3 Things Generation Y Needs to Fix Now

My fiancee asked me an important question yesterday after reading my last post the Rodney Dangerfield Generation, “How do we fix it?” and the “it” referred to the problems we face as Gen-Y beneficiaries of the massive financial mess and total breakdown of representative government we’re about to experience. I wish there was an easy answer for her because she loves it when I have all of the answers and they’re easy. It’s depressing, looking at the numbers, which is an odd thing because a lot of surveys typically characterize us millenials as generally optimistic about our prospects for the future. I am guessing that’s because so few of us has really thought about where we’re heading thanks to our predecessors. Maybe that’s why I spend so much time depressing everyone with my posts.

I’ve talked about the problems until I’m blue in the face; education is expensive, student loan debt is unforgivable in all but the most extreme cases, unemployment for Millenials is double the national rate, and we’re all going to be stuck with the debt load of today plus entitlement spending that is growing like bamboo. In fantasy land, aka the desert of the ideal (which still looks a lot like Kansas), the simple answer is to welsh on our national debt, do like Greece and default on all of our bonds. That would solve the insolvency problem, but the financial system including pensions, insurance, mortgages and just about everything tied to the dollar would go haywire on us, so it’s not the best solution either, plus the Chinese (our biggest creditors) would be sorta pissed.

As much as I would love to anger the Chinese, because I think they’ve been fixing their currency, manipulating exchange rates, blocking our imports and stealing our technology for decades, we probably don’t want to suck the rest of our financial system down with them. I mean “our” financial system in the loosest association possible because we really don’t own much of it, not yet at least. When it comes time to pass the torch, we’re probably going to get a much smaller piece of the financial pie than our predecessors anyway. The reason being massive deflation that I predict in my post The 4 Horsemen of the Economic Apocalypse.

So here’s a recap one last time; retiring baby boomers will mean a lot less spending on everything (from McMansions to the stuff that goes inside them), which will mean unemployment, lower tax revenues for governments in debt up to their eyelids and massive public and private debt defaults which deflates the money supply and prices. Simple enough? If we finally accept this is a foregone conclusion, we can start making plans to deal with it all and that brings me to my first set of ideas for our generation (Gen-Y) on how to deal with this mess we’re going to inherit.

1) Eliminate Black Markets. The economy may be in the tank thanks to a relative decline in demand over the short run, but 10 years from now the Echo Boom will replace that demand as we reach our peak spending years and we’re going to need to be ready to maximize our resources. When times are good, making structural changes is very difficult because nobody wants to upset the proverbial apple cart. This allows things like black markets to form and they’re toxic to the overall system.

Whether we’re talking the black market for drugs, counterfeit goods, environmental protection, prostitution or human trafficking there are so many holes in the purview of our regulatory systems that are unfilled by oversight, we’re allowing the worst of the worst human beings to do as they please at the expense of our society.

Anywhere something is banned, outlawed, or unsupervised there are going to be economic incentives for someone to provide that banned substance. It will happen, there’s nothing we can do to stop it, we can spend all we want to try to minimize, criminalize and ostracize anyone associated with breaking the laws of prohibition, or we can institute the same kinds of regimes we have for other controlled substances, industries and behaviors to make sure that what goes on is taxed, supervised for safety and regulated appropriately for the good of everyone.

This puts a lot of people at odds with regard to their moral interests, or in other words, did he just say legalize drugs and prostitution? Well, sort of, but not really. I’m not talking about letting a free for all take place where anyone who wants to own a brothel or brew methamphetamine should be allowed to do it, but I am talking about removing the stigma associated with these taboo subjects and taking a hard look at how we can allow these activities to exist safely in our society because right now they exist and they’re not safe, and a lot of people are getting hurt as a result.

2) Democracy is a responsibility; not a privilege. There are so many people out there who don’t vote. When they do, they’re generally dragged into the polling stations because they’re outraged. I think this is a fundamental flaw in our democratic process. I also think that there are far too many parts of government where voters don’t have a say and they should; like the Supreme Court justice nominations, or the Federal Reserve Chairman and the leadership positions of the various federal agencies like the EPA, Department of Justice, and the Secretary of State. Why did we stop with electing only the President and Congress? Whose dumb idea was it to let the President’s golf buddies run the country.

I would like to see everyone have to vote once a year when they renew their motor vehicle registration or make an annual drivers license renewal process. I would also like to see a referendum vote take place on all new legislation enacted by the President and Congress and if both branches of the legislative body disagree, then the tie breaker would be a popular vote. The goal of this would be to prevent the type of paralysis that occurred in 2011 with regard to raising the debt ceiling and taking away the old excuse that voters would crucify any elected official who touches sensitive issues like entitlement spending and abortion.

Getting people to participate in the process is going to open up a whole can of worms as it relates to so many issues like campaign financing and term limits. There are so many structural barriers today preventing direct democracy that when people are finally given a say in their own government they’re going to have a lot of walls to consider for demolition. Keeping people out of the process is a good way to disenfranchise them, but forcing participation may be the best way to wake everybody up to the frustrations we’re all going to face if we don’t start making some structural reforms to our system.

3) Reform the Education System. America has the strongest university system in the world, yet for some reason we can’t teach all of our kids in elementary school how to read and write effectively. One of the biggest problems with our education system is that it carries a misguided assumption that everyone is endowed with the same set of abilities to begin with. Unfortunately not “All man are created equally” and trying to educate them as though they are is a great way to find out just how true that statement is.

Programs like No Child Left Behind have left many children behind and recently several states were allowed to opt out of this mandated test score driven approach to educating children. Not every child is going to be the next Albert Einstein, Shakespeare, or President of the United States, but wasting years of their lives teaching them to be the next of those geniuses isn’t the best way to prepare our kids for the future they are best suited for. We already spend millions of dollars a year evaluating gifted students and those with learning disabilities, and while we are doing some things to help those kids at the extreme opposites of the bell curve of ability, the ones in the middle are getting the least attention.

Being moderately gifted and not impaired by a learning disability is not a crime, but those kids are punished everyday. Without being identified for special services, we let millions of kids float through school without encouraging them to excel or identify the areas of studies that their learning aptitudes would allow them to excel in. There are so many different ways we could help these kids to perform and find their career paths earlier, but thanks to our distorted assumptions about equality of learning abilities we don’t do anything for them and that needs to change. We need to create more merit based access to specialty education where non-traditional subjects are emphasized and the talents of each of our children can be nurtured to their full potential.

Conclusion – Time for Real Change

What are we trying to accomplish as a society? I would hope that thanks to Generation Y’s indomitable optimism and a good healthy dose of naivete, we can overcome the challenges that our parents generation have been unable to solve, or at least try! When we look at the attempts made by our last few leadership regimes at reforming the education, electoral and entitlement systems the strong message was don’t mess with the structure. As beneficiaries of a mess, we have the right to mess with the system and it is most certainly in our interests to do so because we will not be able to solve the massive challenges we face by looking at them on the same plane of consciousness from which they were created. It’s time to think beyond the box and I think that we have a real opportunity to improve our world if we can be successful.

How’s that for being positive?