The Real Wealth Gap

The intergenerational wealth gap, the housing crisis, and how “BLM vs. MAGA” poisons the discussion on every issue that matters.

Recent events have made it harder but more necessary than ever to eschew the reactive tribalism encapsulated currently by “BLM vs. MAGA” in favor of an honest dialogue about the material conditions under which middle-to-lower class Americans in both camps increasingly suffer. Case in point is the BLM camp’s focus on “white supremacy” as a supposedly foundational force of inequality within society. Few would argue that racial prejudice isn’t a driver of inequality in many areas of American life, but in the bigger picture, is it the most pertinent one? Is it the most productive thing to focus on in 2020? Certainly, it is not the most unifying.

A glance at the data on the racial wealth gap reveals that while such a gap exists for all age groups it rises dramatically with age. The racial wealth gap for the 18-34 range of American adults is approximately six times less wide than it is for Americans 75 and up, according to the 2016 Survey of Consumer Finances. No one in the millennial age range has much wealth, in other words, while white boomers remain the wealthiest people in America by leaps and bounds. How the racial wealth gap will look over the next 30, 40, or 50 years is difficult to predict but that it won’t reach anything near the chasmic level between white boomers and black boomers seems a good guess given how staggeringly harder it is for millennials of any race to build wealth than it was for boomers.

The intergenerational wealth gap, and the plight of the “screwed” millennial generation has been a part of the national conversation since the 2008 financial crisis, and certainly calling attention to it was a significant factor in Bernie Sander’s appeal to young people. Yet the rhetoric of the cultural left often seems bent on distracting from this. It is perhaps no coincidence that immediately following the “Occupy Wallstreet” movement the mainstream media and press began talking about racial inequality extensively, creating a powerful distraction for left-minded young people away from the purely economic issues which could unite the country. Wokeness-studies graph guru Zach Goldberg illustrates this curious timing exhaustively in a recently reposted series of graphs. Whether the recent surge of “Black Lives Matter” activism and support is truly the result of organic, grassroots, consciousness-raising or the latest monkey-wrench thrown at the possibility of American class-consciousness is for you to decide. Certainly it seems fair to argue that the outpouring of pro-BLM sentiment from virtually every large corporation in America, and moneyed-boomers elsewhere in public life, is a PR move: a way of fulfilling some necessary noblesse oblige by endorsing a specific identity politics issue rather than thinking through the more general stabilizing and uplifting of the bottom half of society that we so direly need. That might require actual financial sacrifice after all, and it just doesn’t make for quite as fashionable of a hashtag.

The real shame of the new “BLM vs. MAGA” chapter in the culture war—or the real advantage if you are in a financial position that would be threatened by the boat being rocked—is that it makes everyone revert back to the baser, less-nuanced, less-pragmatic, version of their politics. A Trump voter who might have been sympathetic to protectionism, Universal Healthcare and even wealth-redistribution if you’d asked him six months ago now sees an implicit threat to his civilization in anything resembling socialism thanks to the actions of “activists” who see riots, looting, defunding the police and desecrating monuments as the justified and necessary first steps toward creating an equitable society. He thinks, perhaps not without justification, that stopping these lunatics should be a top political priority. Those who promise to represent his interests in this regard may hold fiscal policy that goes against his interests, but he’s angry, even scared, enough that he won’t read the fine print. It’s easy to get him to buy into the regressive Reagonomics of yesteryear since the Marxist-tinged, or otherwise left-wing, movements he sees in his country are so racialized and cultural in what they seek to promote and destroy.

On the other side, the energies of those in the Bernie Sanders crowd who are aware of the problems facing millennials, and middle-to-lower class Americans generally, are distracted from this bigger picture thinking that could have a common-sense, average-joe appeal if it found itself on the national stage. They are instead focused squarely, in many cases hysterically, on identity politics issue which poses significantly less of a threat to the financial powers that be and substantially more of a threat to normal Americans. The status quo is thus: two tribes—called “BLM” and “MAGA” above— clash futilely, while the moneyed corporate and political powers that be signal as they must for votes and reputation but carry on largely unscathed.

An illustrative example of the depressing regression in the national political conversation is the case of Nimbyism vs Yimbyism (the so called “Not in my backyard” vs “Yes in my backyard” debate regarding the construction of new housing projects, and how to deal with the housing crisis in high cost urban areas generally). This debate has recently been stirred up by two proposed housing bills: SB-50 in California which would have up-zoned areas around public transit and another, more ambitious series bill in Virginia, which would end zoning exclusive to single family homes.

Right wing media has sided squarely with the cause of Nimbyism. As with the socialism-allergic Trump voter, the right-wing kneejerk Nimbyism is emotionally understandable when you look at the rhetoric of the opposing side. Factions within the Yimby movement are all-too-eager to align their cause with that of “woke” politics. Many left-leaning politicians and journalists advocate using up-zoning as a way to diversify the suburbs and redistribute the wealth from the equity of well-off White homeowners. This kind of rhetoric has been especially prevalent in the conversation surrounding the Virginia bills. Conservatives will also often point to examples of Democrats promoting the construction of section 8 housing in Suburban areas. The absolute most-horrifying version of this kind of anti-white-neighborhood rhetoric came out during the recent riots, when the woke consequences of burning down white neighborhoods were casually discussed on twitter.

With such culturally loaded rhetoric in the conversation, who can blame conservative Americans from taking a kneejerk stance against all Yimbyism? But we must look past the surface level, and perhaps swallow some hard pills before we can formulate our ultimate stance on the matter. Once again what we are really looking at is an intergenerational gap in wealth that we cannot talk about as such thanks to the poison of culture-wars issues and resentments.

