth,energy, and charm impressed the nation—especially Boomer moms—andreplaced the Lost Generation’s Eisenhower in the White House as the firstof seven consecutive GI Generation presidents.

It was the same year that Louisville’s Cassius Clay won a boxing goldmedal at the Rome Olympics. He later reportedly threw his gold medal intothe Mississippi River in protest of the Vietnam War. In 1964, Clay joinedthe Nation of Islam, changed his name to Muhammad Ali, and refused tobe inducted into the U.S. military. He was convicted as a draft evader andsentenced to 5 years in jail. Because of racial tensions in the country at thetime, Ali was viewed by mainstream America as an unpatriotic dissidentwhen he reportedly answered a reporter’s question with another question:“Shoot them? For what? Them Vietcong never called me nigger.”8

Within 90 days of JFK’s inauguration, the charismatic president starteddown a dark path that would end in his death just 2 years later. In 1961, aband of Cuban exiles—trained by the CIA and supported by the U.S.government—came ashore at the Bay of Pigs in Cuba and attempted tooverthrow the government of Fidel Castro. The failed attempt exposed theUnited States in its attempt to again overthrow a foreign government.Then, a year later in the fall of 1962, just 20 days after Johnny Carson tookover the Tonight Show, President Kennedy spoke to the nation about hisplans to place a naval blockade around the island of Cuba in response to abuildup of Soviet missiles just 90 miles from the U.S. mainland.

Although some in Congress called for air strikes on Cuba, Kennedycontinued to appeal to the Soviets, listening instead to his close advisors.On October 24, Senate majority leader Mike Mansfield purportedly madea statement during a briefing for Congressional leaders that eerily resembledthe argument that Colin Powell would make 40 years later when discussingthe downside of invading Iraq in 2003. Mansfield was concerned about“overstating the ease as well as the results of an air strike” on Cuba. “I don’tthink there is any such thing as one of these quick, easy and sanitary air

66 Boomer Destiny

strikes. There is no such thing as a small military action. Now the momentwe start anything in this field, we have to be prepared to do everything.”9

The world held its collective breath for 13 days until Soviet leader NikitaKhrushchev agreed to dismantle the missile sites, averting a potentialnuclear war.

The Needs of Ms. Boomer

As Boomers started to matriculate to America’s colleges in large numbersin the early 1960s, Boomer women represented a significant piece of thatgrowth segment. No longer was a college education the exclusive domainof the American white male. With the dramatic increase in the number ofcollege-educated women Boomers, there was a desire to have it all—notunlike their male counterparts. This caldron had been—and in some waysstill is—bubbling since the early days of the Women’s Suffrage Movement.Boomer women felt the need to shape their own experience and identity,and this was new for America.

Helping feed the need in 1963 was the best-selling work The FeminineMystique by author Betty Friedan, which was based on interviews withcollege-educated housewives—many of them mothers of Boomers.Friedan wrote about the need for housewives to break from their “comfort-able concentration camp”10 at home and enter the workforce in order toseek and find a satisfying and fulfilling life. This marked the beginning ofthe feminist movement in America and played extremely well with confident,well-educated Boomer women, who saw no difference between themselvesand Boomer men.

It was an era when women—like other marginalized groups—soughtequal rights in all aspects of American life. But it was still a time whenwomen were not treated equally—not allowed entry into something asbenign as the Boston Marathon or a golf club in Georgia. It was still a timeof inequality.

The Equal Rights Amendment (ERA) to the U.S. Constitution wasspecifically written to protect the constitutional rights of women: equalityof rights under the law shall not be denied or abridged by the United Statesor any state on account of sex. First proposed in 1923, the ERA has yet tobe ratified by the necessary two-thirds majority of states. Fully 35 stateshave ratified the ERA, but a total of 38 states is necessary for it to becomepart of the U.S. Constitution as the 28th Amendment. In some ways, wehave come so far. In others, we have barely begun the journey.


Abraham, Martin, and John

Racial tensions continued to disrupt progress of a nation that was still try-ing to find its footing after World War II. The 1954 landmark SupremeCourt decision in the Brown vs. the Topeka (Kansas) Board of Educationcase made it illegal to segregate public schools. As a result of the SupremeCourt ruling, nine African American students enrolled at Central HighSchool in Little Rock, Arkansas, in the fall of 1957. In defiance, ArkansasGovernor Orville Faubus ordered the Arkansas National Guard to sur-round Central High in order to deny admittance to the nine students asschool opened in September. In response, President Eisenhower dispatchedtroops from the 101st Airborne Division to escort the students safely intoCentral High, averting a more serious conflict.

Civil rights events occurred in places across the southern U.S. inplaces such as Montgomery, Alabama. A young Atlanta ministerstepped into the fray as a peaceful voice of reason. In August 1963,Martin Luther King Jr. organized a peaceful march on WashingtonD.C.: tens of thousands gathered in front of the Lincoln Memorial andthe Great Emancipator to hear King’s vision in his now famous “I Havea Dream” speech.

In his lifelong struggle for equality for all people, King’s courage andwisdom helped pave the way for the Civil Rights Act of 1964. Within 90 daysof that historic gathering at the Lincoln Memorial, President Kennedysuffered the same fate as Lincoln and, ironically, the same fate that wouldbefall King less than 4 years later. At 1:30 P.M. Eastern Standard Time onFriday, November 22, 1963, the 35th president of the United States wasshot and killed in Dallas, Texas. The event was a shock for the ages—aseminal event that became indelibly etched in the memory of early waveBoomers. Even today, Boomers are bound by the common experienceand share that moment in history with other Boomers by asking thetimeless question: where were you when you heard that Kennedy hadbeen shot?

An exciting time of hope and possibility came to a screeching halt.The ideals of this man, which were deeply rooted in the AmericanDream, ultimately moved forward—but not until a nation mournedmore than the loss of a president. It mourned the loss of an era—whenlife was simple and carefree. The world was growing dark and mostdecidedly distressed.

68 Boomer Destiny

The First Turning Fades

For Boomers, the assassination of President Kennedy may have been theshock that signaled the end of spring and the beginning of summer in theMillennial Cycle. Only 47 days after Dallas, the new president, LyndonBaines Johnson (LBJ), declared war on poverty in America in his first Stateof the Union speech on January 8, 1964. Then the controversial Gulf ofTonkin incident led to the significant escalation of the war in Vietnamoccurred only 90 days before the election of LBJ in November 1964. ByLabor Day of 1964, LBJ had the justification that he needed to escalate thewar and, at the same time, to appease his hawkish advisors.

The 17-month period from August 1963 to the end of 1964 signaled theend of an era of hope and the beginning of a time of uncertainty andturbulence in America. Suddenly, the First Turning Expansion of theMillennial Cycle came to an abrupt ending, and the Second Turning Awaken-ing began.

In five short years, a society that was focused on a new beginning featuringcommercial prosperity, institutional solidarity, political stability, andpurposeful society ended with the threat of nuclear war, the assassinationof a U.S. president, and U.S. involvement in a full-fledged war in SoutheastAsia—another war that Americans would be unable to win.

Clearly, the mood in America was changing. Even though many felt thehope of a new leader, others continued to feel increasingly disenfranchised.By the end of the turning, all Boomers had been born and the oldest wereturning 18—the minimum age for active duty in the armed services. Thetransition to the Second Turning Awakening was complete. A time of inno-cence was over. And a time of conflict was just beginning.


Chapter 5

Boomer Summer:1965 to 1984

Unfortunately, the administration chose to hang the rationale for expanding itswar-making franchise in Southeast Asia on an incident which could not stand upto any kind of objective examination of the full documentation. So, as eventuallyhappened in 1968, when the Gulf of Tonkin Resolution came to be reviewed, theincident that it was based on also came under scrutiny. When the events of4 August (1964) were revealed to have been based on very thin evidence, it con-currently demonstrated that the Johnson administration had indulged in a veryselective use of information. If the administration had not lied exactly, it had notbeen exactly honest with the public, or, for that matter, even honest within its owndeliberations. The question no longer was about the appropriateness of the reso-lution, but the basic honesty of the administration. It would cast a pall on analready distrusted Johnson presidency.

—Analysis of NSA historian Robert J. Hanyok, from the NSA’s CryptologicQuarterly, on the declassification of documents relating to the alleged August

1964 incident that sparked the U.S. escalation of the war in Vietnam.1

The longest war in American history may have been sparked by an incidentthat didn’t even happen. Based on declassified National Security Agency(NSA) documents that were released in 1975, data were apparently eitherselectively used or fabricated altogether to support an action that had beenpredetermined by the administration. The timing of the alleged incident iscertainly fortuitous, if not completely calculated. At the time, LBJ wasseeking first-time election to the office of president, against a formidableopponent in Republican Barry Goldwater. An attack on a pair of Americandestroyers in the Gulf of Tonkin, coupled by swift and decisive retaliatoryaction on the part of the incumbent president, might go a long way to helpcinch an election that was less than 90 days away.

In a matter of months after the assassination of JFK in November 1963,it was clear that the United States had the opportunity and means to justifyan escalation of its involvement in Vietnam. All that was needed was motiveand it looked as though the Gulf of Tonkin incident would fill the bill.

Americans certainly have a history of rallying around the flag whenattacked. After reports of the Gulf of Tonkin incident, U.S. military enlist-ments spiked, just as they had following Pearl Harbor and, again, after theattacks of September 11, 2001. So an unprovoked attack on U.S. ships lessthan 3 months in advance of the general election in November 1964certainly couldn’t hurt the president’s chances—especially given that hewas running against a well-known Republican hawk.

Prior to the alleged incident, U.S. troop levels had increased, from a groupof just 700 advisors in 1960 to 16,000 troops in 1963. After the incident andthe subsequent successful election of LBJ, troop levels grew exponentially: to50,000 in May 1965; 125,000 in July; and 175,000 by the end of 1965—morethan 10 times the number of troops from just the year before.2

The move puzzled many, however, because LBJ appeared to be a schizo-phrenic member of the GI Generation—not unlike his predecessor JFK—one minute displaying compassion for the country’s poor, the next minutedisplaying paranoia while planning to attack a foreign nation in order tostop the spread of communism.

By the end of 1965, the stage had been set for a significant polarizationinside of America—with the GI Generation on one side and the first-waveBoomers on the other. To a great extent, it was a small group from the GIGeneration—people who, ironically, had little or no prior militaryexperience—that drafted the blueprint for a very unpopular war that ulti-mately lasted nearly another decade. Vice President Hubert Humphrey andNational Security Advisor McGeorge Bundy had no military experience at all;Secretary of State Dean Rusk and Secretary of Defense Robert McNamarahad posted limited noncombat tours with the U.S. Army. Ironically, Americawould face a similar situation 40 years later: the administration of George W.Bush, a president who was entirely lacking in combat experience, built a casefor war on what also turned out to be questionable intelligence.

America Turns and Enters an Awakening

It was 1965 in America and the happy days of Ozzie and Harriet Nelson’sworld were rapidly giving way to one of the earliest forms of reality televi-sion. Replacing Ozzie’s heroics, such as when he rescued the neighbor’s cat,

72 Boomer Destiny

were the images of naked South Vietnamese boys and girls runningthrough the dirt streets of bombed-out villages. The nightly newscasts ofWalter Cronkite (CBS), Chet Huntley and David Brinkley (NBC), andHoward K. Smith and Harry Reasoner (ABC) brought the reality of warinto America’s living rooms for the first time ever. Suddenly, the romanticnotion of a just and noble war seemed pathetically unimportant. Thenightly news would more often be a series of split screens—with a shot ofa helicopter sweeping in to collect bodies in a jungle clearing on one sideand a shot of student demonstrators burning the American flag on thesteps of the Capitol on the other. The daily images were a stark reminderthat the mood in America had fundamentally shifted. It was the start of anew turning, and, suddenly, it didn’t look much like Kansas anymore.

As a generation born of an expansion, Boomers started to experiencetheir first major social shock as young adults during the Awakening. TheSecond Turning started with the escalation of the Vietnam War, whichawakened the innermost passions of a generation of people who had noneed for it. The establishment was coming under vicious scrutiny by thevery generation that they had themselves created—the Boomers. A grow-ing new social order was increasingly calling into question the motives ofa generation that had romanticized war, turning it into a “good versusevil” drama in which good always prevailed and evil was alwaysvanquished. But war was becoming more complex, with increasinglyuncertain outcomes.

Few Awakenings in history can match the level of frustration and angerfelt by multiple generations of Americans. Members of the GI Generationlooked at young rebellious Boomers as smart-ass know-it-alls. Boomerslooked at members of the GI Generation as inflexible bullies, telling therest of the world what to do and how to do it. It was the first time that themotives of the storied GI Generation were questioned. Political and socialinjustices were the charges levied against a generation whose racial andideological prejudices were largely driven by fear—fear of minorities, fearof communists, and fear that their own children feared neither minoritiesnor communists.

A Generation Gap

The clouds of the Second Turning rolled in and replaced the docile andinnocent world of Father Knows Best with the dangerous and unpredictableworld of Mission Impossible. Boomers were coming of age, having enjoyed

Boomer Summer: 1965 to 1984 73

a life of unprecedented freedom and choice, free from the types of sacrificesthat prior generations had made. Boomer children had lived in a worldwhere their needs came first. They were the self-confident, self-absorbedsons and daughters of GI Joe and Betty Crocker—who hated to be toldwhat to do. After an indulged childhood, the battleground was set for aclassic confrontation between two dominant generations, and they wereabout to make themselves heard in the streets and on campuses acrossAmerica.

The GI Generation parents, who grew up obeying orders withoutquestion, were raising a generation of people who just couldn’t help but ask“why?” Frustrated parents let their bitter disappointments be known, andtheir nonconformist sons and daughters pushed back. Suggestions forMarine-like buzz haircuts turned instead into Beatles-like mops for theboys. Dresses that fell below the knee turned into miniskirts for the girls.Behavior that was considered tasteless and uncouth by young ladies of pastgenerations was not only done but probably overdone. Sex, drugs, and rock’n roll—it was more than just a lyric for Boomers. It was a declaration ofindependence for an entire generation of people who were hell-bent onshaping their own opinions and lives.

It was during this period that the term generation gap was coined inAmerica, referring to a profound and growing lack of understandingbetween GI Generation parents and their Boomer children about theirdifferences in experiences, opinions, behavior, and choices. Certainly, thiswas not the first time in history that such a gap existed. But, in the 1960s,the sheer number of Boomers gave them unprecedented influence andvoice. In music, fashion, culture, social conscience, and politics, Boomersdefied their GI Generation parents, making the gap even wider. Boomerstook up arms against the institutions that they believed were telling themwhat to do, where to go, what to wear, and how to act. In turn, Boomershad little difficulty telling authority where to go. They didn’t just debatethe issues on the war and equal rights—they burned their draft cards andtheir bras in defiance.

Boomers came of age as the young adults of an Awakening—the firstsocial shock for Boomers—and the moment would galvanize the generationand its personality for life. The GI Generation also experienced its first shockas young adults, but as the young adults of a Crisis that similarly influencedthe rest of their lives. Even though it was the same phase of life for bothgenerations, the events were quite different. This is why the generations

74 Boomer Destiny

became wired as polar opposites: two very headstrong generations—andeach thought that its way was the only way.

The Great Society

On Monday, January 4, 1965, LBJ spoke to the country in his first State ofthe Union address since becoming elected. In his speech, the president out-lined his vision for sweeping legislation that addressed the most pressingdomestic issues facing the country. Johnson’s vision for a “Great Society”was a good one. The spirit of LBJ’s domestic programs was pure, and itspoke directly to the issues of the day that affected millions of Americans—poverty, education, civil rights, and healthcare for aging Americans. Insome ways, LBJ sought to build on FDR’s original New Deal vision to helpthose who needed it most.

Unfortunately, LBJ’s Great Society agenda was forced to compete with theagendas of a number of his GI Generation advisers who were determined toescalate U.S. involvement in Vietnam. Johnson appeared to be more inter-ested in fixing a broken America than he was in fighting a war in SoutheastAsia. But the hawks in the Johnson administration pressed hard for escala-tion only days after JFK was assassinated in Dallas. According to StanleyKarnow’s Vietnam: A History, just over a month after Kennedy’s assassina-tion, Johnson told his joint chiefs of staff at a Christmas Eve gathering at theWhite House, “Just let me get elected and you can have your war.”3 Overtime, Johnson was worn down by his advisors, and, in the end, he gotelected—and they got their war.

Ironically and, for some, unfortunately, Boomers started turning18 years old just as the Johnson administration started to escalate the warin 1965. Rising out of the generational divide was the Boomer generation,poking at the conscience of America—questioning the wisdom of aggres-sively forcing an American way of life on other countries around the world.It was a foreign policy strategy that would cost the United States dearly asit lingered well into the new century. Coincidently, the United States wentto war a total of three times during the Second (Vietnam) and Third Turn-ings (Gulf War and Iraq War); each time, the president of the United Stateswas from the state of Texas.

Although Crises have often originated outside the United States as issuesof foreign affairs, Awakenings have mostly been home-grown conflicts.Boomers had been raised in an environment that encouraged questions


and they were certainly asking them. Patriotic GI Generation dads willinglysigned up for duty in Europe or the South Pacific. Some 30 years later, theyexpected their opinionated sons to do likewise in Vietnam, telling themthat it was their duty and their obligation. That strategy was bound to failand, of course, it did.

Generational Constellation

Moving up into the role as senior leaders of American society from around1965 to 1984 were heroes of the GI Generation. Many of them becamecaptains of industry—plucked from the storied Harvard Business Schoolclasses of the late 1940s to lead America through its greatest period ofexpansion in history. This generation’s string of seven straight Americanpresidents over a 35-year period—from the 35th president, JFK in 1961, tothe 41st president George H.W. Bush, in 1993—is unprecedented in U.S.history. Only the Gilded Generation (born 1822–1842) comes close to suchgenerational dominance in the White House, matching the GI Generationin total number, with seven presidents, but over only 28 years.

John McCain’s Silent Generation took on the personality of a classic sec-ond child, wedged between the favorite first child (GI Generation) and thehigh-attention Boomer. The birth order of children in a family can have aprofound effect on the personalities of the children as they grow. Childpsychologists have long studied this phenomenon and typically find thatoldest siblings tend to be responsible leaders, the youngest tend to bespoiled rotten and are often coy and manipulative, and the middle childoften has no defined role in the family. Middle children tend to be loners,which helps explain why the Silent Generation is so called. It may also helpexplain why John McCain’s generation is the only generation in Americanhistory that has never produced an American president.

The Gen X Generation—born 1965–1984—is the first generation inAmerican history with a greater than 50 percent chance of growing up in ahousehold with a single parent or with both parents working in order tofund the pursuit of their American Dream. Members of Gen X were alsothe first generation to experience daycare outside of the home in largenumbers. Whereas Boomers were raised by mom, Gen Xers were largelyraised by someone else’s mom.

As the war in Vietnam started to heat up in 1965, members of the GIGeneration were once again in a position to serve as masters to the youngerBoomer Generation—this time, not as their parents but as their bosses.

76 Boomer Destiny

Over the course of the turning, tens of millions of Boomers came of ageand entered the workforce for the first time.

Hello Darkness, My Old Friend

If ever there was any doubt whether the mood in America had radicallychanged, that doubt was erased in the first six months of 1968. One of thedarkest years in American history started with the Tet Offensive in Vietnam—an 8-month surge taking its name from the Vietnamese term Tet (meaningNew Year)—the escalation started on January 30, 1968, the beginning ofthe Vietnamese New Year. Troop levels reached their pinnacle in 1968(536,000 troops). The number of troop deaths also reached the highestlevels in 1968—between 40 and 50 American deaths per day, totaling16,592 deaths by year’s end.4

On returning from a trip to Vietnam following the Tet Offensive, eveniconic newscaster Walter Cronkite appeared convinced of the futility ofAmerica’s war efforts in Southeast Asia: “It seems now more certain thanever that the bloody experience of Vietnam is to end in a stalemate.”5

An increasingly pessimistic LBJ reportedly responded to the broadcast,abruptly turning off the television and announcing to an aide that his rolein this game of “Texas Hold ’Em” might be over: “That’s it. If I’ve lostCronkite, I’ve lost middle America.”6

On Sunday, March 31, LBJ addressed the nation on live television andspoke about measures that he was proposing to limit the war in Vietnam.Toward the end of the speech, he shocked the nation by announcing thathe would not be running for reelection in the fall.

With America’s sons in the fields far away, with America’s future underchallenge right here at home, with our hopes and the world’s hopes for peacein the balance every day, I do not believe that I should devote an hour or aday of my time to any personal partisan causes or to any duties other thanthe awesome duties of this office—the Presidency of your country. Accord-ingly, I shall not seek, and I will not accept, the nomination of my party foranother term as your President.7

Johnson was done. He was now openly talking about limiting the warthat he had escalated over the previous 3 years. Something had happenedto cause the president to change his mind. Something had convinced himthat the United States was off track. Was it Lady Bird? Was it Cronkite’sremarks? What was it? Perhaps we were about to find out.


Untruths and the Unthinkable

Although it took some years to be exposed to the public, one of the darkestlittle secrets of the Vietnam era happened in the small South Vietnamesehamlet of My Lai on March 16, 1968. Under the command of LieutenantWilliam Calley, the troops of Charlie Company were on a search-and-destroy mission to find North Vietnamese Vietcong fighters. Weeks before,dozens of U.S. soldiers were maimed or killed in the heavily mined area.Calley ordered his men to enter the village firing, and, when no Vietcongwere found, the incident turned ugly. Frustrated U.S. soldiers turned theiraggression against the villagers and murdered over 300 apparentlyunarmed civilians—most of them women and children.8

When word finally made it to the White House, this event may have beenthe tipping point of the war and, perhaps even, of the future of the Johnsonadministration. My Lai was just the first domino to fall in 1968. The nextwould come before tax day.

A little more than 2 weeks after My Lai, while he was supporting strik-ing sanitation workers in the city of Memphis, American civil rights leaderReverend Martin Luther King Jr. was struck down by an assassin’s bullet atthe age of 39 on April 4, 1968. America was stunned by such a violent actagainst such a peace-loving man who espoused nonviolent civil disobedi-ence as the path to civil rights change in America. Robert Kennedy (RFK)was campaigning in inner-city Indianapolis as part of his bid for the WhiteHouse in 1968 when King was shot. He was to speak before a mostlyAfrican American crowd that night; instead of going forward with hispolitical remarks, he offered these words of comfort:

Ladies and Gentlemen—I’m only going to talk to you just for a minute or sothis evening. Because . . . I have some very sad news for all of you, and I thinksad news for all of our fellow citizens, and people who love peace all over theworld, and that is that Martin Luther King was shot and was killed tonight inMemphis, Tennessee.

Martin Luther King dedicated his life to love and to justice between fellowhuman beings. He died in the cause of that effort. In this difficult day, in thisdifficult time for the United States, it’s perhaps well to ask what kind of anation we are and what direction we want to move in.9

Robert Kennedy’s soothing words comforted the crowd, but the hurtfrom the loss of King ran deep, and one of the darkest years in history wasfar from over. Within 60 days of the King assassination, RFK himself was

78 Boomer Destiny

assassinated in the kitchen of a Los Angeles hotel after winning the Californiaprimary against Eugene McCarthy.

Within 60 days of the RFK assassination, demonstrations outside theDemocratic National Convention in Chicago erupted into violence whenprotesters clashed with police, resulting in more than 600 arrests.

A little over 60 days after the Chicago convention, Republican RichardM. Nixon was elected as the new president of the United States. Nixon’selection seemed to polarize the generations even further—the third GIGeneration president in just 8 years.

The Draft Lottery

The military draft was a rite of passage for all Boomer men as soon as theyturned 18. Even though they couldn’t yet vote, it was their legal obligationto register with the local office of the Selective Service System on turning18. And, as troop levels in Vietnam increased, it became clear that themilitary was short of soldiers. Even though able-bodied American malescould be called up at anytime, draftees were taken in order of age—oldestfirst—which was considered unfair, especially if you were among the oldesteligible. The solution was to reinstitute the draft lottery on December 2,1969—the first since 1942.10 That lottery determined the order ofinduction into service for U.S. males born between January 1, 1944, andDecember 31, 1950.

A large glass container held 366 capsules, each corresponding to a day inthe calendar year—including leap years. The lower the draft number was, thehigher the likelihood would be that you would be drafted into the service,provided that you were physically fit to serve. A classification of 1A meantthat the individual could report to active duty immediately if called up.

Now young Boomers were being forced to serve in a war that was builton an aging generation’s view of what was right for the rest of the world.The very thought of being told what to do chafed Boomers no end. Beingtold to fight a war that was based on the premise of telling other countrieswhat to do was grounds for rebellion. After the bloodiest years of the war,there appeared no end in sight when the draft returned, further alienatingBoomers and strengthening their resolve to resist.

With every passing year after the Gulf of Tonkin incident, another cropof close to 2 million 18-year-old Boomer males became draft-eligible. Ofcourse, not all Boomers were classified as 1A, indicating that they werephysically and mentally able to serve. Some registered as conscientious


objectors—individuals opposed to serving in the armed forces based onmoral or religious principles. Ironically, the one generation that was sovehemently opposed to the war ultimately sacrificed the most in terms oflives. In the end, almost two-thirds of the 58,19311 soldiers killed inVietnam were Boomers and this—among other devastating events tocome—had a dramatic and long-lasting impact on Boomers.

Before the turbulent 1960s came to a close, the United States experi-enced a glimpse, in 1969, of U.S. life as it might be—a peaceful nationpoised for accomplishment. Two important events helped America lookmomentarily beyond the war: Neil Armstrong fulfilled the vision of the latePresident John F. Kennedy—the United States had successfully sent a manto the moon before the end of the 1960s. Within 3 weeks of the moonlanding, more than 500,000 people—most of them first-wave Boomers—gathered in upstate New York for 3 days of peace and music at the WoodstockMusic & Art Fair from August 15 to August 18, 1969. For America, it wasan important reminder of what life could be like. For Boomers, it was adefining moment and a statement of the generation’s personality and theend of one of the most difficult decades in American history.

The Decade of Lost Trust

As a new decade dawned, the war continued and frustrations mounted,reaching a crescendo on May 4, 1970, when four student Boomers wereshot and killed on the campus of Kent State University by Ohio NationalGuardsmen.“On May 4, four students at Kent State University were killedby rifle-fire from National Guardsmen dispatched by Ohio GovernorJames Rhodes, to keep order during several days of violence. There was ashock wave that brought the nation and its leadership close to the point ofphysical exhaustion,” recalled former Secretary of State Henry Kissinger inThe White House Years.

The momentum of student strikes and protests accelerated immediately.Washington took on the character of a besieged city. A pinnacle of mass publicprotest was reached . . . Police surrounded the White House; a ring of buses wasused to shield the grounds of the President’s home . . . The very fabric of gov-ernment was falling apart. The executive branch was shell-shocked. After all,their children and their friends’ children took part in the demonstrations . . . 12

In retrospect, the tragedy may have been the tipping point in the war. Justas My Lai may have been the last straw for LBJ, the Kent State killings marked

80 Boomer Destiny

the beginning of the end for Nixon.“Kent State, in May 1970, marked a turn-ing point for Nixon, a beginning of his downhill slide toward Watergate,” saidone of Nixon’s White House advisors, H.R. Haldeman, in his book The Endsof Power. “None of us realized it then (because) we were all too busy tryingto calm the national furor over the Cambodian invasion.13

The frustrated National Guardsmen—some of them members of the GIGeneration—may have simply reached a boiling point in a classic strugglebetween generations—one that unquestionably obeyed all of the rules andthe other that resisted all of the rules. Kent State was symbolic of a wardesigned by the GI Generation and largely fought by the Boomers—aformula for failure from the very start.

All the President’s Men

The American people were fed up with the Vietnam War and all that itrepresented. For frustrated members of the GI Generation, it meantanother failed war effort—the second in as many decades. For the groupalso called the “Greatest Generation,” wars were not supposed to end thisway: no flag raisings on Iwo Jima, no unconditional surrenders, no sailorskissing girls in Times Square. After the complete and final victory in WorldWar II, the Vietnam War underscored the futility of both war and theimposition of one government’s will on another’s.

In 1972, it was the start of another election year, and the Nixon admin-istration wanted to take no chances in the president’s reelection bid and sowent to great lengths to make sure that he would remain in the Oval Office.Nixon went so far as to pardon Jimmy Hoffa in consideration for theTeamster’s support—support that he had not gotten in the 1968 election—in the upcoming election.

America would never look at politics or politicians the same way againafter the Sunday edition of the Washington Post was distributed, June 18,1972. The headline simply read: “Five Held in Plot to Bug DemocraticOffices Here.” The story reported that a team of burglars had been caughtby a security guard in the offices of the Democratic National Committee,which were located in the Watergate office complex in Washington D.C.

On the surface, the story seemed pretty benign but young Post reportersBob Woodward and Carl Bernstein were tenacious and, instinctively,would not let the story die. The early-wave Boomers worked with sourcesinside the government, including a shadowy figure known only as “DeepThroat”—a reference to a popular hard-core pornographic movie of the


day. What followed was a little more than 2 years of deception and cover-upthat ultimately led to Nixon’s resignation on August 9, 1974.

The war in Vietnam officially ended on January 27, 1973, with anagreed-upon cease-fire and an agreement by the United States to withdrawall military personnel within 60 days; the North Vietnamese agreed torelease more than 500 U.S. Prisoners of War. After 13 difficult years, thelongest war in U.S. history was over.

Two years later, Saigon fell to the North Vietnamese and was renamedHo Chi Minh city. North and South Vietnam were reunited under commu-nist control—the original objective of U.S. involvement in the region wasthus essentially negated.

The Lessons from Vietnam

In his 1996 book, In Retrospect: The Tragedy and Lessons of Vietnam, RobertS. McNamara (GI Generation), U.S. Secretary of Defense in the Kennedyand Johnson administrations, served up 11 lessons learned from the U.S.engagement in Vietnam. McNamara, a Harvard Business School graduate,wrote a book, closely resembling the popular management-style books ofthe day, that identified numerous erroneous assumptions and strategicmiscalculations that were made while prosecuting the war.

If only McNamara’s retrospective insights could have been his guidingvision in 1965, how different the outcomes would have been. Even moresadly, although his specific lessons were available to future administrations,they were all but ignored in the days leading up to the decision to invadeIraq in 2003. In particular, McNamara cautioned against underestimatingthe resolve of the locals and overestimating the potential dangers to the U.S.mainland.14 Although he steered well clear of comparing Vietnam with theIraq War, McNamara’s lessons serve as a manifesto against preemptive war,and one only has to wonder how—30 years after the Vietnam War ended—such wisdom could have been ignored by the United States in 2003.

Roe v. Wade

Aside from mandated military conscription, another important fight forchoice during the Second Turning Awakening played out in the courtroominstead of in the rice paddies of Southeast Asia. Abortion was illegal inAmerica before 1973, but its illegality was about to be challenged by ayoung Boomer whose name was withheld and only referred to as Jane Roe.Roe brought a class action suit challenging the constitutionality of Texas

82 Boomer Destiny

law that viewed abortion as a criminal offense. Roe was later identified asBoomer Norma McCovey.

Prosecutor Henry Wade of Dallas represented the State of Texas whenRoe challenged the state law prohibiting a woman’s right to an abortion.Wade had gained national notoriety when he represented the Lone StarState in the prosecution of Jack Ruby for the murder of Lee HarveyOswald, presumed assassin of JFK. Wade was later found to have convicteda number of innocent defendants in order to maintain an almost perfectconviction record.

Roe v. Wade played out in one of the most celebrated landmark cases ofall time, in which the U.S. Supreme Court overturned all state and locallaws prohibiting abortion—on the grounds that those laws violated awoman’s constitutional right to privacy. The ruling, decided on January 22,1973, effectively made abortions during the first trimester permissible forany reason.

The historic case was a victory for the pro-choice movement in theUnited States and a loss for the pro-life movement. An ironic byproduct ofthe Roe v. Wade decision was identified in the 2005 book Freakonomics byUniversity of Chicago professor Steven D. Levitt and New York Timesreporter Stephen J. Dubner. The authors link the significant drop in crimein the 1990s in cities like New York not to any change in strategy from RudyGiuliani or his police commissioner, but to the fact that there were moreabortions and fewer babies born (Gen Xers) during the years following Roev. Wade. Fewer inner-city babies in the years 1974 to 1980 translated intofewer 15- to 21-year-olds in the 1990s. In other words, the authors believethat the decrease in crime was much more a matter of a statistically smallerpool of prospective criminals in inner cities.

As the 1970s faded, many Boomers began to transition to life in the realworld. By 1980, two-thirds of Boomers were already in the workforce, withsome of the early wave Boomers moving up the corporate ladder. At thestart of the decade, 20 young American Boomers defeated the Soviethockey team at the 1980 Winter Olympics in Lake Placid—for many, thegreatest sports moment in history. It may also have represented the firstand only time that the Boomer Generation made the GI Generation proudin a way that they could understand and appreciate—by defeating evil in away that was complete, final, and shared by the rest of the world. Afterincomplete and unsatisfying efforts in Korea and then Vietnam, ironically,it took a band of Boomer college hockey players to give GI Generation the“Iwo Jima” moment that they had been seeking for 35 years.


Tech Sector In—Manufacturing Out

It certainly is no surprise that the U.S. manufacturing sector has been shrink-ing for decades. Manufacturing jobs increased from 15.521 million in 1950 to19.812 million in 1980, which represented the peak year in manufacturingemployment; the numbers have been sliding ever since. According to theCBO, the drop in U.S. manufacturing jobs has actually accelerated since 2000.In 2004, there were 14.3 million manufacturing jobs in the United States,according to the CBO—down 3.0 million from 17.3 million in July 2000 andmore than 5.2 million jobs since the historical peak. The number of U.S.manufacturing jobs has actually declined to 1950s levels in recent years.

The United States officially became a “service economy” in 1982 when theservices component of personal consumption expenditures of GDP toppedexpenditures for goods for the first time in history. The services sector hasgrown every year since 1982 and, in 2007, represented about 60 percent of con-sumption, whereas goods represented 40 percent of personal expenditures.

But, fortunately for the U.S. economy, just as the manufacturing sec-tor started to shrink, jobs in the tech sector took off—concurrent withthe introduction of the IBM personal computer in 1981—and contin-ued through the introduction of the World Wide Web in the early 1990sand into the late 1990s before hitting a wall when the “dot com” bubbleburst.

Since 2000, however, jobs in the tech sector have dramatically decreased.A University of Illinois-Chicago study showed that Internet technology(IT) jobs in Massachusetts (known for its high-tech environment)decreased by nearly 35 percent from 2000 to 2006. Ironically, many IT jobsare now going the way of conventional manufacturing jobs—offshore.

Right out of Central Casting

Fade in:

Exterior Western Plains at dusk: Cactus, rocks, sand, and wind blows up dust as tum-bleweeds roll from right to left.

Cut to: Tight shot of a tall, handsome man on horseback wearing acrisp, white ten-gallon hat.

Cut to: Tight shot of a large, dark figure on horseback wearing acrushed black hat.

Cut to: Wide shot of both figures as they slowly approach each otherand then finally stop.

