osenton - boomer destiny; leading the u.s. through the worst crisis since the great depression (2009)

Yet like FDR’s Missionary Generation—the senior leaders of thelast American crisis—Boomers, led by Boomer President Obama, have achance to write an entirely new ending to the legacy they

BOOMER DESTINY: LEADING THE U.S THROUGH THE

WORST CRISIS

SINCE THE GREAT DEPRESSION

Tom Osenton

BOOMER DESTINY: LEADING THE U.S THROUGH THE

WORST CRISIS

SINCE THE GREAT DEPRESSION

Tom Osenton

Osenton, Tom.

Boomer destiny : leading the U.S through the worst crisis since the Great Depression / Tom Osenton.

p cm.

Includes bibliographical references and index.

ISBN 978-0-313-35604-9 (alk paper)

1 Financial crises—United States 2 United States—Economic conditions—21st century.

3 Baby boom generation—United States—Economic conditions I Title.

HB3722.O84 2009

330.973’092—dc22 2008045516

British Library Cataloguing in Publication Data is available.

Copyright © 2009 by Tom Osenton

All rights reserved No portion of this book may be

reproduced, by any process or technique, without the

express written consent of the publisher.

Library of Congress Catalog Card Number:

ISBN: 978–0–313–35604–9

ISSN: 2008045516

First published in 2009

Praeger Publishers, 88 Post Road West, Westport, CT 06881

An imprint of Greenwood Publishing Group, Inc.

www.praeger.com

Printed in the United States of America

The paper used in this book complies with the

Permanent Paper Standard issued by the National

Information Standards Organization (Z39.48–1984).

and Millennial—who inspire me to want

to make a difference every day.

7 Boomer Winter: The Next American Crisis—2005 to 2024 107

Life grants nothing to us mortals without hard work.

—Horace

As I was finishing this book during the summer of 2008, I honestly felt as

though I was drafting an early-warning about a looming secular crisis

some-where out there on a three to six year timeline Virtually all of the social andeconomic components that I researched—the sub-prime mortgagecrisis, the oil shocks of 2005 and beyond, the Dow’s unsustainable ride to

14000, the further maturation of an already mature U.S gested that the underlying fundamentals of the patient’s health wereindeed NOT strong

economy—sug-Like a comprehensive history and physical performed by the good folks

at the Mayo Clinic or Massachusetts General or Johns Hopkins, all thesymptoms were there foretelling a difficult stretch ahead What surprisedand unnerved me most was the speed at which conditions metastasized.Suddenly, instead of writing about a future crisis, I was writing about ahere-and-now crisis That’s the bad news The good news—if there isany—may very well lay in the fact that if the crisis arrived faster, we maypass through it faster Like the cold and dark days of winter, the faster weget through them, the faster we get on to the hopeful spring thaw

Over the course of about a year while writing this book, I experienced atleast four power outages due to a variety of natural and unnatural reasonsthat simply stopped me dead in my tracks One particular severe thunder-storm knocked out electrical power for two days in the neighborhood.Although that might not sound like much of a hardship, the experiencereminded me just how dependent we are on electricity as a resource central

to our lives After just four hours without power, I was essentially transported

back to 1860, lacking all of the modern conveniences that we take forgranted today As dusk approached and my batteries ran out, I was unable

to use my laptop, my cell phone, my Kindle, or my iPod I was unable tocall anyone, email anyone, text anyone, or use instant messaging (IM) tocontact anyone

As the sun went down, I lit candles and realized that I couldn’t cook dinnerwith my electric stove or microwave, and besides, almost everything in therefrigerator was already ruined No television, no movies, no music—justcandle light, books, pen and paper All that was missing was the log cabin

By Day 2, I started to realize just how much we rely on electricity, howmuch we take it for granted, how angry we get when it goes out, and howangry we get when we call the power company demanding to know exactlywhen power will be restored In my house, I couldn’t even make that callbecause the telephone runs on electricity And now I was beginning tosmell, because I couldn’t take a shower: the hot water heater ran on—yes—electricity Even driving downtown to get coffee and a bagel was not anoption because the stores didn’t have power either Life as I knew it had

stopped—just as in the sci-fi cult classic The Day the Earth Stood Still when

a flying saucer lands in Washington, D.C., and neutralizes all electricity.That scared me as a 10-year old, but it scares me even more now

When the electricity finally came back on after more than 48 hours, thefirst thing I did was take a shower Then I cleaned out the refrigeratorbefore getting back to work on the computer, something that many of usrely on every day for work and play

What became clear to me during those 48 hours was that we live eachday incredibly close to the edge of a world that is very different from theone in which we grew up This is a world of shortages, not excesses; a world

of limited choices, not unlimited choices A world of less, not more In thewords of cartoonist Walt Kelly’s comic strip character Pogo: “We have seenthe enemy and he is us.” That comic strip ran almost 40 years ago and it’sstill true today Now it is up to us to change that to help save the AmericanDream—not for us, but for our children and grandchildren