Conservatives are often sympathetic to the Nimby argument because they view the single- family home as a placeholder for an ideal of the American dream, based on a middle class, homogenous, high trust society that has become increasingly rare. Based on their antiquated picture they view Yimbyism as part of the left’s assault on the American way of life, or part of some UN agenda 21 conspiracy to overturn property rights.

The conservative Nimby homeowner wants to protect the character of his neighborhood, his investment, home equity and property values. The woke Yimby will then accuse him of not wanting to integrate his neighborhoods. There is indeed an element of implicit whiteness to what the single-family home symbolizes to conservatives, as a buffer protecting the middle class against the coalition of the ascendant and bad policies of the left. While that idealized lifestyle may still exist in places such as Utah it has already been lost and can’t be recreated in places like California and thus the single family home in a place like San Jose or the San Fernando Valley is just a symbol of what once was.

Demographic change continues regardless, as restrictions on new housing combined with high levels of immigration create an even greater scarcity for millennials looking to rent or buy. In the case of the Westside of LA, the combination of housing restrictions and poor school quality has made it difficult for even the moderately wealthy to start families. Nimbyism is in fact an ineffective strategy for holding back demographic change as immigrants are much better adapted to scarcity, and close living quarters.

The reality is that suburbs are transforming as rapidly demographically as high-density urban cores. This is characterized by an increase in ethnoburbs, and aging suburbs full of empty nesters where once high performing schools are closing due to lack of enrollment. This creates a zero-sum game of competition among groups where one group can’t grow unless it’s at another’s dispossession.

Wokeness, meanwhile, is far from the fundamental rational behind Yimbyism. At core, the Yimby coalition is comprised of millennials left out of the housing market who advocate the reforming of zoning laws to allow the building of more housing units in existing neighborhoods.

Most rank and file Yimby sympathizers are not left-wing social engineers but rather millennials from middle class backgrounds who have worked hard, played by the rules but have found the American Dream unattainable.

What the conservative Nimby defends goes scarcely beyond his immediate, selfish interests. He sees himself opposing the woke Yimby crowd and their radical cultural politics. What he doesn’t realize is that he throws the baby out with the bathwater—opposing bad left-wing politics, yes, but with such a lack of nuance as to close himself off to any conversation about how the next generation might achieve even an iota of the success he enjoyed.

The only group that really benefits from the housing scarcity are older, established , empty-nester, homeowners, who, in the case of California, are disproportionately liberal. Their home values continue to soar, with the added benefit of cheap labor from illegal immigrants, and not having to worry about the quality of local schools. This particular liberal demographic is the forefront of the Nimby cause in California, with conservatives on the sidelines, along with the anti-gentrification activists who make the opposite case, that Yimbyism will bring in too many whites into communities of color. We won’t go on for too long about liberal Yimbys here—the sort of people who live in Malibu—but suffice it to say they are among the biggest hypocrites in the country. Like those who call for the defunding of the police while being able to afford private security; radical-leftist-elitist haters of the American way of life, and any white people who fall socio-economically below them.

Why should conservatives care about the socio-economic success of the next generation anyway? The question hardly needs to be answered for anyone not fully under the spell of Ayn Randian objectivism, but we will provide one anyway.

The core demographic for conservativism has always been middle class families and if the right is serious about having a political future, they must ensure that group thrives. They already lost the political battle in California when it became impossible for the middle class to start families and have a decent quality of life. Whites and middle-class people of all backgrounds have left the state in droves, and, of those who do stay the family formation rate is low. The older conservatives who do remain in California hold onto Nimbyism—as well as Prop 13, which also disfavors young families—as place holders for conservatism, but fail to invest in future generations.

This lack of new housing is keeping many millenials in a state of life-long adolescence and, thus, inclined to be liberals, easily swept away by the culture of narcissism, simplistic hashtags, and the sweeping reductions of history we have seen recently boom in the wake of the George Floyd protests. The research of Professor Joel Kotkin, the author of one of the foundational think-pieces citing millennials as a “screwed generation”, which he recently revisited here, reflects how the conditions of economic scarcity coupled with environmental concerns have lead the generation to be deeply, even morally, opposed to having children. The more stake a person has in society—afforded by such things as children, homeownership, and steady work—the more at least small-c conservative they will be. Largely, the fiscal policies that the Republican Party and conservatives have supported for the past 30-40 years have created the precise conditions which lead people away from social conservatism.

Back in January, Tucker Carlson predicted that “the candidate who makes it easier for 30-year olds to get married and have kids will win the election and will deserve to win.”

“Improve people’s lives and they will vote for you,” he concluded. This was before covid-19, before the riots, and Bernie Sanders was still the Democratic frontrunner in many of our minds. Indeed, it was just five months ago but a completely different political landscape. Tucker was saying this as a warning to the Trump administration and its diehards that if they didn’t get their act together and promote policy that would make a demonstrable difference in the lives of Americans, Bernie was going to win.

We’ve already seen this trend, with many younger Whites, from working class to upper middle class backgrounds, going over to the Sanders side because the current system has failed them and conservatives have focused more on symbols of Americanism, such as, a house in the suburbs, rather than providing them a clear path to succeeding and starting a family. One has to wonder: if Bernie had stuck to his fiscal message and not allied himself with such cultural-politics figureheads as the AOC/ Ilhan Omar crowd, not to mention Cardi B, would he have matched or surpassed his 2016 numbers with white Midwesterners and received the Democratic nomination?

Any palatable politics of the American future will have to take this kind of culture-wars transcending, essentialist thinking into account. Even from a conservative point of view, one message from the recent civil unrest rings true: the system is not working and is in dire need of reform.