84 Boomer Destiny

Cut to: Extreme close-up of a hand reaching for a pearl-handledrevolver.

Cut to: Wide shot of the two figures. SFX (sound effects): One gunshot.Slowly, the large, dark figure slumps forward and then falls offthe horse to the ground.

Cut to: Extreme close-up of a hand replacing the pearl-handledrevolver into its holster.

Cut to: Wide shot of the tall, handsome man in white hat, riding offinto the sunset.

Fade to black.

The 40th president of the United States was virtually always in control.After all, that was his training as an actor. The “great communicator”navigated through a first term that was burdened by the deep recession thathe inherited. He responded with deep tax cuts and the reintroduction ofescalating budget deficits, leading to a near tripling of the national debt—the most rapid rise in U.S. history. Ronald Reagan’s supply-side economicswere roundly criticized as ineffective in helping increase tax revenue, andReagan became the first president in U.S. history to preside over $1 trillionin outlays in a single year.

The war in Vietnam was already a bad memory for America whenRonald Reagan took office, with most people vowing never ever to getinvolved in another Vietnam. There was another GI Generation presidentin the White House and a period of GI Generation leadership dominancein corporate America. Having spent much of mid-life (the Third Turningfrom 1965 to 1984) as the beneficiaries of the greatest commercial expan-sion in U.S. history, the GI Generation moved up the corporate ladder andinto the roles as senior leaders of American society as the most successfulgeneration of salespeople in U.S. history. So, as newly minted Boomergraduates made their way into the marketplace from 1971 to 1989, it wason the heels of a remarkable sales track record by the GI and the SilentGenerations.

Now it was time for Boomers to step up and grab the torch from theirsenior constellation mates. But, at about the mid-point of the Boomerentry into the business world, something dramatic happened on the way tocontinued record sales outputs. Around 1980, the rate of growth of themajor corporations that had been reaping the post-World War II salesboom hit a wall.


86 Boomer Destiny

Sales outputs for the Dow components and S&P 500 corporations of theday, which had been growing at ever-increasing rates, peaked and startedgrowing at ever-decreasing rates of growth. The trend was clear at the dawnof the 1980s: Sales outputs would simply be harder to grow with eachpassing year.

Looking with disdain on the eager Boomers in business were theirsenior leaders from the GI Generation. Displeased with their efforts, GIGeneration business leaders were once again disappointed in their Boomeroffspring. First, they refused to serve their country. Now, they were simplyunable to “sell like we did.”

The End of the Second Turning

The Second Turning of the Millennial Cycle was wrought with conflict andtension, as Boomers questioned the authority and wisdom of its leadershipand its laws. At the beginning of the turning, the United States was juststarting to escalate a senseless war in Vietnam. By the end of the turning,the war had been over for more than a decade and most Boomers hadmoved on to jobs in an America at peace.

The life lessons learned by the GI Generation, as young adults during theCrisis that ended with World War II, were quite different than those learnedby the Boomer generation as the young adults during the Awakening.Although members of the GI Generation learned that sacrificial effortssuch as D-Day were worth it, Boomers learned that waging war in strangelocations tens of thousands of miles from home in order to impose anAmerican way of life was probably not worth it.

Ironically, three decades later, Boomers would be asking the samequestions about Iraq, except, this time, there was no draft. Yet, also ironically,it would be a first-wave Boomer who would make the same mistake thatanother U.S. president from Texas had made 40 years before—ordering apre-emptive military engagement in a foreign country with oppressiveweather and with no exit plan.

An era of lost innocence was over, and many Boomers had traded intheir tie-dyed T-shirts, headbands, and love beads for dark suits, whiteshirts, and conservative ties. The “corporatization” of America—and of theBoomer generation—had begun.

Chapter 6

Boomer Autumn:1985 to 2004

Every man must decide whether he will walk in the light of creative altruismor in the darkness of destructive selfishness.

—Martin Luther King Jr.

Jeffrey Skilling will be remembered for a lot of things. Selflessness will notbe one of them. Skilling will be remembered as the former chief executiveofficer (CEO) of the largest corporate bankruptcy in U.S. history. As theposter boy for bad corporate behavior, Skilling spent a career living in thegray area between what was legal and what was illegal. What was ethical orunethical was more often lost when business school students such asSkilling moved on to the real world. And that’s the unfortunate truth in anera driven by a mandate to increase shareowner value at almost any cost.Skilling’s own interpretation of that credo landed him in a federal peniten-tiary in Waseca, Minnesota, for 24 years.

The Unraveling: 1985–2004

Following the Second Turning Awakening of the Millennial Cycle, Americaslipped from the heat of summer to the coolness of autumn, a season whentrust in institutions begins to erode and, usually, with good reason.Scandals such as the Iran-Contra deal, the Lewinsky indiscretion, and thejustification for war in Iraq undermined the loyalty and confidence of theAmerican public and helped bring about an overwhelming desire fordramatic change.

As the Third Turning began, Boomers were approaching mid-life; theyhad high expectations for themselves and even higher expectations fortheir children. There was tremendous pressure to achieve in all aspects of

their lives. Financially, Boomer adults fully expected to build a “better” life,which, for them, meant improving their standard of living—the numberof cars in their garage, as well as the size and number of homes that theyowned. What they forgot was that a quantum leap in their standard ofliving might come at the expense of the quality of their lives.

During the Third Turning, it became increasingly necessary for bothhusband and wife to work outside of the home in order to maintain arelatively high standard of living. The result for parents was less time avail-able with their children and more time on the weekend needed for runningthe household errands and chores that didn’t get done during the weekbecause no one was home to do them. Consequently, Saturdays became ablur of “to do’s,” including laundry, food shopping, house cleaning, yardmaintenance, and soccer games. Add more children to the equation anddowntime became limited to the first minutes of a movie rental beforefalling asleep during the opening credits. Monday morning came quicklywhen Saturday and Sunday were mostly devoted to readying for anothersprint to the next weekend.

Even though dual careers may have afforded Boomers a bigger house, asecond car, and some of the other trappings of the typical Third Turningfamily, all of that was not without its cost. Add to the equation a modicumof guilt—especially from mom—and you have a formula for a more per-missive, more indulgent nurturing environment.

The Shifting Mood in America

Given the ever-loosening parenting styles of the Third Turning, it’s notsurprising that the conventional family structure was eroding as a result ofthe splintering of the family unit, which was most often focused onindividual efforts as opposed to family efforts. The results includedskyrocketing divorce rates and the high incidence of single-parent house-holds, which often increased the level of parental guilt and thus led to moreindulgence, less supervision, less respect, and an unraveling of values.

Although the family unit during the Second Turning may have started toweaken, it decayed as the Third Turning progressed. According to a 2002National Bureau of Economic Research (NBER) working paper byMarianne E. Page and Ann Huff Stevens, divorce rates increased by morethan 50 percent from 1960 to 1995; nearly one-third of all children wereborn out of wedlock by 1995.1 As a result, more than half of all Americanchildren alive today can expect to spend at least some of their childhood years

88 Boomer Destiny

as part of a family that is headed by a mother who is divorced, separated,unwed, or widowed.

The working paper went on to say that “family income of childrenwhose parents divorce and remain divorced for at least six years falls by 40 to45 percent,” which tends to make the single parent feel even more guiltyand to work even harder and longer hours, resulting in an escalation ofindulgence and a progressively weakening family structure.

Another child-rearing trend of the Third Turning involved keepingchildren extremely busy in all kinds of extracurricular activities—especiallywhen mom was working out of the home. In 2001, Dr. Alvin Rosenfieldand Nicole Wise wrote a best-selling book, The Over-scheduled Child:Avoiding the Hyper-parenting Trap,2 that described a frenetic child-rearingstyle that involves parents who push their children to build world-classrésumés in advance of applying to the country’s leading colleges. To takethis a step further, dozens of workshops have emerged across the countryoffering help to parents who have overscheduled their children, leavinglittle time for them just to hang out. The idea of kids simply being kids all but disappeared by the end of the turning. Kids were booked—often forced to choose a single sport or activity because of the level ofintensity and year-round commitment required to compete at the highestpossible level.

To the overachieving Boomer mother, just hanging out might haveappeared to be a waste of time. In his book On Paradise Drive,3 New YorkTimes columnist David Brooks calls Boomer mothers Uber Moms—theproduct of a cross-generational conspiracy to focus energy and million-dollar educations to rear young achievers. “Uber Moms are easily recogniz-able because they generally weigh less than their children,” says Brooks.

Maturing Economy

The U.S. economy continued to grow in actual terms during the ThirdTurning, but at ever-decreasing rates—after growing at a very robust averageof just over 4 percent during the 1950s and an even healthier 4.44 percentduring the 1960s. But then the economy hit the top—the average rate ofgrowth stopped increasing and started decreasing on a very slow but steadypace over the next four decades. When economic and financial results areserved up every 90 days, it’s difficult to see any trend—especially when theeconomy has always moved through the classic four-phase business cycleof expansion, peak, contraction, and trough.

Boomer Autumn: 1985 to 2004 89

Of course, the American economy continued to grow during the 1970s,1980s, 1990s, and into the 2000s—but at ever-slower rates—at 3.30 percentin the 1970s, 3.09 percent in the 1980s, 3.12 percent in the 1990s, and just2.55 percent through 2007. Through Q3 2008 GDP figures only make thefirst decade of the new century look even worse with growth of 1.06 percent.4

From a macro view, the U.S. economy started to mature in the 1970s,with its greatest growth rate years behind it, but few noticed that anuptrend had turned into a downtrend—at least, not until the mid-1980s.From a micro view, the same slowdown was having an impact on all U.S.corporations that had been in business at least since the end of WorldWar II, including the hundreds of blue chip companies that drove themajor indices—especially the Dow 30. Many of America’s great corpora-tions reached peak growth rates during the latter years of the SecondTurning, with the pace of erosion picking up speed in the early years of theThird Turning.

The U.S. economy grew so fast through the 1950s, 1960s, and 1970s thatit simply became harder and harder to match that growth starting in the1980s—the decade that spawned cost-cutting. Consequently, many U.S.corporations became victims of their own success. The more they grew, theharder it was to grow even more. For example, General Electric (GE) more

90 Boomer Destiny

FIGURE 6.1. Rate of U.S. GDP GrowthRate of U.S. GDP growth has been slowing since the 1960s.

Source: Bureau of Economic Analysis—U.S. Department of Commerce

than tripled its revenue, from around $39 billion in 1990 to more than$129 billion in 2000, acquiring more than 100 companies per year from1996 through 2000.5

If there ever was a parallel to performance-enhancing drugs, JackWelch’s last 5 years at the helm of GE is roughly equivalent to BoomerMark McGwire’s last 8 years in baseball. McGwire bucked the conventionalbaseball trends by dramatically improving his hitting statistics during thesecond half of his career compared to the first half. McGwire improved hisbatting average by 28 points and hit 125 more home runs over the secondhalf of his career. By comparison, New York Yankee Hall of Famer MickeyMantle hit 36 fewer home runs and dropped 26 points off his batting aver-age over the second half of his career.

Instant gratification became the hallmark of the Third Turning inalmost all aspects of life, underscoring a major shift to selfish individualismover cooperative teamwork. The rules of engagement had changed. It wasnow every man and woman for himself or herself in a marketplace that wasbeginning to mature.

By 1980, two-thirds of all Boomers had already entered the workforce,logging the long hours necessary to get noticed on their important climbup the earnings ladder. Boomers’ desire to have it all coincided with aneconomy that was beginning to show signs of maturity. Unlike the economicboom times that had defined their childhoods and young adulthoods, theThird Turning brought slower growth to the economy.

The best years of growth at General Motors (GM), for example, were inthe rear view mirror. From the mid-1970s to the early part of the new century,GM experienced a long and sliding road, as its rate of growth slowlydeclined until it turned negative in 2001. The former titan of industry wasnot only aging but in decline, along with many of its Dow componentcompadres. This was not a good thing for the waves of Boomers who beganto enter the workforce just as the tide was turning and robust double-digitgrowth became harder and harder to deliver.

Growth at All Costs

As revenue growth slowed for America’s maturing corporations, wewitnessed the rise in importance of earnings growth and the birth of a nearFaustian concept on Wall Street—shareholder value. If public corpora-tions were unable to deliver top line growth consistently, they had surebetter learn quickly how to deliver bottom line growth consistently.


Suddenly, re-engineering became part of the business culture during theThird Turning, giving way to a host of new courses of business schoolstudy, including supply and value chain management, total quality man-agement, and six sigma strategies. Suddenly, the product or service that acompany created mattered much less than meeting analysts’ expectations—giving way to a new management formula at America’s maturing publiccompanies:

1. When revenue and unit growth begins to slow.For some corporations, the rate of revenue and unit growth stopped

increasing and started decreasing—until reaching a rate that is nil or negative.One of America’s most recognizable brands started to feel the growth pinch,after turning 100 years old, just after the start of the Third Turning. TheCoca-Cola Company (ticker symbol: KO) went global well before most otherAmerican companies, and, in the early 1970s, it even began to peddle Cokein previously closed China. So, by the turn of the century, the soft drink gianthad already spent over one-quarter of a century establishing a presence inChina, introducing its brands to the largest number of new prospects in theworld.

Regardless, the rate of Coke’s growth continued to slow through the 1980sand 1990s, until it achieved negative growth in 1998 and then again in 2001and 2002. No one can fault Coke for not trying every possible marketingstrategy under the sun. And, when the company decided to increase market-ing spending dramatically during the late Chuck Fruit’s final years as chiefmarketing officer, it essentially answered the question that marketers ofhugely recognizable yet mature brands have been asking for decades: whatwould happen if we increased our marketing? The answer came back: not awhole lot. The lack of return on Coke’s investment prompted the companyto shift to a decidedly different growth strategy, with the return of NevilleIsdell as chairman in June 2004, to acquisition and product-developmentinitiatives—strategies that quickly add brand-new revenue to the mix eachyear—revenue that was not there the previous year.6 But such strategies canbe likened to sales promotion—although they certainly can add a temporaryspike in revenue, a bigger and better sales promotion strategy would berequired the next year.

There are certainly limits to growth, and a closer look at Time-Warner’sSports Illustrated shows that the universe of prospects for every product orservice is limited to a number that is only known after it has been reached. In1985, the sports-weekly had grown to a circulation of 3.1 million over a30-year-period since launching in 1954. More than 20 years after reaching the3.1 million mark, its circulation is still 3.1 million. Why? Because it had

92 Boomer Destiny

reached its natural size. Try as they might to grow subscriptions in a sports-crazy country, the folks at Time-Warner realized a long time ago that there arelimits to the number of people who are willing to subscribe to their showcasepublication. The good folks at maturing companies such as Hershey realizedthe very same thing about Twizzlers—no matter how much they wanted toexpand sales of popular brands, those brands had effectively achieved naturallimits. Unit sales growth was over, replaced by unit-pricing growth.

2. Downward pressure on price in order to maintain volume levels.Some corporations, such as GM, looked to maintain volume, and prices

dropped often at the expense of margins. Employee discount programscertainly delivered volume, but at a cost. For many years, GM was thelargest company in the world, often held up as the quintessential model ofAmerican business by those teaching the subject, such as Harvard’s JohnKenneth Galbraith. Around 1975, the rate of GM’s unit sales began toslow—although sales were still growing in actual terms—and, over a quarter century, rode a long and declining road to negative unit growth,starting in 2001.

Management monumentally misread the market and placed all bets on“making it up in volume.” This old-world assumption has cost GM and itsemployees dearly. Once considered the shining corporation on the hill, GMhas been dying a slow death since the mid-1970s, tragically unable to see itsway through to creating a wholly new business model.

Table 6.1 shows the slide in terms of unit sales, market share, and totalnumber of employees.

3. Cost reductions gain in importance.When revenue growth slows, cost reductions gain in importance in order

to meet earnings targets. And that’s exactly the shift that took place towardthe end of the Second Turning and into the Third Turning.


TABLE 6.1. The Unraveling of General MotorsU.S. Light Vehicle Sales—1995 to 2007

GeneralMotors Sales 1995 2000 2005 2007

Sales of U.S. 4,895,000 4,953,000 4,517,730 3,867,000Light Vehicles U.S. Market U.S. Market U.S. Market U.S. Market

Share: 32.4% Share: 27.8% Share: 25.9% Share: 23.5%

Number 709,000 386,000 335,000 266,000of Employees

Source: SEC Filings

For mature corporations, such as Kraft Foods, cost reductions becamemuch more important to the process of delivering earnings increases. By themid-1980s, corporate America introduced a new initiative to the workplace—re-engineering.

Management consulting firm Coopers & Lybrand was one of the firstorganizations to help its corporate clients trim their bloated enterprises.Consultant Michael Hammer popularized the term re-engineering in his1990 article in the Harvard Business Review, “Re-engineering Work: Don’tAutomate, Obliterate.”

Although Hammer and companies such as Coopers & Lybrand certainlyhelped lay the groundwork for the downsizing of corporate America, littleexplanation was given as to why the need for re-engineering appeared in thefirst place. And that reason, quite simply, is tied directly to the maturation ofthe American corporation and the inherent inability to continue indefinitelyto grow sales at historical rates.

For the first time ever, an American infrastructure that had been built uparound the arrival of the Boomers in the 1950s, 1960s, and 1970s was forcedto begin to dismantle. And so started the deconstruction of the Americancorporation that had been built up during the First and Second Turnings ofthe Millennial Cycle.

4. The wholesale acquisition of sales gains in importance.When organic growth could no longer drive the levels of revenue that

corporations needed in order to continue earnings growth, inorganic growthstrategies became the play for some. For example, GE used acquisitionsaggressively to deliver portfolio growth.

The Third Turning was one of the great periods of wealth creation in thehistory of the United States. Some of that wealth was the result of a tsunamiof corporate deal-making and high-risk financing. From junk bonds toleveraged buyouts (LBOs) to record numbers of initial public offerings(IPOs) and mergers & acquisitions (M & A)—the path to wealth for somebecame less about developing new products and much more about invest-ment banking. Accounting was also playing an increasingly detailed andcomplex role in serving up the results of America’s public corporations.When earnings growth became difficult to deliver, some companies used theembarrassingly transparent method of reporting earnings on a per sharebasis (EPS). A company could improve its earnings per share simply bypurchasing blocks of shares on the open market, thereby reducing the numberof shares outstanding and increasing EPS.

5. Earnings fork-in-the-road.Many U.S. corporations experienced this evolution of maturity, which—

in the end—tested the mettle and morals of its highest-ranking executives.

94 Boomer Destiny

Some chose wisely. Others did not. Corporations that failed to deliverexpected earnings growth found themselves in the difficult position of hav-ing to choose between (1) reporting decreased earnings or even negativeearnings growth, for example, American Airlines (AMR) or (2) fabricatingresults, for example, HealthSouth (HLS). And, if all of that failed, perhapsUncle Sam could help.

Corporate Welfare

A new era in American politics arrived in Washington with the appearanceof former Hollywood actor and California governor Ronald Reagan. By thetime he was elected a second time in 1984, Reagan had already chartered anew course for America—one that favored the wealthy as well as the matur-ing American corporations.

After a serious recession at the end of the Second Turning (1980–1982),a new political agenda began to unfold from an administration that wouldcut social programs from LBJ’s Great Society-era while dramaticallyincreasing defense spending, on the way to creating record budget deficitsas well as record levels of national debt.

Under Ronald Reagan, the U.S. government rekindled its love affair withAmerican corporations. Earlier in the decade, Chrysler Corporation wason the brink of bankruptcy before the U.S. government stepped in with a$1.5 billion7 loan in an effort to save hundreds of thousands of U.S. jobs.Later in the decade, the George H.W. Bush administration agreed tobailout the beleaguered savings and loan industry, costing U.S. tax payersin excess of $124 billion.8 In the end, Reagan will not be remembered forhis failed economic policies or the Iran-Contra embarrassment, but ratherfor the classic confrontation of good versus the “evil empire”—the SovietUnion—before riding off into the sunset.

As U.S. corporations struggled with top line revenue growth during the1990s and into the 2000s, the U.S. government stepped in again to help—this time to make it easier for maturing public corporations to meet WallStreet’s bottom line expectations. While it’s true that the tax rate for U.S.corporations is among the highest in the developed world, it’s a rathersuperfluous point since the majority of them pay no income tax at all.

In April 2002, the General Accounting Office (GAO) of the U.S. govern-ment released a report on corporate taxation, revealing that most publiccorporations paid no income taxes at all over the 5-year-period from 1996


to 2000—a particularly robust era for corporate earnings. The GAOreport said:

• During the 5-year period, 61 percent of U.S. corporations and an evenhigher percentage (71 percent) of foreign-controlled corporations in theUnited States paid no income tax whatsoever.

• Overall corporate taxes fell from 5 percent of GDP in 1946 to 1.4 percent in2002.

• Corporations accounted for 23 percent of all tax revenues collected by theU.S. government in 1960—13 percent in 1980 and less than 8 percent in 2002.

• Although the corporate tax rate was at 35 percent in 2002, the average effec-tive tax rate for all publicly traded companies in 2002 was 12 percent—downfrom 15 percent in 1999 and 18 percent in 1995.9

Why was there all of this benevolence for the publicly traded U.S. corpo-ration? The answer was simple: lower corporate taxes meant higher corpo-rate earnings. And that fulfills the number one Wall Street requirementthat helps drive the price of a stock higher and higher. So, in a time whenrevenue growth was slowing, which mandates deeper cost cuts, any helpfrom the federal government that will have a positive impact on earningswas greatly appreciated.

An Era of Cheap Labor

After almost 20 years of driving costs out of maturing American corpora-tions, the cost-savings strategies shifted after 2000. With pressure squarely onpublic corporations to continue to meet Wall Street’s stringent demands forsteady increases in earnings, cheap labor became the choice of many as a wayto squeeze a few more pennies out of expenses and into earnings.

Cheap labor came in an increasing number of unlikely forms in the newcentury, and even the bluest of blue chip corporations took advantage ofsome if not all of these strategies:

• Trade AgreementsAfter more than a decade of mixed reviews, the North American Free

Trade Agreement (NAFTA) stands as an abject failure to deliver on the orig-inal promises of the agreement. From the American worker’s perspective, theNAFTA resulted in the loss of jobs in the United States, primarily in themanufacturing sector. A little more than a decade after NAFTA was signedinto law, the Central America Free Trade Agreement (CAFTA) was similarlycriticized for having a negative impact on U.S. workers in the manufacturing

96 Boomer Destiny

and farming industries. The winners in such trade agreements have mostlybeen U.S. corporations that are seeking to drive costs out of their businessesby replacing higher-wage earners with lower-wage earners.

• Minimum WageThe minimum wage in the United States remained frozen for the longest

period in American history from September 1997 to July 2007, when it wasfinally increased to $5.85 from $5.15. Over the same period, Congress voteditself seven pay increases. At $5.15 an hour, an individual working full-timeearned a total of $10,712 a year for an entire decade, a total that fell belowthe poverty level for a two-person household under 65 years of age, accord-ing to the U.S. Census.10

• Undocumented WorkersAccording to an April 2006 study by the Pew Hispanic Center, there are 11 to

12 million undocumented workers in the United States, with close to one-third working in the leisure and hospitality industries and about 20 percentworking in construction-related jobs.11 The undocumented worker is alsobecoming more and more transparent in American society. In many parts ofthe country, it is not uncommon to see large groups of undocumentedworkers gathering outside a Dunkin’ Donuts or 7-Eleven every morning forthe chance to join a construction or landscaping crew for the day. Rightly orwrongly, undocumented workers have become a valuable resource for localbusinesses; therefore, the future status of these workers must be handled care-fully to avoid a major disruption to the productivity of local communities.

• OffshoringFor years, many U.S. companies outsourced certain parts of their business

processes in order to evolve their business model. But slower top-line growthdrove many U.S. companies to offload jobs of all types to countries with sig-nificantly cheaper labor costs—relegating the latter-day rally cry of “Made inAmerica” to the annals of American business folklore. For example, U.S. com-panies such as Dell, American Express, and a number of other credit cardcompanies set up offshore customer service call centers in order to pay a frac-tion of the cost per hour for managing inbound 800 telephone numbers.

No company ever sent its call center activity to India in order to improvethe quality of its customer service. Even though the practice most assuredlysaves companies money, the long-term impact of offshoring customer serv-ice is not yet known. What is known is that, with inbound offshored calls,time-to-resolution dramatically increases, probably as a result of lack offamiliarity with products and U.S. consumer demands. Tight guidelines andscripting also restrict flexibility and empowerment of representatives—all ofwhich results in a longer period of time on the phone, often without anyresolution to the caller’s problem. Although the cost of that longer call maybe significantly cheaper than one that is handled by an on-staff employee


stateside, only time will tell how a company’s decision to save money mightaffect a consumer’s decision to spend money in the future.

The relentless pressure to squeeze dollars and cents out of matureenterprises—an exercise that started as a temporary initiative in the mid-1980s—became as much a part of the office as the famed water cooler. Inthe years leading into the Fourth Turning, cost cutting certainly hitemployees hard. But no one could have imagined that joining the party—in giving back to the corporation—would be a group that so manyassumed was sacrosanct—retired employees.

Era of Lost Pensions

The days of companies providing pensions to employees may be nearlyover. What began as a tool to recruit employees in the late 1800s, turnedinto a company-sponsored entitlement during good times; now it hasbecome a rare exception outside of government or union jobs. During the1960s and 1970s in Detroit, unions such as the UAW were successful increating pensions that have become yet another serious millstone aroundthe neck of U.S. automakers like GM.

It was not uncommon for the benefits from pensions, such as retirementincome and health benefits, to outlive greatly the employee and be passedon to the surviving spouse for the balance of his or her lives. Demographictrends, such as longer life expectancies, have made programs such as thesepainfully expensive for companies.

Although often viewed as sacrosanct, pension funds, in both the privateand public sectors, have come under increasing pressure in recent years asa source of potential savings for companies that are desperate to make thenumbers. On the private side, pensions are normally protected, but all betsare off if the company files for bankruptcy protection, as was the case withDelta Airlines in 2005. As part of its bankruptcy proceedings, Delta askedfor relief from the liability in its pilots’ pension program, which was under-funded by more than $3 billion according to the Pension Benefit GuarantyCorporation, which took over administration of more than 13,000 pilotpensions on December 31, 2006. The $1.7 billion asset in the pension fundfell well short of the $4.7 billion overall future liability that was needed tofund the original program fully.12 So, not even pensions are completely safefrom the long arm of the corporate cost-cutter—and this is making a lotof retirees—and soon-to-be retirees—very nervous.

98 Boomer Destiny

The Housing Bubble Bursts

Over a 30-year period from 1965 to 1995, the average percentage ofAmericans owning homes was fairly consistent, averaging around 64 per-cent, with a low of 63.4 percent (1965) and a high of 65.5 percent (1980).This trend suggests that homeownership in America reached a natural levelof saturation around 1980. In fact, the percentage virtually did not changeover a 20-year period during all of the 1980s and the 1990s. Until the newmillennium when homeownership percentages spiked from an average 64.2percent in the 1990s to 68.2 percent in the 2000s (through 2007). Thehomeownership percentage spiked beyond 69 percent in 2004—the mostsignificant jump in homeownership since the 1950s—fueled by subprimemortgages by unregulated lenders, many of which ignored conventionalunderwriting standards. Millions of people who ordinarily would not qual-ify for a home mortgage suddenly became eligible. But, as soon as the teaserrates to these adjustable rate mortgages (ARMs) expired, millions of newhomeowners were unable to pay the higher monthly mortgage fees.

The flood of new buyers into the lower end of the marketplace did little toincrease demand for or the value of homes at the midrange prices and up. Asnew homeowners started to default on their subprime mortgages and exitedthe market, the value of existing homes continued to slide. According to theS & P/Case-Shiller Index, home prices declined by 17 percent in May 2008


FIGURE 6.2. U.S. Homeownership RatePercentage of Americans owning homes.

Source: U.S. Bureau of the Census

versus during the same month in 2007. Overall housing values decreased bymore than 23 percent by May 2008, after peaking in July 2006.13

Millions of homeowners started defaulting on their home mortgages,starting in 2005, which helped fuel the meltdown. Not surprisingly, thepercentage of Americans owning homes has retreated for 3 years in row—in 2005 (68.9 percent), 2006 (68.8 percent), and 2007 (68.2 percent)—andit is unclear when the slide will settle at more natural levels.14

As the percentage of homeowners started to return to more naturallevels in 2008, the Justice Department kept busy with a nationwide crack-down on lenders that used unethical, if not illegal, tactics to lure newhomeowners into the market in order to boost sales artificially. The short-term gain turned into tens of billions of dollars in losses when the housingbubble finally burst in 2007.

The subprime mortgage meltdown signaled the end of the road for thenation’s largest underwriter of mortgage bonds in Bear Stearns, promptingthe Federal Reserve to step in to avert a Wall Street crisis. Bear Stearns waseventually purchased for $10 a share by JPMorgan in a deal that wasbrokered by the Federal Reserve. Chairman Ben Bernanke—an expert onthe Crash of 1929—moved quickly to take action, realizing that a string ofbank failures in an already fragile economy could be devastating. Thefinancial sector continued to struggle through 2008 as more subprimemortgages expired, triggering more defaults and foreclosures when con-sumers were simply unable to pay the higher rates.

The Nation Overspends

Just off Times Square in New York, there is a lighted sign on a building twostories up showing in real time—like an electronic scoreboard—the ever-increasing national debt. The lights on the sign count up so quickly, adding

100 Boomer Destiny

TABLE 6.2. Artificially Inflated HomeownershipLike so many other elements of the Third Turning, housing was unable to grownaturally.

1975 1980 1985 1990 1995 2000 2004 2005 2006 2007

Percentage of 64.5% 65.5% 63.5% 64.1% 65.1% 67.5% 69.2% 68.9% 68.8% 68.2%AmericansOwningHomes

Source: U.S. Bureau of the Census

to the national debt, that it hurts the eyes. Even though the U.S. governmenthas virtually always been in debt, it is the depth of that debt that brings thecommon 10-digit calculator to its knees. It’s been 30 years since the debt wasmeasured only in hundreds of billions. Ever since 1982, it has been measuredin trillions of dollars—that’s a number with 12 zeroes after it and that prob-ably cannot be easily handled by the calculator in your kitchen drawer.

Helping launch the nation into the financial stratosphere was noneother than the great communicator—Ronald Reagan. In 8 short years inthe White House, Reagan nearly tripled the national debt. And, becauseReagan grew the debt so much during his tenure, it made George H.W.Bush’s growth rate of a measly 54.8 percent seem like chump change.However, the 41st president of the United States increased the debt in realterms, over just 4 years, by almost the exact same amount as his successorClinton did in twice the time.15

The Nation Drifts

Meanwhile, as the citizens of the nation sat on the sidelines, watching on theirflat screen high-definition plasma TVs—purchased on their already over-stressed credit cards—the mood of the nation turned cynical at what wasseen as a national double standard—in the wake of scandals, such as Iran-Contra, Whitewater, and Lewinsky, and the folly in Iraq that was Weapons ofMass Destruction (WMDs), as, time after time, high-profile leaders increas-ingly ignored the rules by pushing the edge of the moral and ethical envelope.

President Bush has accomplished what only his father was able to do beforehim—create the largest gap in history between the highest approval ratingand the lowest approval rating during his time in office. Bush 41 generated an89 percent approval during Desert Storm, before plummeting to a low of33 percent in 1992. That’s a 56-percentage point gap between good and bad.16

Not to be outdone by pappy, Bush 43 put up virtually unbeatable num-bers, by posting an approval rating high of 92 percent in the days follow-ing 9/11, down to 27 percent and dropping after a portfolio of misstepsthat puzzle even the staunchest of Republican supporters—a whopping65-percentage point difference between high and low—undermining theconfidence of the American public and fueling a powerful desire for changethroughout the 2008 presidential election process.

Ironically, it was during Bill Clinton’s tenure that America enjoyed thegreatest stability of all of the U.S. presidents during the Third Turning.Fighting a reputation of democratic ineptness when it comes to managing


money, Clinton not only balanced the budget but delivered a surplus for3 years in a row (1998–2000). But, even with a $236 billion surplus in 2000,the United States was unable to reduce the national debt because the intereston the debt was greater than the surplus. The last time that the UnitedStates actually reduced the national debt from one year to the next was in1950 when Truman was president.17

Americans became increasingly pessimistic about their respectivefutures by mid-2008 when The Conference Board—a consumer researchgroup—reported that its consumer confidence index had slipped to 51.0,down from 90.0 in December 2007, driven largely by a weakening labormarket in the United States.18

When Down Is Up

At least part of the reason why the wholesale acquisition of growth becamevogue during the period was that the largest economy in the world wasbeginning to show signs of maturing—growing at slower and sloweraverage rates as the new millennium dawned. But, looking at Wall Streetresults, one would never know it.

Ironically, the DJIA enjoyed its greatest period of growth ever—a 799-percent gain—during the Third Turning Unraveling, from 1985 to 2004.The dramatic move far outdistanced the growth of the DJIA during theSecond Turning (only 39.3 percent) and grew more than twice as fast as itdid during the First Turning High, from 1946 to 1964. The DJIA shatteredthe 1500, 2000, 3000, 4000, 5000, 6000, 7000, 8000, 9000, 10000, and 11000marks during the period, before retreating for close to 7 years following theterrorist attacks of September 11.

And there never was a better time in U.S. history to be the CEO of anAmerican public corporation. In 1978, U.S. CEOs were paid 35 times that ofthe average worker. By 2000, this elite group earned 531 times the average

102 Boomer Destiny

TABLE 6.3. U.S. President’s Approval RatingsThird Turning—1985 to 2004

President High Low Difference

Ronald Reagan 1981–1988 73% 42% 31 PP.GHW Bush 1989–1992 89% 33% 56 PP.Bill Clinton 1993–2000 68% 55% 13 PP.George W. Bush 2001–2008 92% 27% 65 PP.

Source: ABC/Washington Post Poll

worker’s salary, according to the Towers-Perrin study.19 And even in a“bad” year on Wall Street, average annual bonuses can approach $180,000—more than 7 times the annual per capita income of $25,465 in the UnitedStates in 2004.20

When business is good, there’s little reason for bad behavior. Revenue isup; earnings are up. The board is happy. And all is especially well when theStreet is happy. But when business is bad—especially when business istrending down—the “Me” gene in the human genome is summoned. And,if you care to look closely enough, you will find that we are all wired tofulfill the “Me” needs first—some more than others. After all, Maslow’sHierarchy of Needs is not about someone else’s needs.

Era of Selfishness

The Third Turning Unraveling of the Millennial Cycle in America will beremembered as an era of extraordinary selfishness—a time when individualsand institutions stretched and ultimately overstepped ethical boundaries inorder to improve results. Simply put, it was an era of deception and of thedirty little secrets: trading arms for hostages, cooking the books, cookingup weapons of mass destruction, cheating on the Mrs., and taking anythingunder the sun to hit more home runs or run faster than any other human.

It was Harvard economist John Kenneth Galbraith who said that “themodern conservative is engaged in one of man’s oldest exercises in moralphilosophy; that is, the search for a superior moral justification for selfish-ness.” The cast of characters during the Third Turning of the MillennialCycle in America could fill a book.