Why I Wrote This Book

My last book, The Death of Demand, explored the growth of the American

corporation over the second half of the twentieth century Although somelooked at it as a doomsday book, others saw it for what it was—an aca-

demic study of growth rates and the impact on a corporation’s initiativeswhen growth rates begin to slow, as they have for all corporations thatwere around just after WWII It was a study of the advent of reengineer-ing or cost-cutting—activities that didn’t even exist in the 1950s, 1960s,and 1970s during which time America’s corporate infrastructure was built

up in large part because of the arrival of 76 million baby boomers It was

a study of the deconstruction of the infrastructure of America’s blue chipand blue hair corporations

After reading William Strauss and Neil Howe’s groundbreaking work

Generations: The History of America’s Future, I realized that the economic

downturn for companies such as General Motors has not only been ing for a long time, but is part of a repeating cycle of American historythat goes back to the very beginning Suddenly, my last book made muchmore sense History tell us that America experiences a major crisis every

com-80 years, and with a mature economy that is made up of mature sectors,mature industries, and mature corporations, it is rapidly approaching theeightieth anniversary of the day that marked the beginning if the last

American crisis—Black Tuesday, October 29, 1929 The Revolutionary

War was followed 80 years later by the Civil War, itself followed 80 yearslater by the Great Depression and World War II Now as we approach

80 years since Black Tuesday and face an array of challenges never before

matched in American history, it becomes our responsibility to preparefor the coming crisis of the new millennium So the sociologically bent

Boomer Destiny was born as a natural extension to the economically bent The Death of Demand.

The Baby Boom generation has yet to distinguish itself as more than justthe self-centered, materialistic consumers that they have come to be per-ceived as Yet like FDR’s Missionary Generation—the senior leaders of thelast American crisis—Boomers, led by Boomer President Obama, have achance to write an entirely new ending to the legacy they will leave over thenext 10 to 15 years as the senior leaders of the coming American crisis.One last reason that I wrote this book - I care deeply about the world wewill be leaving to our children and grandchildren It doesn’t look anythinglike the world we entered, and the prospect of being the first generation inAmerican history to leave the country in worse shape than we found itshould frankly shame all of us into action We have been called as a gener-ation to save the American Dream—not for us but for our kids; and there

is no greater gift that we can possibly give them

A Few Words to Historians and Sociologists

I must express my sincere appreciation to the gurus of generations—the late

William Strauss and the very generous Neil Howe It was upon their thesesthat this book was built, and without them, this book never could havebeen written

Second, there are different schools of thought on the precise definition

of generations—many of which were coined by Strauss and Howe—andthe time span that identify each Sociologists and historians, for example,might define the Boomers as those born between 1943 and 1960, althoughpop culture says the Boomers were born from 1946 to 1964

Because the essence of this book does not turn on a generation’s precisedate of birth, I have taken the liberty to standardize the time-definition

of generations into neat 20-year spans These 20-year spans also roughlycoincide with the duration of each of Straus and Howe’s social turnings.For example, FDR’s Missionary Generation was born from 1865 to 1884which coincides with the 20-year First Turning high of the Great PowerCycle Dwight Eisenhower’s Lost Generation was born roughly from

1885 to 1904 which coincides with the Second Turning awakening of theGreat Power Cycle JFK’s GI Generation was born roughly from 1905 to

1924 which coincides with the Third Turning unraveling of the GreatPower cycle And John McCain’s Silent Generation was born roughlyfrom 1925 to 1944, which coincides with the Fourth Turning crisis of theGreat Power cycle Those were the four generations born during theGreat Power cycle Boomer Barack Obama, on the other hand, was part

of a generation that was born at the beginning of a new cycle—duringthe First Turning high of the Millennial cycle The following are the nineAmerican generations that are widely discussed in this book, along withtheir date of birth and the specific turning during which those birthsoccurred:

• Missionary Generation—born 1865 to 1884—High

• Lost Generation—born 1885 to 1904—Awakening

• GI Generation—born 1905 to 1924—Unraveling

• Silent Generation—born 1925 to 1945—Crisis

• Boomer Generation—born 1946 to 1964—High

• Gen X Generation—born 1965 to 1984—Awakening

• Millennial Generation—born 1985 to 2004—Unraveling

• New Silent Generation—born 2005 to 2024—Crisis

• New Boomer Generation—born 2025 to 2044—High

Please understand that I mean no disrespect of the nuances of the study ofsociology or history or of generations But this standardization seemed likethe best method for me to tell my story.

