Nice bit of Baby Boomer propaganda

From The Telegraph:

Baby boomers shouldn’t feel guilty about being better-off than younger generations, because people aged over 50 today saved harder and spent less when they were young than is the case today. That’s the conclusion of analysis of more than 2,000 people by the Chartered Insurance Institute (CII).

The study acknowledges that baby boomers – or those born within 20 years of the end of World War II – were fortunate to enjoy easy mortgage availability and decades of house price inflation plus final salary or defined benefit pensions denied to most young adults today.

As a result, about 80pc of the Britain's net personal wealth of £6.7trn or £6,700bn is owned by people aged over 50 while younger folk often have no savings, substantial debts and little hope of becoming homeowners any time soon. The average age of first-time buyers is now 37 or about 10 years later than two decades ago.

But the CII claims that ‘generation rent’ are partly to blame for their own misfortune because many fail to follow their elders’ example by starting to save early. They have come to expect regular foreign holidays, among other treats once regarded as luxuries, often funded by credit cards taken out earlier than their parents did.

That is all complete hogwash. As I said over at HPC, it is pointless comparing living standards now with what they were at any mythical time in the past, fifty years ago, people did not fly abroad on holiday or all have colour TVs and iPods and so on, but nowadays they do.

People who were young fifty years ago didn't nobly forego these fripperies because they were so thrifty and hard working, these fripperies simply didn't exist. And nowadays everybody spends money on these things, young and old alike. That does make today's young people feckless and wreckless and the authors of their own misfortune.

In turn, living standards fifty years ago were vastly higher than they had been fifty years before that. Fifty years ago, at least everybody had mains electricity, nearly everybody had a gas or electric cooker and a fridge, most of them had a black and white telly and a gramophone, and plenty already had a car or central heating. So from the point of view of somebody born in 1900, those born in 1950 lived in the lap of luxury.

And no doubt in future , they'll invent new stuff and manufactured goods will get ever cheaper and in another fifty years time today's young people will be playing the same card and saying "Ee by gum, in my day an iPod cost half a week's wages, nowadays you get them free with a packet of Corn Flakes."

If you're a Baby Boomer and you feel aggrieved when reading this, then that proves that you have a computer and internet access, probably broadband, which costs you under £20 a month. They didn't have that fifty years ago, did they? And as we well know, having broadband increased the value of your house by thousands of pounds, because nowadays it's a must-have utility, despite it was somebody else who dug up the pavements and did the cabling.

What it really boils down to is that fifty years ago, you could buy a house for four or five times the cost of a fairly crap original Mini car, and nowadays, a house costs fifteen or twenty times as much as a vastly superior modern Mini. It's land prices which make all the difference and which have transferred so much wealth from young to old, it's land values which make up the bulk of that £6.7 trillion supposedly hard earned net personal wealth.

Well, it's land values and decades of government deficit spending, which was just the Baby Boomers spending on young people's credit cards (to paraphrase George Osborne).