Carmel Fisher - The bogus baby boomer blame game

I struggle with the fact that I am a baby boomer.  Not that there is anything wrong with boomers, I just always assumed they were my parents’ generation.  I squeeze into the category by two years.

All through my career, baby boomers have been given a bad rap.  As a young sharebroker I remember being told that baby boomers were going to precipitate the next big share market crash.  The logic was that as boomers retired en masse, they would sell their stocks and drive the market lower.  

A while ago I read another dire warning, this time that baby boomers would kill the small business community.  Under the title ‘A Baby Boomer Tsunami is coming’, the story highlighted that a significant percentage of small businesses are owned by baby boomers.  As they enter their 60s and 70s (this decade) the boomers will need to sell their businesses to unlock funds for retirement.  As the market becomes awash with businesses for sale, there will be many that don’t attract buyers or achieve fair value.  The conclusion pitied all those business owners who have dedicated their lives to a business and worked hard, yet may end up with little reward. 

All because of those dastardly baby boomers!

Then of course there’s the housing market.  Just last month an article featured in American newspapers with a headline warning that the “great senior sell-off” could cause the next housing crisis.  It argued that by 2020 the supply of homes for sale by baby boomers will overwhelm the demand for their homes.  It is not just the volume at issue, it’s also that baby boomers will want to sell the sort of houses that buyers won’t necessarily want, and these houses might be in declining or stagnant cities while more of the buyers are in growing metro areas.  The article portrayed a worst case scenario where sellers of an advanced age will simply walk away from the homes they are unable to sell and move into smaller homes, further driving down property values.

Of course, many of these theories can be disproven.  When baby boomers have retired, they have not necessarily sold their shares.  In a low interest rate environment, the dividends off their share market investments have helped boomers fund their retirement lifestyles.  If anything, their ongoing demand for high dividend stocks may have buoyed markets rather than dragged them down.

As for businesses, there is little evidence of a bunch of hard-working, older business owners being stuck in their businesses because they can’t find buyers for love nor money.  A good business will sell at a good price; a bad business won’t, irrespective of the proprietor’s age.

And as for housing, ask any Generation X home buyer to show you suburbs of cheap houses that baby boomers can’t sell.  Although in aging nations, people’s housing needs may require re-calibrating, supply and demand invariably adjust to reach equilibrium.  

Baby boomers can’t be blamed for everything.  What about the economic boost that will come as they (we!) spend money to stay young and healthy, and live an active lifestyle?  

Surely we get some credit for that.