One of the difficulties in writing a book about the U.S government is thatyou need to be equipped with a calculator that adds, subtracts, multiplies,and divides in at least the tens of trillions That’s 13 zeroes A trillion lookslike this: $1,000,000,000,000 And after writing this book, I wondered if youbecome desensitized to large numbers if you work for the U.S government,because now when I look at $1,000,000,000—one billion dollars—it doesn’tlook that huge anymore

Lastly, I have offered up some suggestions in the latter part of the booknot as definitive solutions but more as thought starters for all Americans toponder as we seek to fix the great country that we all love My objective is

to encourage us to look at old problems in new ways—for example, the

suggestion for a Boomer Resource Grid that I detail in Chapter 10 This is

simply an idea designed to demonstrate the potential power of a tion and how—with a little organization and creativity—the Boomer gen-eration can make a huge impact on the world it leaves behind

genera-Boomer Destiny was written as an appeal—a manifesto—for the

gener-ations now alive in America I hope you enjoy the book, and I wouldwelcome any questions or ideas that you might want to share Just send me

an email at tom@boomerdestiny.com and I’ll gladly reply

Acknowledgments

I first want to thank the amazing Miss Em It would be impossible for me

to thank you enough, Emilie, for all you’ve done to make my life better.Thank you also from the bottom of my heart for helping me think throughand shape the book that I wanted to write Without your help, it neverwould have gotten done Thank you so much, Em, for all that you do

My sincere thanks to John McCabe for his time and keen eye and writingexpertise at each step in the process Thank you so much, John

Enormous thanks to my editor Jeff Olson who has an incredible eye and

a great sense of the world in which we live Jeff, thank you for helping me

to make this book better in every way

Thank you to all my Millennial students who taught me much over thelast three years

Finally, to the late Don Murray, who helped me so much in the early

stages of thinking through this book: nulla dies sine linea.

A Legacy Not Yet Written

Life is a series of collisions with the future; it is not the sum of what we have been, but what we yearn to be.

—Jose Ortega y Gasset

Winning the election was not nearly as difficult as the task that lay aheadfor the newly elected president of the United States The laundry list ofchallenges was daunting, exacerbated by the prior administration’s lack ofurgency and action A flagging economy, unemployment, an uneven distri-bution of wealth, the threat of bombings on Wall Street, immigrationconcerns, millions living beyond their means, a crumbling infrastructure,natural disasters, and weakening aggregate demand—all of it happening

on the heels of a decade of prosperity

Although this may sound like the agenda for a newly elected BarackObama in 2009, these were the challenges of the day for a newly electedFranklin Delano Roosevelt (FDR), as he stood on the steps of the U.S.Capitol and was sworn in as the 36th president on March 4, 1933 He hadjust turned 51 years old, and he already knew what he was getting himselfinto After all, he had been governor of the state of New York when thestock market crashed in 1929; when the Depression picked up speed, hisstate was particularly hard hit The new chief executive was no stranger totough times; taking over the reigns from Herbert Hoover in mid-Depressionwas no big deal for the optimistic FDR

But sometimes it takes a little more than just a “rah-rah” attitude and a tle elbow grease to turn a nation around Make no mistake about it—FDR’s

lit-“can-do” attitude helped serve as the glue to rally a nation But it also took agreat deal of time, patience, resources, hard work, and luck, as well as the will-ingness of multiple generations of Americans to adjust their expectations andattitudes and to sacrifice selflessly by working together for the common good

Standing there on that cold and overcast Saturday morning in 1933,did FDR fully comprehend the enormity of the challenge that layahead? More than 13 million Americans were out of work Many of thenation’s banks were closed More than three years after the crash of

1929, the Dow Jones Industrial Average was still down more than 80percent from pre-crash levels A deepening depression would drag onthrough his first two terms As chief executive, he would live throughPearl Harbor, D-Day, and the Battle of the Bulge yet would never per-sonally experience U.S victories on V-E or V-J Day How could he have

known, while listening to Hail to the Chief for the very first time as

pres-ident, that, in just a little more than a decade, he would have conqueredthe vast majority of the challenges that were before him only to die atthe age of 63?

This is FDR’s legacy as well as that of his peers of the MissionaryGeneration—mostly born in the years immediately following the CivilWar It was the destiny of the Missionary Generation to serve as the wisesenior advisors to the mid-lifers of General Eisenhower’s Lost Generation,who, in turn, served as the managers of the young adults of LieutenantKennedy’s GI Generation These three generations of Americans workedtogether to overcome the last prolonged crisis in American history For 16long years, through a deep depression and a world war, Americans pulledtogether to overcome long odds and unimaginable suffering

It was Albert Schweitzer who said, “One truth stands firm All thathappens in world history rests on something spiritual If the spiritual isstrong, it creates world history If it is weak, it suffers world history.”Something quite spiritual happened in the years following Black Tuesdayand the Wall Street Crash of 1929 Three different generations of Americansteamed up to muscle through the most challenging times since the CivilWar It was a bitter and painful time for America, but the country pre-vailed “If we had no winter, the spring would not be so pleasant,” wroteseventeenth-century American poet Anne Bradstreet “If we did not some-times taste of adversity, prosperity would not be so welcome.”

Just about 80 years ago, America was served up a heaping helping ofadversity: a Wall Street crash that triggered the Depression, a 1937 reces-sion that slowed the recovery, and then a four-year World War Yet evenwith 16 years of uncertainty and self-sacrifice, the United States eventuallymade its way through a very long, very cold winter and onto a new andprosperous spring of hope And, when it did, it welcomed the arrival of anentirely new generation of Americans Baby boomers, or Boomers—thelargest generation in American history—ushered in a new seasonal cycle,

and life in America was good But, as with all seasonal cycles, spring doesn’tlast forever And neither does summer or autumn.