The cast includes “Kenny Boy” Lay, Marion Jones, Elliot Spitzer, RogerClemens, Jack Abramoff, Barry Bonds, Jack Grubman, Michael Milken,Dennis Kozlowski, Martha Stewart, and Bernie Madoff; hundreds, if notthousands, of Catholic priests; greedy venture capitalists from the dotcombubble; greedy bankers from the housing bubble; and one of the latestentrants, former presidential candidate John Edwards. Even the good folksat Kraft Foods decided to reduce the amount of milk used to make CheeseSingles in order to save a few bucks or to make a few more bucks. FounderJames Kraft must be spinning in his grave.

Then there were the IPOs, such as Burger King’s, when the 55-year-oldfast-food giant went public in 2004 for the first time. In the old days, com-panies went public in order raise capital so that they could invest to growthe company, not so in the case of Burger King. After raising an estimated


104 Boomer Destiny

$431 million, the company used almost all of it to pay down debt and cleanup its balance sheet. The good people over at Kolberg Kravis (KKR) put thedeal together. There were dozens of IPOs that were done simply as trans-actions to make money on the deal, leaving investors holding stock in com-panies that have no growth story or growth potential whatsoever. Howmuch is enough? Now KKR wants to go public. Early-wave Boomer HenryKravis is reportedly worth between $3 and $5 billion.21 Will this Boomer’slegacy simply be that he made a lot of money?

Certainly not all Boomers took the Faustian route to riches. But many ofthem did. It was during the Third Turning that Boomers made a choice—to improve their standard of living with the belief that it would alsoimprove their quality of life. For some, it did. For many, it did not.

By the end of the Third Turning, around 2004, corporations hadexplored every possible means to increase revenue and cut costs yet stillfound it difficult to create any kind of sustained momentum. Somewherealong the way, America was transformed from a country that cared aboutbeing better to a country that only cared about being bigger. That meta-morphosis has truly taken its toll.

The cumulative effect of the slowdown has been mentally fatiguing, andthe challenges that society now faces are so profound, so overwhelming,that it becomes easier for the powers-that-be to ignore them by lookinginward, borrowing more money, and creating an even larger collective debtthat will be the responsibility of future generations. The challenges aheadare significant for the country, its corporations, and its citizens. The crisishas begun. Will we jump out of the pot of water before it boils or will wesimply cook to death?

Frost on the Pumpkin

As the crisp days of late autumn morph into the frosty evenings of earlywinter, an increasing number of people are seeing and feeling the signs ofa difficult season ahead. Even though even the most optimistic realize intel-lectually that winter is coming, many still prefer to hang onto the futilehope that winter will pass us by this time. But it never has. Winters can bemild, as was the winter of 1999–2000 in the northeastern United States. Orthey can be severe, as was the winter of 1977–1978 in the northeasternUnited States.

So what will it be? Will it be a record-breaking winter such as the UnitedStates experienced during the prior Fourth Turning Crisis from 1925 to

1945? We ignore the coming winter at our own peril. Whatever the sever-ity of the winter that is upon us, like the storm off the Gulf coast that wecan see on Doppler radar, we can prepare for it and minimize its damage.This didn’t happen in the years leading up to the last American winter.Nobody saw it coming. Like Katrina gathering strength off the Gulf coast,the crisis gets closer and more severe every day and it won’t just go awaybecause we want it to.


Chapter 7

Boomer Winter: TheNext American Crisis,

2005 to 2024

Out of every crisis, every tribulation, every disaster, mankind rises with someshare of greater knowledge, of higher decency, of purer purpose. Today we shallhave come through a period of loose thinking, descending morals, an era ofselfishness, among individual men and women and among Nations. Blame notGovernments alone for this. Blame ourselves in equal share. Let us be frank inacknowledgment of the truth that many amongst us have made obeisance toMammon, (god of greed) that the profits of speculation, the easy road withouttoil, have lured us from the old barricades. To return to higher standards we mustabandon the false prophets and seek new leaders of our own choosing.

Never before in modern history have the essential differences between the two majorAmerican parties stood out in such striking contrast as they do today. Republicanleaders not only have failed in material things, they have failed in national vision,because in disaster they have held out no hope, they have pointed out no path for thepeople below to climb back to places of security and of safety in our American life.

—Franklin Delano Roosevelt,Nomination Speech at the Democratic National Convention

July 2, 1932, Chicago

Two weeks after being sworn in for the second time as president of theUnited States, Boomer George W. Bush spoke to the nation in his State-of-the-Union address on February 2, 2005. Within the first few hundredwords of his address, the president made one of the most important state-ments of his two-term tenure:

[As] we watch our children moving into adulthood, we ask the question:what will be the state-of-their-Union? . . . Over the next several months, on

issue after issue, let us do what Americans have always done, and build a bet-ter world for our children and our grandchildren.

Truer words were never spoken. The president was no doubt referring tohis experience as a parent of twin daughters, one of whom (Jenna) wouldbe married 3 years later. That vision was spot-on for the offspring of theBoomers. What will be the state of their Union? Will it be better or worsethan ours? That’s a frightening question for many Boomers, as they see theirchildren take on the real world toe-to-toe. Fortunately, there’s still time leftfor Boomers to do something about it before moving through their seniorleadership role and onto their senior years.

Unfortunately, the balance of Mr. Bush’s address shortchanged thedozens of challenges that not only have an impact on Americans every daybut also make the long-term issues worse—much worse. Clearly, the realproblems facing America are in America, not in the Middle East, yet wecontinue to issue warnings to other countries about the inappropriatenessof their behavior—casting the first stone in spite of our own sins.

The president’s address essentially focused on four themes:

1. About 22 percent of the president’s speech focused on his plan to reformSocial Security.

2. About 20 percent of the president’s address lightly touched on no fewer than20 domestic issues, including the economy, taxes (relief and credit), corpo-rate criminals, homeownership, inflation, the budget, the deficit, new mar-kets, spending discipline, jobs and job training, college education, smallbusiness, legal reform, energy, pollution, immigration, healthcare, womenand minorities, advances in medicine, and the No Child Left Behind educa-tion program. Ironically, the president took credit for raising homeowner-ship “to the highest level in history”—an accomplishment that would comeback to bite him in the months following the speech, as millions of marginalmortgage holders started to default on their subprime loans.

3. Only about 12 percent of the president’s speech focused on America’sresponsibility to future generations.

4. Close to one-half of the president’s speech focused on foreign policyissues—issues that are important to the security of the United States and totrade relations abroad, but not so relevant to the challenges that the averageAmerican faces on a day-to-day basis. And there seems to be little sense ofthe urgency on the part of administration officials to address the emergentissues of the day that affect America here. Unfortunately, it may require anold fashioned, big-bang disaster to get the United States to focus on its sub-stantive domestic issues.

108 Boomer Destiny

The president’s speech seemed especially detached from what was actu-ally happening to Americans in America on that February night in 2005.Like so many of its own citizens, the United States had spent way morethan it earned since 2001, pushing huge liabilities out to future generationsof Americans.

Consider the poor stewardship record of the Bush 43 administration:

• Deficits in the United States increased each year during Bush’s first term,from a surplus of $128.2 billion in 2001 to a string of deficits including$157.8 billion in 2002, $377.6 billion in 2003, $412.7 billion in 2004.1 Out-lays outpaced revenues by more than $1 trillion over President Bush’s firstterm. The only other president in U.S. history to add more to the nationaldebt in a 4-year-period was Bush’s father. And, although deficits retreated in2005, 2006, and 2007, the administration’s final deficit was again headed inthe wrong direction—nearly three times the shortfall recorded in 2007, witha projected $400+ billion deficit submitted as part of the administration’sproposed 2009 budget.

• Presidents Reagan and Clinton increased the national debt by $1.6 trillionand $1.3 trillion, respectively, over 8 years, whereas Bush 41 and Bush 43increased the debt by $1.2 trillion and by $1.6 trillion, respectively, over just4 years. The difference in both cases: war.2

• The interest alone on U.S. national debt in 2007 ($430 billion) was greaterthan the GDP (Purchasing Power Parity) of close to 90 percent of all of thecountries in the world.3

The bottom line is this: the United States simply cannot afford to wagewar proactively. It has too many domestic issues that require time and

Boomer Winter: The Next American Crisis, 2005 to 2024 109

TABLE 7.1. State-of-the-War AddressPrioritizing America’s Issues

Percentage of Theme Number of Words Overall Speech

President’s Plan for 1115 21.9%Social Security Reform

Various Domestic Issues 1047 20.7%America’s Responsibility 638 12.6%

to Future GenerationsThe Middle East & 2280 44.8%

the War in IraqTotals 5080 100%

resources, and, unless we reverse course soon, our children and grandchil-dren will inherit a broken America they will have to fix.

The State of Reality

Now consider the same State-of-the-Union message with the followingdomestic issues facing the American public on the night of the president’saddress:

• The economy grew at an average rate of 2.0 percent from 2001 to 2004,which was the slowest rate of growth since the 1930s.

• The public debt was more than $7 trillion in 2004 and was costingAmericans close to $1 billion per day in interest expense alone.4

• The war in Iraq—about to start its third year—was costing the Americanpublic more than $250 million per day.5

• More than 37 million Americans were living in poverty.6

• More than 7 million Americans were unemployed.7

• More than 45 million Americans were without healthcare.8

• More than 3.5 million Americans were homeless.9

A slowing economy makes employees very nervous, because they knowthat, when revenues slow, cost reductions speed up. Although some areconcerned about the possibility of the United States developing a protec-tionist view, the United States now finds itself in a smoke-filled airlinecabin with a choice to make: put on its own oxygen mask first or run therisk of passing out from smoke inhalation while tending to other passen-gers. The United States can legitimately be criticized for a lot of things, butone of them is not its historical benevolence as a good-hearted global citi-zen in coming to the aid of others in need. But times and circumstanceshave changed.

Morphing into Crisis

America received not one but two political shocks that signaled Crisis inthe 1930s and 1940s. First, there was the economic shock when the stockmarket crashed on Black Tuesday in October 1929, which sparked theDepression. Then there was the attack on Pearl Harbor in December 1941,which pushed the United States into World War II. Both shocks were dev-astating events and both hurt America deeply. It was certainly not difficultto figure out how America would react in the hours and days following theJapanese attack on Pearl Harbor. There was no lobbying, no backroom

110 Boomer Destiny

negotiations, no pork-barrel politics—no debate in Congress as to what todo next. The very next day—Monday, December 8, 1941—FDR addressedCongress and, in no time, war was declared on Japan, with only one dis-senting vote.

Historically, a crisis in the Fourth Turning has been sparked by powerfulevents. Some have speculated that the attacks of September 11 may havecreated the momentum for a long-term crisis. Others look to the oil shocksthat started around 2005 as the culprit. When President Bush took office in2001, the price of crude oil was around $28 a barrel.10 In 2008, the price ofcrude spiked to more than $140 a barrel, sending gasoline prices wellbeyond $4.00 per gallon in the United States. The early impact of this dra-matic spike manifested itself as pain at the pump. However, it may very wellturn out that the increase in the price of oil will create an inflationary rip-ple effect across the economy because of the vast number of petroleum-related products, such as plastics, as well the diesel fuel that fills the trucksand the jet fuel that fuels the airplanes that deliver all of the goods thatAmericans buy.

The question in the minds of Americans in 2005 was the same one thatis always on their minds when the economy slows: do I have enough moneyto survive? Whether they are employed or retired, whether their source ofmoney is a job, a pension, 401(k), Social Security, personal savings, or acombination, Americans get very nervous about the future, particularlywhen filling up the family car becomes a $75 to $100+ event.

Many Boomers remember the days of long lines at the pump during theOil Crisis of 1973. Supply was the issue in those days. Many gas stationssimply ran out of gas, which caused consumers to scramble for availablegas. So far, that has not been the case with the Millennial Oil Crisis. A littlemore than 30 years after the Oil Crisis of 1973, global oil productionpeaked in 2005, leading to a steady increase in the price of crude. At thesame time, the increase in global demand from burgeoning economiessuch as China and India will only make matters worse over the years tocome in terms of both limited supply and increased demand. Given cur-rent global demand, it is difficult to imagine that the demand for oil wouldsubside over the next 20 years unless fundamental behaviors dramaticallychange around the world.

How do you know if you are in a Crisis when there is no disastrous eventsuch as Black Thursday or Pearl Harbor? As Supreme Court Justice PotterStewart wrote in his opinion about a hard-core pornography case in 1964,although obscenity is hard to define, “I know it when I see it.” The same


may be said of the gradual ramp to the next American Crisis. We may knowit only after we are in it.

If history repeats itself, we will be continually presented with changingvalue propositions over the coming years about actions that we take eachand every day. Should we get rid of the SUV and get a smaller car? Whatabout a hybrid? What about two cars instead of three? Are we able to eatout as much as we’d like? Will we have to choose between a home mortgageand our child’s college education? Are there alternative schools that arecloser and that cost less? Should we downsize our home? Can we sell it?Maybe we should cut our own lawn and take our own trash to the dump.

As we watched history begin to repeat itself during the second half of2008, the questions on everyone’s mind are how deep and how long?

The last American Crisis started—as most do—with a series of misstepsthat over time we conveniently link to a single day’s event such as BlackTuesday. This crisis may simply sneak up on us—death by a thousand cutsas the Chinese might say—without one single event that enables us to layblame and chronicle the slide. The American public showed remarkableresilience during the last Crisis, pulling together as one, and this is whatmust happen again. The last American Crisis, a drive that culminated inovercoming both internal and external threats, literally started October 29,1929, and ended August 14, 1945. After October 29, 1929, things got worse.After August 14, 1945, things got better. Whether or not the next AmericanCrisis will unfold as succinctly this time around is simply unknown.

The last American Crisis literally shocked Americans, who bandedtogether in a cooperative common cause in the days following the attackon Pearl Harbor. All superfluous activity ceased after Pearl Harbor. Notonly was there a sense of urgency, there was a sense of emergency—as if thefuture of the Republic depended on the cooperation of all generations—and, in many ways, it did. It was a united front to defend America, as wellas the American Dream.

Each Crisis in American history has been uniquely shaped by the times;consequently, they are all very different. The American Revolution was allabout fighting a foreign foe domestically. The Civil War was all about fight-ing a domestic foe domestically. World War II was all about fighting foreignfoes around the world. How will this American Crisis be shaped? Will itinvolve a war? Will it include an economic crisis? Or will it be both?

All that can be said for certain is that the United States faces monumen-tal challenges ahead that include extrication from a complicated andexpensive engagements in Iraq and Afghanistan, as well as a daunting array

112 Boomer Destiny

of domestic issues the likes of which this country has never seen—not evenin the years leading into the Great Depression.

Out of the last American Crisis came America’s love affair with the“good versus evil” story line—where good always prevails and evil is alwaysdefeated or at least vanquished until the sequel. It was pervasive in litera-ture following World War II (To Kill a Mockingbird, Old Man and the Sea)and also in movies (From Here to Eternity, Cape Fear, West Side Story). Theformula was simple: protagonist (John Wayne) is in a race to overcomeantagonist (the Japanese military); antagonist tries to prevent protagonistfrom accomplishing that objective (winning the war); protagonist ulti-mately triumphs over antagonist with the help of his friends in raising theAmerican flag in victory (The Sands of Iwo Jima).

Will the next American Crisis unfold in a similar external way or will itbe an internal victory? It is certainly unclear when the Great Depressiontruly ended and how it would have been resolved had the United States notentered World War II. It’s possible that, this time, our energies will be ableto focus inward without the distraction of a foreign war that simply sapsresources, time, and lives. On the other hand, every American FourthTurning Crisis has included a serious war, and it’s likely that this time it willbe no different. Whether or not it will take on a shape beyond Iraq andAfghanistan is anybody’s guess. But, with unpredictable powers such asIran, Pakistan, and even Russia, the elements for a potentially broader,more costly, and more destructive engagement in the region is distinctlypossible.

What we do know is that the United States is already engaged in a warin the Middle East that could easily expand across the region. We knowthat the country faces historically complex domestic challenges. The plateis overflowing and there’s no capacity to add more. Now is the time tosimplify.

The midpoint of the last American Crisis was 1937—before the UnitedStates entered World War II. Few realize that, after several years of recov-ery, the country sank into a recession again in 1937, and few economistsare willing to say definitively when and if that recession ever subsidedbefore the United States entered World War II on December 8, 1941. Formany, including the president of the United States, 1937 was a roughyear: FDR had been reelected in 1936 and, just as the economy appearedto be healing, it slipped into recession, slowing the recovery. It tookalmost another decade for the country finally to move past a very longand dark period.


Every 80 Years a Crisis

The research is pretty compelling; the idea that the United States might befacing difficult times ahead doesn’t seem like much of a stretch. First of all,there’s the evidence from history. Every 80 years since the United Statesbecame an independent republic, the country has experienced a prolongedperiod of difficulty—and, each time, a constellational team, made up ofsenior leaders, mid-lifers and young adults, literally rose to the occasionand carried the country through the Crisis. Sometimes the Crisis wasfinancial in nature (the Great Depression); sometimes it wasn’t, but, eachand every time, it involved a war.

Benjamin Franklin led the fight for independence in the RevolutionaryWar as a senior leader. About 80 years later, Abraham Lincoln led thefight to keep the Union together as a senior leader. In another 80 moreyears, Franklin Delano Roosevelt led the fight to free the world fromNazism and Fascism as a senior leader. After another 80 years, we are atthe end of the first decade of the twenty-first century and in the earlyyears of a crisis. Will it be as short as the Civil War or as long as theDepression and World War II?

However you look at it, the United States faces daunting challenges overthe course of the next 10 to 15 years. A brand-new generation ofAmericans—the New Silent Generation—will move into young adulthood,and a new generation of children will begin to appear in 2025—the NewBoomers. What will the world be like for the first full generation of the newmillennium? And, more important, what will it take to fix a dizzying arrayof systemic issues that have not only festered for decades but come to a headat precisely the same moment in time? The task is daunting. It affects mul-tiple generations and will require multiple generations to fix.

An Aberration of Growth

In 200 years, when students study the history of growth in the United States,they will point to the 50-year period from 1950 to 2000 and ask: “What hap-pened here?” The aberration will be obvious in retrospect even though it isnot so obvious today. It all starts with a maturing economy.

The United States has just experienced an incredible half-century ofexpansion. When viewed from this perspective, quantum leaps of growthsimply do not and cannot continue forever. Because we most often inspectthe economy from a very close range—every 90 days—it is difficult to seetrends over very long periods of time. When viewed in 50- or 100-year blocks

114 Boomer Destiny

of time, the second 50 years of the twentieth century truly stand out as aunique era—an era that will likely not repeat in any of our lifetimes.

The Boomer Generation played at least a role in that uniqueness, first asbaby consumers and then as adult consumers and productivity machines.Tom Brokaw is not wrong in saying that the GI Generation was the “Great-est Generation”: they certainly were qualitatively, but it’s tough to matchthe Boomers as the greatest generation quantitatively.

What is an economy but a collection of sectors, made up of industries,made up of companies, made up of products and services? All productsand services exist somewhere in a life cycle from moving up the growthcurve to moving down the growth curve. Today, the U.S. economy is largelymade up of products and services that are on the downside of growth,which rolls up into corporations that are on the downside of growth, whichrolls up into sectors that are on the downside of growth, which rolls up intoan economy that is on the downside of growth. Growth will no doubtcontinue—it just won’t happen as dramatically as it once did—no matterhow many new products we develop, ads we run, or companies we acquire.Just as we would all like to be able to perform as we once did in our youth,it is hard for us to accept the fact that we simply can’t. It’s why some peo-ple get face-lifts and tummy-tucks and color their hair.

An Era of Failed Strategies

It’s difficult not to feel sorry for GM—once the largest company in theworld. It has gone through a very difficult time over the past 20 years—shrinking in almost all respects. In some ways, it resembles the U.S.government—creating, for example, incredibly generous benefit programsfor its people in the 1960s, just as did the U.S. government. Now those pro-grams are coming back to bite both GM and the United States.

The respective entitlement programs sponsored by GM and the U.S. gov-ernment are now creating a drag on both institutions. On the revenue side,both institutions have been growing at ever-decreasing rates for decades. Forthe United States, even though its GDP has been slowing in recent decades, atleast it continues to grow on an actual dollar basis. However, the same cannotbe said of GM. Like sitting and watching Katrina approaching landfall, GMcan be blamed for staying the course with a strategy and business model thatneed to be discarded completely. But the company is incapable of doing so.

Rather than change its business model and pursue a “better” strategy,GM instead chose to stay the course with its “bigger” strategy. The result


was that Toyota—a company that pursued a “better” strategy—ended upleading in both categories in the end, replacing GM as the largestautomaker in the world in 2007. Figure 7.1 shows GM’s U.S. light vehicleunit sales from 2001 through 2007—a period when the automaker lostmore than 20 percent of its sales or close to a million units.

Time is running out on GM. It has already lost its leadership position interms of worldwide sales to Toyota. And it’s possible that the Japaneseautomaker will become number one in the United States in 2009 as well.During the First Turning of the Millennial Cycle, televisions were manu-factured in the United States. Now no televisions are made in the UnitedStates. During the Second Turning, the very cool Chuck Taylor sneakerswere made in America. Now they are not. During the Third Turning, Leviswere made in the United States. Now they are not. It is not completely outof the realm of possibility that, by the end of the Fourth Turning, there willbe no U.S. automakers making cars in America.

It seems that GM is like a proud athlete. Watching it try to recapturethe days of its youth is like watching newsreels of Babe Ruth in the lat-ter part of his career—swinging wildly at pitches and badly twisting hisankle, only to limp back to the dugout after striking out. No one wantsto see that. We want to see GM point to the bleachers and hit a homerun. But, unfortunately, those days are part of the past. If GM is to

116 Boomer Destiny

FIGURE 7.1. General Motors U.S. Light Vehicle Sales since 2000Seven straight years of negative growth.

3000000

3500000

4000000

4500000

5000000

2001 2002 2003 2004 2005 2006 2007

GENERAL MOTORSU.S. LIGHT VEHICLE SALES

2001 to 2007

UNIT SALES

Source: SEC Filings

survive, it must completely reinvent itself, probably as a much smallercompany. But it is unlikely that it will do so of its own accord.

An Era of Economic Wild Cards

There are certainly enough economic challenges in the United States in theearly years of the Fourth Turning. What the United States doesn’t need inthe future is the confluence of known events that have an impact on theeconomy with unknown events that affect the economy. It doesn’t help asagging economy when natural disasters, such as Hurricane Katrina, ter-rorist attacks, or devastating forest fires or floods, require hundreds ofbillions of dollars of budgeted and unbudgeted federal funds in relief.

When Hurricane Katrina slammed into the Gulf Coast in August 2005,no one could have predicted the extent of the damage that it would do. Inthe aftermath of the storm, more than 1,800 people were dead and tens ofthousands were homeless and hungry. Although the full economic impactof Katrina on the region, as well as the nation, is still being calculated, someexperts estimate that the total bill to the U.S. taxpayer could ultimately top$300 billion.

Consistent with other weather patterns, the frequency and severity offorest fires in the state of California have increased in recent years, destroy-ing millions of acres and tens of millions of dollars of personal property.The U.S. Forest Service was budgeted for $1.14 billion to fight forest firesin 2008, which was well under what it spent the previous year to fight firesacross the United States.11

Floods have also increased in both volume and intensity in recent years.Iowa floods in the summer of 2008 forced 38,000 people to evacuate fromtheir homes. The floods also had a dramatic impact on local farmers, vir-tually wiping out the state’s corn crop for the season.

Since 1980, the National Oceanic and Atmospheric Administration(NOAA)’s National Climate Data Center (NCDC) has tracked all U.S.-based weather and climate-related events that result in at least $1 billion indamage. Over the period, the NCDC has tracked a range of billion-dollarnatural disasters, including droughts, freezes, hurricanes, tornadoes, snow-storms, ice storms, hailstorms, floods, and firestorms. The research showsthat there were 12 natural disasters during the 1980s that caused more than$1 billion in damage in nominal terms. However, the number of billion-dollar disasters tripled, to 36 events, in the 1990s and continued on thatpace through the first 6 years in the 2000s.12


A Crumbling Infrastructure

On August 1, 2007, the ugly underbelly of the American infrastructure wasexposed for the rotting, decaying mess that it is when the I-35 Bridge inMinneapolis collapsed into the Mississippi River. Although it appeared tobe an isolated event, the bridge disaster raised awareness in a growingproblem that is beginning to threaten the safety and lives of Americansdriving the highways, crossing the bridges, or using other public buildings,airports, and bus and subway stations across the country. America’s aginginfrastructure was the subject of a 2008 study by Ernst & Young LLP andthe Urban Land Institute (ULI).13 The report estimated that there is a fund-ing gap of about $170 billion earmarked for infrastructure projects andthat gap has been widening every year.

“Frankly, the United States has been coasting when it comes to infrastruc-ture spending, especially when compared to growing economies such asChina which spends about nine percent of GDP on infrastructure,” said DaleAnne Reiss, global leader of real estate at Ernst & Young. “The economicuncertainty facing us means that public infrastructure is even in greaterjeopardy.” The report concluded that a joint effort between the public andprivate sectors will be the best way to shrink the funding gap and address themost emergent issues. Other countries have effectively used public-privatepartnerships (PPP) as an important tool in solving infrastructure problems.

In the days following Katrina, there was almost a palpable loss of confi-dence in bipartisan American leadership. A string of government officialswere accused of serious crimes. Former House Majority Leader, Tom Delay(conspiracy), Vice President Cheney’s Chief of Staff, Scooter Libby(obstruction of justice), and Washington lobbyist, Jack Abramoff (fraud),were forced out of their cushy positions in 2007–2008.

Then came the Abu Ghraib scandal, the unconstitutional spying onAmericans without warrants, and the CIA’s destruction of interrogationvideotapes, which caused confidence to sink even further. The best thingthat happened in 2007 was that it ended and 2008 began. As it turned out,2008 became a surprising year of hope for the American public. Emergingfrom the shadows of the Senate was Barack Obama—with a fresh and hon-est outlook, he became a beacon of hope for the future of America.

A New Number One

Just as GM was once the largest corporation in the world, it’s also a goodbet that, before the end of the Fourth Turning, the United States will also

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give way—probably to an Asian country that will replace the United Statesas the world’s largest economy. If the growth rates of China and the UnitedStates continue as they have in recent years (see Figure 7.2), China’s GDPwill pass that of the United States in 2023.

The question now for both GM and the United States is this: what’s thestrategy now? The United States has always been able to reinvent itself. Ithas done so after every Crisis. After the Civil War, innovation in the UnitedStates mushroomed, with the introduction of the telephone, the radio, andthe automobile. After World War II, American energy and creativity rapidlycreated a thriving economy that was kick-started by the arrival of theBoomers. How will the winter of the Fourth Turning metamorphose intothe spring of the next First Turning?

On-Deck as Senior Leaders: Boomers

As the first decade of the 2000s draws to a close, the GI Generation is all butgone, and the Silent Generation has mostly moved into its senior years. Step-ping up to the plate as the next senior leaders of society will be the Boomers,in what may turn out to be one of the most challenging quarter-centuries in


FIGURE 7.2. U.S. and China GDP GrowthAt current average rates of growth, China’s economy will top the U.S. in 2023.

Source: Bureau of Economic Analysis (BEA)

U.S. history. Can a generation of narcissists lead the United States throughthe worst American Crisis since the Great Depression? That’s a good ques-tion. But it’s a question that has been asked before of generations thatended up creating a legacy in their Final Turning that literally changed thecourse of American and world history.

Consistent with Strauss and Howe’s theory of repeating generational types,FDR’s Missionary Generation experienced a similar upbringing as the indulgedchildren of a postwar era. As young adults, members of the Missionary Gen-eration were in the forefront of the widespread student unrest on college cam-puses across the United States. Colleges and universities became centers forradical and revolutionary thought during the late 1800s, and helping drive thatmovement was the bull-headed Missionary Generation. It was also during theFirst Turning of the Great Power Cycle that the first African Americans andwomen—all from the Missionary Generation—started to attend college reg-ularly, sparking civil unrest and underscoring just how little had changed sincethe signing of the Thirteenth Amendment (emancipation).

We remember FDR as the strong leader in the face of tyranny—not FrankRoosevelt, opinionated editor of the student newspaper the Harvard Crimson.“The 1960s was only one of the many eras of student unrest at Harvard,”according to the Physiologist in 1982. “In 1904, a group of students sought anaudience with the Dean of the Harvard Medical School to protest the largenumber of failures of physiology . . . a third of the class was failing.”14 Studentunrest was touched off at many colleges across the country as administrationsstarted to clamp down on the academic studies of social butterflies like FDRwho, as an undistinguished student, happily accepted a “Gentleman’s C.”

Just as Boomers caused a ruckus during the Awakening in the 1960s, sodid those from the Missionary Generation around 1900. Boomers are onthe same repeating track as the Missionary Generation and are about tobecome the senior leaders of a society in Crisis. Joining the Boomers in thegenerational constellation in taking on the Crisis will be Gen Xers enteringmid-life and the Millennial Generation entering young adulthood. Howthey will perform as a team will unfold over the years leading up to the endof the Fourth Turning, around 2024.

Boomer Inspiration

On February 12, 2008, 62-year-old Kathleen Casey-Kirschling—thenation’s first Boomer—made history when she became the first of her gen-eration to receive Social Security retirement benefits. A steady stream of

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Boomers will follow Casey-Kirschling’s footsteps, all the way through theend of the Fourth Turning, in 2026, when the youngest Boomers turn 62.

But don’t count on Boomers to flock to Florida just to put their feet upby the pool. This generation does not intend to go quietly and probably notanytime soon. And they certainly don’t intend to live the same sedentarylifestyle that their parents did after reaching the age of 62. It’s likely thatBoomers will mostly come in three flavors on reaching the magic number:certainly some will continue to work because they have to—they simplywon’t have enough money to stop working. Another segment of Boomerswill transition out of their long careers of work and into their secondcareers of passion—doing the things that bring them joy and getting paidfor it. A third group will stop their work of mid-life that fed their egos andbank accounts and begin their work as senior leaders—quite possibly themost important job that they will ever have.

There are virtually hundreds of studies on the concerns of Boomers asthey approach retirement age. Because the overwhelming majority of thesestudies focus on financial issues, much of the research fails to focus onwhat is becoming the generation’s number one concern for the future—the shape of the world that we are leaving to our kids.

For better or for worse, your generation has been appointed by history todeal with those problems and to lead America toward a new age. You have thechance never before afforded to any people in any age. You can help build asociety where the demands of morality, and the needs of the spirit, can berealized in the life of the Nation.

So, will you join in the battle to give every citizen the full equality which Godenjoins and the law requires, whatever his belief, or race, or the color of his skin?

Will you join in the battle to give every citizen an escape from the crush-ing weight of poverty?

Will you join in the battle to make it possible for all nations to live inenduring peace—as neighbors and not as mortal enemies?

Will you join in the battle to build the Great Society, to prove that ourmaterial progress is only the foundation on which we will build a richer lifeof mind and spirit?

There are those timid souls who say this battle cannot be won; that we arecondemned to a soulless wealth. I do not agree. We have the power to shapethe civilization that we want. But we need your will, your labor, your hearts,if we are to build that kind of society.

Those who came to this land sought to build more than just a new coun-try. They sought a new world. So I have come here today to your campus tosay that you can make their vision our reality. So let us from this moment


begin our work so that in the future men will look back and say: It was then,after a long and weary way, that man turned the exploits of his genius to thefull enrichment of his life.

On May 22, 1964, LBJ spoke those words at the University of Michiganin Ann Arbor—6 months to the day after he had been sworn in as presi-dent on Air Force One, following JFK’s assassination in Dallas. It was a timeof uncertainty. It was a time of war. It was after the High and at the begin-ning of the Awakening. But his words ring as true today as they did in 1965when a conflicted country made decisions that it later regretted. Now it istime to revisit the words of LBJ and his vision for a Great Society. The roleof Boomers in helping build that Great Society will require both leadershipand compassion.

Boomers spent most of their lives devoting time to building their careers—an homage to themselves—and they succeeded. But the transaction was acostly one—their time and spirit in exchange for the resources to increasetheir standard of living and to forge an identity. We all have the sameamount of time.

For Boomers, time and spirit were the currency that they gave up inorder to build their own American Dream. The transaction was costly forBoomers. In some ways, Boomers lost in the exchange: they lost time athome, marriages, relationships with peers, and the opportunity not only towatch their children grow but to build a foundation for a relationship yearslater. Now Boomers have a chance to change all of that. They have a chanceto leave the greatest gift of all to their children and grandchildren—the giftof a better world.

Former heavyweight boxing champ Muhammad Ali may have said itbest in the inimitable way that only he could: “We have one life; it soon willbe past; what we do for God is all that will last.” Some Boomers have takenthis advice to heart. We look to them for inspiration and a way to channelthe abundant energy of the largest generation for the common good. It isnow that we need it the most.

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Chapter 8

The New New Deal

As an immediate program of action we must abolish useless offices. We musteliminate unnecessary functions of Government—functions, in fact, that are notdefinitely essential to the continuance of Government. We must merge, we mustconsolidate subdivisions of Government, and, like the private citizen, give up lux-uries which we can no longer afford.

Throughout the Nation, men and women, forgotten in the political philosophy ofthe Government of the last years, look to us here for guidance and for more equi-table opportunity to share in the distribution of national wealth.

I pledge you, I pledge myself, to a new deal for the American people. Let us all hereassembled constitute ourselves prophets of a new order of competence and ofcourage. This is more than a political campaign; it is a call to arms. Give me yourhelp, not to win votes alone, but to win in this crusade to restore America to itsown people.

From FDR’s nomination address at theDemocratic National Convention in Chicago, July 2, 1932

When FDR spoke these now famous words at the 1932 DemocraticNational Convention in Chicago, he was still governor of New York, yetonly days away from being crowned the nominee of the Democratic Partyfor the general election in the fall. The only real obstacle between FDR andthe nomination was a former New York governor, Al Smith, who had beenthe party’s nominee in his failed bid for the presidency against RepublicanHerbert Hoover in 1928.

In the years leading up to the 1932 election, it was not customary for theparty’s nominee to appear at the convention at all. But FDR broke with thattradition—when, even though he was heavily favored to win the nomina-tion, it became clear that he might not. On the convention’s first ballot,FDR held a commanding lead in delegates over Smith.

On the second and third ballots, FDR’s margin didn’t change much, yethe still did not have enough delegates (two-thirds were required) to clinchthe nomination. His 682 total after three ballots fell just 80 votes shy of the

nomination. So, between the third and fourth ballots, the behind-the-scenes political machinery of the day kicked into overdrive.

After a deal was struck with media mogul William Randolph Hearst—aSmith supporter—FDR finally gained the nomination on the fourth andfinal ballot, and the path to the White House was clear. Only an unpopularincumbent stood between FDR and the presidency and his vision for a newdeal for America. If it wasn’t for some eleventh-hour lobbying, the NewDeal might never have seen the light of day.

The New Deal

The primary purpose of the New Deal was to jump start a failing U.S. econ-omy. Within days of taking office, FDR started to lay the groundwork forthe first phase of the program that he promised in his inaugural address.Part one of the New Deal was designed to attack short-term issues, such asgetting Americans back to work. Part two of the New Deal would come2 years later, with more long-term programs and objectives—most notablySocial Security.

