Poor Us: The Great Depression 2.0

March 13, 2009

Generation P’wn3d: “The vast majority of baby boomers will be approaching retirement with little wealth outside of Social Security.”

Woodstock was a music festival, billed as An Aquarian Exposition, held at Max Yasgur’s 600 acre farm

Were you a citizen of the Woodstock Nation? If not you may belong to Generation P'wn3d.

“Let those poor go to the prisons and the Union workhouses, and if they would rather die, they had better do it, and decrease the surplus population.” Ebenezer Scrooge

If you know all the words to In A Gadda Da Vida and claim you can pick yourself out of the crowd in the photograph at left, then you are no doubt a member of the baby boom generation and the subject of the report recently published by the Center for Economic and Policy Research: ” Wealth of the baby boom cohort after the collapse of the housing bubble.  We’ll get back to you  in a moment.

If on the other hand you are familiar with the term p’wn3d, then you are more likely the offspring of the previously mentioned cohort, and consequently have even more to lose due to the current economic Apocalypse described in the report. You, I’m sorry to say, are Generation P’wn3d.  But before you start reading the bad news about the rest of your life, I want to offer two words that may offer a more optimistic alternative than simply surrendering to cruel, boomer-inflicted fate: Soylent Green.  I’m just saying, think about it.

Now, you’ve probably been wondering, as I have, what will become of us as a  consequence of the current mortgage-credit-industrial-job meltdown? Can you take the truth? If so, I encourage you to read the 25-page  report by David Rosnick and Dean Baker of the Center for Economic and Policy Research.  Whether you’re of the doomed boomer cohort or simply p’wn3d, it should more than satisfy your curiosity.  However, don’t get reckless: definitely do not read while operating heavy machinery or if you’re out of work or have a house that you’ve bought within, say, your current lifetime. Or if p’wn3d through absolutely no fault of your own. (And, really, get in on the Soylent Green franchise before Halliburton sets up shop.)

So, let’s cut right to the chase. This is the concluding summation:

“In short, as a result of the collapse of the housing bubble, the vast majority of baby boomers will be approaching retirement with little wealth outside of Social Security. While the younger baby boomers will still have some opportunities to accumulate wealth in the years until they retire, it is unlikely that the picture will be very different after a relatively small number of additional work years. This means that cutting back Social Security and Medicare from current levels will impose serious hardships on this age group.

Finally, these projections should make clear that homeownership is not always an effective way to accumulate wealth. Homeownership during a housing bubble was a route toward losing wealth, not accumulating it. While typical homeowners cannot be blamed for not recognizing the bubble, the economists and policy professionals who designed policies that pushed homeownership certainly can and should be blamed. It was possible to recognize a bubble at least as far back as 2002 based on the sharp divergence in house prices from their historic trend.The fact that so many economists and policy professionals failed to recognize and warn of this bubble had enormous consequences.  Unfortunately, the people who listened to these experts are likely to suffer the consequences of the experts’ failure, rather than the experts themselves.” (read on)

via Paul Kedrosky’s Infectious Greed

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February 27, 2009

History in hock: Annie Leibovitz pawns photos

In 1975, photographer Annie Leibowitz and writer Hunter S. Thompson went on the road with the Rolling Stones

Photographer Annie Leibovitz kept the Baby Boom generation in sharp focus from their misspent youth to tapped-out middle age but no one ever pictured her getting caught up in their craziness.

Until now. Tuesday The New York Times reported that finding herself in a financial bind, Leibovitz “essentially pawned every snap of the shutter she had made or will make…”

“Leibovitz…borrowed $5 million from a company called Art Capital Group. In December, she borrowed $10.5 million more from the same firm. As collateral, among other items, she used town houses she owns in Greenwich Village, a country house, and something else: the rights to all of her photographs. Leibovitz secured two loans last year from a company calls Art Capital Group, which is essentially a pawn shop for the art elite. ”

For 75 million Baby Boomers who still dream of being shot by Lebovitz for the cover of Rolling Stone or Vanity Fair,  this may be the first time they  identify with the photographer more than the rock stars or Oscar winners in her pictures.  That’s because they’re all as broke as she is. CNN Money reported this the same day the pawned art story broke:

“The collapse of the housing bubble, which led to the current recession, has already destroyed almost $6 trillion dollars in housing wealth for homeowners,” said report co-author Dean Baker. “This reality is compounded by the recent collapse of the stock market. Many baby boomers will only have Social Security and Medicare to rely on in their retirement.”

So much home equity has been lost that should boomers need to sell their homes, 30% of those aged 45 to 54 would owe money at closing, according to ‘The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble,” a report released by the Center for Economic and Policy Research, a Washington, D.C.-based, non-partisan think tank. About 18% of boomers aged 55 to 64 are underwater and would have to bring money to the table.”

Source: Boom2Bust

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