Déjà Vu All Over Again

As the first decade of the twenty-first century draws to a close, the UnitedStates finds itself in uncertain times once again, facing many of the samechallenges that FDR faced in the 1930s and 1940s The economy is weak-ening, with record budget deficits and skyrocketing national debt Theworking class is underpaid, underinsured (healthcare), underfunded(retirement), and overextended (credit) Services such as public schools,hospitals, and police and fire departments are all overstressed by budgetcuts and the legal and illegal inflow of immigrants Add to the equation thethreat of domestic and international terrorism, as well as the ever-presentpossibility of a natural disaster, and America today is arguably facing achallenge that is at least equal to if not greater than the threat that existed

in the years leading up to the Great Depression (see Table 1.1)

Certainly the United States has always had its share of challenges,regardless of the era But the current alignment of significant socioeco-nomic challenges has never been greater or capable of adversely affecting

so many These challenges may not result in a Depression, but the problemsthat they create certainly will require the cooperation of several genera-tions of Americans and more than just a few years to fix

During the 1930s and 1940s, America slogged its way through a barreled crisis that included financial disaster and a world war Onceagain, America finds itself in the same precarious position it experiencesevery 80 years or so—on the brink of crisis Increasing unemployment, apull-back in consumer spending, a costly war, a mature economy, weaken-ing demand, and the slowest GDP growth since the 1930s all add up to aninevitable period of pain and adjustment

double-During the 1930s and 1940s, there was high awareness of and sensitivity tothe overconsumption of natural resources Because most Americans did notyet own an automobile, demand and consumption of gasoline were notmajor issues But by 2000, unbridled postwar commercial success brought theUnited States to the edge of saturation When there are 40 million more reg-istered vehicles than licensed drivers in the United States, it is difficult to sellcars—even with employee discounts When the percentage of U.S homeown-ers is relatively flat for decades because of responsible lending standards, ittakes irresponsible lending standards to increase the universe of homeowners.After pushing the edge of the envelope for more and more growth, the United

States arrived at a very dangerous destination—one that negatively impactedthe economy as much as it did the environment.

During the 1930s and 1940s, immigration was a significant issue in theUnited States National origins quotas greatly restricted immigrants fromentering the United States and, in some cases, banned entire nationalities,such as the Chinese, from entering at all Legislation from the late 1920seffectively ended the mass migration that had been common in thenineteenth century In the 1990s and 2000s, immigration is once again acentral issue, but this time the focus is on the growing number of immi-grants living in the United States illegally—either by overstaying their orig-inal legal entry or by crossing the border illegally

The alignment of a host of once-a-century social and economic challengeshas been quietly forming over the last quarter century And, even though

TABLE 1.1 Constellation of Contraction

What was will be again The times may change but the issues remain the same

Issue 1930s and 1940s 1990s and 2000s

The Economy Depression Slowest GDP Growth

Since Depression The Environment Over-Consumption of Global Warming

Natural Resources War World War II Iraq War (5 Years and

(3 Years 8 Months) Counting) Trade Protectionism/ Trade Deficit

Collapse of Intl Trade Working Stagnant Stagnant

Class Wages

Federal Budget Deficits from Record Deficits

1931–1946 from 2003–2009 National Debt Increased 15-Fold Tripled from

from 1929 to 1945 1990 to 2007 Healthcare National Health 47 Million Without

Insurance Defeated Healthcare Coverage Housing Lack of Affordable Sub-Prime Mortgage

Housing Bubble Security Anarchists Bomb Terrorists Attacks of 9/11

Wall Street Immigration National Origins 20 Million Undocumented

Quota Workers Wildcards Dust Bowl, Drought, Great Hurricane Katrina,

Okeechobee Hurricane Fires, Floods

there has always been an ambitious agenda of issues facing the United States

at almost any point in its nearly 235-year history, there have certainly beenthose rare moments when a unique convergence of challenges is so concur-rently significant that it simply causes the dam to burst

The last American crisis was filled with dramatic events, such as the rareattack of the U.S mainland, a Wall Street crash, and a long and painful warthat ended with the use of nuclear weapons Now America again faces adaunting list of challenges that are fundamentally not that much differentthan those of 80 years ago America prevailed in 1945 and lived to seeanother spring—one of the greatest in U.S history—and it will prevailagain But now, as then, the United States must endure a winter season thatwill challenge multiple generations and beg for truly inspirational new lead-ership with the guts to make difficult decisions at the risk of popularity.Gone however, are FDR’s Missionary Generation, Ike’s Lost Generation,and most of JFK’s GI Generation—the triumvirate that helped the UnitedStates through the last American crisis Instead, a new line-up of genera-tions has formed—one that has the aging Silent Generation (born1925–1944) moving out of the role as senior leaders and into its senioryears Moving into the role as senior leaders of American society over thenext 20 years will be the largest, most written-about, most marketed-togeneration of all time: the baby boomers

The timing is such that Barack Obama’s Boomers are becoming seniorleaders of American society at the beginning of an American crisis—just

as Benjamin Franklin did as a member of the Awakening Generationthrough the crisis of the American Revolution, as Abraham Lincoln did as

a member of the Transcendental Generation through the crisis of the CivilWar,1and as FDR did as a member of the Missionary Generation throughthe last American crisis—the Great Depression and World War II Thoseare big shoes to fill and big issues to conquer Besides being the largest andmost conspicuously consuming generation of all time, who are theBoomers? Are they up to the task of leading the country through the nextAmerican crisis?