However, a little known but critical component of the New Deal hadnothing to do with adding new programs. The U.S. government hadbecome increasingly bloated and ineffective through some passive admin-istrations that simply maintained the status quo (the Hoover administra-tion, 1929–1932) and another that focused on managing its ownself-interests (the Harding administration, 1921–1923). We have heard somuch about the programs that FDR added when he took office that werarely hear about how he attempted to shrink a government that itself waspreventing progress.

As part of the very early New Deal initiatives, less than 2 weeks after tak-ing office, FDR successfully pushed through Congress the Economy Act of1933, which enabled him to cut more than $500 million from the budget.1

His choices were limited. After all, the country was in a depression, soincreasing taxes in order to generate more revenue was certainly not anoption. He also rejected the notion of borrowing from a future that was souncertain. So making serious cuts in the budget was his only choice, and itprovided an important lesson for all Americans, to whom he reached outthrough his fireside chats on the radio. Although the Economy Act did notprevent budget deficits from growing in FDR’s early years in office, it didhelp to curb the unbridled growth of government programs—a seeminglytimeless issue for the U.S. Government. The new chief executive set a newtone for the country—You can’t spend what you don’t have2—and it was

124 Boomer Destiny

as much an appeal to Congress as it was to millions of Americans who hadbecome credit-dependent in the years leading up to the Crash of 1929.

At that time, FDR’s ambitious goal was to cut 25 percent of the budget.The savings would come from a variety of sources, including a 15-percentpay cut for all federal employees, as well as a reduction in pension benefitsfor nondisabled veterans. The action proved that FDR was serious aboutfixing the economy and, in the process, made it crystal clear that he had nopatience for budget deficits—at least at this point in his presidency. But thecuts were not without pain or controversy—especially from veterans of theSpanish-American War or World War I who received generous pensionsafter their respective wars.

Even though the concept of shrinking the government is certainly not anew one, it has only been accomplished a few times in the nation’s history—and since 1965 the government has only expanded. Every U.S. presidentover the last 45 years has agreed that bigger government is not the answer,yet every president since Lyndon Johnson has watched the federal govern-ment grow every year since the escalation of the Vietnam War in 1965. Evenduring the Clinton surplus years, outlays increased every year. The differ-ence in those years was more a matter of increased revenues than decreasedoutlays. Because of reckless spending, the public debt has increased in allbut 5 of the past 40 years (1969, 1998–2001).3 And, along the way, theUnited States has created a liability so large that it’s rarely even discussed.Instead, when it comes to spending money in Washington, the emphasis ismore often on limiting the size of the deficit, with the goal someday of bal-ancing the budget—as if that’s the end game. Balancing the budget simplygets us to a place where we’ve stopped the bleeding. Lawmakers have carelesslyspent U.S. taxpayers’ money with little regard as to how it might be paidback. Just to put national debt in perspective, the United States would haveto generate a budget surplus of $100 billion a year for more than 50 years ina row just to pay off the current $5.3 trillion in principal. The numberof years during which the United States has delivered a surplus of $100 bil-lion or more is only three: 1999, 2000, and 2001. Just to underscore the dif-ficulty of the burden of payback, the total budget surpluses that weregenerated in 1998, 1999, and 2000 ($431.2) would have barely covered theinterest on the national debt in 2007 alone ($429.9).4

Entitlement Programs

It’s no secret that the country’s entitlement programs are the chief cause ofthe government’s financial woes. Two of the three largest budgets that

The New New Deal 125

make up the overall U.S. budget are tied to entitlements—programs thatare born of the heart and not necessarily of the head. And, instead ofchanging with the times and the economy, these programs have grown wellbeyond our ability to pay for them.

Many of the entitlement programs that exist today were designed andinitiated during a time when America and Americans were deeply hurting.It was in that spirit that programs such as Social Security and laterMedicare and finally the prescription drug bill were adopted. Like a parentwanting the best for its children, Presidents Roosevelt, Johnson, andGeorge W. Bush were the chief executives responsible for the most signifi-cant entitlement programs in U.S. history.

Although it’s hard to argue with the spirit of entitlement programs, therecomes a time when programs that were designed for one era create untenableconditions in the next. There’s no question that these programs greatly helpseniors on fixed incomes. But because of changing demographics, longer lifecycles, and especially skyrocketing healthcare costs, the future benefit com-mitments from these programs alone total in the tens of trillions of dollars.As nice as it would be for Uncle Sam to continue to pick up the tab for cur-rent and future generations, the math simply does not work. Continuing toborrow money in order to fund the broken programs of the past comes veryclose to the definition of insanity—providing the same ineffective solutionsover and over again and hoping for a different outcome each time.

The current entitlement programs were twentieth-century solutions fortwentieth-century problems. At worst, these programs must evolve into awholly new form in the twenty-first century. A re-engineered America thatis run with more business discipline will certainly not be without a heartand soul. But it also must be realistic. American seniors who rely on enti-tlement programs every day to stay alive should be able to count on thatpromise. On the other hand, as younger generations begin to move towardretirement, they understand—as many seniors already do—that the mea-ger retirement income from programs such as Social Security won’t beginto cover the cost of living in America over the next 30 years. At the sametime, what many seniors view as the most valuable of retirement benefits—Medicare and prescription drug coverage—are simply unaffordable andcannot continue in their current form. So what’s a country to do?

No doubt today’s seniors value the existing entitlement programs morethan tomorrow’s seniors, which may provide an opportunity to segue cre-atively and fairly from the existing antiquated model to an entirely newone. Enabling current seniors to maintain the coverage that they alreadyhave may be a place to start the discussion at least. However, as for future

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generations of seniors, it’s almost a certainty that the government-sponsored programs that currently exist will either change dramatically orbe eliminated altogether in the near future. The challenge will be in craft-ing legislation that does the near impossible: satisfy the needs of tomor-row’s seniors without disrupting the needs of today’s seniors. It certainlycan be done, but it won’t be without pain.

Many of the challenges that lawmakers face go well beyond reform.Adding another coat of fresh paint to Social Security or Medicare is not thesolution. Everything about the house that the United States has built is out-dated, inefficient, and in need of replacement. The wiring, the plumbing,the floor plan, and the garage are all from another era. We are living in ahouse whose foundation was designed and constructed during the Depres-sion. Reform suggests a tweak here and a tweak there and voilà—a newgovernment appears that works for all of the people all of the time. Mostbusiness models in the first half of the twentieth century bear little resem-blance to new millennial models. Businesses have continually evolved overthe past 100 years, with profitability as the common goal. The governmenthas not. No business school case study has ever described the creativity andgenius behind the re-engineering of America. Why not? Because it’s diffi-cult and painful and disruptive to a selfish status quo.

It’s not uncommon today for wealthy homeowners to buy a house onlyto bulldoze it to the ground and construct a new one. The government gen-erates plenty of revenue each year both to run and to reinvent the govern-ment, all at the same time. That doesn’t mean that it will be easy. It wasn’tand still isn’t easy for American corporations to restructure into organiza-tions that are much smaller in historical terms. The time for the govern-ment to follow suit has long since passed.

Some may say that the idea of rebuilding the government from scratchis a naïve notion. Thinking that the government now in place is the bestthat we can do is also naïve. President Kennedy challenged the Americanpeople to put a man on the moon within a decade’s time. It seemed fantas-tically impossible at the time, but we did it. There’s a Nextel commercialthat asks the question: what if firefighters ran the world? The ad opens witha shot of firefighters sitting in a Congress-type setting, with the fire chiefaddressing the troops from the podium; we are to assume that firefightershave replaced lawmakers in the decision-making process. The chief asks anumber of simple questions to which the firefighters—presumably theCongress—rattle through and make decisions on a number of issues, suchas the budget, clean water, taxes, and better roads. At the end of the 30-secondcommercial, the chief slams the gavel and says, “this is the easiest job I’ve


ever had—we’re outta here,” underscoring how dreadfully complicatedpoliticians have made politics.

We often treat latter-day government programs in such a sacrosanct way asto paralyze our ability to make sensible changes in a world that is constantlychanging. Conventional thinking is not what is needed now. What‘s needednow is radical thinking that helps us reinvent the way that we run our coun-try. Only the greatest nation in the world would be able to reinvent itself. Itcan be done, and it actually can be empowering and exciting. What are wewaiting for? If we are waiting for a crisis to happen before we make a move, itwill come. But the pain and suffering will be far more severe if we wait.

It will be up to lawmakers in Washington to wrestle with the issue oflimiting the size of government by eliminating unnecessary programs, pri-oritizing spending, and holding expenditures to budgeted levels. As itstruggles with pork-barrel spending and the selfish needs of one memberover another, the Congress might consider some disciplined fiscal exercisesthat make it possible to see what the government might become if it startedwith nothing more than a blank spreadsheet. Naysayers point to the factthat the vast majority of government funds are earmarked as “mandatory”spending and are therefore restricted from scrutiny. What business inAmerica would be able to survive today if nearly 70 percent of all itsexpenses were protected as sacrosanct spending?

The New New Deal

What successful business in America is voluntarily increasing costs in one ormore categories today by 10 percent or more? There is a consequence toincreasing the operating costs of a business that is not growing revenues—the ire of both the shareholders and the Wall Street analysts. If the U.S. gov-ernment were a publicly traded stock, analysts would certainly not be issuing“buy” or even “hold” recommendations. The reason is simple: the U.S. gov-ernment has been a very poorly run business, lacking almost any fiscal disci-pline. In many ways, the U.S. government is like an alcoholic who is lockedin a wine cellar. There is access to—or, at least, the ability to access—the onething that causes deeper and deeper trouble. For the alcoholic, it’s alcohol.For the U.S. government, it’s cash. And, because the U.S. government can’thelp itself because of its addiction to spending, the scenario will probablyplay out in one of two ways: a tragic event or an intervention.

History tells us that the United States has more often dealt with the painand difficulty of the aftermath of tragic events than the pain and difficulty ofproactively reversing its destructive course. In either case, the United States

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will likely experience a painful stretch over the next decade. The only ques-tion that remains is this: will the U.S. government intervene on behalf of itsaddictive self and reverse course or will it do what it usually does and waituntil catastrophe strikes? It certainly can intervene, but will it? The time forposturing and talk has passed. This is a bipartisan issue that requires a bipar-tisan intervention that leads to a proactive solution over the next 10 years.The U.S. government needs political rehabilitation immediately.

Like the old Fram Oil Filter ad, the choice is pretty simple: pay me now,or pay me later. Paying now will be less costly but will require the UnitedStates to change behavior, which is not easy to do. It wasn’t easy for U.S.corporations to do either, but they’ve adjusted to cost reductions as simplya way of business life today. Companies re-engineered themselves over thepast 20 years, and now it’s time for the country to do the same over the next20 years.

Re-Engineering America

When corporate America started to hit a wall in the mid-1980s, it was theshareholder who demanded action to fix the problem. When revenuegrowth started to slow, earnings soon followed and that was an unaccept-able premise for shareholders whose investments were threatened. Enterre-engineering into the American business lexicon in the late 1980s—andwhat is necessary when costs as a percentage of revenue have reached lev-els that threaten the corporation’s ability to deliver increased earnings.Corporations first sought blamed-based solutions as to why revenuegrowth was slowing. Hire a new vice president of sales? A new sales force?Change the sales compensation plan? Fire the ad agency and hire a new oneto get new and better creative, a snappier jingle or a pithier slogan? Noneof it worked. What most corporations such as GM didn’t realize was thatthey had hit a market share wall, reaching innovation saturation5—thepoint at which an ever-increasing rate of revenue growth peaks and beginsa trend of ever-decreasing rate of revenue growth, and an inability toreverse that trend over the long term.

For the post-World War II American corporation that experienced ever-increasing growth rates through the 1950s, 1960s, and 1970s, the 1980s wasthe decade when revenue growth rates started to slow, having reachedinnovation saturation. For example, after stellar revenue growth rates atGE in the 1970s, growth rates in the 1980s dropped dramatically andushered in the cost-cutting practices that gave “Neutron” Jack Welch hisnow infamous reputation. Even though the last thing that the country


needs is another Jack Welch, it certainly could use a little fiscal discipline,if not an entire Department of Fiscal Discipline. We already have the Officeof Management and Budget (OMB), the General Accounting Office(GAO), and the Congressional Budget Office (CBO). What publicly tradedcompany has three finance departments?

As the turmoil, pain, and punishment inflicted on the sales side of thebusiness world continued through the 1990s and into the 2000s, it becameclear that no new combination of factors could substantively change thenature of a maturing organic sales base. So, although sales initiativesshifted to global expansion and the wholesale acquisition of market sharethrough mergers and acquisitions, the chief financial officer (CFO) gotbusy squeezing costs out of an infrastructure that had mostly grown sincethe end of World War II. This is precisely where the U.S. government standstoday—well beyond the point where it should be seeking additional loansfrom foreign governments. That’s the heroin that makes kicking this addic-tion harder for our children and grandchildren. Smaller is the solution.

Before even contemplating any moves on the revenue side of the equa-tion, the first step in re-engineering America is to go cold turkey relative toborrowing additional funds to pay for current programs. The next steprequires a dramatic rethinking of U.S. spending across all programs—butparticularly with respect to those programs that are the largest and thatgrow at the fastest rates. There are a number of effective business strategiesthat can be employed to help the United States begin to reprioritize spend-ing of funds that are probably sufficient in the whole to fulfill all of theneeds of the American people if viewed from new and creative perspec-tives—not at all dissimilar to the way that FDR and his team thoughtthrough U.S. needs and resources in the early 1930s.

Zero-Based Budgeting

One popular exercise, especially when dealing with a bloated enterprise, iszero-based budgeting. It is a means of budget planning that is effectivelythe opposite of conventional budgeting. Instead of starting with amountsthat had been allocated or spent during the previous year and either boost-ing or reducing those levels for the next fiscal year, the budget is literallybuilt from the ground up—with each department starting with no moneyallocated to any programs whatsoever. Even mandatory programs arereviewed from year to year.

Zero-based budgeting requires the architects of the budget to prioritizeprograms from most critical to least critical and also to identify new pro-

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grams that might replace older, less effective programs. For example, theDepartment of Defense’s 2009 budget called for an increase in spendingfrom $583 billion to $651 billion—an 11.6 percent increase over 2008.

As much as the Pentagon might believe that every program in the budgetis necessary from one year to the next, the process of zero-based budgetingcares little about what happened in the past. Dynamic budgets are budgetsthat assume nothing from year to year. Even mandatory programs such assalaries and wages are carefully reviewed. It’s certainly easier just to addincremental costs to existing programs from year to year. But desperatetimes call for desperate measures. The discipline of justifying value in pro-gram investments each year would provide Congress with a much betterunderstanding of and accountability for what’s being funded and why.

The 40/20/20 Exercise

Another creative tool in helping prioritize spending is an exercise called40/20/20. This program was made popular during the mid- to late-1980sby U.S. management consulting firms, which were hired to look at bloatedU.S. corporations that—for the first time in history—were forced torethink the organizational cost structure of a corporation from the groundup as revenues slowed and expenses continued to increase.

The 40/20/20 concept is an exercise in eliminating programs and tasksthat are ineffective while adding new programs that are designed toaddress more contemporary needs. The beauty of the program is that thenew programs are fully funded from the dollars that are cut—plus there’sa little left over that could be used to either reinvest or write down thenational debt. As part of the planning process, the first step is to ask eachdepartment to identify 40 percent of budgeted costs that could be elimi-nated. The OMB’s 2009 projected baseline budget for the federal govern-ment indicates expected outlays of just over $3.0 trillion.6 Applying the40/20/20 exercise to this budget would mean cutting $1.2 trillion (40%)from the budget and across the board. The second step requires eachdepartment to identify new, more innovative, and more productive pro-grams that, if approved, could be funded by half of the cost savings, or, inthe case of a $3.0 trillion budget, a total of $600 billion (20 percent).

The third step is that the leftover 20 percent—or $600 billion—that wasidentified in the original $1.2 trillion in cuts can either be used to fundother federal programs or be used to write down the national debt.

The 40/20/20 exercise requires serious cuts, but the long-term benefits,such as debt elimination, could temper the short-term pain from the cuts.


Now is the time to change course, which will be necessary if we are to havea substantive impact on what President George W. Bush called the “state ofour children and grandchildren’s Union.”

We must start running the government as we would run a business.Expenses must never exceed revenues, and loans would be taken only to fundprograms that could be directly linked to a hard return on investment. Formore than 20 years, U.S. corporations have been actively downsizing, yet,during the same period, the U.S. government has only increased in size andhas never experienced the discipline—and benefits— of re-engineering.

An Intervention by Executive Order

In a hypothetical case, let’s assume that one of the first orders of business forBarack Obama would be to challenge his cabinet to use a baseline budget of$3.0 trillion in outlays as the basis for recasting an entirely new budget fromthe bottom up for 2010 and beyond. Additionally, the new president hasdeclared that budgeted outlays would be frozen at $3.0 trillion for 3 years(2010–2012), with each of the major departments within the governmentrequired to perform a 40/20/20 exercise prior to the casting of the newbudget. In issuing this important fiscal challenge, the president identified fivemajor objectives to accomplish within the parameters of the frozen budget:

1. Re-engineer the Department of Health & Human Services (HHS)—thesingle largest line item in the budget. At the same time, tie all future welfarepayments to a quid pro quo method of compensation—a workfare model.

2. Re-engineer the Social Security Administration (SSA)—the second largestline item in the budget, without causing a negative impact on those seniorsalready covered by existing entitlements programs. Also come up with a cre-ative way for seniors to offer up their time and expertise both in paid andvolunteer positions.

3. Re-engineer the Department of Defense (DOD)—the third largest line item inthe budget, in anticipation of a responsible drawdown of U.S. troops in Iraq.

4. Implement universal healthcare coverage for all Americans with creativeways of funding what will undoubtedly become the largest line item in thebudget in future years.

5. Balance the budget and begin to reduce the national debt within the presi-dent’s first term.

That would be a pretty ambitious agenda for the new president—recast-ing the largest line items while changing the way the U.S. governmentoperates fundamentally—taking a page out of Harry Truman’s playbook

132 Boomer Destiny

when he called for a “fair deal” for the American people, which he outlinedto Congress in his first State of the Union address in 1949.

The re-engineering of America starts with a 40/20/20 analysis of the$3.0 trillion federal budget—a budget that would be frozen for Obama’sfull first term:

Total Projected Outlays $3.00 trillion7

40 Percent Reduction $1.20 trillionNew Baseline Budget $1.80 trillion20 Percent Reinvestment $600 billion20 Percent Savings $600 billion

This analysis assumes that every department in the federal governmentwould first identify 40 percent of its projected outlays to eliminate. Second,they would make recommendations as to how they might more wiselyreinvest half of the 40 percent—or $600 billion—into new, more efficientprograms designed to work harder than the existing programs. With newrecommendations in hand, the new president would have $1.2 trillion athis disposal in order to (a) fund some, all, or none of the new programsrecommended by his cabinet; (b) fund new programs such as universalhealthcare, which is currently unbudgeted; (c) allow some or all of the sav-ings to drop to the bottom line in order to begin to deliver balanced budg-ets and debt write-down; or (d) some combination of the above.

Now, it’s on to re-engineering.

Step One: Re-Engineer the Department of Health & Human Services

For a very long time, the U.S. government has built a reputation as a verygenerous provider. The new president’s objective would be to maintaina spirit of compassion within the boundaries of sound fiscal responsibil-ity—a caring government, but not a foolish one—so HHS is challengedto re-engineer its original $737 billion budget into a much leaner $442billion budget.

Total HHS Projected Outlays $737 billion8

40 Percent Reduction $295 billionNew Baseline Budget $442 billion20 Percent Reinvestment $148 billion20 Percent Savings $148 billion


First, the cabinet recommends the reinvestment of 20 percent or$148 billion from HHS’s original budget into new workfare initiatives.Workfare time and energies would be applied to a prioritized list of gov-ernment initiatives that are tied to a master strategy utilizing the time andskills of workers to reduce the burden on existing government needs.Workfare assignments are generated from a “needs database” (the BoomerGrid) discussed in more detail in Chapter 10. Workfare payments are madeto participants based on their fulfillment of designated workfare hours. So,even though the $148 billion has been designated as outlays, these fundsonly turn into outlays in exchange for work performed by recipients.

Assuming that the recipients fulfill 100 percent of the hours required toearn $148 billion in outlays, a total of 7.4 billion hours of dedicated workwould be generated in exchange for workfare cash. To put that in perspec-tive, it would be like hiring 3.7 million full-time employees for an entireyear. That’s more employees than Wal-Mart, Procter & Gamble, GE, GM,Home Depot, and AT&T combined.

Medicare and Medicaid would no longer exist as we know it after 2009.Instead all Americans would be covered under a new universal health careplan. However, in order to secure the integrity of coverage for existingMedicare recipients, a shift to a universal healthcare plan would not resultin any reduction in coverage or benefits. Workers would continue to paysocial insurance taxes to help pay for grandfathered programs, as well as fornew universal healthcare coverage for themselves. The oldest Boomers,turning 65 in 2011, would no longer qualify for Medicare as we know it butwould instead be covered by the new universal healthcare plan thatincludes all Americans. Existing recipients of Medicare in 2010 wouldreceive comparable benefits under the new universal healthcare program.Because no new recipients would be added to Medicare after 2010, socialinsurance tax revenue would be used to help fund the new universalhealthcare program. As the next major generation that will begin to qual-ify for Medicare, it becomes imperative that Boomers stand up as a gener-ation and support a move to universal healthcare in lieu of a currentMedicare program that is simply unsustainable.

Table 8.1 shows that outlays to Medicare and Medicaid cease in 2010and that $148 billion would be dedicated to workfare for three yearsbefore increasing starting in 2013. Other assumptions for these outcomesrequire that (1) workers under the age of 65 continue to pay social insur-ance taxes at current rates, (2) no new recipients are added to Medicareafter 2009, (3) all existing Medicare recipients receive comparable benefitsfor life, (4) workfare members are required to devote a minimum number

134 Boomer Destiny

of hours in order to receive any outlays, (5) workfare funds begin tomarginally increase after 2012, (6) Medicaid will no longer exist as weknow it after 2009 but instead will be replaced by universal healthcare,and (7) other HHS programs are frozen at $52 billion for three years,then begin to increase in 2013.

Revenue in the form of social insurance taxes would be used to coverthe cost of HHS programs, a reengineered social security program, as wellas the new universal healthcare program. Because of the generous natureof the existing Medicare program, it is possible that supplemental fundsmay be required in order to maintain the integrity of benefits currentlyin place. However, such supplemental funds would diminish over timebecause no new Medicare recipients would be added after 2009.

Step Two: Re-Engineer Social Security

Similar to Medicare, no new Social Security recipients would be added to therolls after 2009, when all existing program participants would be grandfa-thered into their Social Security retirement benefits for life. Revenue wouldcontinue to grow—through the collection of social insurance taxes fromworkers under the age of 65, who, in exchange for these taxes, would receiveuniversal healthcare coverage (discussed in detail in Step Five). Outlays forSocial Security benefits would continue to shrink over time (see Table 8.2)because no new recipients would enter the program after 2009 but revenueswould continue to grow and more than cover the cost of remaining SSAcommitments. Other programs that are funded by the SSA would be coveredon an ever-diminishing basis, as the pool of funds shrinks over the yearsahead. Table 8.2 identifies outlays for SSA from 2010 forward and reflects anever-diminishing group of beneficiaries drawing from SSA.

The objective of this plan is to eliminate Social Security outlays tofuture generations and to replace those benefits with universal


TABLE 8.1. Medicare, Medicaid, and Welfare(Figures shown are in the billions.)

2010 2011 2012 2013 2014

OutlaysMedicare $0 $0 $0 $0 $0Medicaid $0 $0 $0 $0 $0Welfare/Workfare $148 $148 $148 $155 $163Other $52 $52 $52 $55 $57

Total Outlays $200 $200 $200 $210 $220

healthcare coverage. Individuals would be responsible for managingtheir own retirement benefit programs—either through work, inde-pendent investment, or a combination of both. Those citizens not grand-fathered into existing Social Security outlays could begin to earn incomeonce they reached the age of 65 through a new program called “Senior-fare.” Seniorfare would become an active workfare program for seniorsas they turned 65 beginning in 2011, concurrent with the grandfatheringof Social Security the same year. Seniorfare would operate on the sameprinciple as workfare, in that all outlays would be tied to volunteer workperformed in connection with the government’s “needs database” (theBoomer Grid—see Chapter 10).

Step Three: Re-Engineer the Department of Defense

The DOD budget for 2009 is projected to be $651 billion, in large part as aresult of the U.S. presence in the Middle East. A simple 40/20/20 exercisecould identify $260 billion in cuts, with a new baseline budget of $391 bil-lion for 2010.

Total DOD Projected Outlays $651 billion9

40 Percent Reduction $260 billionNew Baseline Budget $391 billion20 Percent Reinvestment $130 billion20 Percent Savings $130 billion

In essence, the challenge for the DOD would be to create a much leaneroperation however it can. It would never get done by asking the JointChiefs of Staff what they needed. It would only get done by presenting theJoint Chiefs of Staff with a smaller budget and challenging them to makethe dollars work harder—like all Americans have to do.

136 Boomer Destiny

TABLE 8.2. Social Security(Figures shown are in the billions.)

2010 2011 2012 2013 2014

OutlaysSocial Security $687 $653 $620 $589 $560

(shrinks by 5% per year)Seniorfare $0 $25 $50 $75 $100

Total $687 $678 $670 $666 $660

Step Four: Create Universal Healthcare Coverage for All Americans

Beginning in 2010, all Americans would be covered by a new universalhealthcare plan. There would be two sources of funding for the program:

1. Individuals, through the continued payment of Social Insurance Taxes.Unused funding from diminishing HHS and SSA budgets would be shiftedto help defray UHC costs; and

2. Corporations, through a 50 percent contribution of an employee’s UHC costs.Currently, approximately 63 percent of all companies contribute on averageabout 70 percent of employees’ healthcare coverage. These companies wouldlikely recognize a savings by reducing coverage from 70 percent of the cost to50 percent of the cost. Companies not currently supporting employee coverageor supporting it at a level less than 50 percent would have a choice: pay 50 per-cent of each employee’s coverage or be subjected to a tax increase equal to thatfigure. The bottom line objective is to engender a spirit of cooperation amongemployers, employees, and the government in order to fund coverage for all.

Individual segments of the population would receive funding for coverageas follows:

• Existing Seniors. Approximately 35 million seniors would have 100 percentof their coverage paid by the government.

• Workers and their dependents. Approximately 250 million workers and theirdependents would have 50 percent of their coverage paid by their employersand 50 percent paid by the government.

• Unemployed and disabled. Approximately 25 million unemployed or disabledAmericans would have 100 percent of their coverage paid by the government.

The cost of universal healthcare will not be cheap. According to theNational Coalition on Healthcare (NCHC), total spending on healthcare inthe United States in 2007 topped $2.3 trillion, or roughly $7,600 for everyAmerican. Let’s assume that in negotiation with healthcare providers – andthe elimination of third-party health insurance payers – the government isable to reduce that figure down to $6,000 for every man, woman and childin the United States. That’s a total of approximately $1.86 trillion per yearfor universal healthcare. But if corporations pick up half the cost ofapproximately 250 million employees and their dependents – or about$750 billion – then the government would be responsible for covering thebalance of about $1.1 trillion which it would collect from individuals pay-ing social insurance taxes as they are now.


Table 8.3 shows that the cost of universal healthcare would increase by 8percent per year through 2014.

Because the plan is sensitive to the promise made to senior Americans withregard to maintaining the integrity of existing Social Security and Medicarecommitments, it makes it much harder to add universal healthcare coveragefor all Americans and still balance the budget, all at the same time. However,under this aggressive plan, the budget could be balanced before the end ofObama’s first term, at which time a serious plan to reduce the national debtcould be implemented. This new sense of fiscal discipline, championed by thenew president in 2009, would set the United States on a course that would notonly address short-term budget shortfalls but also long-term issues arisingfrom a mounting national debt.

Step Five: Balance the Budget and Reduce the National Debt

If the United States were able to institute a disciplined fiscal program such asthe one sketched out here, the impact on the overall budget would be pro-found (see Table 8.4). What is required of the government in order to accom-plish this goal is to institute the same fiscal disciplines that many Americancorporations have been championing for nearly a quarter century. Althoughdeep cuts and shifting of funding seems like a radical notion, it is no moreradical than the actions taken by thousands of companies since the late 1980s.

Let’s assume that revenue increased at 5 percent per year and that outlaysincreased at 3 percent per year from 2015 forward. It would be extremely dif-ficult, but the United States could eliminate the national debt by the presiden-tial election of 2024—an accomplishment that would requrie the cooperationof at least two presidents. Now it’s up to Americans to make it happen. Elim-inating the national debt is certainly a lofty goal, but it’s one that just mightintrigue the Boomers, by playing to their egos and their need to achieve. It cer-tainly would be one of the great financial accomplishments of all time, and itwould make up for a tremendous number of bad decisions on the part of the

138 Boomer Destiny

TABLE 8.3. Universal Healthcare Plan(Figures shown are in the billions.)

2010 2011 2012 2013 2014

OutlaysUniversal Healthcare $1,100 $1,188 $1,283 $1,386 $1,497(cost not covered by employers—increases at 8% per year)

Total $1,100 $1,188 $1,283 $1,386 $1,497

U.S. government. To accomplish it would give our children and grandchildrena much better chance at living the American Dream in the years to come.What better gift could we possibly leave to them?

There are certainly many other challenges that the government facesover the next 20 years. However, this exercise is intended to demonstratethat, with some guts and true dedication to change, the U.S. governmentcan be re-engineered. None of this will be easy. But FDR had it muchharder, with shrinking tax revenue during his first and second terms. Thetime to act is now—before we run the risk of creating a shrinking tax baseand end up precisely where FDR was in 1933.

Rising to the Occasion

The bottom line is this: in order to fix the financial mess that we have cre-ated, one generation must suck it up. The Boomers are in a position to beanother American generation that sacrifices for the common good. Thesacrifice this time may be quite different than that made by FDR’s Mission-ary Generation, Eisenhower’s Lost Generation, and JFK’s GI Generation.But the outcome could be the same: leaving a better world for our childrenand grandchildren. It’s really a matter of a generation’s desire to make a dif-ference before exiting. Will Boomers rise to the occasion?


TABLE 8.4. Balancing the Budget

2010 2011 2012 2013 2014

RevenueProjected Income Taxesa $1,743 $1,956 $2,123 $2,200 $2,308Projected Social $1,002 $1,056 $1,107 $1,154 $1,202

Insurance TaxesOther $171 $188 $235 $246 $260

Total Revenue $2,916 $3,200 $3,465 $3,600 $3,770Outlays

HHS $200 $200 $200 $210 $220Social Security $687 $678 $670 $666 $660Universal Healthcare $1,100 $1,188 $1,283 $1,386 $1,497Department Of Defense $391 $391 $391 $411 $431Other Outlays $622 $543 $456 $388 $315

Total Outlays $3,000 $3,000 $3,000 $3,061 $3,123

Surplus/(Deficit) ($84) $200 $465 $539 $647

aOffice of Management and Budget (OMB), Budget for the fical year 2009, page 31, http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf

http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf

http://www.whitehouse.gov/omb/budget/fy2009/pdf/hist.pdf

Chapter 9

Rising to the Occasion

The dogmas of the quiet past are inadequate to the stormy present. The occasionis piled high with difficulty and we must rise with the occasion. As our case is new,so we must think anew and act anew. We must disenthrall ourselves, and then weshall save our country.1

—Abraham Lincoln

When the 16th president of the United States wrote these words, the coun-try was moving through the bloodiest years of the Civil War Cycle.Four years and more than 600,000 American deaths later, the war was overand the Union was preserved. It was a particularly difficult winter, butAmerica moved through it successfully and onto to another spring andanother celebration of American ingenuity and prosperity.

Some 80 years after the Civil War, America was in Crisis again—10 yearsor more of economic devastation, followed by a World War that, accordingto some estimates, wiped out between 50 and 70 million people worldwide,including more than 400,000 Americans. But again America perseveredand moved through another rough winter and onto another gloriousspring of expansion and prosperity.

The year 2009 marks the 80-year anniversary of the event that sparkedthe last American Crisis. The Wall Street crash on Black Tuesday, Octo-ber 29, 1929, signaled the beginning of what turned out to be the longestmajor crisis in American history. Most of America’s Silent Generation—the generation of John McCain (who was born in 1936)—grew up dur-ing the years from the Crash in 1929 to the end of the World War II in1945. Although it is unlikely that few will mark the event with celebra-tion, the anniversary provides a sobering reminder that we are onceagain on the doorstep of the final phase of a cycle—the crisis phase—

that has rolled through American history as consistently as the tides andthe seasons. It’s upon us and we must deal with it.

Boomers Have Lived the Good Life

Almost by any measure, Boomers have lived the good life. So far, theyhave been the healthiest, wealthiest, and wisest generation of all time, andthey are a long way from their final curtain call. From a health perspec-tive, they will live longer than any previous generation in history. Theaverage life expectancy in the United States was 77.8 years in 2005,according to the National Center for Health Statistics (NCHS). However,considering Boomers alone, the numbers get even better. Boomers whoreach the conventional retirement age of 65 can expect to live to the ripeold age of 83.2

Thus far, Boomers are the wealthiest generation in history—in relationto their parents at the same time in life. According to the Brookings Institute,two of three adults today enjoy higher incomes than their parents.3 But thathas not necessarily translated into a greater net worth because Boomers aresaving less and spending more than their parents did. They are also inher-iting less from their parents.

According to Boston College’s Center on Wealth and Philanthropy,retirees are spending more in retirement than they expected to, and theytherefore have less to pass on to their heirs. Second, about 1 percent of U.S.households inherit one-half of all accumulated U.S. wealth; the other halfis spread among the other 99 percent of households, which dramaticallypulls down the average, at the same time disappointing the heirs.4 SoBoomers are just now beginning to worry about whether or not they haveenough money to retire comfortably.

Before they started having and educating families of their own, Boomerswere the best-educated generation in American history. Thanks to theirparents’ encouragement, Boomers expected to go to college and a majorityof them did. They have passed this expectation along to their own children,whose educational expectations often looked beyond a bachelors degree toa masters or even a PhD. Even though the average cost of a college educa-tion has increased by more than 10-fold since Boomers were in college, itmatters little to Boomers. Their kids will go to college.

In terms of war, Boomers are certainly familiar with it, having grown upin households with veterans of World War II, the Korean War, or both. Andmany had their own experience with the Vietnam War. But, for the most

142 Boomer Destiny

part, this generation has mostly lived without war. Except for the 6-monthGulf War in 1990–1991, Boomers spent 30 war-free years—1973 to 2003—during which time they built careers and families, but not necessarily inthat order.

Boomers Have Done Some Bad

Like most generations, Boomers have done some bad. The Boomers’“Hall ofShame” is well represented by cannibals (Dahmer), child murderers (AndreaYates), and serial killers (Son of Sam, Ted Bundy). Then there is the white-collar variety of criminal, bitten by the greed bug that distorts reality andcalls for disproportionate wealth accumulation. Junk bond king MichaelMilken, Tyco’s Dennis Kozlowski, and Enron’s Andrew Fastow are just someof the infamous individuals who joined fellow Boomer Jeffrey Skilling inembracing the deadliest of deadly sins on their way to the big house.

