another comment on Dean Baker

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One of Dean Baker's remarks in his "Stop Baby Boomer Bashing" piece that I mentioned on Thursday needs a rebuttal. Baker wrote that the bursting of the stock market and housing bubbles will benefit younger workers:

The loss to the baby boomers is a gain to younger generations. They will, on average, be able to buy up the housing stock for prices that are 30 to 40 percent lower than what they would have faced three years ago. They will be able to buy the wealth of corporate America at a discount of more than 40 percent.

Not if they don't have the cash!

They can only "buy up" assets if they have money available to do so. The price of a house or a share of stock is irrelevant to younger workers who are often just scraping by--without savings, or lines of credit, or stable jobs, or healthcare...

This price deflation is great for the wealthy, though, who dream of a new gilded age. They can use their capital gains from the previous bubbles to buy up the homes, 401(k)s, and other possessions of the unemployed, bankrupt, and desperate families who can no longer maintain a middle-class lifestyle.

The young, who don't tend to have such assets, will likely not be benefiting from the fire sale.

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This page contains a single entry by cognitivedissident published on February 21, 2009 11:24 AM.

Wieseltier's morning in America was the previous entry in this blog.

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