Boomer Bio

We have heard the basic statistics a thousand times: 76 million Boomerswere born during an 18-year period from 1946 to 1964—the largestgeneration in American history (although the Millennial generation, bornfrom 1985 to 2004, came quite close in size) But no generation comes close

to the prolific output of American women on an annual basis: in 1957—the

peak birthing year for Boomers—4.3 million Boomers were born during atime when the U.S population was only 150 million Now, more than

50 years later, it is still the case that U.S women have never birthed 4.3 lion babies in one year—even with a total population at more than 300million, more than twice that of the late 1950s.2

mil-Boomers were the first generation in history to gain notoriety as childrenbecause of the sheer size of the generation Historically, it has taken timeand experience for a generation to make its mark The GI Generation—thegeneration that Tom Brokaw calls the Greatest Generation—made its mark

as the rising adults who fought and died during World War II This was thegeneration of young people who, returned to the United States after somuch time and suffering, and started to turn out “victory babies” in recordnumbers

In the 18 years prior to 1946, the number of live births in the UnitedStates averaged 2,687,000 per year In the 18 years following World War II, that average jumped to 4,215,000 births per year, or an addi-tional 1,500,000 babies per year until 1964 That amounts to an incre-mental 27 million Americans added to the U.S population from 1946 to

1964,3or nearly one-half the size of all of Generation X, born from 1965

to 1984

So the Boomer Generation was first known for its size Second, it wasknown for the economic opportunity that its size created And, later in life,when Boomers joined the labor force, no other generation could spend likethe Boomers—quite possibly as a means of self-remuneration as the self-

centered, narcissistic generation that happily traded quality of life hours for standard of living hours—in building what they deemed a “better” life.

Constellation of Expansion

In the years immediately following World War II, a unique alignment ofconditions and events provided a recipe for dynamic economic growth inthe United States First, three generations of Americans who had sacrificed

so much for so long—through a depression and a world war—couldfinally get on with their lives At last, FDR’s generation had done its part inmanaging Eisenhower’s generation, which, in turn, pulled the strings of theobedient grunts from JFK’s generation These generational cohorts werespent, and, when their pent-up demand was finally unleashed after the war,

it didn’t take much to spark a new wave of expansion in the United

States—the first since the Roaring Twenties.

Second, the birth of more than 76 million Boomer babies created newdemands for basic food, clothing, and shelter Birthed alongside the Boomerswas the American Dream—with the help of the GI Bill, which provided low-interest loans to cover college tuition, new homes, and new cars.

Third, with the war effort behind them, Americans turned theirinnovative juices to the development of dozens of new household goodsand appliances—all designed to make life a little easier for the postwarAmerican family

The arrival of Boomers created the single largest demographic segment

in history—a real boon for marketers such as David Ogilvy (Ogilvy &Mather) and Bill Bernbach (Doyle Dane & Bernbach), who opened their

ad shops in 1948 and 1949, respectively, and made Boomers the mostmarketed-to generation in history And that pursuit of trillions in discre-tionary dollars from this massive balloon of consumers continues today, asthe Boomers march through time toward retirement From manufacturers

of medications for erectile dysfunction and osteoporosis to retirementcommunity developers and cruise line operators, Boomers still represent

an enormous opportunity for marketers

As soon as GIs returned stateside in late 1945, maternity wards acrossthe United States started to swell The country was euphoric A photo of anunidentified sailor kissing an unidentified girl in the middle of Times

Square captured the spirit of the times on the cover of LIFE Magazine Even

pregnant moms got into the act by painting the message “Kilroy was here”

on their bursting bellies as they were wheeled into the delivery room Theboys were home—and with them came a recipe for explosive growth thathad been bottled up in Europe or the South Pacific for nearly a generation.The 1950s and 1960s ushered in more new consumer product categoriesthan any other time in U.S history The parade of images and pitches wereall designed to take advantage of the sudden upsurge in demand For whiterteeth, there was Pepsodent toothpaste (“You’ll wonder where the yellowwent”) For a cleaner feeling, there was Dial soap (“People who like peoplelike Dial”) You could fill up your new Chevy at your local Texaco station(“You can trust your car to the man who wears the star”) Those peskyinsects spoiling your weekend get Raid insecticide (“Kills bugs dead”) Ifyou had a hankering for green beans, there was Green Giant vegetables (“Inthe valley of the Jolly Ho Ho Ho Green Giant”) When you had too much

of those green beans, well, then there’s Alka-Seltzer antacid (“Plop plop, fizzfizz, oh what a relief it is”) When you’ve failed at scrubbing out stains inyour shirts, it’s time for Wisk detergent (“Ring around the collar”)