Boomers have also had their share of fallen heroes. What Boomer willever forget the helicopter shots of football legend O.J. Simpson driving upthe Interstate in a white Ford Bronco? What could have been sadder thanwatching the unraveling of an American hero on live television during thenarcissistic nineties? These fallen Boomers were the most extreme productsof a generation that mostly believed and acted as if the rules did not applyto them, and they paid dearly for their sins.

But the Boomers Have Done Some Good

Plenty of Boomers have done some good. Early wave Boomer Bill Clintonbroke the dominance of GI Generation presidents in the Oval Office. Andtwo Boomer Senators reenergized the Democratic Party in 2008 on the wayto record voter turnout, just when the privilege of voting appeared to be anall-but-dead tradition. Barack Obama and Hillary Clinton almost single-handedly brought a new energy to the political process in an election yearthat was about changing America’s course.

Not surprisingly, high-achieving Boomers have won countless awards inall fields. There have been Boomer winners of the Oscar (Tom Hanks, SallyField, Jodie Foster, Steven Spielberg, and Ron Howard), the Tony(Bernadette Peters), the Grammy (Whitney Houston), the Super Bowl (JoeMontana), the Pulitzer Prize (Maureen Dowd), and even the Nobel Prize(Al Gore).

Politically speaking, there are Boomers on the right (Rush Limbaugh)and on the left (Al Franken). There have been Boomer queens (Lisa Hajeeb

Rising to the Occasion 143

Halaby—Queen Noor of Jordan), kings (Stephen), and even princesses(Carrie Fisher).

Some Boomers have created enormous fortunes and are among thewealthiest people on the planet. And you will find some of them onBusiness Week’s list of the 50 Most Generous Philanthropists. But you’relikely to find many of their younger generational constellation matesfrom Gen X on the list as well. As a generation, Boomers have been prettystingy, and they trail prior generations significantly in every form ofgiving, from time to money. They actually live up to their reputation as aselfish brood. According to the Center on Philanthropy Panel Study(COPPS) of more than 7,400 households between 2001 and 2003,Boomers’ philanthropic giving for all types of gifts trailed prewar (WorldWar II) generations by more than 40 percent and were only slightly better than that of Generation X.5 The study characterized the differencebetween prewar and later generations as both “numerically large andstatistically significant,” which undoubtedly has nonprofits concernedabout the prospects of future giving.

Boomers’ tendency to fall short of other generations with their timeand money may in part be based in their own selfishness and desire to dobetter than their parents. The Boomer definition of a better life mostoften translated into the need for more household income, in order tofund a bigger lifestyle than that of their parents. The opportunity todemonstrate their success openly by accumulating unnecessarily largequantities of material possessions was fueled by that increased income.The possessions made it possible for Boomers to live out the narcissist’sneed for self-promotion and the acknowledgment of achievement.Although their parents might have owned a 1500-square foot, three-bedroom, Cape-style home, Boomers instead opted for largesse—a3,800-square-foot McMansion with four bedrooms, a three-car garage,and a car in each of the bays.

The migration to super-sized SUVs helped make a louder and louderstatement of the Boomer’s success—they often drove just a few miles inthree tons of metal and plastic just to pick up a gallon of milk. And it didn’tmatter if that particular Boomer was a Wall Street broker or a plumber insuburbia. Bigger became better according to the Boomer definition. Butthat trade-off came at a cost. More time working meant less time at homewith family. An increase in a Boomer’s standard of living was oftentimesproportionately equal to a decrease in his or her quality of life, which mayin part explain why more than 50 percent of marriages fail today.6

144 Boomer Destiny

Generating higher household income also translated into more workinghours for both mom and dad, leaving little time for volunteer work duringmid-life. According to a 2007 study by the ACT Community Service Center(funded by a grant from the Massachusetts Service Alliance), the numberone reason why Boomers don’t volunteer is that they “don’t have enoughtime.”7 Additionally, the motivation to volunteer varies greatly from onegeneration to the next, according to a 2008 study by Temple University. TheGI Generation has been motivated to volunteer because they believe it’ssimply the right thing to do. Boomers, on the other hand, were more moti-vated by what they might get out of the experience, expecting that theywould “get credit and respect for accomplishments”—a quintessentialBoomer reaction.8

Even though Boomers may have lived a more expensive lifestyle thantheir parents did, it’s not exactly clear whether or not Boomers have endedup better off materially. With their bigger homes and more expensive carscame much higher mortgage and car payments and thus a substantialdrain on Boomer cash flow. As a consequence of their need to live the goodlife, Boomers as a generation never developed the good saving habits thattheir parents did. Boomers often live well beyond their means.

Boomers learned early that they could leverage their purchasing powerthrough one of the most debilitating habits that individuals, corporations,or even governments can adopt—credit. Boomers learned well from a gov-ernment that started pushing huge financial liabilities out to the futureduring the 1980s—a colossal mistake in retrospect and either a completemisread of the potential growth of the U.S. economy in the 1990s and2000s or a case of complete indifference. Whether he knew it or not, FDRhad the luxury of borrowing from a future that was capable of dynamicgrowth. Reagan did not.

Almost in parallel, Boomers adopted the same bad habit as the govern-ment, just as they started to earn more and want more during the WhiteHouse years of Ronald Reagan. Boomers’ poor fiscal habits have nodoubt helped fuel a disturbing trend—the virtual abandonment of sav-ings. American’s lack of financial discipline from top to bottom comes ata time when it can least afford to be cavalier about living within limitedmeans.

Now, after all that work, earning, and consumption, Boomers are begin-ning to feel financial pressure from the two generations on either side ofthem—their children and their parents, according to a Pew ResearchCenter Social and Demographic Trends survey.9 Children are an increasingly


expensive investment, especially for big ticket items such as college andwhen it comes time to scrape together a down payment to buy a home. Par-ents of Boomers are becoming increasingly strapped financially, sometimesfinding it necessary to either move in with their children or borrow moneyfrom them—or both. Perhaps this is another reason why Boomers havebeen so challenged with their time and money in terms of generosity. Afterspending on themselves, is there anything left?

Then Junior Went off to College

Boomers pushed hard through their thirties and forties, spending moneyas fast as it came in. And, as their own children started to approach collegeage, it became painfully clear to some Boomers that they might not haveenough cash savings to pay for skyrocketing college educations. Livingthe high life for 20 years or more put some Boomers behind the eight ballwhen it came time to send little Matthew and Kaitlyn off to college. Thedays when Boomers paid $3,000 a year for the most expensive education inAmerica were long gone.

According to the National Center for Education Statistics, the cost of1 year at a 4-year private university has increased more than tenfold sincethe 1973–1974 academic year. Tuition, fees, and room and board at a 4-yearprivate university cost $3,040 in 1973–1974. In 2006–2007, the same edu-cation cost $38,400.10 More than half of all Boomers were 18 or over bythe 1973–1974 school year, so there are many Boomers who remember thedays when a college education cost $3,000 a year, all in all. Those werethe years when a good summer job cutting lawns, babysitting, or paintinghouses could help Boomers put a dent in their school expenses—notanymore (see Figure 9.1).

Consider what it would take to pay for the privilege of sending yourchild to Harvard for the next 4 years. For a mere $1,000 a week—52 weeksa year—you could have sent your son or daughter off to Harvard in the fallof 2008.11 That’s a total investment of more than $210,000—and that doesn’teven include beer money. That figure was more than the gross value of theaverage American home in 2005, according to the American Housing Sur-vey of the U.S. Census Bureau.

Boomers were often regaled with stories of their parents’ childhood(when I was your age . . .) about how little they had when growing up—especially during the Depression years. Boomers dismissed these stories,

146 Boomer Destiny

often offered up as advice from parents, as hooey. They rationalized thatthey had plenty of income in relation to their parents at the same time inlife—even though it may have required two incomes to fund the Boomerlifestyle. Increasingly, first-time homeowners—including Boomers—havebeen forced to seek help from their parents for the down payment in orderto purchase a home—a fundamental element of the American Dream.

Many parents of Boomers realized a windfall from real estate purchasedin the 1970s and 1980s that they cashed out after their children left home;they often downsized their homes and lifestyles on the way to retirement.Leaving a piece of that financial legacy was often viewed by many parentsof Boomers as one of the most important gifts that they could leave theirchildren. However, a change in the financial situation of many retirees ofthe GI and Silent Generations has forced them to liquidate some, if not allof their retirement investments in order to meet escalating costs. Increas-ingly, retirees are outliving their retirement investments and are forced toliquidate what they can in order to survive. This trend is now beginning tohave an impact on the level of inheritance that Boomers and younger


FIGURE 9.1. The Cost of a College EducationTuition, Fees, Room & Board For 4-Year Private Universities, 1970-2005.

Source: National Center for Education Statistics

generations might expect from their parents, making the chances of afinancial windfall more and more remote.

Waiting for the Reading of the Will

If Boomers are planning on receiving a sizable inheritance from mom anddad, they’d better think again. Increasingly, investments that were thoughtto be sufficient at the time of retirement are not the only resource that isfalling short of retirees’ expectations. Social Security payments haven’t keptpace with the cost of living in most years, and, in most cases, they onlyserve the original intention of the entitlement—as a supplement to othersources of income.

A study conducted by the Federal Reserve Bank of Cleveland found thatnearly 92 percent of Americans will receive no inheritance at all in thefuture and the vast majority of the remaining 8 percent will average lessthan $25,000.12

As Boomers begin to approach retirement, a combination of factors mayrequire some of them to rethink when, where, and how they transition intoretirement. Many have lived beyond their means, and their retirementsavings can’t possibly maintain their lifestyles. Their options are tocontinue to work in some capacity beyond conventional retirement age, tobe forced to reevaluate and downsize those lifestyles as they consider tran-sitioning out of the workforce, or both.

Redefining Retirement

Already, the very definition of retirement is rapidly changing, and, by thetime the youngest Boomers turn 60 years old in 2024, the entire conceptmay itself be, well, retired. “The current language of aging is obsolete andmay actually be an impediment to change,” says a 2005 joint study by theHarvard School of Public Policy and the Met Life Foundation.13 Termssuch as seniors and golden years are rapidly losing relevance, as more andmore Boomers move into their sixties. It’s more likely that Boomers—eventhose over 60—view their parents as seniors but see themselves as frozenat middle age.

Most Boomers do not have the same vision of retirement as theirparents. And that might be a good thing for at least three reasons. First,many Boomers will not have enough savings to retire. Second, Boomersneed to feel productive. This is not a generation that will be content play-ing golf 5 days a week, followed by a walk around the mall. Third, and this

148 Boomer Destiny

may be the most important of all, the country needs the intellect, energy,and experience of Boomers to help lead us through the difficult timesahead. According to the Harvard-Met Life study,

Baby-boomers will soon have the opportunity to redefine the meaning andpurpose of the older years . . . As some of the demands of work and familythat have commanded their attention in mid-life recede, Boomers will havethe potential to become a social resource of unprecedented proportions byactively participating in the life of their communities.14

As a generation, Boomers possess far superior educational credentials,professional skills, and work experience compared to their parents.Boomers are driven to achieve—a nurturing gift from their GI Generationparents. More than 70 percent of Boomers see themselves working wellbeyond the conventional retirement age of 65, and some even envision sec-ond or third careers. Although their parents have always been generouswith their time when asked to pitch in, it is unlikely that Boomers will becontent spending their free time pushing patients around the local hospi-tal in a wheelchair or filing books on the shelves of the local public library.

Even though that might appear to be an arrogant outlook for effortsaltruistic, the fact is that their uniquely advanced experience and skill setacross so many professions make the Boomer generation the greatest poten-tial civic resource in U.S. history. But, instead of planting trees as the CivilConservation Corps (CCC) did in the 1930s, Boomer professionals couldmatch their vast skills in a planned way against the significant needs of theUnited States over the next 20 years; that is a powerful notion indeed.

So, although Boomers may need to continue to generate some income intheir senior years in order to survive, they will still find themselves with extratime on their hands. The question is—what will they do with that time? Butan even larger question looms for a generation that already has a poor trackrecord for civic participation—trailing their GI Generation parents inalmost every area of community participation, including voting rates andjoining community groups. Can Boomers mobilize in an organized andmeaningful way that leverages the generation’s significant skills and experi-ence to help solve the problems that put the American Dream at risk?

Inspirational Leaders

America has been fortunate to have been led by a remarkable group ofinspirational leaders through every generation in American history. Throughgood times and bad, the roll call of leaders from each generation of


Americans since the American Revolution is inspirational in itself. If it werepossible to have a dinner honoring the great generations in American history,consider the cast of honorees that might be seated on the dais: seated from leftto right, beginning with the oldest, would be Benjamin Franklin, representingthe Awakening Generation. Next to him would be George Washington, repre-senting the Liberty Generation, Thomas Jefferson of the RepublicanGeneration, Andrew Jackson of the Compromise Generation, AbrahamLincoln of the Transcendental Generation, Ulysses S. Grant of the GildedGeneration, Teddy Roosevelt of the Progressive Generation, Franklin DelanoRoosevelt of the Missionary Generation, Dwight David Eisenhower of theLost Generation, John F. Kennedy of the GI Generation, Martin Luther King,Jr. of the Silent Generation, and Barack Obama of the Boomer Generation.

Master of ceremonies for the gathering would have to be the late TimRussert. Like a kid in a candy store, the ever-prepared Russert would relishthe tough questions that he’d ask of Washington, Lincoln, and, especially,JFK, on the way to what might be one of the most entertaining and reveal-ing evenings in U.S. history.

The common talent and vision of these great builders of Americansociety lived more in their ability to inspire than in their ability to craftlegislation. The nation has been beaten up badly during the first decade ofthe 2000s—a decade of too much politics and too little progress on somany fronts calling for reform—immigration, Social Security, healthcare,education, and on and on. The first decade of the twenty-first century willbe mostly remembered as one of tragedy—September 11, the Iraq War,skyrocketing oil and gas prices, Hurricane Katrina, and culminating in thefinal days of the Bush 43 administration with enormous financial distressfueled by the sub-prime mortgage meltdown. It may be viewed as a decadeof lost hope, which ended with the need for serious change and inspiredleadership that made the elections of 2008 all the more important.

In the 1990s, President Bill Clinton provided textbook management ofthe government as a business—by the numbers, he was the best presidentof the twentieth century. In his inspirational book Giving: How Each of UsCan Change the World, Clinton describes politics as a “getting business”—one that requires the politician to get support, contributions, and votes—and, because of this, politics leaves little room or time for “giving.”15 Truerwords were never spoken—especially from a man who had plenty of expe-rience with his own “getting.”

And, although President Clinton does a fine job of weaving in storiesabout inspirational Americans and how they “gave” to make a difference, it

150 Boomer Destiny

encourages conventional giving (time and money) in conventional ways.Giving in the United States is mostly a collection of vertical efforts forvertical purposes—the Red Cross raising money or organizing volunteersfor its relief efforts, Stanford University raising money and organizingvolunteers for its educational efforts, or Sloan-Kettering raising money andorganizing volunteers for its cancer research and patient care efforts. All ofthose efforts are to be applauded. But what’s needed in America—especiallynow—is a mechanism for giving time and money that is tied to a nationalvision and strategy for the purpose of achieving specific goals for thecommon good. It is that type of collective and cooperative initiative thatAmericans have always embraced—especially when united and motivatedby a very specific common goal, such as getting people back to work dur-ing the Depression or defeating the Nazis in World War II.

Unfortunately, our history also tells us that we are not very good at pre-vention. More often, we have been a nation that reacts to disasters—to thebombing of Pearl Harbor, the attacks of September 11, or the devastationof Hurricane Katrina. In order to minimize the pain and suffering of thecoming crisis, it is imperative that Americans begin to organize now inpreparation for the winter storm ahead.

Inspirational Money

No other couple in history has given more than Boomers Bill and MelindaGates. The foundation that carries their names holds a trust asset of morethan $37 billion, and, in recent years, it has granted in excess of $2 billionannually around the world. The core values of the foundation are simple:it focuses on issues that affect the largest number of people, especially thosewho have been neglected in the past. Because of this guiding principle,much of the foundation’s efforts are dedicated to its Global HealthProgram and Global Development Program, which serve individuals insome of the neediest locations around the world.

In 2006, the foundation received a magnanimous gift from financierWarren Buffett that effectively doubled the size of the foundation alongwith its ability to improve people’s lives globally—which is the objectivethat these remarkable Americans have set out to accomplish.

Another truly remarkable American Boomer is the multitalented OprahWinfrey, whose foundations similarly help some of the most needy peoplein the world. Winfrey has always been generous with her time, money, andadvice in helping the less fortunate through her television shows and


numerous charities. Winfrey also took advantage of the reality TV phe-nomenon by creating a prime-time show called The Big Give, in whichcontestants compete against each other by helping total strangers who arein need. In some ways, Winfrey’s effort is an antidote to the reality TVofferings that can more often be described as the greed-driven form of theprogramming genre.

Both the Gateses and partner Buffett, along with Winfrey and U2’sBono, have done more to advance lives of the less fortunate around theworld than any five people on the planet. In many ways, their visions tran-scend the portfolio of needs that America faces during the coming Crisisover the next 10 to 15 years. It is money that is needed most to solve manyof the very basic problems, such as hunger and disease around the world.But, although money certainly helps solve domestic issues, the UnitedStates is in need of more than money to overcome the challenges of thecoming years. It needs a spirited commitment of time and talent from itsmost famous generation—a generation to which much has been given andfrom which little has been asked.

Inspirational Time

If you don’t have $37 billion lying around, maybe you could considerdonating your time as social currency. Although the concept of retirementcontinues to evolve, so does the concept of volunteerism. Certainly noteveryone can give to the extent that Bill Gates or Oprah Winfrey can. Butthere are more ways than one to make a huge difference. Marc Freedman isthe founder of Encore—according to its Web site, a growing network ofpeople who want the personal fulfillment of giving back, along with con-tinued income.16

Author of the best-selling book Encore: Finding Work that Matters in theSecond Half of Life, Freedman has created a social network that helpspeople transition from their conventional jobs to work that allows them togive back while still earning a salary—a perfect solution for many Boomersout there who find themselves not quite ready to stop earning but wantingto do something more meaningful with their lives.17 “Tens of millions ofbaby boomers are entering a period of their lives between midlife and theonset of true old age,” said Freedman. “For most, this period will not onlybe a new stage of life, but also of work.”18

Freedman’s work is truly visionary and has enabled thousands to transi-tion to work that is more meaningful to them: a truant officer who became

152 Boomer Destiny

a critical care nurse, a homemaker who became an Episcopal minister, acorporate executive who became a school teacher. Each and every memberof Freedman’s network has shifted focus from performing a job that is ameans to an end to performing a passion that is an end in itself. Freedmanhas created a perfect solution for the Boomers who want to do more withtheir lives but are simply not able to forgo the inflow of cash that helpsfund their very existence.

The spirit and vision of these and many other innovators are literallychanging lives around the globe every day. These projects speak to theongoing challenges that the world will continue to face every day until theyare eradicated, and the world is blessed to have these extraordinary peopleand resources working overtime to make a difference.

But the storm that is brewing in the United States is a serious one andthreatens the very foundations of the Republic on which it stands. Thefundamental health of the world’s greatest benefactor is failing. The broadshoulders of the United States are tired and the body needs to be repairedand refreshed. It will take a coordinated multigenerational effort to helprehabilitate one of the world’s great resources, enabling the United Statesto move successfully through a Crisis and come out the other side as ahealthier contributor, both domestically and internationally, to thechallenges.

Putting on the Oxygen Mask First

Anyone that has flown on a commercial airline over the past 50 years hasheard the instructions a thousand times: “Please place your own oxygenmask on first, before caring for others.” At first, this may have sounded oddor even selfish, but, on further examination, it makes perfect sense toenable the strong so that they can, in turn, help those who are less likely tobe able to help themselves.

Although there are some who may be concerned that any inward focuson the part of the United States is protectionist, now is the time for someself-healing, some strength-building. The United States is an adult passen-ger on an airplane that is filling with smoke. It’s simple: unless the UnitedStates has oxygen to sustain its own life in a crisis, it will not be able to helpothers in crisis. Even though the United States can be faulted forhistorically sticking its nose into the business of too many countriesworldwide since 1950, its track record for lending a hand to the rest of theworld over the last half century is unmatched. A world with an unhealthy


United States is a world that is itself unhealthy. But it now faces its own cri-sis, which may threaten its unflinching ability to provide aid wherever andwhenever it is needed worldwide. Yet don’t look for other nations to run tothe aid of a needy United States. That’s why it’s critical for the United Statesto stop hurting itself and start healing itself. Otherwise, no one else aroundthe world gets help.

It’s Up to the Boomers

Some of the great figures in American history who helped muscle throughthe past three American Crises did not necessarily hold a populist view. Anaging Benjamin Franklin was growing weary of the debate over changes tothe original Constitution of the United States toward the end of theConstitutional Convention in Philadelphia in 1787:

I confess that there are several parts of this Constitution which I do not atpresent approve. . . . I doubt . . . whether any other Convention we can obtainmay be able to make a better Constitution. For when you assemble a numberof men to have the advantage of their joint wisdom, you inevitably assemblewith those men, all their prejudices, their passions, their errors of opinion,their local interests, and their selfish views. From such an assembly can aperfect production be expected? It therefore astonishes me . . . to find thissystem approaching so near to perfection as it does. . . . Thus I consent . . . tothis Constitution because I expect no better, and because I am not sure, thatit is not the best.19

Franklin knew that a document alone was not the answer to the coun-try’s challenges, and, frankly, so did Lincoln during the Civil War Crisis andFDR during the Great Power Crisis. The Emancipation Proclamation wasnot enough, and neither was the Thirteenth Amendment to the Constitu-tion, which officially abolished slavery in the United States. “I am a firmbeliever in the people,” said Lincoln. “If given the truth, they can bedepended upon to meet any national crisis. The great point is to bringthem the real facts.” Honest Abe had the guts to speak the truth, eventhough it probably ended up costing him his life. Lincoln was assassinatedeight months before the Thirteen Amendment, outlawing slavery, wasratified by all states.

As for FDR, he literally crafted a blueprint to rebuild America that wasattacked on all sides—including the Supreme Court, which ruled thatsome of his New Deal programs were simply unconstitutional. But FDR’s

154 Boomer Destiny

own legacy was not so much the brilliance of his legislative abilities as theinspiration and vision that he provided as a leader of the people. “The testof our progress is not whether we add to the abundance of those who havemuch. It is whether we provide enough to those who have little.”20

Certainly, FDR was a master of rallying the troops and inspiring a gen-eration. As much as we’d like to think that an FDR-like figure will emergefrom the sea of the Boomer generation’s conspicuous consumers, manywonder if that is really possible. But, miraculously, the United States hasalways been blessed with great leaders, and, for the first time in Americanhistory, an African American has become the president of the UnitedStates. Barak Obama now has the privilege of leading the United Statesthrough dark times. Imagine the pride that Abraham Lincoln and MartinLuther King Jr. would feel if they were alive today.

If ever there was a time in recent history that such a miracle couldhappen, it is now. Record numbers of citizens—close to 60 million regis-tered voters—made their way to the polls to vote in the primaries leadingto the election of the 44th president of the United States. The words of FDRecho as a reminder of the duty of the few to serve the many—not the manyto serve the few.

The Next 10 Years

No one knows the extent of the crisis that has now moved onshore. It couldbe mild or it could be severe. A philosophy of preparing for the worst andhoping for the best is perhaps the wisest one that we can adopt over thenext 10 years. Pretending that a major economic turnaround is just aroundthe corner is foolhardy. It was Daniel Webster who said, “wisdom begins atthe end.” If that’s true, we are approaching a time of wisdom and it could-n’t come any faster.

Preparedness is our best defense for two reasons. First, the onset of crisismay be so gradual that we are well into it before we even notice. Second,the fix will take all of our ingenuity, experience, and a good deal of our timeover the next decade.

The Great Depression is remembered as a time of scarcity that leftAmericans with a fundamental imperative—manage limited resourcessparingly. Americans lived day-to-day, struggling to make ends meet. Thechoice was made every day about what was needed to sustain a family spir-itually and physically. Basic sustenance has not been an issue for mostBoomers. They have been blessed to live in times of plenty. But the current


economic storm could change all of that and, for the first time, forceBoomers to rethink their “bigger is better” philosophy of living.

In 1971, when the oldest Boomers were turning 25 years old, there were114 million licensed drivers in the United States and 113 million registeredmotor vehicles. That was the last year that licensed drivers ever outnum-bered registered vehicles, according the Bureau of Transportation Statistics(BTS).21 In 2006, as the oldest Boomers turned 60, there were 40 millionmore registered motor vehicles than licensed drivers in the United States.Think about that. If every licensed driver got behind the wheel of a car,there would be 40 million cars without drivers—more than enough carsfor every man, woman, and child in Canada.

America has pushed and pushed for growth from all quarters over thepast century, and what has happened? It has mostly succeeded in creatingthat growth. But there’s a downside to so much dynamic growth—andtherein lies the “capitalist’s dilemma”—the more you grow, the harder it isto grow more. There is usually a price to be paid for dynamic growth overa period of time. Consider the environmental price that China is payingright now for its remarkable growth. What kind of a world are they creatingfor their children and grandchildren?

Our vast overconsumption has led to the creation of two industries dur-ing the peak years of Boomer earnings, spending, and consumption. Wouldit surprise you to know that there is a Self-Storage Association? Believe it ornot, the exponential growth that this industry has enjoyed in the past25 years has spawned a trade association for the estimated 60,000 opera-tors of self- and mini-storage facilities nationwide. The Self-Storage Asso-ciation estimates that the $22 billion industry has grown by more than 65percent since 1995. More than 10 percent of U.S. households now rentsome part of the 2.2 billion available square feet of storage space in theUnited States every year. That translates into 78 square miles of storagespace, or, roughly, three times the size of Manhattan. What is it in our frag-ile, insecure makeup that compels us to overconsume?22

Once we decide to dispose of some of that extra stuff, we have an entireindustry dedicated to coming to our home to haul it away. Waste manage-ment has grown from a cottage industry in the 1800s to more than $50 bil-lion in 2006. Three major companies—Waste Management, Allied WasteIndustries, and Republic Services—manage more than half of all of thewaste that is generated in the United States each year. According to theEnvironmental Protection Agency’s (EPA) most recent report on MunicipalSolid Waste (MSW), Americans generated over 88 million tons of MSW

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in 1960. More than 45 years later, total MSW nearly tripled, to 251 milliontons in 2006, or 4.60 pounds per person per day, which is beginning toapproach 1 ton of waste for every person in the United States each year andrising.23 The good news is that after four decades of consistent per capitaincreases in MSW production, there was a slight decline in the amount ofwaste generated on a per person basis in 2006. But still we overconsume.A serious reexamination of personal consumption habits by Boomersand their generational constellation mates would go a long way todecreasing per capita waste generation in the United States through thebalance of the crisis.

Land O’ Plenty

Boomers have expected plenty and have received plenty. They have beenaccustomed to a life in which they don’t have to think in terms of choosingwhether to buy this or that because often they could afford to buy both.Even though we are not experiencing the Second Great Depression today,each Boomer must still ask an honest question—how much do I need, tosustain myself physically and spiritually going forward? More important,Boomers need to understand that whatever they consume will not be avail-able for their children and grandchildren to consume. Think of it this way:we are all today consuming gas that is stored in one giant gas station; andwhen it’s gone—it’s gone. The supply that we deplete today means just thatmuch less for the future—not our future—but our children’s future.Whatever you choose to use, they will lose.

Rightsizing is a reasonable strategy for Boomers—as consumers and asrole models for their constellation mates (and for the government, for thatmatter). There are simple things that we can do. For example, turning offthe water in the sink when brushing your teeth can save gallons of waterevery time—and drinkable water at that. Then there are the harder tasks,like growing your own tomatoes in the summer. That takes time, effort,patience, and attention, but it’s an experience that you might be able toshare with children, and it’s less likely that you’ll have to worry aboutsalmonella contamination. It won’t be easy to craft a life that provides youwith what you need in balance with what you can afford and what you canjustify consuming. Your consumption decisions today have an impact onall of the generations who will be alive after you are gone.

Channeling the extraordinary talent and experience of Boomers intomeaningful work can make a big difference to the U.S. economy—just as


the Civil Conservation Corps did for FDR in the early years of the Depres-sion. Giving time and money is important, but channeling time and moneyis even better. Channeling is not only about the aggregation of all resourcesbut also about directing those resources into efforts within the context ofan overall strategy that is designed to heal and strengthen a nation.

Channeling Boomer Energy

Consider the potential power of Boomers if that power is channeledcorrectly. There are 78 million Boomers, who are the best educated, mostexperienced generation in history—and they don’t intend to retire anytime soon. Although many of them might need to generate income beyondthe age of 65, it doesn’t mean that they can’t craft a second or thirdcareer—making money at the same as providing more meaningful work.Coordinating the energy and talents of the Boomer generation into the“Biggest Give” (with apologies to Oprah Winfrey) in history is what isneeded now to help turn this country around.

What we need is a way to take advantage of the time and talents of theBoomer Generation. We need to match those substantive resources with thesubstantive needs in this country, needs that won’t be fixed with moneyalone or with conventional volunteer time. We need a way to channel theoverwhelming power of Boomers and to connect resources directly to needsin a national strategy that helps heal the country—mentally and fiscally.

Time to Rethink Priorities

There is an opportunity now—not only to rethink America’s priorities butalso the means by which those priorities are met. This is not just a uniqueopportunity to change the direction of America dramatically—it is ourobligation to do so.

Just as specific needs and resources were unique to the times in the 1930sand 1940s, there are needs and resources that are unique to twenty-first-century America. In 1935, the Social Security Act was written into law as away to help Americans ease into their golden years, when a lifetime of hardwork was complete and a life of leisure began.

Try to envision a great big whiteboard on the wall with absolutelynothing written on it. Now put up the headings: needs on one side andresources on the other. On the needs side are all of the issues that Americafaces today—healthcare, education, homeland security, retirementfunding, immigration, maintenance of infrastructure, and dozens more.

158 Boomer Destiny

On the resources side are the tesn of millions of Boomers—really allgenerations of Americans—with unique talents and skills that can bedirectly matched to the needs side.

The greatest challenge for Boomers—the senior leaders of the Crisis—will be to create a balance of funding that is both fair and consistent withthe times. Who pays for healthcare? Who pays for retirement funding? Areundocumented workers a need, a resource, or both?

Now is the time to start with a blank whiteboard and a new palette ofcolors with which to re-create America. This is what Benjamin Franklindid. This is what Lincoln did. This is what FDR did. As the prior chapterestablished, America needs a New New Deal and the imagination andenergy of the next generation of senior leaders who can, in the process,write a new legacy for themselves.

The Clock Is Ticking

Boomers have a limited number of years left on this planet. Most Boomerswill be gone by 2040. If the epitaph were written today for the BoomerGeneration, it might read something like this:

Here lies the Boomer GenerationBorn from 1946 to 1964The largest and most selfish generation in history.

So far, Boomers have mostly been takers and not givers. But there is stilltime left to change that. When FDR stood on the steps of the Capitol inMarch 1933, the legacy of the Missionary Generation had not yet beenwritten. But what it accomplished over the next 12 years is what historynow remembers as its legacy—its contribution to America and tohumankind. This time, we don’t have to save the world to be heroes. Wehave to save those most dear to us—our children and grandchildren—andthe country that we love. And the clock is ticking.


Chapter 10

The Boomer Grid

In our personal ambitions we are individualists. But in our seeking for economicand political progress as a nation, we all go up or else all go down as one people.

—Franklin D. Roosevelt

Somewhere along the way, we got the impression that the U.S. governmentowed us. We came to expect that Uncle Sam would provide us with anincome if we had a baby, paid for our healthcare and prescription drugswhen we became seniors, and paid for housing 3 years after a hurricanedestroyed our home.

Maybe it all started with the benevolence of FDR during the GreatDepression and then followed up with LBJ’s Great Society efforts in the1960s and, finally, George W. Bush’s overzealous generosity when he signedthe Prescription Drug Bill into law. The United States has been a parentthat has overindulged many of its children. Just look at the 2009 federalbudget: weighing in at slightly more than a projected $3.0 trillion, nearlyhalf of the entire federal budget is tied up in just two departments, theSocial Security Administration (SSA) and the Department of Health andHuman Services (HHS)—departments that didn’t even exist during thelast American Crisis.

Three areas of spending have to change quickly if this government is tofind its way out of the very deep hole that it has created. The United Statesmust begin to reduce its addiction to spending on runaway entitlementprograms, loans from foreign governments that enable the United States toavoid fiscal accountability, and oil. These three addictions have the capac-ity to bring the U.S. empire down.

Matching Needs and Resources

When times get tough, it becomes even more important to be very stingywith limited resources while, at the same time, creating alternative pro-grams that fulfill needs at virtually no cost. This was part of the spirit andgenius of some of FDR’s programs back in the 1930s that always appearedto get more bang for the buck. There was an enormous concern about theoverconsumption of natural resources. Because most Americans did notown cars in the early 1930s, the serious threat posed by carbon emissionswas still decades away. However, there already was a common sensitivity tothe need to replenish what had been stripped from the land. Inspired by hisdistant cousin Teddy, FDR was determined to replace the millions of treesthat had been mined from U.S. forests in the decades of expansion follow-ing the Civil War.

One of the first efforts coming out of FDR’s New Deal was the CivilConservation Corps (CCC), a program that put hundreds of thousandsback to work, planting millions of trees in stripped forests across the coun-try. Ironically, more than 75 years later, a similar need has arisen in U.S.forests because of budget cuts. But those cuts will greatly limit efforts todeter both the frequency and intensity of major forest fires.

In recent years, devastating fires have taken their toll in the western UnitedStates, causing billions of dollars in damage while destroying millions ofacres of U.S. forests. Cuts in the 2009 budget for the U.S. Forest Service’s firepreparedness would mean that the agency would be unable to clear deadtrees and overgrown brush that serve as a kind of kindling and increase boththe likelihood of fires starting and their intensity once started.

It is precisely this type of project that was enthusiastically embraced dur-ing the early days of the New Deal. It goes without saying that money wastight during the Depression, but that didn’t deter the administration fromcreatively matching needs and resources to solve two problems at once—unemployment and environment needs. That type of innovative thinkingrequires a different type of mind-set. It takes a sense of urgency, powerfulmotivation, and innovative thinking to get things done. Unfortunately,today we are lacking in all three areas.

Twenty-first–Century Needs and Resources

It’s coming up on 80 years since FDR signed into law the sweeping legisla-tion that dramatically changed the country’s course for the rest of thecentury. As important as that vision was, it was a vision for its time, based

162 Boomer Destiny

on the needs of its time. It is not a vision for this time. But it does provideinspiration for a new vision—a vision that enables a more creativeapproach to solving the mountain of problems that the United States faceswith limited resources. What is needed is not reform. What is needed is acomplete rethinking of the purpose of all programs for twenty-first-centuryAmerica.

