Baby Boomers weren’t sitting idly by, it was politicians
Auckland writer
Baby Boomer-bashing has become something of a national sport of late. Those of us born into the warm embrace of the postwar years are routinely derided for having it easy all our lives and devoting our declining years to pulling the ladder up after us.
If true, it would be a grievous fault, but it distorts the facts in favour of a divisive blame game that distracts us from the conversations we should be having.
In an article last weekend about the vanishing dream of home ownership, the normally sensible economist Shamubeel Eaqub said we Boomers had ‘‘sat idly by’’, attributing our wealth to our canny investments. We had failed to ‘‘act on the deep and structural policy problems’’ that were accumulating; and had been blind to the fact we were profiting at the expense of our children and grandchildren.
The former statement is wrong-headed; the latter is just wrong.
I am under no illusion that I came of age in the most privileged time and place in the history of the world. Materially (if not culturally or in terms of race relations), New Zealand in the 1950s and 1960s was as close to heaven as it gets, at least for Pa¯ keha¯ .
Sure, first-mortgage rates were 18 per cent when I bought my first home, but it cost $68,000, so I didn’t do it too hard. But just as my situation was not an achievement for which I should be congratulated, neither is this houseless generation’s plight a sin for which I should be blamed.
Boomers’ wealth is not the cause of Millennial deprivation; it is not a zerosum game. Our children should have enjoyed the same affluence we did, and without the market-obsessed economic ‘‘reforms’’ that began in the 1980s, they would have.
Eaqub is on safer ground when he mentions the ‘‘deep structural problems’’ that have pushed home ownership beyond the reach of our kids, but to say that we Boomers ‘‘sat idly by’’ as they developed ignores both political reality and common sense.
What, I wonder, would he have had us do if we had only stirred from our prosperous torpor? The only Boomers who could have stopped the national average house price rising from $110,000 to $600,000 (and in Auckland from $130,000 to $800,000) in the past 25 years were the ones sitting in Parliament.
As banks fell over themselves to lend money to people (I was not one) who wanted to buy heavily leveraged residential property, those investors were not sitting idly by; they were very busy indeed, enjoying tax-free capital gain and being encouraged by the same tax-deductions that a plumber can claim on his tools.
Others of us (I was one) wrote to successive finance ministers, beginning in 2000 (when the average house price was $169,000 and in Auckland $241,000), imploring them to strike an election-proof multi-party accord to tax gains on all but family homes. None of those letters was acknowledged.
The sitting-by took place, all right, but it was calculated, for electoral advantage, and not idle at all. To say that my generation ‘‘failed to see’’ what was happening is insulting. Some Boomers made millions and have doubtless housed their kids with the profits, but the rest of us practically wept with rage. Every conversation I had with my kids for 20 years touched on house prices.
Those responsible for making our home affordability among the world’s worst are those who could and should actually have done something about it. The entire Baby Boomer generation does not deserve the blame.