Literally hundreds of new products and new product categories thatnever existed before were introduced during the Boomer birth years And,

if spreading the word about a new product was a problem, it wasn’t aproblem for long in postwar America The arrival of network television in

1949 provided the final piece of the puzzle that helped create a remarkablegrowth anomaly over the second half of the twentieth century The great-est mass marketing tool of all time provided marketers with instantaneousaccess to millions of hungry Americans with a powerful appetite forconsumption For the first time ever, local television stations across thecountry aligned with one of the three New York-based television networks

in order to transmit a common signal to millions of households across thenation

This unique combination of events and conditions helped hundreds ofcompanies—such as Procter & Gamble, General Foods, and Kellogg—successfully pitch their products to millions of American families, right inthe comfort of their own living rooms As a result, an American economythat had been idling for more than 20 years finally gained momentum,thanks in large part to the arrival of the Boomers (see Fig 1.1)

“The times, they were a changin’” and the U.S economy was just onemeasure of that change Real Gross Domestic Product (GDP) grew bymore than two-and-a-half times over the course of the 20 years immedi-ately following World War II (1946–1966): from $1.5 trillion in 1946 toclose to $3.9 trillion in 1966.4 The postwar expansion was on, and forgrowth the sky was the limit

Raised by Mom and Dr Spock

Boomers largely grew up in one-income households—with mom at home

and dad at work—characterized by American author Philip Wylie as The

76 Million baby-boomers create immediate new demand

New products Dozens

of new products/new product categories

Network television Most powerful mass-marketing tool in history

Greatest period

of GDP growth in U.S history

+

FIGURE 1.1 Constellation of Expansion

Conditions for growth were ideal from 1946–1964.

Sons and Daughters of Mom in his 1971 book of the same title Predominantly

engaged in the full-time career of raising children and making a home,many Boomer moms were guided by the philosophies of pediatricianBenjamin Spock

Dr Spock’s 1946 book The Common Sense Book of Baby and Child Care

was timed perfectly with the very beginning of the baby boom and was anattempt to counterbalance many of the rigid traditions of conventionalpediatrics of years gone by Dr Spock’s essential appeal to new mothers—and there were record numbers of them—was more like advice from anold friend rather than a definitive rulebook on appropriate child-rearing

“Trust yourself,” said Spock, whose book was second only to the Bible

in sales “You know more than you think you do.”5 The controversialSpock was viewed by many GI dads as too liberal But GI moms had a dif-ferent take on the theories of the good doctor GI dads looked at Spock assoft on discipline, which helped create a “good cop, bad cop” scenario inmany Boomer households When mom was forced to, however, she coulduse the threat of dad to keep Boomers in line until dinner time: “Just waituntil your father comes home” was a common refrain in the 1950s, 1960s,and 1970s It was this dynamic that helped shape an entire generation ofindependent thinkers who often questioned authority—seeing in theirfathers, as well as their mothers, what they didn’t want to become whenthey grew up

Spock’s philosophy emphasized the individual and the need for flexibility

in raising children This liberal and tolerant focus on self-actualizationencouraged mothers not to worry too much about spoiling the child.Labeled by many of his critics as “the father of permissiveness,” Spock laterreflected that his original intent was to emphasize mutual respect betweenmother and child, not just one-way respect from mother to child In the 1998

edition of Baby Care, Spock addressed the issue, saying that the parents may

have misinterpreted the original intent of his message: “Parents began to beafraid to impose upon the child in any way,” explained Spock.6

By 1998, the youngest Boomers were already approaching the age of 35, so,

if mom had misinterpreted Spock’s intent, it was way too late to do anythingabout it The die had been cast on the most indulged generation in Americanhistory The extent of Benjamin Spock’s role in that indulgence will forever bedebated—but what can’t be debated is this: in the span of just one generation,parenting habits and behaviors radically changed and resulted in the hard-wiring of a new generation of American children who would behave like noother in history

Wanting for Nothing

If there ever was a period in recent American history when mothers hadthe time and the luxury of practicing a more patient and liberal means

of child-rearing, it was during the 20 years following World War II.Those born during an economic expansion were simply parented differ-ently than those born when times were tough Parents of children bornduring good times rarely worried about basic needs; instead, they weremore focused on ensuring that their children received a great education,

as well as helping them adapt socially But children born during an nomic contraction often had to fend for themselves for very basic needs.During the Great Depression, thousands of young people wrote directly

eco-to the First Lady—Eleanor Roosevelt—telling their personal seco-tories ofdesperation and asking for money, clothing, and even bicycles so thatthey could more easily get back and forth to work A 16-year-old Mass-achusetts girl sent an appeal for some money to help make payments onthe family’s refrigerator:

my bed from May twenty until Nov twenty-second I am just recoveringfrom a delicate operation I came home from the hospital Nov eighth and

my father was layed [sic] off after working for the railroad fifteen years Many

a girl of my age is hoping that on Christmas morn they will find a wristwatch, a handbag, or even a fur coat But my one and only wish is to havefather and mother spend a happy Christmas Mrs Roosevelt I am asking ofyou a favor which can make this wish come true I am asking you to keep upour payments until my father gets back to work as a Christmas gift to me.Though father worked part time for quite a while we never lost anything forthe lack of payments If the refrigerator was taken away from us father andmother would think it a disgrace