As we move through this time of crisis, it’s not possible to predict pre-cisely what will happen to a fragile economy for which the limitedresources are getting even more limited each day. Hubbert’s Peak providedan early warning that our most precious natural resources are not withoutlimits. Hubbert’s prediction that U.S. oil production would peak around1970 was spot-on and so was his follow-up prediction about world oilproduction, which peaked around 2005. But, rather than act on that warn-ing, we have mostly chosen not to escalate our energy situation to anemergency status. Instead, we fool ourselves into thinking that offshoredrilling is the silver bullet solution. It is not.

As predicted, after a run-up to record prices in the early summer of 2008,the price of gas miraculously started to decrease 90 days before the presiden-tial election. But as January 20, 2009 approached, gas prices began to inchtheir way up. Let’s put to bed the myth that gas prices will retreat permanently.Since 1950, gas prices have either increased or remained the same in 47 of 58years. In the 11 years that gas price decreased from year to year, it dropped byless than 10 cents per gallon nine times and by 27 cents per gallon twice (1986and 1998). The average price of gas has been higher at the end of each decadethan it was at the beginning in all but one decade (the 1980s), and the likeli-hood that it will end the first decade of the 2000s at a record percentageincrease compared to the beginning of the 2000s is a virtual certainty.1

Table 10.1 shows the average price of a gallon of gas (all grades) at thebeginning and at the end of each decade since the 1950s. Prices increasedfrom beginning to end in each decade, except for the 1980s when pricesdropped by 16 cents per gallon. Only two decades show an increase in gasprices of 100 percent or more—the 1970s and the 2000s (through 2008).Even if gas prices average $2.00 per gallon in 2009, they will still haveincreased more than any other decade besides the 1970s. So we can some-times get fooled into thinking prices are moderate when they are not.

The simple law of supply and demand already started dictating highermarket prices in 2007. A reversal of those prices is now highly unlikely,given that energy-hungry China and India—comprising one-third of theworld’s population—are just now taking a seat at the world’s oil table.

The Boomer Grid 163

Just as there are, no doubt, huge deposits of gold in the Earth’s core, sotoo are there sources of oil that could satiate the most ravenous of con-sumption appetites. But there comes a point when the cost of extraction farexceeds the value once the oil is extracted, and we are rapidly approachingthis point with oil. That was the purpose of Hubbert’s original warning inthe 1950s. The 30-year view suggests that we desperately need to begin toaugment or replace historical sources of energy with new alternatives. But,in a world that measures and compensates itself based on 90-day cycles,there is not enough built-in motivation for the powers that be to care muchabout the 30-year view.

What will it take for us to realize that the days of easy access are over? Nomatter what the natural resource is, it is limited. And, as it relates to ourfuture stewardship of those resources, there are only four potential coursesof action:

1. Continue to drain existing sources.2. Find new sources.3. Create alternative sources.4. Change our consumption behavior.

Is it difficult to imagine a day when rolling blackouts, like those commonin California in the early 2000s, will become a regular part of our lives? Isit difficult to imagine that certain foods that we enjoy will not always beavailable when we want them or that, when they are available, they mightcost two, three, or four times what they now cost? Is it difficult to imaginethat gas will become so scarce and so expensive that the family car mostlysits in the garage and is only used once or twice a month? Is it difficult toimagine a world that gets so much smaller that most stores are within

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TABLE 10.1. Average Price of a Gallon of Gas in the U.S.—All Grades

1950s 1960s 1970s 1980s 1990s 2000s

Beginning $0.27 $0.31 $0.36 $1.22 $1.22 $1.56of Decade

End of Decade $0.31 $0.35 $0.86 $1.06 $1.22 $3.25*

Increase or +$0.04 +$0.04 +$0.50 −$0.16 +$.00 +$1.69Decrease +12.9% +11.4% +138.9% −15.1% +0.0% +108.3%

Nominal U.S. Dollars

*Average price of gas in 2008

walking distance, and the office building becomes a relic of the twentieth-century past? Can you imagine life as a throwback to the days before theautomobile? The reality is that our resources are rapidly disappearing, andit’s time for our perceptions to catch up with that reality. More than that,we may have to get our minds around an entirely new definition of theAmerican Dream—a definition that is measured more in terms of qualitythan quantity—when “more” means more time with family and friendsand less time at work.

The Wake-Up Call That May Never Come

America has a unique opportunity now to take advantage of a powerfulresource because of an unusual demographic trend that will literally begone in 40 years. Boomers, like oil and gold, are a substantive but finiteresource that, if channeled wisely during the Fourth Turning Crisis, canhelp the United States overcome its near-term crises and lay a foundationfor a chance at a better way of life. Fix Social Security? That’s absolutelypossible. Create universal healthcare for all Americans? That’s also possible.Balance the budget on the way to eliminating the national debt? It’s allpossible. In America, and for Americans, there’s nothing that’s notpossible. In some ways, our problems are much bigger than those thatFDR faced 80 years ago. But we also have many more tools with which tofix the problems. It is truly a matter of channeling energy and usingresources wisely.

During the last Fourth Turning Crisis, FDR sketched out a wide visionand a detailed plan to help get America back on its feet. One of the biggestdifferences between this and other crises is that we may never receive thetype of wake-up call that Americans received in October of 1929—atleast, let’s hope not. That’s why it is important for a Boomer-led genera-tional constellation to take on the challenge proactively before it takes uson. The New Deal was a practical reaction to the challenges of the time—even if a number of aspects of the program failed. The success of the NewDeal lived in its spirit—in its ability to pull a people together for the com-mon good. There will always be critics of the effectiveness of specificprograms, but FDR must be given enormous credit for mobilizing quicklyand taking action. As Obama did in his first days in office.

American society today is so fractured and so self-directed that it rarelyfeels as though we have a common cause or goal. Unfortunately, it takesevents like September 11 to pull us together and motivate us to act. The

The Boomer Grid 165

New New Deal must be shaped around twenty-first-century needs, withtwenty-first-century resources. The tools of the past will not help us solvethis crisis. The solutions that were shaped 80 years matched the needs of those primarily in the Lost, GI, and Silent Generations—the parents,grandparents, and great-grandparents of Boomers. The solutions that willbe shaped during this crisis must match the needs primarily of Gen X,Millennial, and New Silent Generations—the children and grandchildrenof Boomers.

The challenge will be this: how can the United States channel the signif-icant skill and talent of the most highly educated generation of all time intoan amazingly powerful and productive resource that meshes with the over-whelming needs of a nation in crisis—all without using a penny of thegovernment’s money? And the question for Boomers now is this: how canBoomers mobilize in a meaningful way to channel their enthusiasm andexpertise into an overall strategy that helps preserve the American Dreamfor future generations of Americans? The government can’t do it alone. Ithas always relied on the remarkable strength and resilience of the Americanpeople to pull through a crisis.

Power Grids

For many years, electricity stations in the United States have been con-nected via a network that allows electricity generated in one state to beshared with another state. Power grids enable a community that may be ina high-need situation because of weather conditions or during high-usageperiods to access electricity from another community in a lower-needsituation. The United States has 6,000 such power generation stations thatare linked in a network that allows electricity to flow from one station toanother over high-voltage lines. The flow of electricity is controlled byexpert personnel who monitor need as well as distribution of power fromlow-demand to high-demand areas. So, if San Diego were in a high-demand situation as a result of a heat wave, grid coordinators would beable to identify excess power from a low-demand area and reroute thenecessary energy to ease San Diego’s temporary crisis.

The concept of the power grid has been borrowed by a number of indus-tries and causes, as a way to manage resources more efficiently. Some Websites have captured the essence of grids by asking those with a given needto post that information for those seeking to fulfill a need—really it’s nodifferent than simple ride-sharing programs. But, because of the democratic

166 Boomer Destiny

and pervasive nature of the World Wide Web, social networks are growingin importance and effectiveness—matching needs with resources.

The Boomer Resource Grid

There are 78 million Boomers out there with extraordinarily skills, experi-ence, and energy who could end up becoming one of the greatest resourcesin U.S. history. Whether Boomers intend to retire outright, transition toanother type of work, or stay in their current jobs indefinitely, they stillrepresent enormous potential as a supplementary resource that fulfills avariety of needs that the U.S. government is simply unable to provide. Aspart of a New New Deal initiative, the Boomer Resource Grid is a conceptthat would harness the largely untapped resource of 78 million talentedBoomers and channel that power into a thoughtful strategy that helps takefinancial pressure off federal, state, and local governments.

The Boomer Grid would be a nongovernmental organization (NGO) thathelps aid the government in delivering high-priority resources. The BoomerGrid would be a Web-based resource that identifies specific local and federalneeds on one side, matching those needs with individual talent on the other.

The Boomer Resource Grid would be a social network, in the form of avirtual labor force that trades off all generation’s time and talent—based onthe altruistic premise that greed is indeed not good, but that generosity is.As a generation, Boomers have been running a lifelong sprint to nowhere—understanding no more than the need to keep running. Boomers are tal-ented and creative thinkers with the collective human power to eliminatethe national debt over time. Few of them are thinking about conventionalretirement, but many of them are thinking about life after leaving the con-ventional workforce and the Boomer grid provdes a framework to channelthis generation’s time and talent.

The Objective of the Grid

The overall objective of the Boomer Grid would be to strategically channelthe enormous resource that is the Boomer generation, in order to takepressure off of the government in funding critical programs for Americans.In the short term, the objective of the Boomer Grid would be to helpreduce the necessity for additional spending and reliance on loans fromforeign banks and governments. The Grid’s long-term objective would beto help the U.S. government eliminate the crippling national debt. Whatbetter gift could a generation leave its children and grandchildren?

The Boomer Grid 167

The Boomer Grid would enable the U.S. government to use budgetedoutlays to deliver priority programs to U.S. citizens within budget limits. Itcould also be an important component in an overall strategy to bring fiscalresponsibility, fiscal discipline, and department/agency accountability tothe overall management of government programs. What better legacycould the Boomer generation leave than to end a difficult Fourth TurningCrisis around 2024 by consistently delivering balanced budgets, and withno future liability for the sins of the past?

The Spirit of the Boomer Grid

If you ever travel to Colorado Springs, Colorado, and you need a wirelessconnection to the Internet when waiting for your plane at the local airport,it’s as simple as firing up your laptop and opening up your browser. Thereis no fee for wireless Internet access at the Colorado Springs Airport. Theexperience of logging on to the Internet for free is somewhat of a shock intoday’s “squeeze every nickel” world. Kudos go to Colorado Springs forproviding a great example of the type of spirit that’s required to healAmerica. Greed is the enemy. Generosity and selflessness are the cure.

The Linux open-source software was founded on the same altruisticspirit as that of the Boomer Grid as an open social network. In Linux, soft-ware development work is done collaboratively and becomes part of thefree Linux operating system. Individual volunteers enrich the collectivevalue of the software by adding functionality, based on their own experi-ence, skills, and interests.

Similarly, Wikipedia—the Internet-based free encyclopedia—is devel-oped by a social network of individuals who contribute content on virtu-ally all topics. The collaborative effort enables individuals to update andenrich the content continually, content that can then be challenged byother collaborators to ensure the accuracy and reliability of the data.Wikipedia as a free resource is built purely for the common good and relieson the generosity of others in order to survive. In the past, Wikipedia hasbeen criticized for inaccuracies and questioned as a reliable and trustworthysource. However, a 2006 study in the Harvard Business Review found that theEncyclopedia Britannica—with decades of contributions by paid writers anda stellar editorial board—had an average of 2.9 inaccuracies per page. On theother hand, Wikipedia—launched in 1999—had an average of only 3.9 inac-curacies per page—a remarkable record compared to the much older, muchmore expensive business model. The Boomer Grid could be similarly

168 Boomer Destiny

designed to provide high-quality productivity and output in a collaborativesocial network for virtually no cost.

How the Boomer Grid Would Work

The currency that would run the Boomer Grid is hours—hours of labor,expertise, counseling, and so on. These hours could, for example, be “depos-ited” into the Grid’s Web-based repository, which might be segmented into 10major resource categories and 10 major needs categories, such as healthcare,education, and food and clothing. Individuals or organizations could depositresource hours into an online resource database based on four characteristics:(1) total number of hours donated; (2) the type of hours donated, for exam-ple, manual-labor hours or skilled-labor hours, such as accounting; (3) thelocation of the hours, for example, manual labor hours for which the workmust be performed in a specific city, or virtual hours for which the workcould be accomplished online; and (4) the dates and times for the hours.

1. Resource HoursResource-hour contributions would be deposited into the Web-based

repository by individuals or organizations by completing a simple onlineresource form. For example, let’s say a registered nurse wishes to donate8 resource hours per month of, in her case, skilled labor hours—in thegreater Phoenix-area on either Saturday or Sunday in all months exceptAugust. The Grid searches on deposited needs-hours requests for matchesand contacts the individual via e-mail with any matches.

2. Needs HoursApproved government agencies would be able to deposit needs hours into

the Web-based repository by completing a simple online needs form. TheGrid searches on deposited resource hours for matches and contacts theagency administrator via e-mail with any matches.

Because of the vast number of needs in jobs and skills across the U.S.economy, it would be necessary to organize the Grid into 10 broad sectorsthat allow donors to deposit resource hours into specific sectors and, at thesame time, allow member organizations to identify needs hours on asector-by-sector basis.

Ten Sectors for Needs and Resources

Within each of the 10 sectors, participants would be able to completedetailed online forms to enable a more granular match of skills and needs.For example, within the environmental sector, individuals or organizations

The Boomer Grid 169

could identify very specific skills, such as “experience fighting forest fires”or “recycling management skills,” that would help Grid administratorsmore closely match needs with resources.

The following is a description of 10 major sectors of the Grid, withexamples of some of the tasks or skills in each area:

Food and ClothingThe most basic of all needs are represented here relating to food and cloth-ing. Included in this sector might be classes from experts on growing yourown vegetables, starting a food coop, or washing clothes for a clothing net-work that serves out-of-work parents who have multiple children at home.

ShelterAll issues relating to housing are coordinated through the shelter sector ofthe Grid. From advice for first-time homeowners to homeless shelters to safehouses, the Grid’s temporary and permanent shelter needs would be coordi-nated here. Other skills would include donation of time for construction and home-building and repair skills offered by carpenters, electricians,plumbers, and others.

HealthcareHealthcare would continue to be a high-need area—especially with morethan 47 million people living in the United States without healthcare cover-age. For example, the skilled labor of doctors, dentists, nurses, physicians’assistants, and other medical professionals could be used to staff free clinicsand wellness and preventative care clinics.

SafetyThe safety sector would enable police officers and firefighters, for example,to donate time to help supplement efforts in areas that are lacking theirskills. It is likely that, as budgets tighten, there will be a high demand for sup-plemental help in this sector—in ways that enable the safety professionals todedicate more of their time to the unique skills that they have, in order tofocus more proactively on fire and crime prevention.

EducationOne of the most underpaid livelihoods in the United States is public schoolteaching. How many stories have we heard about the local second-gradeteacher who purchases school supplies out of his or her own pocket in orderto provide a richer experience for students? Mentoring, substitute teaching,and supplementing offerings in the arts that may have been drastically cutover the past 25 years are just some of the initiatives that this sector couldprovide.

EmploymentThe Boomer Grid would serve as means of helping get employees back towork. Expert human resource volunteers could offer seminars, advice, and

170 Boomer Destiny

training to people who are out of work and need help getting back on track.These efforts would be designed to help reduce financial pressures on thegovernment, in managing people that constantly move in and out of thelabor force.

EnergyThis sector would cover a wide array of energy-related topics, such as natu-ral gas, oil heat, solar energy, wind energy, public transportation, car pool-ing, and free seminars on how to save water, electricity, and gas. The realchallenge of this sector would be to develop creative solutions to our limitedenergy resources, including a research and development component thatwould offer incentives to individuals or organizations through significantcash awards and tax credits to develop alternative sources of energy.

Personal FinanceUnfortunately, millions of Americans have followed the lead of the U.S. gov-ernment in spending significantly more than they take in. This sector wouldhelp individuals and families with advice about financial management andplanning, including strategies to reduce and eliminate debt, repair credit,increase savings, and set up plans for retirement or college expenses.

InfrastructureMuch of the federal and local infrastructure in the United States is old andtired and, in some cases, no longer safe to use. In what may end up lookingsimilar to FDR’s Civil Conservation Corps effort of the 1930s, the BoomerGrid could help identify volunteer workers of all levels to help supplementthe imperative upgrading of America’s bridges, highways, parks, transporta-tion outlets, and other facilities that are in disrepair and desperately needmore than simply another coat of paint.

EnvironmentThis sector would cover all issues that have an impact on the environment—from global warming to the pollution of local water sources—and wouldprovide physical labor, as well as expertise, in cleanup and prevention ele-ments. Educational seminars could include subjects ranging from changingyour driving habits in order to save gas to car-pooling strategies or beach andpark cleanup patrols that would reduce government’s need to spend on thoseservices.

Each sector would be chaired by a prominent American Boomer who isrecognized as a subject matter expert and whose job would be to oversee themajor efforts of the sector. As an NGO, the Boomer Grid would link to thegovernment as a resource, but it would not be funded by the government.

Table 10.2 is a representation of the dashboard of the Boomer ResourceGrid. From one summary screen, Grid administrators are able to access asummary view of the 10 resource and needs sectors. Under each sector are

The Boomer Grid 171

two columns marked RH and NH: RH refers to the number of resource hourscurrently available in that sector of the grid and NH refers to the number ofneeds hours that sanctioned organizations have posted on the Grid.

The very bottom row of Table 10.2 calculates the difference betweenresource hours (RH) and need hours (NH) in each sector. In this example,most sectors are showing a surplus of resource hours to needs hours, untilreaching the second to last column under the Infrastructure sector. Thissector shows that its current needs outpace its resources to fill those needsby 457 hours. And, because there are more than enough collective surplushours from the nine other resource categories, it’s quite possible that Infra-structure can borrow resource hours from other categories in order to fillthe current need.

Grid administrators would be able to drill to a deeper view to determinethe specific nature of the need requirements in the Infrastructure sectorand to attempt to match those needs with available resources elsewhere inthe Grid. If, for example, there is a high need for manual labor in the Infra-structure sector because it’s midsummer and the peak season for highwayand bridge maintenance and repair, a significant percentage of the 457deficit hours might be manual labor hours, which could possibly be shiftedfrom one of the other sectors.

When the need is purely physical labor, ordinarily hours can be shiftedfrom one sector to another. However, because the Boomer Grid attemptsto also take advantage of highly skilled expertise, highly skilled hourswould not necessarily translate into useful hours in another sector that hashigh manual labor needs. When there is a high need in a sector requiringmanual labor because of tornado destruction in Kansas City, for example,Grid administrators would send out via e-mail to Grid members a “call forresource hours” that specified the need for manual labor hours.

On the other hand, when there is a high demand for the highly skilledprofessional—such as registered nurses to work in free clinics during the

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TABLE 10.2. The Boomer Grid Dashboard View: Needs and Resources

FoodClothing Shelter Healthcare Safety Education

RH NH RH NH RH NH RH NH RH NH4430 4231 3776 2889 6298 6276 4176 3657 7092 6345

+199 +887 +22 +519 +747

summer months in San Francisco—Grid administrators would issue a “callfor resource hours” from within the healthcare sector and specifically withregistered nurses. In the case of other professional skills, such as accountingor information technology, there is a much higher likelihood that those skillhours could be shared with other sectors. Hospitals need accountants aswell as IT professionals, but so do most other organizations.

Boomers for Education

California Governor Arnold Schwarzenegger proposed cuts of $4.8 billionfor the state’s K–12 budget for 2008–2009 in an effort to address the over-all $14.5 billion budget deficit in the state.2 The proposal called for a sus-pension of Proposition 98, which effectively guaranteed minimum fundinglevels for California schools. As a result, programs such as special educationand child care and child development have been slashed by $550 million.Governor Schwarzenegger, himself a parent, is certainly not without com-passion for the state’s school children, but he is charged with running thestate of California as a business—money out must not exceed money in.Consequently, it’s unlikely that the state’s educational needs will ever besatisfied through conventional funding.

In theory, Governor Schwarzenegger would be able to access the BoomerGrid to relieve some of the financial pressure on the school budget,enabling the schools to do more with less. For example, music and art pro-grams could be supplemented, if not completely staffed, by Boomer volun-teers in order to save money.

According to the National Education Association (NEA),3 the federalgovernment created a $71 billion gap between promised and actual fund-ing for the nation’s public schools under the No Child Left Behind pro-gram. Although the funding gap is truly unfortunate, it is now unrealisticto think that all of the gaps in the nation’s educational system can be filledby the federal government.

The Boomer Grid 173

Employ- Personal Infra- Environ-ment Energy Finance structure ment


+6 +110 +208 -457 +62

If Governor Schwarzenegger had access to the Boomer Grid as aresource to help fill some of the gaps in California’s educational needs, hewould be able to relieve some of the stress on the state’s education budget.Although it may not be the answer to all of the state’s educational woes, itcertainly could help relieve budgetary pressures while helping enrich thepublic school experience for California’s children.

Table 10.3 provides a drilled-down view of the Education sector of theGrid for the state of California. All of the resource and needs hours arespecific to the state and can be further identified by town, city, county, orzip code (not shown). Reading across the top of the chart, the Educationsector has been divided into 10 major needs and resource categories:special education, child care and development, health services, tutoring,maintenance, teachers, the arts, life skills, technology, and athletics. Theschool systems have articulated their needs in the form of skill type andnumber of hours and have posted them on the Grid. Schools in this exam-ple are seeking volunteer support in virtually every subsector—from med-ical professionals for health services, to assistant soccer coaches in athletics,to help with maintenance, life skills, and in substitute teaching.

In this particular example, child care, tutoring, and the arts (music, the-ater, art) all show that their needs are far greater than their resources at thispoint in time. Grid administrators would able to match relevant skills fromthe surplus resource hours from other areas that may be able to close someof the gaps that exist here, but they would have to issue a “call for resourcehours” for the particular skills in high demand.

The $71 billion gap that the NEA reports between promised and actualfederal spending on education is equal to roughly 3.5 billion hours ofvolunteer time valued at $19 per hour—the estimated value of volunteertime according to the leadership forum Independent Sector.4 If everyBoomer donated 1 week of skilled labor during the school year, it wouldequal $71 billion in value to the nation’s public schools. Certainly not all of

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TABLE 10.3. Boomer Grid Education Sector Needs and Resources

HealthSpecial Ed Child Care Services Tutoring Maintenance


+41 −913 +169 −609 +27

the $71 billion could be replaced with volunteer time. But the point is thatthe enormous energy, skill set, and experience of Boomers—as well as theirgenerational constellation mates—could go a long way toward relievingsome of the financial pressure on the federal and state and local govern-ments in so many areas that are often forced to continue to limit thebreadth and depth of a public school education in the United Statesbecause of limited resources.

If 78 million Boomers contributed 2 hours to the Grid per week, itwould represent 624 million resource hours per month. That would be thesame as hiring close to 4 million full-time equivalent employees. In termsof monetary value, the numbers are pretty impressive. The 624 millionresource hours per month would represent a dollar value of nearly $12 bil-lion a month. That’s $144 billion per year or nearly enough to completelyfund the budgets of the Departments of Education, Energy, Housing andUrban Development, the Small Business Administration and NASA.

What if we applied half the number of hours and were able to channel allof it toward the public school system in the United States? According to theBureau of Labor Statistics, there were 3,954,000 public school teachers at thepreschool, kindergarten, elementary, middle, and secondary school levels in2006. The public school teacher labor force is expected to grow to 4,433,000by 2016—a 12-percent increase—which may be understated, based on recentmatriculation trends of children of both legal and illegal immigrants.5

Based on a contribution of just 2 hours per week to the Grid, the coun-try’s public school administrators could have access to 156 million resourceshours per week to help assist, in any way, the existing public school teachersand staff. Just 2 volunteer hours per week from every Boomer effectivelydoubles the number of hours currently provided by the 4 million existingteachers on a weekly basis. If that resource were made easily available to thepublic schools, they would doubtlessly use that resource to create an evenbetter, safer, and connected school experience for children.

The Boomer Grid 175

LifeTeachers The Arts Skills Technology Athletics


+106 −602 +87 −935 +125

176 Boomer Destiny

What We Need to Leave Our Children

We certainly need to leave our children much more than money. Moneyalone will not solve the problems that our children and grandchildren willface if we don’t act soon. Part of what we need to leave our children is ademonstration of compassion, to show them that we care deeply about theworld that we are leaving them.

Like so many other generations in American history, the Gen X andMillennial Generations are already predisposed to live a life that is unlikethe one that their Boomer parents lived. The same way that Boomerslearned from their parents that they didn’t want a life defined by financialstruggle, the offspring of Boomers have learned, by watching the freneticpace that their parents set in building a bigger life, that working long hoursis not at all for them. The trend of recent college graduates—steering awayfrom jobs on Wall Street to more meaningful lifetime work—at greatlyreduced earning levels—is an important sign that Boomers will have coop-erative generational partners in reshaping the future of America.

Boomers have an extraordinarily unique opportunity now to bond withtheir children, perhaps for the first time, in shaping futures together thattip the scales in favor of building a life based on quality and not quantity.The question still remains: will they do it?

Chapter 11

Boomers’ Will

Real generosity toward the future lies in giving all to the present.

—Albert Camus

As the frenetic pace that they have set for themselves begins inevitably toslow, Boomers increasingly reflect on the lives that they have lived and thelives that they have not lived—on the examples that they have providedand the examples that they wish they had provided. And, more and more,the disproportion of Boomer withdrawals to deposits is crystallizing intothe realization that those behaviors might affect someone other than them-selves. So now what? We know that Boomers have pretty much sprintedthrough life so far, producing much, consuming much, and achievingmuch, by following the philosophy that a better life is a bigger life. But thehighlight film of the Boomer journey thus far turns out not to be such aflattering one.

Fortunately for Boomers, they are now in a position to finish the storyof their generation with a completely different final act. The question iswhether they can now look deep inside and ask themselves what mattersmost to them as they begin to get in touch with their own mortality. Thejury is still out as to whether or not Boomers are capable of stepping backand reversing direction from the course that they have followed their wholelives—and, in the process, writing a completely new legacy.

Boomers began life in an environment that was safe and nurturing, withthe security of extended family nearby and the richness that comes fromtime to play, time to discover, and even time just to goof off—an activityoften frowned on by adult Boomers, labeling those without the same driveto achieve and acquire as “slackers.” In a rhythmical twist of irony, Boomershave become their parents, criticizing Gen Xers and Millennials for not see-ing the world as they see it.

Back in the day, mom was at home and seemingly always available tomake Fluffernutters for lunch and take turns with other moms shuttling

the kids back and forth to the public pool on steamy summer days. Dadwas home for dinner every night, sitting in his favorite chair, smoking hispipe, reading the evening newspaper, and waiting for mom to call everyoneto the dinner table. There was plenty of time for just goofing off with yourfriends—like the scenes from the movie Stand By Me—walking along therailroad tracks, throwing rocks, heading nowhere in particular, and puttingyour ear to the rail to feel the vibration of the oncoming train. Life wasgood. So what happened?

The Definition of Better

There’s a famous scene in Woody Allen’s Annie Hall when a split-screen shotshows Allen in character Alvy Singer speaking with his therapist on one sideand his girlfriend Annie Hall (Diane Keaton) speaking to her therapist on theother.“How often do you sleep together?” Alvy answers, “Hardly ever, maybethree times a week.” Then Annie’s therapist asks the same question of her andshe answers, “Constantly, I’d say three times a week.”

Often, our perceptions don’t match our realities at all. As Boomers weregrowing up, they constantly heard about the conditions in which their par-ents grew up, and, often, the implied or even overt message was this:“That’s not a life for you.” Instead, parents wanted a better life for theirbabies. Boomers saw the simple but good life that was often wrought withmoney troubles, and so they interpreted what a better life would be instrictly extrinsic terms. Thus they were off on a lifelong quest for theBoomers’ Holy Grail—a higher standard of living.

The message to Boomers as they were nurtured as children was this:“Get a good education so you can get a good job that pays well so thatyou won’t ever have the money worries that we had growing up.” Obser-vant young Boomers interpreted that advice quite literally and enteredthe workforce with a laser-like focus on achieving one thing: earning lotsof money. What they took from their formative years was that increas-ing their standard of living was crucial. Lost in the balance, however, wasthe simpler, quality-of-life days of childhood, which were replaced bythe more complex and frenetic standard-of-living days of adulthood. At theend of the day, Boomers have to look back and ask whether it was allworth it.

As Boomers ventured out on their own to build their careers, from around1975 to 1984, they frequently stayed at the office until all hours of the night.As they continued to climb the corporate ladder, increasing both position

178 Boomer Destiny

and income, many of those elements that define quality of life started toerode and disappear. Instances of quality time with the family, friends, andextended family and even time alone became fewer and farther between.Along the way, a greedy corporate America happily accepted the enormousproductivity boost that was gained as Boomers forsook home and family intheir mission to drive to the top of the standard of living mountain.

Boomers got married, had kids, and moved into 3,800-square-foothomes in the suburbs. But, with a bigger home, more cars, and now kids,two new issues emerged in the pursuit of a higher standard of living: First,Boomers continued to push the edge of the achievement and consumptionenvelope—earning more and spending more and therefore needing more(especially with college educations to pay for on the horizon). Second,mom was an intelligent, college-educated business professional who hadher own career until the kids came along. So mom’s re-entry into the work-force actually helped fulfill two objectives: her own personal satisfactionand the need for more money.

As soon as mom went back to work, the kids were either shipped off todaycare or cared for by an au pair or nanny. Boomers spent most of theThird Turning in an outright sprint to improve standard of living, often atthe expense of quality of life. Hand in hand with an ever-increasing num-ber of hours at the office, as well as more business travel, came an ever-increasing helping of guilt and a loosening in parenting style. Suddenly, thekids got the green light on most requests, from sleepovers to personal cellphones. But those trinkets were nothing compared to the general size anddimension of birthday and Christmas presents, as well as the debut of thefamily mega-vacation.

No more Lincoln logs or erector sets for these kids; instead, they got$500 X-Boxes and their own laptops. Birthday parties went from a coupleof friends and a cake to a $5,000 catered affair, with a clown and pony ridesfor 30. Vacations went from driving the old station wagon down to theshore for the weekend to flying to Orlando for a week at Disney World. By2004, Disney World, even for the lowest income families, seemed to achieverite-of-passage status for many American children.

Boomer Motivation

Maslow observed that “man is a perpetually wanting animal.” Once a needemerges—such as the desire to build a better life—then human beingsorganize their behavior in their conscious life around the fulfillment of

Boomers’ Will 179

that need, assuming that all lower, more fundamental needs have been ful-filled. This certainly describes the behavior of Boomers as they took fullcontrol of their own lives as young adults and as they were able to shape aso-called better life on their own terms. But what was it that shaped theBoomers’ motivation? Why did Boomers follow a blueprint that took themdown a road that only defined better quantitatively?

There are two types of human motivations: intrinsic motivation andextrinsic motivation. Intrinsic refers to the needs that fill us spiritually—from within us. Extrinsic refers to pursuits that fill us materially—fromoutside of us. Like so many other elements of human behavior, these moti-vations are first cast in us based on when we are born. If we are born, likethe Boomers, during a time when quality of life was relatively high, we tendto want what’s missing from our lives—material gain. Alternately, if we areborn during a time when standard of living is high, such as the Millennials,we again tend to work toward attaining what’s missing—but this time it’sabout what fills us spiritually. As selfish Homo sapiens, we always want whatwe don’t have—in constant motion, swinging from one end of the spec-trum to the other.

A better life can be defined as either attaining a higher standard of liv-ing (SOL) or a higher quality of life (QOL). Because people are driven towant what they don’t have, QOL and SOL are almost always mutuallyexclusive. In order to achieve a higher SOL, it usually requires giving upsome of those elements that add to the quality of one’s life, such as dinnersat home every night or more time to garden or exercise. On the other hand,in order to achieve a higher QOL, it usually requires giving up some ofthose elements that add to the standard of one’s living, such as higherincomes that come with longer days and two working parents. Certainlythere are exceptions to the rule, but, for most, it is difficult to attain onewithout compromising on the other.

Figure 11.1 graphically shows that humans are either driving toward ahigher SOL or a higher QOL. As progress is made toward one, it is usuallyat the expense of the other. Boomers were born when QOL was relativelyhigh (1) and SOL (2) was relatively low. Mom was at home and dad was atwork and the household operated on one salary. The house was small,vacations were within driving distance, and eating out was a rare extrava-gance. Mom cooked a meal every night and found creative ways to stretcha dollar and yet deliver a satisfying meatloaf. The family sat at the dinnertable and talked about each other’s days. Even in Beaver Cleaver’s world,Ward and June spoke about saving money and living the frugal life.

180 Boomer Destiny

As Boomers came of age, from 1965 to 1984, many entered the workforceand started their pursuit of a better life. As shown in Table 11.1, this causedan upward movement in SOL from (3) to (4) and a downward movement inQOL from (3) to (5). Because of a heightened emphasis on increasingresources (money), dad spent more hours away from home, either in theoffice or traveling, and often so did mom. This translated into less family timetogether—more daycare, fewer family dinners, and a generally frenetic paceto get everything done before it started all over again on Monday morning.

The need to create a bigger life also created higher expenses in order torun the household. House-cleaning services, car washes, dry cleaning,laundry, snow removal, lawn care. Many of the chores that Boomers hadperformed themselves, as part of their upbringing, were now being per-formed by strangers for a fee because of a lack of time. Boomers main-tained this pace through the mid-life years, from around 1985 to 2004,when their SOL peaked (4) and their QOL reached its lowest point (5).

And we are not just talking about Boomers who work on Wall Street. Weare talking about all Boomers—Boomer electricians, Boomer painters,

Boomers’ Will 181

FIGURE 11.1. The Law of WantsAs SOL increases, QOL decreases, and vice versa.

1946–1964 1965–1984 1985–2004 2005–2024 2025–2044

HIGH

LOW

HIGH

LOW

1

2

3

4

5

6

SOL

SOLQOL

QOL

Source: www.boomerdestiny.com

http://www.boomerdestiny.com

Boomer police officers, firefighters, and yes Boomer plumbers (just not Joe thePlumber—he’s a Gen Xer). The Boomer Generation wanted more—no matterwhat the career or neighborhood. And for credit-seeking Boomers, an increasein standard of living usually translated into the purchase of material goodsfor all to see: shiny new pickup trucks with Hemi engines, Cadillac Escalades tohaul the kids on youth hockey trips to Montreal, and trips to Cancun.

As they went through their thirties, forties, and fifties, Boomers earnedmore and more and spent more and more, in most cases giving up thequality of life that had defined their childhood and their adolescence.Instead, they built a life that deprived their own children of that idyllic startin life. Even though Gen Xers and Millennials enjoyed ski trips to Vail, theywitnessed what Mom and Dad gave up in order to deliver “the good life”and came to the conclusion that their adult lives would look very differentthan their parents’ adult lives.

