Boomers may be going bust
TEXT OF COMMENTARY
Scott Jagow: We've been asking the question - what happens if there's no bailout? Commentator Robert Reich says the more appropriate question is who suffers if there isn't one?
Robert Reich: If there's no bailout to prevent credit markets from completely freezing up, we're all in trouble, because businesses cannot borrow money to keep producing. And we consumers can't borrow money to buy a car or get a mortgage or send our kids to college. All of which means a deep and prolonged recession, and lots more people without jobs.
Now that's bad enough. But if you're an early baby boomer over the age of 55, you may be in even bigger trouble, bailout or no bailout. In an economic crisis, many employers lay off older workers first, because their seniority makes them more expensive. And studies document that older workers who lose their jobs face more difficulties finding new ones.
That's not your only problem. The house you've been living in for 25 or 30 years and were planning to cash in for retirement is worth far less now than the last time you looked. So is that 401(k) plan you were counting on.
And you don't have enough time before retirement to make up for these losses -- certainly not enough time to reap the gains you expected between now and then. If the economic crisis is as bad as some predict, housing prices and share values might not bounce back for five years or more. Japan's meltdown took 10 years to correct.
We early boomers -- and note I said "we," because, sadly, I'm one of you -- once had all the advantages. We entered the housing market in the 1970's and 80's, when houses were still cheap, and reaped the gains when late boomers came into the market and pushed prices up. We also got the plumb jobs because we were the first into the post-industrial economy, before the boomers who followed us. And many of us got into the stock market early on, and rode that great wave.
So maybe now we're paying the price for our good fortune then. But that doesn't make this any less painful.
Jagow: Robert Reich's book, "Supercapitalism," is now in paperback.