I close hoping with all my heart that my letter will be considered Mrs.Roosevelt you may rest assure [sic] that I have learnt [sic] my lesson.

a fully equipped house, with all of the now-standard appliances—washers,dryers, telephones, televisions, toasters, record players, and a car in thegarage They were the first generation in American history to wake up earlyevery Saturday morning to watch cartoons, while eating sugary cereals in a

safe and secure environment of plenty For Boomers, Leave It to Beaver was

more than a popular television show—it was truly art imitating life

On the other hand, many of the parents of Boomers—and certainlythe grandparents of Boomers—grew up at a time and in conditions thatrequired great sacrifice The most basic needs, such as food, clothing,shelter, and safety, were, in many cases, completely lacking Otherhuman needs, such as love, a sense of belonging, the building of self-esteem, and the desire to lead a fulfilling life, were mostly left unad-dressed for families such as those that lived in makeshift tents in NewYork’s Central Park around 1930—the most southern area of the park

that became known as Hooverville in mock homage to the incumbent

president at the time

Boomers grew up in an environment bursting with opportunities thattheir parents never had, which helped them gain confidence early on abouttheir feelings and choices And, as Boomer children grew into the youngadults on college campuses across the country, they were not shy aboutmaking their voices heard

the war in Vietnam, although it’s possible that not all of their motivationswere purely altruistic Boomers certainly did not like to be told what to do,and, when the military draft lottery was reinstituted in 1969, it provided anadded incentive for healthy American males aged 18 and over to want to see

an end to the war in Vietnam It was the first time that the lottery had beenused since early in World War II; consequently, the first draft included allAmerican males born between 1944 and 1951 Normally, the oldest drafteeswere sent into battle first, but, under the lottery system, draftees would betaken based on the order in which birth dates were selected randomly, like alottery

At its headquarters in Washington, D.C., the Selective Service System set

up a huge drum with little capsules inside, each corresponding to the 365(or 366 in a leap year) birth dates Typically, a member of Congress wasasked to select a capsule and read off the birth date contained therein In thecase of the December 1969 draft, Representative Alexander Pirnie (R-NY)pulled September 14 out of the drum as the first birth date This meant thatU.S males born on September 14 in the years 1944 through 1951 would bethe first to be called up for active duty—a certain ticket to the jungles ofSouth East Asia As it turned out, there were only three drafts during theVietnam War, and they involved only Boomers born in 1953 or before Withthe advent of an all-volunteer military, starting in 1973, the dynamicchanged for the Gen X and Millennial generations, which may in part helpexplain why the Iraq war was not nearly as actively protested on collegecampuses

Boomers protested the Vietnam War in a big way and in prime time oncollege campuses across the United States, desperately trying to find ways

to end the pointless conflict and killing in Southeast Asia Vocal and times violent protests in the late 1960s created an “us versus them” tensionbetween Boomers and the predominantly GI generation establishment.The establishment for Boomers was essentially their parents, schooladministrators, bosses, the government, and pretty much anyone else whowas over 30 years old

often-As the 1970s dawned, most of America had become tired of fighting awar that had taken more than 58,000 American lives8—many of themBoomers—for reasons that were not entirely clear The draft ended in

1972, and, by the spring of 1975, the United States was completely out ofVietnam and Nixon was out of the White House—signaling that changewas in the wind for Boomers The Boomers were beginning to enter theworkforce, most of them with a college degree that many of their parents

never received Boomers now owned a shirt and tie and, in recordnumbers, poured into the civilian workforce for the balance of the 1970sand into the 1980s.

The 1970s had it all—a war, an oil crisis, a deep recession, the tion of a president, Republicans and Democrats in the White House, ahostage crisis, and the 200th birthday of the country Change wascertainly in the air as the country struggled to find a rhythm As the 1980sdawned, the focus of the United States was off Southeast Asia and on theMiddle East—a focus that would stay with the country well into the newcentury Presidents from the GI generation dominated the White Housefor all of the 1960s, 1970s, and 1980s—seven straight presidents, includ-ing the 40th president of the United States, Ronald Reagan

resigna-Deficits and DINKs

“It is morning again in America.” The line was from one of PresidentReagan’s re-election television commercials in 1984 The rare 60-secondcommercial spoke about record employment levels and low interest andinflation rates What it didn’t talk about was dramatically escalatingbudget deficits and the national debt “Why would we want to return towhere we were less than four short years ago?” asked the commercial.Maybe because budget deficits caused the national debt to nearly triple ineight short years?9It’s easy to create the illusion of good times when thebill for those good times is passed from generation to generation Like hisgreat skill as an actor, Reagan’s good times of the 1980s were more fantasy than reality