Having spent a life in a drive for more, Boomers now find themselvesmoving into senior hood and reflecting on a chaotic 40-year blitzkreig ofsteady advancement and increases, followed by mergers, layoffs, and angstthat come hand in hand with a life that defines better as more. Like a sol-dier returning from battle, Boomers are an exhausted generation, and theyare just now beginning to seek a reversal of the fortune that they’veenjoyed. They find themselves longing for the days of their youth and, atworst, a return to equilibrium (6) in which SOL and QOL meet, as onedecreases while the other increases.

Just as Boomers watched their own parents argue over money andvowed never to live that life as adults, observant Gen Xers and Millennialssimilarly watched their Boomer parents run a race to nowhere, acquiringlots of stuff along the way—like a couple who won a supermarket sweep,sprinting from aisle to aisle, filling up their carts until the final buzzer sig-nals them to stop. Children of Boomers are saying no to the lifestyle thatdefined their parents and that they enjoyed. Instead, their definition of theAmerican Dream and a better life is much more about QOL than SOL—and, econonmically, the timing could not be better.

The Definition of the American Dream

The pursuit of the so-called American Dream is inextricably tied to a gen-eration’s definition of better. In its simplest form, the American Dream hasbeen defined in the very same way by every generation of Americans, fromGeorge Washington’s Liberty Generation forward. All that any generation

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ever wants for its children is a better life. It’s what Benjamin Franklinwanted for his children, what Abraham Lincoln wanted for his children,what FDR wanted for his children, and what Barack Obama wants for hischildren. The difference is that each generation has its own definition ofwhat a better life and the American Dream mean to them.

For the parents of those in the Missionary Generation—the great-grandparents of Boomers—the American Dream may have simply meantcoming to America in the mid-1800s for the chance at a life that was betterthan the life that existed in Ireland, Italy, or Germany at the time. For the par-ents of those in the GI Generation—the grandparents of Boomers—theAmerican Dream may have simply meant establishing a life here and the abil-ity to survive in America, just for the chance at greater opportunities. For theparents of Boomers, the American Dream may have meant providing a meansto getting a better education, as a way to move beyond manual labor or work-ing in the trades as a carpenter, electrician, or plumber.

What evolved with each generation was its own definition of theAmerican Dream—typically alternating from one defined intrinsically toone defined extrinsically. For Boomers, the extrinsic drive that helped filltheir garages, closets, basements, attics, and storage units is lost on their chil-dren. A lifetime of superconsumption does not appeal to the Gen X and Mil-lennial Generations. Unlike their parents, they entered young adulthoodnear the peak of standard of living, in relative terms. As humans, they lookat what they don’t have and they want it. And, more often than not, for thechildren of Boomers, that means a higher QOL.

Imagine what Boomers’ children will go through over the next 40 years indealing with the assets from the estates of Boomers, sifting through the junkcollected over a Boomer’s lifetime. What is it that Boomers will leave that isanything more than a burden to be sold via a mammoth yard sale or the clas-sifieds? Boomer heirs will sort through mountains of stuff to find a few pre-cious tidbits that truly defined their parents as individuals. What will thosebe? Mom’s well-worn 3 × 5 recipe files that bring back memories of meatloafdinners and warm chocolate chip cookies on snow days? Or dad’s bull’s-eyeputter that had generated so many stories of dramatic 30-foot winners?

Boomers at the Crossroads

As more Boomers look back on a life that, so far, has been far more abouttaking than giving, will they finally establish their own philosophy of stew-ardship before they move on to that big shopping mall in the sky?

Boomers’ Will 183

Over the first three-quarters of their lives, Boomers were remarkablymotivated animals—driven to achieve, to gather, and to consume like noother segment of humans before or since—and only now are they lookingfor a deeper understanding of their own wants and emerging needs. Thedecisions that Boomers make over the next 20 years about their own habitsand behaviors will have a profound effect on the resources that they consumeas well as the resources that they will leave behind for other generations.

Although they certainly enjoyed life built on their parents’ credit cards,it’s unlikely that children of Boomers will be willing to trade QOL for SOL.They saw firsthand what their parents gave up in QOL terms in exchangefor a higher SOL. The alternating nature of human wants continues its flip-flopping pattern, with a decided shift by Gen Xers and Millennials thatplaces a much higher value on QOL. At the same time, the worn-outBoomer also begins to reshape the definition of a better life as retirementnears and a sense of mortality sets in for the first time.

What Do We Really Need Now?

As Boomers continue to move through life, they contemplate questionsthat many of them have never considered before. Ironically, Boomers havehit an SOL wall at precisely the same time that their offspring are begin-ning to build their own lives around a QOL core. It may very well be thiscoincidental movement away from a life defined by SOL and toward a lifedefined by QOL will serve to bring the generations back together as eachbegins to seek a more balanced life that does not require pushing the lim-its of consumption in order to achieve contentment.

Already it appears that a new momentum is beginning to pull theBoomer generation in a new direction, which may explain in part whydivinity school applications for students over 50 are on the rise. And it mayexplain why programs such as Encore—the San Francisco-based organiza-tion that helps match retirees with altruistic second careers—haveappeared as a bridge for the growing number of Boomers whose definitionof better seems to be shifting back toward one that is motivated moreintrinsically rather than extrinsically.

We have been accustomed to think that all bad conditions are tempo-rary. Huge layoffs, tornadoes, hurricanes, rolling blackouts, and spikes inthe price of gas are all seen as temporary events. They may cause a lot ofshort-term pain, but then it will be over. What if these inconveniencesbecome a routine part of everyday living in America? It’s been a very, very

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long time since Americans truly had to sacrifice. Are we prepared to makethe mind shift necessary to deal with a world that suddenly is short on thevery basics of food, water, shelter, and electricity? What does a day in thelife of America look like without those four essential resources?

When the will and testament of the Boomer Generation is read to itschildren and grandchildren, will they be enriched by the experience ordrained by it? No one expects to go into a lawyer’s office and listen to a willthat leaves debt to its heirs: “To America’s children, we leave the sum totalof $11 trillion in outstanding public debt—plus interest.” If that’s the case,we might bequeath a life of deep sacrifice and struggle to our children andgrandchildren.

A Return to the Way Things Used to Be

Out of necessity, we may be headed for a world that is just the opposite ofsupersizing. Just as corporate America has downsized, so too will thelifestyles of Boomers need to be downsized. What’s the worst that wouldhappen if our world started to shrink? What would happen if employeesworked out of their homes, shopped at a grocery store down the street, andvacationed within 2 hours of home? Doesn’t that sound remarkably simi-lar to the life that Boomers experienced while they were growing up—a lifebuilt on quality and not quantity? That might be exactly what the doctorordered to help the United States get through difficult times ahead—a shiftin attitude and expectations and a recalibration of what we really need inthis life in order to live the American Dream.

Figure 11.2 portrays a simpler life of the 1950s, when families spent mostof their time within a 20-mile radius of home. Working, shopping, school,

Boomers’ Will 185

FIGURE 11.2. Life in America—1950

Home

Work

RecreationVacation

Shop

play, even vacations happened within striking distance of their livingrooms. Vacations in other states or outside of the United States werereserved for the wealthy. Butcher shops, fish stores, and produce standswere often within walking distance. Even though, in some ways, the worldhas gotten much smaller over the past 50 years—with the advent of satel-lites and live television as well as the Internet and the World Wide Web—in other ways, it has gotten much bigger. We have lived in a world of mightyhigh expectations for so long that we have lost sight of the fact that wemight not actually need more—and that less might actually be a welcomealternative.

Figure 11.3 shows how life in America grew well beyond the home overthe past 50 years of the twentieth century. Suddenly, destinations such asEurope, South America, and even Asia became part of both work and vaca-tion possibilities. Even youth sports teams were no longer limited to play-ing teams from surrounding towns. Suddenly, Billy’s peewee team is flyingto Calgary for a week-long tournament in February. During the 50-year

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RecreationVacation

Work

Shop

Home

drive to create a higher standard of living in the United States, we gave upa great deal of the quality of our lives along the way. Maybe it’s time toreverse direction and start a new journey, from SOL toward QOL.

With the expansion of commercial airline travel, our respective worldsgrew even more. The concept of having an early morning breakfast meet-ing in New York—and then boarding a cross-country flight to Los Angelesfor lunch and a meeting, only to return on the “red eye” in time to gostraight into the office the next day—became a reality. Like putting a manon the moon, it became possible in the second half of the twentieth cen-tury. As the world grew further and as countries such as India and Chinaopened up to free trade, our worlds expanded even further.

We already know that our children and perhaps even our grandchildrenlook on the second half of the twentieth century and the frenetic lifestyles ofBoomers and ask “why?” Why would you live a life so dedicated to the mate-rial world? They only have to wait for their own children and grandchildrento come along before they hear the same refrain from them about the waythat life was lived over the first 50 years of the twenty-first century—a timewhen money was tight and standard of living was once again low.

The escalating cost of transportation may actually force a return to sim-pler times across our personal and professional lives. Although the virtualworld might continue to shrink, bringing Beijing closer and closer, the real-ity in our real worlds might make a trip to Beijing simply unaffordable—even for businesses and much more transparent.

The Web plays an even more important role in business, as the primarymeans of getting together. Increasingly, unaffordable trade shows find waysto come to life over the Web, avoiding the cost of travel, the cost of exhibi-tion, the cost of hotels and meals. Marketing becomes almost exclusivelyWeb-based.

As a result of this contraction, Billy no longer flies to his peewee com-petitions but more often plays the town next door—just as they did in1950. Figure 11.4 depicts a return to simpler times, when most purchaseswere transacted within 20 miles of home. A major difference in 2050,compared to 1950, is that e-commerce is central to many activities in thehome, including our some of our primary sources of entertainment. Just10 years ago, it was next to impossible to deliver a full-length motion pic-ture over the Internet. How long will it be before we are able to purchasefirst-run releases on our laptops or iPhones? The days of the physicalpackaging of intellectual property of any kind are nearing an end. Someindustry experts believe that, by as early as 2015, the vast majority of

Boomers’ Will 187

books, music, and movies will be purchased and delivered online—enabling our individual worlds to shrink back to that 20-mile radius. Thebusiness model for book publishing, music, and movie-making hasmoved away from the physical world and has actually spurred a renais-sance in creating and sharing intellectual property. The world is a muchsimpler place, gets by on less, and is just as fulfilled as it was when it had100 pairs of shoes in the closet.

“The best things in life are free” becomes a slogan for a new Ameri-can society that feels less burdened, less pressured, less driven to attainthe highest possible SOL at the expense of the quality of that living—that is, until the members of the New Boomer Generation (born 2025 to2044) come of age around midcentury and realize that they lack the SOLthat their great-grandparents, the Boomers, had achieved from 1985 to2004. And so the cycle will start again, with a new generation of childrenof the First Turning who end up forsaking a high QOL in exchange fora high SOL.

Boomer Legacy

The precise legacy that Boomers will leave has yet to be written. How thatlegacy will read is entirely up to them. How will the final act of the playend? Will it have a tragic ending? Will it be more of the same excesses? Orwill the final act show a side of Boomers that the world has never seen—that of compassionate and generous beings who are driven to heal an ail-ing American society? The choice is theirs.

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Home

Work

RecreationVacation

Shop

Chapter 12

Boomer Legacy

One generation plants the trees; the next enjoys the shade.

—Chinese proverb

It’s not uncommon for newspapers such as the New York Times to preparethe obituaries of famous individuals well in advance of their passing inorder to save time—especially in cases when the death comes on suddenly.Next to the GI Generation, there is no generation in history that has mademore headlines than the Boomer Generation. So it seems appropriate thatthe Times might consider preparing an obit in advance of the passing of thegeneration.

Like many of the movie stars and politicians whose partial obits sit in thefiles over at the Times, the Boomer’s life thus far could be captured inexpectation of the day when the generation becomes part of America’spast. The first part of the Boomer obit might read something like this:

Boomer Generation Succumbs—ReluctantlyKnown as the overindulged children of the post-World War II era, Boomerswere mostly the sons and daughters of those from the GI Generation—theheroes of the last American Crisis. Boomers were raised in a world that wasliterally without limits, and they spent most of their time on Earth trying toreach those limits anyway. The generation came of age as the bold and rebel-lious collegians of the 1960s and 1970s and used their cunning to dodge thedraft and the pill to avoid pregnancy—on the way, battling their parents’generation as well as the establishment that it represented.

Boomers developed a reputation as the most selfish generation in Americanhistory, starting in the 1980s, as many of them turned in their tie-dyed T-shirts and bandanas for Brooks Brothers’ suits and ties and their colorfulVW buses for silver BMWs and Upper East Side co-ops.

As parents, the generation gained a reputation as overschedulers, keepingtheir children busy during long days at the office, for both dad and mom.Nannies often served as surrogate parents during long days and late nights, aswell as for business trips to Asia, as Boomers forged a standard of living like noother generation in American history. The price paid was less time at home,which, in turn, resulted in guilt-driven gifts and vacations in order to make upfor quality-of-life shortcomings as parents. Boomers provided a model forbuilding a standard of living that their children both enjoyed while growing upand yet rejected as a model for their own adult lives—in keeping with theAmerican tradition of doing just the opposite of the parents’ generation.

More to come.

It’s certainly too early to write the ending of the generation’s obit, but it’snot too early for the generation to start to think about what that obit mightsay once the last Boomer has rung up his or her last purchase on QualityValue Network (QVC). At this point in time, if the New York Times were toprepare for the inevitable passing of the generation, it might commissiontwo different obits in order to save time in the end if Boomers end upchanging course over the last decades of life.

Film director Francis Ford Coppola struggled over the ending to his1979 Vietnam War epic Apocalypse Now, so he created two endings andthen decided, just before the film’s opening, which one he’d use. Ironically,he ended up choosing the more docile ending, rather than the explosiveend-of-days climax that the film’s distributor United Artists preferred.Coppola’s decision was an intrinsic one. United Artists’ preference wasmore extrinsic. Eight oscar nominations suggest Coppola was right.

Boomers now have a similar choice. The generation can choose the end-ing of its own obit and there are two possibilities: the first ending describesmore of the same type of selfish behavior that Boomers have exhibited so far.The second describes a change of heart—from extrinsic to intrinsic, fromselfish to selfless, from taking to giving. Which one will they choose?

Around 2064, the youngest of Boomers will turn 100 years old. We knowthat Kathleen Casey-Kirschling was the first Boomer—born on January 1,1946, at 12:01 A.M. Who will be the last living Boomer? What will the Timessay about the generation that he or she represented over the span of a lifetime?

Boomer Obit: Ending #1

A Legacy of Selfish Concern for ThemselvesDuring their twilight years, Boomers maintained a lifestyle of excess, towhich they had grown accustomed—bankrupting the generation financially

190 Boomer Destiny

and spiritually, leaving its offspring with a growing inventory of insur-mountable challenges. Serious issues run the gamut from homeland security,to a decaying infrastructure, an eroding quality of education, unaffordablehealthcare, as well as tens of trillions of dollars of debt that now become theresponsibility of their children, grandchildren, and great-grandchildren.

A number of times in recent years, Boomers mostly watched as thenation’s entitlement programs and mounting national debt brought thecountry to near insolvency. The lack of urgency and action by Boomers hashelped create a downward spiral in both the quality of life and the standardof living in America, in large part because of Boomers’ selfish nature andwonton desire to take care of themselves first, leaving future generations tofend for themselves in a world that was been weakened—not strengthened—because of their participation in it.

Boomers are survived by the struggling members of the Gen X, Millennial,New Silent, and New Boomer Generations, who will now be responsible fordealing with billions of tons of junk collected over a lifetime of spending onmany items that were altogether unnecessary. In lieu of sending flowers, familyand friends are asked to save their money because they will likely need it.

Boomer Obit—Ending #2

A Legacy of Selfless Concern for OthersDuring their twilight years, Boomers turned over a new leaf, reversed themomentum of their lives, and started giving more than taking. In theprocess, the generosity of the generation, in terms of time and resources, overthe last quarter of its life not only provided an inspiration for younger gen-erations but also helped address and solve many of the pressing social issuesof the day. A vast improvement in America’s infrastructure, healthcare, andeducation programs, as well as the overall fiscal health of the nation,provided an environment that enabled balanced budgets, the creation ofuniversal healthcare for all Americans, as well as a significant reduction inpoverty, homelessness, and the national debt.

Quite possibly, the greatest gift left to its survivors was a new spirit of hopefor America that Boomers helped build during their final years on Earth.

Boomers are survived by the thriving members of the Gen X, Millennial,New Silent, and New Boomer Generations, who continue in the tradition ofbuilding a better quality of life, inspired by their parents before passing. Inlieu of sending flowers, Boomers have asked that family and friends plant atree so that future generations may enjoy the shade.

Which ending will it be? The choice now lies squarely in the laps of indi-vidual Boomers everywhere. Each Boomer must look inside and ask the

Boomer Legacy 191

192 Boomer Destiny

question: what will my legacy be? What do I want it to be? A legacy of tak-ing less and giving more is within reach for Boomers. But it requires a con-scious effort to change direction, change behavior, and change outcomes.The motivation is simple. Not only does it create a better world for the chil-dren, grandchildren, and great-grandchildren of Boomers, but it’s alsosimply the right thing to do. Time is about up, Boomers. This is yourchance to write a new legacy. Will you?

Notes

Chapter 1 A Legacy Not Yet Written

1. William Strauss and Neil Howe, Generations: The History of America’s Future(New York: William Morrow, 1991), 420.

2. U.S. Census Bureau, Historical National Population Estimates, HistoricalNational Population, http://www.census.gov/popest/archives/1990s/popclockest.txt.

3. U.S. Census Bureau, Historical National Population Estimates, http://www.census.gov/popest/archives/1990s/popclockest.txt

4. U.S. Bureau of Economic Analysis (BEA), http://bea.gov/national/index.htm#gdp.

5. Benjamin Spock, M.D., Dr. Spock’s Baby and Child Care, 8th ed. (New York:Pocket, 2004), 1.

6. Benjamin Spock, M.D., Dr. Spock’s Baby and Child Care, 7th ed. (New York:Pocket, 1998).

7. The New Deal Network, Dear Mrs. Roosevelt, http://newdeal.feri.org/eleanor/jb1137.htm.

8. The National Archives, http://www.archives.gov/research/vietnam-war/casualty-statistics.html.

9. Congressional Budget Office (CBO), http://www.cbo.gov/budget/data/historical.shtml.

10. Reno Gazette-Journal, January 16, 2008, http://news.rgj.com/apps/pbcs.dll/article?AID=/20080115/VIDEO/80115026.

11. Dale Bumpers, “To Cut the Deficit, Keep ’87 Tax Rate,” New York Times,November 18, 1987, http://query.nytimes.com/gst/fullpage.html?res=9B0DE7DE163DF93BA25752C1A961948260.

12. Louis Uchitelle, The Disposable American (New York, Vintage, 2007).13. The Wall Street Journal, http://online.wsj.com/mdc/public/npage/2_3051

.html?mod=mdc_h_dtabnk&symb=DJIA#IndexComponents.14. MetLife Mature Market Institute, The New Face of Work, http://www

.civicventures.org/publications/surveys/new_face_of_work/new_face_of_work.pdf.

http://www.census.gov/popest/archives/1990s/popclockest.txt

http://www

http://bea.gov/national/

http://newdeal.feri.org/

http://www.archives.gov/research/vietnam-war/

http://www.cbo.gov/budget/data/

http://news.rgj.com/apps/pbcs.dll/

http://query.nytimes.com/gst/fullpage.html?res=

http://online.wsj.com/mdc/public/npage/2_3051

http://www

Chapter 2 Repeating Cycles in American History

1. Bureau of Economic Analysis, http://bea.gov/national/index.htm#gdp.2. Jonathan Alter, “The Generation Game,” Newsweek Magazine, April 15, 1991,

http://www.newsweek.com/id/121923.3. Diana Baumrind, “Effects of Authoritative Parental Control on Child Behav-

ior,” Child Development 37(4): 887–907.4. William Strauss and Neil Howe, Generations: The History of America’s Future

(New York: William Morrow, 1991), 151.5. Ibid., 190.6. Ibid., 228.7. Ibid., 295.8. The Wall Street Journal, http://online.wsj.com/mdc/public/npage/2_3051

.html?mod=mdc_h_dtabnk&symb=DJIA#IndexComponents.9. Thomas J. Abercrombie, “Oil, the Dwindling Treasure,” National Geographic,

June 1974.10. Letter to David Nissen, http://www.hubbertpeak.com/hubbert/to_

Nissen.htm.11. U.S. Department of Energy, http://www.eia.doe.gov/emeu/aer/txt/

ptb0524.html.12. U.S. Department of the Treasury, http://www.treasurydirect.gov/govt/

reports/ir/ir_expense.htm.

Chapter 3 The Gathering Storm

1. William D. Nordhaus, National Bureau of Economic Research (NBER) Paper,The Economics of Hurricanes in the United States, 2006. Working Paper 12813.

2. CBS Television Network, 60 Minutes, March 4, 2007, http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml.

3. CBS Television Network, 60 Minutes, March 4, 2007.4. Ben Bernanke, Business Week, February 28, 2007, http://64.233.169.104/

search?q=cache:wGiUv8wUkTcJ:www.businessweek.com/investor/content/feb2007/pi20070228_636020_page_3.htm+%22BEN+BERNANKE%22+AND+UNLIKELY+TO+GROW&hl=en&ct=clnk&cd=19&gl=us.

5. CBS Television Network, 60 Minutes, March 4, 2007.6. Bank for International Settlements (BIS), 2007 Annual Report, http://www

. bis.org/publ/arpdf/ar2007e8.pdf.7. William R. Parke, The Econ Review, http://www.econreview.com/events/

banks1929b.htm.8. U.S. Department of the Treasury, http://www.treas.gov/tic/mfh.txt.9. U.S. Department of the Treasury, http://www.treasurydirect.gov/govt/

reports/pd/histdebt/histdebt_histo5.htm.

194 Notes

http://bea.gov/national/index.htm#gdp

http://www.newsweek.com/id/121923

http://online.wsj.com/mdc/public/npage/2_3051

http://www.hubbertpeak.com/hubbert/to_

http://www.eia.doe.gov/emeu/aer/txt/

http://www.treasurydirect.gov/govt/

http://www.cbsnews

http://64.233.169.104/

http://www.businessweek.com/investor/content/

http://www

http://www.econreview.com/events/

http://www.treas.gov/tic/mfh.txt


10. Congressional Budget Office (CBO) baseline budget projections,http://www.cbo.gov/ftpdocs/90xx/doc9015/Selected_Tables.pdf.


12. U.S. Department of Energy, Energy Information Administration (EIA),http://www.eia.doe.gov/emeu/aer/txt/ptb0524.html.

13. Congressional Budget Office (CBO), http://www.cbo.gov/budget/data/historical.shtml, http://www.cbo.gov/publications/bysubject.cfm?cat=35.

14. Office of Management of the Budget (OMB), http://www.whitehouse.gov/omb/budget/fy2009/pdf/09msr.pdf.

15. U.S. Department of the Treasury, http://www.treasurydirect.gov/NP/BPDLogin?application=np.

16. Ibid.17. U.S. Bureau of Labor Statistics (BLS), http://data.bls.gov/PDQ/servlet/

SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0000000001&output_view=net_1mth.

18. U.S. Department of Labor Statistics, http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CUSR0000SA0&output_view=pct_1mth.

19. U.S. Bureau of Labor Statistics, http://data.bls.gov/PDQ/outside.jsp?survey=ln.

20. National Center for Education Statistics (NCES),http://nces.ed.gov/programs/digest/d07/tables/dt07_002.asp?referrer=report.

21. Progress in International Reading Literacy Study (PIRLS),http://pirls.bc.edu/PDF/P06_IR_Ch1.pdf.

22. U.S. Department of Transportation, Federal Highway Administration,http://www.fhwa.dot.gov/policy/ohim/hs03/htm/dlchrt.htm.

23. U.S. Department of Transportation, Federal Highway Administration, Con-ditions and Performance Report 2004, http://www.fhwa.dot.gov/policy/2004cpr/chap3c.htm#body.

24. U.S. Federal Courts, http://www.uscourts.gov/Press_Releases/2008/Bank-ruptcyFilings.cfm.

25. Federal Reserve Bank, http://www.federalreserve.gov/releases/g19/Current/,http://www.federalreserve.gov/releases/chargeoff/delallsa.htm.

26. Robert E. Scott, The China Trade Toll, Economic Policy Institute (EPI),http://www.epi.org/content.cfm/bp219.

27. The World Bank, Food Price Surge Could Mean ‘Seven Lost Years’ in PovertyFight, http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:21726628~pagePK:64257043~piPK:437376~theSitePK:4607,00.html.

28. Trust for America’s Health (TFAH), Report Finds Food Safety System in Crisis, http://healthyamericans.org/newsroom/releases/release043008.pdf.

Notes 195

http://www.cbo.gov/ftpdocs/90xx/doc9015/Selected_Tables.pdf


http://www.eia.doe.gov/emeu/aer/txt/ptb0524.html


http://www.cbo.gov/publications/bysubject.cfm?cat=35

http://www.whitehouse.gov/

http://www.treasurydirect.gov/

http://data.bls.gov/PDQ/servlet/

http://data.bls.gov/PDQ/servlet/

http://data.bls.gov/PDQ/outside.jsp

http://nces.ed.gov/programs/digest/d07/tables/dt07_002.asp?referrer=report

http://pirls.bc.edu/PDF/P06_IR_Ch1.pdf

http://www.fhwa.dot.gov/policy/ohim/hs03/htm/dlchrt.htm

http://www.fhwa.dot.gov/policy/2004cpr/

http://www.uscourts.gov/Press_Releases/2008/Bank-ruptcyFilings.cfm



http://www.federalreserve.gov/releases/g19/Current/

http://www.federalreserve.gov/releases/chargeoff/delallsa.htm

http://www.epi.org/content.cfm/bp219

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0

http://healthyamericans.org/newsroom/releases/release043008.pdf

29. RealtyTrac Inc., Foreclosure Activity Up, July 2008, http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=4891&accnt=64847.

30. U.S. Census Bureau, http://www.census.gov/hhes/www/poverty/histpov/hstpov2.html.

31. Center for Immigration Studies (CIS), http://cis.org/Legal.32. Center for Immigration Studies (CIS), http://cis.org/Illegal.33. Tom Regan, Christian Science Monitor, http://www.csmonitor.com/2006/

0110/dailyUpdate.html.34. MunichRe Group, http://www.munichre.com/en/press/press_releases/

2007/2007_12_27_press_release.aspx.35. Risk Management Systems, CNN/Money, http://money.cnn.com/2005/09/

02/news/katrina_estimates/.

Chapter 4 Boomer Spring: 1946 to 1964

1. All Library Index, http://www.libraryindex.com/pages/1984/Arts-Media-MEDIA-USAGE.html.

2. Levittown Historical Society, http://www.levittownhistoricalsociety.org/history.htm.

3. Centers for Disease Control (CDC), Live Births, http://www.cdc.gov/nchs/data/statab/natfinal2003.annvol1_01.pdf.

4. U.S. Census Bureau, Population Estimates, http://www.census.gov/popest/archives/pre-1980/.

5. U.S. Department of Homeland Security, Immigration Statistics,http://www.dhs.gov/ximgtn/statistics/publications/LPR07.shtm.

6. Abraham Maslow,“The Instinctoid Nature of Basic Needs,” Journal of Person-ality 22 (1954): 326–347.

7. National Center for Education Statistics, Digest of Education Studies,http://nces.ed.gov/programs/digest/d07/tables/dt07_008.asp.

8. Joseph Epstein and Fred R. Shapiro, The Yale Book of Quotations (New Haven:Yale University Press, 2006).

9. Mike Mansfield, “Cuban Missile Crisis 1962, History and Politics Out Loud,”www.hpol.org.

10. Betty Friedan, The Feminine Mystique (New York: W.W. Norton & Co.,1963), 307.

Chapter 5 Boomer Summer: 1965 to 1984

1. Robert J. Hanyok, National Security Administration’s (NSA) CryptologicQuarterly, http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB132/relea00012.pdf.

2. Tim Kane, The Heritage Foundation, Global U.S. Troop Deployment1950–2003, http://www.heritage.org/Research/NationalSecurity/cda04-11.cfm.

196 Notes

http://www.realtytrac

http://www.census.gov/hhes/www/poverty/histpov/

http://cis.org/Legal

http://cis.org/Illegal

http://www.csmonitor.com/2006/

http://www.munichre.com/en/press/press_releases/

http://money.cnn.com/2005/09/

http://www.libraryindex.com/pages/1984/Arts-Media

http://www.levittownhistoricalsociety.org/

http://www.cdc.gov/nchs/

http://www.census.gov/

http://www.dhs.gov/ximgtn/statistics/publications/LPR07.shtm

http://nces.ed.gov/programs/digest/d07/tables/dt07_008.asp

http://www.hpol.org

http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB132/relea00012.pdf

http://www.heritage.org/Research/NationalSecurity/cda04-11.cfm

3. Stanley Karnow, Vietnam: A History (New York: Penguin, 1997), 342.4. The National Archives Records Administration (NARA), Casualties,

http://www.archives.gov/research/vietnam-war/casualty-statistics.html.5. “This Is Not the Media’s Walter Cronkite Moment,” Columbia Journalism

Review, November 2006, http://64.233.169.104/search?q=cache:5e2s0ALapiEJ:www.cjr.org/politics/this_is_not_the_medias_walter.php+%22Vietnam+is+to+end+in+a+stalemate%22+AND+cronkite&hl=en&ct=clnk&cd=9&gl=us.

6. Cal Fussman,“What I’ve Learned: Walter Cronkite,” Esquire Magazine, June 2006,http://www.esquire.com/features/what-ive-learned/ESQ0406WILCRONKITE_170.

7. LBJ Library and Museum, The President’s Daily Diary, March 31, 1968,http://www.lbjlib.utexas.edu/johnson/archives.hom/Diary/1968/680331.asp.

8. Vietnam Online, http://www.pbs.org/wgbh/amex/vietnam/trenches/my_lai.html.

9. Robert F. Kennedy, “History and Politics Out Loud,” http://www.hpol.org/transcript.php?id=56.

10. Selective Service System (SSS), http://www.sss.gov/lotter1.htm.11. The National Archives Records Administration (NARA), Casualties,

http://www.archives.gov/research/vietnam-war/casualty-statistics.html.12. Henry Kissinger, The White House Years (New York: Little, Brown &

Company, 1979).13. H.R. Haldeman, The Ends of Power (New York: Times Books, 1978).14. Robert McNamara, In Retrospect: The Tragedy and Lessons of Vietnam (New

York: Vintage, 1996).

Chapter 6 Boomer Autumn: 1985 to 2004

1. Marianne E. Page and Ann Huff Stevens, “Will You Miss Me When I’m Gone?The Economic Consequences of Absent Parents,” February 2002. National Bureauof Economic Research (NBER), http://www.nber.org/papers/w8786.

2. Alvin Rosenfeld and Nicole Wise, The Over-scheduled Child: Avoiding theHyper-parenting Trap (New York: St. Martin’s Griffin, 2001).

3. David Brooks, On Paradise Drive: How We Live Now (and Always Have) in theFuture Tense (New York: Simon and Shuster, 2004).


5. General Electric Company, http://www.ge.com/annual00/highlights/index.html, http://www.ge.com/search/index.jsp.

6. The Coca-Cola Company, SEC Filings, http://ir.thecoca-colacompany.com/phoenix.zhtml?c=94566&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9MTM0NzY1MCZhdHRhY2g9T04%3d.

7. Eduardo Porter, New York Times, April 14, 2006, http://www.nytimes.com/2006/04/14/automobiles/14bailout.html?pagewanted=print.

Notes 197

http://www.archives.gov/research/vietnam-war/casualty-statistics.html

http://64.233.169.104/search?q=cache:5e2s0ALapiEJ:

http://www.cjr.org/politics/this_is_not_the_medias_walter.php+%22Vietnam+is+to+

http://www.esquire.com/features/what-ive-learned/ESQ0406WILCRONKITE_170

http://www.lbjlib.utexas.edu/johnson/archives.hom/Diary/1968/680331.asp

http://www.pbs.org/wgbh/amex/vietnam/trenches/

http://www.hpol.org/

http://www.sss.gov/lotter1.htm

http://www.archives.gov/research/vietnam-war/casualty-statistics.html

http://www.nber.org/papers/w8786


http://www.ge.com/annual00/highlights/

http://www.ge.com/search/index.jsp

http://ir.thecoca-colacompany.com/

http://www.nytimes

8. McGraw-Hill Companies, “America’s Biggest Bailouts,” Business Week,October 1, 2001, http://www.businessweek.com/magazine/content/01_40/b3751710.htm?chan=search.

9. U.S. General Accounting Office, “Comparison of the Reported Tax Liabilitiesof Foreign and U.S. Corporations,” http://www.gao.gov/new.items/d08957.pdf.

10. U.S. Department of Labor, http://www.dol.gov/esa/whd/flsa/.11. Pew Hispanic Center, “Estimates of Undocumented Migrant Population,”

http://pewhispanic.org/files/factsheets/17.pdf.12. Pension Benefit Guaranty Corporation, http://www.pbgc.gov/media/

news-archive/news-releases/2007/pr07-09.html.13. Standard & Poor’s/Case-Shiller Index, May 2008, http://www2

.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html.

14. U.S. Census Bureau, http://www.census.gov/hhes/www/housing/hvs/historic/index.html.

15. U.S. Department of the Treasury, http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm.

16. Washington Post/ABC News Poll, http://www.washingtonpost.com/wpdyn/content/custom/2006/02/02/CU2006020201345.html.

17. U.S. Department of the Treasury, http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm.

18. The Conference Board, Consumer Confidence Index, June 2008,http://www.conference-board.org/economics/consumerConfidence.cfm.

19. Gretchen Morgenson, “Explaining (or Not) Why the Boss Is Paid So Much,”New York Times, January 25, 2004, http://query.nytimes.com/gst/fullpage.html?res=9807E4DE1F39F936A15752C0A9629C8B63.

20. Tomoeh Murakami Tse and Renae Merle, The Washington Post, January 28,2008, http://www.washingtonpost.com/wp-dyn/content/story/2008/01/29/ST2008012900465.html.

21. “The 400 Richest Americans,” Forbes Magazine, 2006, http://www.forbes.com/lists/2006/54/biz_06rich400_Henry-R-Kravis_ED7G.html.

Chapter 7 Boomer Winter: The Next American Crisis, 2005 to 2024

1. Congressional Budget Office (CBO), http://www.cbo.gov/budget/data/historical.shtml.

2. Ibid.3. CIA World Fact Book, https://www.cia.gov/library/publications/the

-world-factbook/rankorder/2001rank.html.4. U.S. Department of the Treasury, http://www.treasurydirect.gov/govt/

reports/ir/ir_expense.htm.

198 Notes

http://www.businessweek.com/magazine/content/01_40/b3751710

http://www.gao.gov/new.items/d08957.pdf

http://www.dol.gov/esa/whd/flsa/

http://pewhispanic.org/files/factsheets/17.pdf

http://www.pbgc.gov/media/

http://www2

http://www.census.gov/hhes/www/housing/hvs/


http://www.washingtonpost.com/

http://www.treasurydirect.gov/

http://www.conference-board.org/economics/consumerConfidence.cfm

http://query.nytimes.com/gst/fullpage.html

http://www.washingtonpost.com/wp-dyn/content/story/2008/01/29/

http://www


https://www.cia.gov/library/publications/the


5. Peter Grier,“The Rising Economic Cost of the Iraq War,” The Christian ScienceMonitor, May 19, 2005, http://www.csmonitor.com/2005/0519/p01s03-usmi.html.

6. U.S. Bureau of the Census, Historical Poverty Tables, http://www.census.gov/hhes/www/poverty/histpov/hstpov2.html.

7. U.S. Department of Labor, Bureau of Labor Statistics (BLS), ftp://ftp.bls.gov/pub/special.requests/lf/aat1.txt.

8. U.S. Bureau of the Census, http://www.census.gov/hhes/www/hlthins/hlthin06/p60no233_table6.pdf.

9. National Law Center on Homelessness and Poverty, http://www.nationalhomeless.org/publications/facts/How_Many.pdf.

10. U.S. Department of Energy, Energy Information Administration (EIA),http://tonto.eia.doe.gov/dnav/pet/hist/wtotworldw.htm.

11. Ben Goad,“Bush Proposal Cuts National Forest Fire Prevention Budget,” ThePress-Enterprise, Riverside, California, February 13, 2008, http://www.pe.com/localnews/politics/stories/PE_News_Local_H_forest13.4007b7b.html.

12. “Chronological List of U.S. Billion Events,” U.S. Department of Commerce,National Oceanic and Atmospheric Administration (NOAA), National Climate Disaster Center (NCDC), http://lwf.ncdc.noaa.gov/oa/reports/billionz. html#chron.

13. Ernst & Young Study, “Private Investment Vital to Improve Public Infra-structure,” September 12, 2007, New York, http://www.ey.com/global/content.nsf/International/Media_-_Press_Release_-_Real_Estate_Investing_Global_Infrastructure_2007.

14.A. Clifford Barger, The Physiologist, Vol. 25, No. 5, 1982, http://www.the-aps.org/publications/tphys/legacy/1982/issue5/407.pdf.

Chapter 8 The New New Deal

1. U.S. National Parks Service, http://www.nps.gov/hofr/upload/March%2020%20and%2022.pdf.

2. FDR quote.3. Congressional Budget Office (CBO), http://www.cbo.gov/budget/data/

historical.shtml.4. U.S. Department of the Treasury, http://www.treasurydirect.gov/govt/

reports/ir/ir_expense.htm.5. Tom Osenton, The Death of Demand (New Jersey: Financial Times Prentice

Hall, 2004), 179.6. Office of Management and Budget http://www.whitehouse.gov/omb/budget/

fy2009/summarytables.html.7. Office of Management and Budget http://www.whitehouse.gov/omb/budget/

fy2009/summarytables.html.8. http://www.whitehouse.gov/omb/budget/fy2009/hhs.html.

Notes 199

http://www.csmonitor.com/2005/0519/p01s03-usmi.html

http://www.census

ftp://ftp.bls.gov/

http://www.census.gov/hhes/www/hlthins/

http://www.national

http://tonto.eia.doe.gov/dnav/pet/hist/wtotworldw.htm

http://www.pe.com/

http://lwf.ncdc.noaa.gov/oa/reports/billionz

http://www.ey.com/global/content.nsf/

http://www.the-aps.org/

http://www.nps.gov/hofr/upload/March



http://www.whitehouse.gov/omb/budget/

http://www.whitehouse.gov/omb/budget/

http://www.whitehouse.gov/omb/budget/fy2009/hhs.html

9. OMB, U.S. Department of Defense 2009 Proposed Budget, http://www.whitehouse.gov/omb/budget/fy2009/defense.html.

10. National Coalition on Healthcare (NCHC), http://www.nchc.org/facts/cost.shtml.

Chapter 9 Rising to the Occasion

1. John T. Wooley and Gerhard Peters, The American Presidency Project, Uni-versity of California—Santa Barbara, “Lincoln’s ‘Second Annual Message,’”December 1, 1862, http://www.presidency.ucsb.edu/ws/index.php?pid=29503.

2. Centers for Disease Control and Prevention, National Center for Health Statistics (NCHS), http://www.cdc.gov/nchs/data/hus/hus07.pdf#027.

3. Julie B. Issacs, The Brookings Institute, “Economic Mobility of Familiesacross Generations,” November 2007, http://www.brookings.edu/papers/2007/11_generations_isaacs.aspx.

4. John J. Havens and Paul G. Schervish, Boston College’s Center on Wealth andPhilanthropy, “Financial Resources and Charitable Contributions of RetiredHouseholds,” August 1, 2005, http://www.bc.edu/research/cwp/meta-elements/pdf/wealthofretired.pdf.

5. Richard Steinberg and Mark Wilhelm, “Tracking Giving across Generations,”Center on Philanthropy Panel Study (COPPS) 2001 and 2003, http://www3.interscience.wiley.com/cgi-bin/fulltext/107629281/PDFSTART.

6. Centers for Disease Control (CDC), http://www.cdc.gov/nchs/fastats/divorce.htm, http://www.cdc.gov/nchs/data/vsus/mgdv84_3.pdf.

7. ACT Community Service Center, http://www.1-800-volunteer.org/1800Vol/ACT-csc/VCContentAction.do?aNewsId=477668.

8. Corporation for National and Community Service, “Motivating Genera-tional Cohorts to Civic Engagement,” http://www.nationalserviceresources.org/node/17902.

9. Pew Research on Boomers feeling financial pressure.10. U.S. Department of Education, National Center for Education Statistics,

Digest of Education Statistics, Table 320, http://nces.ed.gov/programs/digest/d07/tables/dt07_320.asp.

11. Harvard College, Financial Aid Office, http://www.fao.fas.harvard.edu/cost.htm.

12. Jagadeesh Gokhale and Lawrence Kotlikoff, The Baby-Boomers Mega-Inheritance: Myth or Reality? (The Federal Reserve Bank of Cleveland, October 2000).

13. Harvard School of Public Health/Met Life Foundation, “Reinventing Aging:Baby-Boomers and Civic Engagement,” http://www.hsph.harvard.edu/chc/reinventingaging/report_highlights.html.

14. Ibid.15. William J. Clinton, Giving: How Each of Us Can Change the World (New

York: Knopf, September 4, 2007).

200 Notes

http://www.white

http://www.nchc.org/facts/cost

http://www.presidency.ucsb.edu/ws/index.php?pid=29503

http://www.cdc.gov/nchs/data/hus/hus07.pdf#027

http://www.brookings.edu/papers/2007/11

http://www.bc.edu/research/cwp/meta-elements/

http://www3

http://www.cdc.gov/nchs/fastats/

http://www.cdc.gov/nchs/data/vsus/mgdv84_3.pdf

http://www.1-800-volunteer.org/

http://www.nationalserviceresources

http://nces.ed.gov/programs/digest/

http://www.fao.fas.harvard.edu/

http://www.hsph.harvard.edu/chc/

16. Encore.org, http://www.encore.org/#.17. Marc Freedman, Encore: Finding Work that Matters in the Second Half of Life

(New York: Public Affairs, June 2007).18. Encore.org, http://www.encore.org/book/marc.19. Benjamin Franklin, http://www.usconstitution.net/franklin.html.20. Franklin D. Roosevelt, “Second Inaugural Address,” January 20, 1937,

http://www.presidency.ucsb.edu/ws/index.php?pid=15349.21. U.S. Department of Transportation, Federal Highway Administration,

Driver Licensing, http://www.fhwa.dot.gov/policy/ohim/hs03/dl.htm, Motor Vehicle Registrations, http://www.fhwa.dot.gov/policy/ohim/hs03/mv.htm.

22. Self-Storage Association Fact Sheet, http://www.selfstorage.org/pdf/FactSheet.pdf.

23. Environmental Protection Agency (EPA), “Quantity of Municipal SolidWaste (MSW) Generated and Managed,” http://cfpub.epa.gov/eroe/index.cfm?fuseaction=detail.viewInd&showQues=Land&ch=46,47,48,49,50&lShowInd=200,201,202,203,205,208,209,210,211,225,228,246,281,287,313,315,341,342,343,381,405&subtop=312&lv=list.listByQues&r=188238.

Chapter 10 The Boomer Grid

1. U.S. Department of Energy, http://www.eia.doe.gov/emeu/aer/txt/ptb0524.html.

2. Judy Lin, “The Sacramento Bee, Scant Support for California BudgetChanges,” April 13, 2008, http://www.sacbee.com/111/story/857786.html.

3. National Education Association (NEA), “No Child Left Behind Act: Unprece-dented and Unbalanced Federal Role in Education,” http://www.nea.org/lac/gpsfactsheet.html.

4. Independent Sector, “The Estimated Dollar Value of Volunteer Time,”http://www.independentsector.org/programs/research/volunteer_time.html.

5. U.S. Department of Labor, Bureau of Labor Statistics (BLS), OccupationalOutlook Handbook, http://www.bls.gov/oco/ocos069.htm.

Notes 201

http://www.encore.org/#

http://www.encore.org/book/marc

http://www.usconstitution.net/franklin.html

http://www.presidency.ucsb.edu/ws/index.php?pid=15349

http://www.fhwa.dot.gov/policy/ohim/hs03/dl.htm

http://www.fhwa.dot.gov/policy/ohim/hs03/mv.htm

http://www.selfstorage.org/pdf/

http://cfpub.epa.gov/eroe/index.cfm

http://www.eia.doe.gov/emeu/aer/txt/

http://www.sacbee.com/111/story/857786.html

http://www.nea.org/lac/

http://www.independentsector.org/programs/research/volunteer_time.html

http://www.bls.gov/oco/ocos069.htm

Index

7-Eleven, 9760 Minutes (CBS News), 39101st Airborne Division, 68401(k) retirement plans, 97

AARP (American Association of RetiredPersons), 19

ABC-TV, 73Abortion, 82, 83Abramoff, Jack, 103, 118Abu Ghraib, 118Academy Awards, 143ACT Community Service Center, 145Adjustable Rate Mortgages (ARMs), 99Administrative Office of the U.S. Courts, 50Admiral TV, 58Adventures of Superman, The (TV show), 64Afghanistan, 39, 52–53African Americans, 11, 13, 64, 68, 155AIG, 41Airplane, 31Ali, Muhammad, 66, 122Alka-Seltzer, 7Allen, Woody, 178Allied Waste Industries, 156Al-Qaeda, 53American Airlines (AMR), 95American Association of Retired Persons

(AARP), 19American Dream, the, 7, 14, 39, 56, 68, 76, 112,

122, 139, 147, 149, 165–166, 182–183, 185American Express, 97American Housing Survey, 146American Revolution, 5, 44, 112, 150Apocalypse Now (movie, Coppola), 190Appomattox, 57Arkansas National Guard, 68Armstrong, Neil, 80

AT&T, 134Atomic bomb, 31Auto industry, 45Automobile, 31Awakening Generation, 5, 150

Bank for International Settlements (BIS), 40, 42Bank of America, 41Bankruptcy, 43, 47, 50, 95, 98Bankruptcy Abuse Prevention & Consumer Pro-

tection Act, 50Banks, Ernie, 63Battle of Lexington and Concord, 32Baumrind, Diana, 29Bay of Pigs, 66Bear Stearns, 40, 100Beatles, The, 74Bernanke, Ben, 35, 39, 45, 100Bernbach, Bill, 7Bernstein, Carl, 81Betty Crocker, 74Big Give, The, 152Black Monday, 33Black September, 41Black Thursday, 33Black Tuesday, 2, 33, 35, 51, 110–112Bonanza (TV program), 64Bonds, Barry, 103Bono, 152Boomerdestiny.com, 181Boomer Grid, 134, 136, 167–175Boston College

Center on Wealth & Philanthropy, 142Lynch School of Education, 48

Boston Marathon, 67Boston Red Sox, 64Bradstreet, Anne, 2Brinkley, David, 73

Brokaw, Tom, 6, 115Brookings Institute, The, 142Brooks, David, 89Brown v. Board of Education, 68Buchanan, James, 30Budget

deficit, 14, 35, 42, 46, 108–109, 125surplus, 42, 125, 139

Buffett, Warren, 63, 151–152Bulge, Battle of the, 2Bull market, 32Bundy, McGeorge, 72Bundy, Ted, 143Bureau of Labor Statistics (BLS), 175Bureau of the Census, 52, 97, 146Bureau of the Public Debt, 46Bureau of Transportation Statistics (BTS), 156Burger King, 103Burke, James, 63Bush, George Herbert Walker, 76, 95, 101–102, 109Bush, George W., 39, 72, 101–102, 107–109, 111,

126, 132, 143, 161Business cycle, the, 22Business Week (magazine), 144

Castro, Fidel, 66Calley, William, 78Cambodia, 81Camus, Albert, 177Capitalist’s dilemma, the, 156Capra, Frank, 63Carbon emissions, 53Carson, Johnny, 66Casey-Kirschling, Kathleen, 58, 120–121, 190CBS-TV, 39, 73Centers for Disease Control (CDC), 59Central American Free Trade Agreement

(CAFTA), 96Central High School, 68Central Intelligence Agency (CIA), 65–66, 118Center On Philanthropy Panel Study (COPPS),

144Charlie Company, 78Cheney, Dick, 118Chevrolet, 7Childcare, 173–174China, 32, 42, 50, 92, 111, 118–119, 156, 163, 187Chrysler Corporation, 95Citigroup, 41Civil Conservation Corps (CCC), 149, 158, 162,

171

204 Index

Civil rights, 33, 68, 75Civil Rights Act of 1964, 68Civil War, 2, 5, 20, 26, 30, 31, 44, 60, 112, 114,

119, 141, 154Civil War cycle, 30, 141, 162Clay, Cassius, 66Cleaver, June and Ward, 180Cleaver, Wally and Beaver, 65, 180Clemens, Roger, 103Clinton, Hillary Rodham, 143Clinton, William Jefferson, 13, 101–102, 109,

125, 143, 150Coca-Cola Company, 92Communism, 72Communists, 73Compromise Generation, 150Conference Board, the, 102Congress, 39, 52, 66, 97, 111, 124–125, 127–128,

131, 133Congressional Budget Office (CBO), 47, 52, 84,

130Conscientious Objector (CO), 79Conservatorship, 41Consolidation, 41Constitutional Convention, 154Consumer Price Index (CPI), 47Coopers & Lybrand, 94Coppola, Francis Ford, 190Cost-reductions, 93, 98, 129Crash of 1929, 2, 32, 100, 141, 165Credit, 32, 40, 50, 125Credit card debt and delinquencies, 50Crest toothpaste, 60Croft, Steve, 39Cronkite, Walter, 73, 77Cuba, 66

Dahmer, Jeffrey, 143Debt

credit card, 50national, 4, 41–42, 46–48, 95, 125, 132, 138,

165, 167, 191D-Day, 2, 86Deep Throat (Watergate scandal informer), 81Deficit

budget, 14, 35, 42, 46farm, 35needs, 61trade, 4, 35, 50

Delay, Tom, 118Dell, 97

Delta Airlines, 98Demand and supply, 34, 111, 163Democratic National Committee, 81Democratic National Convention, 20, 79, 107, 123Department of Defense (DOD), 131–132, 136, 139Department of Education, 175Department of Energy, 175Department of Housing & Urban Development,

175Dial (soap), 7DiMaggio, Joe, 63DINKs, 14Dot Com bubble, 84Douglass, Frederick, 37Dow Components, 86, 90–91Dowd, Maureen, 143Dow Jones Industrial Average (DJIA), 2, 16–17,

32, 102Doyle, Dane, Bernbach (DDB), 7Draft, military, 79Dragnet (TV show), 64Dubner, Stephen J., 83Dunkin Donuts, 97Dust Bowl Drought, 4

Economiccontraction, 23–24, 40, 89cycle, the, 22–24, 44depression, 38expansion, 23–24, 45peak, 89recession, 38trough, 89

Economic Policy Institute (EPI), 50Economy Act of 1933, 124Economy, the, 4, 22–23, 38, 40, 45, 47, 52, 84,

89–91, 108. 114–115, 124–126, 145, 157Ed Sullivan Show, The (TV program), 64Edwards, John, 103Egypt, 34Eisenhower, Dwight David, 2, 6, 26–27, 29–30,

36, 57, 59, 65–66, 139, 150Electricity, 31Electric motor, 31Employee Retirement Income Security Act

(ERISA), 48ENCORE, 152, 184ENRON, 143Encyclopedia Britannica, 168Entitlement programs, 47, 115, 125–126, 132, 161Environment, 162, 169, 171

Index 205

Environmental Protection Agency (EPA), 156Equal Rights Amendment (ERA), 67Ernst & Young, 118Extrinsic motivation, 180, 184, 190Exxon, 34

Fair Deal, The, 133Fannie Mae, 41Farm deficit, 35Fastow, Andrew, 143Fascism, 114Father Knows Best (TV program), 73Faubus, Governor Orville, 68FDR (Franklin Delano Roosevelt), 1–6, 19–20,

25–27, 29, 32, 36, 40, 54, 56–58, 60, 75,107, 111, 113–114, 120, 123–126, 130,139, 145, 150, 154–155, 158–159,161–162, 165, 171, 183

Federal Highway Administration (FHWA), 49Federal Reserve, 35, 39–40, 100Federal Reserve Bank of Cleveland, 148Feminine Mystique, The (Friedan), 67Field, Sally, 143Fisher, Carrie, 144Food

crisis, 50quality and safety, 51

Food & Drug Administration (FDA), 50–51Foreclosures, 51Fort Sumter, 33Foster, Jodie, 143Fram Oil Filter ad, 129Franken, Al, 143Franklin, Benjamin, 5, 20, 150, 154, 183Freakonomics (Levitt), 83Freddie Mac, 41Free agency, 63Free clinics, 170, 172Freedman, Marc, 152–153Friedan, Betty, 67Fruit, Chuck, 92Fugitive Slave Act, 33

Galbraith, John Kenneth, 93, 103Gas prices, 33, 45–46, 50Gates, Bill and Melinda, 151–152Gazette-Journal, Reno, 13General Accounting Office (GAO), 95–96, 130General Electric, 16, 90–91, 94, 129, 134General Foods, 8General Motors, 63, 91, 93, 115–116, 118, 129, 134

Generation gap, 74Generation X, 6, 12, 18, 25, 27, 36, 54–55, 76, 83,

120, 144, 166, 176–177, 182, 184, 191Generation Y, 25GI Bill, 7GI Generation, 2, 5, 12–13, 26–30, 36, 56, 60–61,

63, 72–76, 79, 81, 83, 85–86, 115, 119,139, 143, 145, 147, 149–150, 166, 183, 189

GI Joe, 74Gilded Generation, 76, 150Giuliani, Rudolph, 83Goldwater, Barry, 71Gore, Al, 143Government-Sponsored Entities (GSEs), 41Grammy, the (award), 143Grant, Ulysses S., 150Great Communicator, the, 85Great Depression, the, 1–4, 10, 20, 26, 28–32, 40,

44, 56, 60, 110, 113–114, 120, 127, 146,151, 155, 157–158, 161–162

Great Emancipator, the, 68Greatest Generation, the, 6, 81, 115Great Power Cycle, the, 30–32, 57, 120Great Society, 75, 95, 121–122, 161Green Giant (food company), 7Greenhouse effect, 37Greenspan, Alan, 35Gross Domestic Product (GDP), 3–4, 8, 22–23,

37, 45, 50, 84, 90, 109, 115, 118–119Grubman, Jack, 103Gulf of Tonkin

incident, 69, 72, 79Resolution, 71

Gulf War, 75, 101, 143Gunsmoke (TV program), 64

Hair Club for Men, 19Halaby, Lisa Hajeeb (Queen Noor), 144Haldeman, H. R., 81Hammer, Michael, 94Hanks, Tom, 143Hanyok, Robert J., 71Harvard, 63, 82, 93, 103, 146Harvard Business Review, 94, 168Harvard Crimson, 120Harvard School of Public Policy, 148–149Health & Human Services (HHS), Department

of, 47, 132–135, 137, 139, 161Healthcare, 47, 49–50, 108, 110, 126, 137, 150,

159, 170, 173, 191Health insurance, 49HealthSouth, 95

206 Index

Hearst, William Randolph, 124Hendrix, Jimi, 22Hierarchy of needs, 60–61, 103Ho Chi Minh City, 82Hoffa, Jimmy, 81Home Depot, 134Homeland Security, 158Homelessness, 110, 170Home ownership, 33, 51, 99, 108, 147Honeymooners, The (TV program), 64Hoover, Herbert, 1, 32, 40, 123–124Hooverville, 11Houston, Whitney, 143Howard, Ron, 143Howe, Neil, 23–25, 29Hubbert, Dr. M. King, 34Hubbert’s Peak, 34, 163–164Humphrey, Hubert H., 72Huntley, Chet, 73Hurricanes

Great Okeechobee, 4Katrina, 4, 38–39, 53, 105, 115, 117–118,

150–151

IBM, 84I Love Lucy (TV program), 64Immigrants, 52, 59, 175Immigration, 35, 52, 108, 150, 158Independent Sector (leadership forum),174India, 34, 97, 111, 163, 187Indy-Mac, 40Inflation, 35, 47Infrastructure, 49, 171–172Initial Public Offerings (IPO), 94, 103–104Innovation saturation, 129Insurance, health, 49Intrinsic motivation, 180, 184, 190I.O.U.S.A.: One Nation. Under Stress. In Debt

(documentary), 39iPhone, 187Iran-Contra Scandal, 87, 95, 101Iraq War, 4, 12, 31, 42, 52–54, 66, 75, 86, 109,

112, 132, 150Isdell, Neville, 92Israel, 34I-35 W Bridge, 49, 118It’s a Wonderful Life (movie), 63Iwo Jima, 81, 83

Jackson, Andrew, 150Japan, 42, 57, 111Jefferson, Thomas, 150

JFK (John F. Kennedy), 2, 6, 26, 29, 36, 66,68–69, 72, 75, 76, 80, 82–83, 122, 127,139, 150

Jimenez, José, 64Johnson, Lady Bird, 77Johnson, Lyndon Baines (LBJ), 69, 71–72, 75,

77, 80, 82, 95, 122, 125–126, 161Joint Chiefs of Staff, 136Jones, Marion, 103JP Morgan (financial and banking company),

100Junk bonds, 94Justice Department, 100

Katrina, Hurricane, 4, 38–39, 53, 105, 115,117–118, 150–151

Keaton, Diane, 178Kellogg, 8Kennedy, John Fitzgerald (JFK), 2, 6, 26, 29, 36,

66, 68–69, 72, 75, 76, 80, 82–83, 122, 127,139, 150

Kennedy, Robert F. (RFK), 78–79Kent State University, 26, 80–81Keynes, John Maynard, 14Keynesian economics, 14Khrushchev, Nikita, 67King, Jr., Martin Luther, 68, 78, 87, 150, 155King, Stephen, 144Kissinger, Henry, 80Kolberg Kravis Roberts (KKR), 104Korean War, 65, 83, 142Koufax, Sandy, 63Kozlowski, Dennis, 103, 143Kraft, James, 103Kraft Foods, 94, 103Kravis, Henry, 104

Labor force, 48, 54–55, 175Lay, Kenny Boy, 103LBJ (Lyndon B. Johnson), 69, 71–72, 75, 77, 80,

82, 95, 122, 125–126, 161Leave It to Beaver (TV program), 11Lehman Brothers, 41Leveraged Buyouts (LBOs), 94Levi’s (clothing), 116Levitt, Abraham, 58Levitt, Steven D., 83Levittown, 58Lewinsky, Monica, 87, 101Libby, Scooter, 118Liberty Generation, 150, 182LIFE Magazine, 7

Index 207

Life stages, 24Limbaugh, Rush, 143Lincoln, Abraham, 5, 20, 57, 68, 114, 141, 150,

154–155, 183Linux, 168Lost Generation, 2, 5, 26–27, 29–30, 36, 57, 66,

139, 150, 166

Madison Avenue, 14Madoff, Bernard, 103Mansfield, Mike, 66Mantle, Mickey, 91Manufacturing, 84, 96Maslow, Abraham, 60–62, 103, 179Mathias, Bob, 64McCain, John, 26–30, 36, 76, 141McCarthy, Eugene, 79McCarthy, Joe, 65McCovey, Norma (Jane Roe), 83McGwire, Mark, 91McNamara, Robert S., 82Medicaid, 52–53, 134–135Medicare, 35, 39, 47, 52, 54–55, 126–127,

134–135, 138Me Generation, 25Mergers & Acquisitions (M & A), 94Merrill-Lynch, 41Met-Life Foundation, 148–149Mickey Mouse Club, 64Middle East, the, 13, 47, 53, 108–109, 113, 136Military draft, 79Military Industrial Complex, 30Milken, Michael, 103, 143Millennial Cycle, the, 30, 32, 57, 69, 86–87, 94,

103, 116Millennial Generation, 5, 12, 18, 28, 36, 48,

54–55, 120, 166, 176–177, 183–184, 191Minimum wage, 97Mini skirt, 74Minneapolis, 49Missionary Generation, 2, 5, 24–27, 29, 36, 56,

120, 139, 150, 159, 183Mission Impossible (TV program), 73Montana, Joe, 143Mortgages, sub-prime, 4, 32–33, 40, 41, 51, 99,

100, 150Muhammad Ali, 66, 122Munich Re (reinsurance company), 53Municipal solid waste (MSW), 156–157Murphy, Thomas, 63Musial, Stan, 63My Lai massacre, 78, 80

National Aeronautics & Space Administration(NASA), 175

National Bureau of Economic Research (NBER),37, 87

National Center for Education Statistics,146–147

National Center for Health Statistics, 142National Climate Data Center (NCDC), 117National Coalition on Healthcare, 137National debt, 4, 35, 41–42, 46–48, 95, 125, 132,

138, 165, 167, 191National Education Association (NEA),

173–174National Geographic (magazine), 34National Guard

Arkansas, 68Ohio, 80

National Oceanic & Atmospheric Administra-tion (NOAA), 117

National origins quota, 4National Security Agency (NSA), 71Nation of Islam, 66Natural disasters, 35, 53Nazis, 151Nazism, 114NBC-TV, 73Nelson, David and Ricky, 65Nelson, Ozzie and Harriett, 72New Boomer Generation, 188, 191New Deal, the, 75, 124, 154, 162, 165New New Deal, the, 123, 128, 159, 166–167New Silent Generation, 24, 36, 114, 166, 191Newsweek (magazine), 23New York Times, the, 16, 189–190Nextel, 127Nissen, David, 34Nixon, Richard M., 12–13, 66, 79, 81–82Nobel Prize, 143No Child Left Behind, 108, 173Non-Governmental Organization (NGO), 167,

171Nordhaus, William D., 37–38North American Free Trade Agreement

(NAFTA), 96North Vietnam, 78, 82

Obama, Barack, 5, 13, 26–28, 36, 46, 118m,132–133, 138, 143, 150, 155, 165, 183

Office of Management and Budget (OMB), 46,130–131, 139

Off-shoring, 50, 97

208 Index

Ogilvy, David, 7Ogilvy & Mather, 7Ohio National Guard, 80Oil crisis, 34–35, 47, 111Oil shocks, 34–35, 46, 150OPEC (Organization of Petroleum Exporting

Countries), 34Oscar, the (award), 143Oswald, Lee Harvey, 83Ozone layer, 49

Page, Marianne E., 88Pakistan, 39, 113Palmolive, 60Pandemics, 35Parents, types of, 29Paulson, Henry, 41Pearl Harbor, 2, 33, 39, 72, 110–112, 151Pension Benefit Guaranty Corporation

(PBGC), 98Pensions, 98Pentagon, The, 131Pepsi Generation, 25Pepsodent (toothpaste), 7Personal Consumption Expenditures

(PCEs), 84Peter G. Peterson Foundation, 39Peters, Bernadette, 143Pew Hispanic Center, 97Pew Research Center, 145 Pharmaceutical companies, 49–50Pirnie, Alexander, 12Pork-barrel spending, 128Poverty, 52, 75, 110, 121Powell, Colin, 66Power grids, 166Prescription Drug Bill, 161Prices

food, 51gas, 33, 45–46, 50, 111, 163oil, 45–46, 111, 163

Procter & Gamble, 8, 134Product development, 92Productivity, 15, 18, 54Progress International Reading Literacy Study

(PIRLS), 48Progressive Generation, 150Proposition 98, 173Protectionism, 4, 153Public-Private Partnership (PPP), 118Pulitzer Prize, 143

Quality of Life (QOL), 6, 15, 144, 176, 180–188,190–191

Quotas, national origin, 4QVC (Quality Value Network), 190

radio, 31Raid, 7Reagan, Ronald, 13–14, 85, 95, 101–102, 109,

145Realty-Trac, 51Reasoner, Harry, 73Recession, 22, 32, 95, 113Red Cross, 151Red September, 41–42Red Sox, Boston, 64Re-engineering, 15–16, 92, 94, 126, 129–136Republican Generation, 150Republic Services, 156Revolutionary Cycle, 30Revolutionary War, 30–31RFK (Kennedy, Robert F.), 78–79Rhodes, Governor James, 80Rightsizing, 157Risk Management Solutions, 53Roaring Twenties, 6Robinson, Jackie, 64Roe, Jane (Norma McCovey), 82Roe v. Wade, 82–83Rolling blackouts, 164Roosevelt, Eleanor, 10Roosevelt, Franklin Delano (FDR), 1–6, 19–20,

25–27, 29, 32, 36, 40, 54, 56–58, 60, 75,107, 111, 113–114, 120, 123–126, 130,139, 145, 150, 154–155, 158–159,161–162, 165, 171, 183

Roosevelt, Theodore (Teddy), 150, 162Rosenfeld, Dr. Alvin, 89Ruby, Jack, 83Rusk, Dean, 72Russert, Tim, 150Ruth, Babe (George Herman), 116

Sales promotion, 92Salmonella, 51, 157S & P 500, 86S & P/Case-Shiller Index, 99Savings & Loan Crisis, 41Schwarzenegger, Governor Arnold,

173–174Schweitzer, Albert, 2Selective Service System, 12, 79

Index 209

Self-actualization, 9Self-Storage Association, 156Seniorfare, 136September 11 (2001), 39, 72, 102, 111, 150–151,

165Service economy, 84Shareholder value, 91Silent Generation, 5, 26–30, 36, 60, 76, 85, 119,

141, 147, 166Simpson, O.J., 143Six Day War, The, 34Six Sigma, 92Skilling, Jeffrey, 87Slavery, 57Sloan-Kettering, 151Small Business Administration (SBA), 175Smith, Governor Al, 123Smith, Howard K., 73Social Insurance Taxes, 134–135, 137, 139Social networks, 167–168Social Security, 35, 39, 47–48, 52, 54–55,

108–109, 120, 124, 126–127, 132,135–136, 138–139, 148, 150, 165

Social Security Act, 158Social Security Administration (SSA), 47, 132,

135, 137, 161Societal cycles, 22–24Son of Sam (serial killer), 143Southeast Asia, 69, 71, 75, 77, 82South Vietnam(ese), 73, 78Soviet Union, 65–66, 95Spanish-American War, 125Spielberg, Steven, 143Spitzer, Eliott, 103Spock, Dr. Benjamin, 8–9, 61Sports Illustrated (magazine), 92Stamp Act, the, 33Standard of Living (SOL), 6, 15, 122, 144,

178–188, 190Stand By Me (movie), 178Stanford University, 151Steel, 31Stevens, Ann Huff, 88Stewart, Justice Potter, 111Stewart, Martha, 103Stiglitz, Joseph E., 53Strauss, William, 23–25, 29Strauss & Howe, 23–25, 29, 120Sub-prime mortgages, 4, 32–33, 40–41, 51,

99–100, 150Suffrage, 67

Sullivan, Ed, 64Supply and demand, 34, 111, 163Supply chain, 92Supply-side economics, 14, 85Supreme Court, U.S., 68, 83, 154Syria, 34

Tax cuts, 43Taylor, Chuck, 116Taylor, Zach, 30Tea Act, the, 33Teamsters, the, 81Temple University, 145Terrorism, 3–4, 35Tet offensive, 77Texaco, 7Thirteenth Amendment, 57, 120, 154Time-Warner, 92–93Tonight Show (TV program), 66Tony, the (award), 143Topo Gigio (Italian television, children’s puppet

character), 64Total Quality Management (TQM), 92Towers-Perrin study, 103Toyota, 45, 116Trade deficit, 4, 35, 50Transcendental Generation, 5, 150Transcontinental Railroad, 31Traub, Marvin, 63Truman, Bess, 65Truman, Harry, 65, 102, 132Trust for America’s Health, 51Tyco International, 143

Undocumented workers, 17, 54, 97, 159Unemployment, 14, 35, 47, 110, 137, 162United Auto Workers (UAW), 63, 98United Nations, 51Universal Healthcare (UHC), 133–139, 165Urban Institute, the, 49Urban Land Institute (ULI), 118Urgent care, 45United Artists, 190United States

auto industry, 45Census Bureau, 52, 97Forest Service, 117, 162Savings Bonds, 46Treasury, 41–42, 46

U.S.S. Missouri, 57

210 Index

Value chain, 92V-E Day, 2Viagra, 19Vietcong, 66, 78Vietnam War, 12, 27, 30, 33, 52, 54, 65–66, 69,

71–73, 75–83, 85–86, 125, 142V-J Day, 2, 27, 31, 58Volunteerism, 151–152, 173–175

Wachovia, 41Wade, Henry, 83Walker, David, 38–39Wall Street, 1–2, 5, 15–16, 91, 95–96, 103, 128,

144, 176, 181Wall Street bailout, 41Wal-Mart, 134Washington, George, 150, 182Washington Mutual (WaMu), 41Washington Post (newspaper), 81Waste Management (company), 156Watergate scandal, 81Water supplies, 50Wayne, John, 60, 113Weapons of Mass Destruction (WMD), 101Webster, Daniel, 155Welch, Jack, 16, 91, 129–130Welfare, 134–135Whitewater Scandal, 101Wiffleball, 65Wikipedia (online reference service), 168Williams, Ted, 63Winfrey, Oprah, 151–152, 158Wise, Nicole, 89Wisk (detergent), 7Woodward, Bob, 81Workfare, 132, 134–136World Bank, 51World War I (WWI), 58, 125World War II (WWII), 4–6, 8, 12, 16, 26, 28,

30–32, 44, 57, 59, 65, 68, 85–86, 90, 110,112–114, 119, 129–130, 141–142, 144, 151

World Wide Web (www), 16, 84, 167, 186Wylie, Philip, 8

Yates, Andrea, 143Yom Kippur War, 34Yuppie, 14

Zero-based budgeting, 130–131Zoellick, Robert B., 51

About the Author

TOM OSENTON is an adjunct professor of marketing at the University ofNew Hampshire’s Whittemore School of Business and Economics. He isalso a partner in the Chicago-based market research and one-to-one mar-keting company Customer Share Group, Inc. Previously, he held senior-level positions at such companies as CapCities/ABC, VNU, and theTimes-Mirror Company. He is the author of Customer Share Marketing:How the World’s Great Marketers Unlock Profits from Customer Loyalty andThe Death of Demand: Finding Growth in a Saturated Global Economy.

osenton boomer destiny; leading the u.s. through the worst crisis since the great depression...

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