A videotaped interview with editorial staffers of the Reno (Nevada)

Gazette-Journal in January 2008 created a bit of a firestorm for late-wave

Boomer and democratic presidential candidate Barack Obama when heidentified with President Ronald Reagan—an odd comparison, especiallyfor an African American candidate for the U.S presidency “Ronald Reaganchanged the trajectory of America in a way that Richard Nixon did not, and

a way that Bill Clinton did not,” Obama was quoted as saying, attempting

to compliment Reagan for his “sense of clarity, optimism, dynamism, andentrepreneurship.”10

What critics heard was that Obama was crediting a Republican presidentwhose record on civil rights and the working class was less than stellar.Reagan did change the trajectory of America—particularly in the areas offiscal and monetary policy Only months after Reagan took office, the

economy slumped into a serious recession, with unemployment topping

10 percent Reagan turned to supply-side economics—the “build it andthey will come” strategy for economic expansion—as a strategy to turn theeconomy around

The ushering in of supply-side economics brought with it the return ofsignificant deficit spending—effectively borrowing from the future—theKeynesian theory that worked 40 years before but had outlived its effective-ness, because it assumes that future growth will pay for today’s programs

In the process, during Reagan’s tenure, the United States went from the world’s leading creditor nation to the world’s leading debtor nation.The president also cut the top income tax rate from 70 percent in 1980 to

28 percent by the end of his second term, thus solidifying his reputation as

a friend of the wealthy and the privileged.11

By 1982, the generation of people who had gained a reputation asindulged, narcissistic brats were now all adult brats With the oldest in theirmid-thirties and the youngest just 18 years old, Boomers began to getserious about the future Many of them turned in their tie-dyed T-shirts forBrooks Brothers’ suits and a chance to join the top 1 percent of wageearners Whereas the parents and grandparents of Boomers had just lookedfor jobs, Boomers expected to build careers They also expected to do bet-ter materially than their parents For the most part, they did and they mayvery well be the last generation for some time to do so But they did it at acost—a cost that required most of them to trade quality of life for anincreased standard of living The American home didn’t quite resemble theCleaver’s or the Nelson’s anymore

It was around this time that the term “Yuppie” appeared in pop cultureand on Madison Avenue, describing young, upwardly mobile professionals.Yuppies were Boomers with plenty of discretionary income, and it wastheir coronation as Yuppies that forever solidified this generation as con-spicuous consumers—especially the segment of the population known asDINKs—dual income, no kids Strong Boomer women emerged bettereducated than their mothers and grandmothers, in touch with their ownself-worth and desiring to seek their own career paths Add to the equationthe fact that the United States experienced the most significant period ofreal estate appreciation in history from 1950 to 1980, and suddenly theAmerican Dream got a whole lot more expensive

Even though Boomers have certainly done better than their parentsmaterially, they have not accomplished it without tradeoffs There can be a

downside to a relentless focus on improving one’s standard of living Inmany cases, Boomer-led households required two incomes just to be able

to afford the bigger house and the second or third car And the generationthat was raised by mom had children later in life, children who, most likely,were raised by someone else’s mom This greatly changed the dynamic inthe home—how the children were nurtured and by whom Whether in asingle-parent or a two-parent household, Boomers blazed the trail in estab-lishing a new norm—most parents worked full-time in order to afford a

“better” life

The two-income household became requisite to fund a lifestyle thatwas otherwise unattainable with one income In many cases, Boomerscreated a much higher standard of living than that of their parents orgrandparents, but it was often at the expense of major aspects of thequality of their lives—those measures that defined the lives of their par-ents Gone were the days when dad—and now oftentimes mom—werehome every night for dinner Instead, the lion’s share of the 168-hourweek was gobbled up by sleep, work at work, work while commuting,work at home, and then a weekend consumed with unfinished errandsand travel to multiple soccer games before everything started all overagain on Monday morning Many Boomers found themselves running

in an all-out sprint of no defined distance with no defined finish line.But on they ran, through good times and bad, in no particular directionwith no particular destination in mind, applying the Olympic motto—

Swifter, Higher, Stronger—to their need to achieve and accumulate.

Boomer Bust

Beginning in the mid-1980s, many of America’s blue chip corporationsstarted to show signs of maturing, with a slowdown in revenue growth despiteaggressive new product development and both domestic and global expan-sion As the top line continued to slow, it became clear that, if corporationswere to deliver on Wall Street’s expectations, cost reductions would have toplay a much more important role as a driver of earnings This was whenAmerican business was first introduced to the concepts of re-engineering:cost-cutting, downsizing, rightsizing, gains in productivity By any name, theinfrastructure that American business had aggressively built up to handle thepostwar expansion—largely caused by the arrival of the Boomers—needed

to get smaller

Re-engineering became a buzzword of corporate culture in the late1980s and into the 1990s What was first viewed as a one-time, cost-efficientcleansing soon became a permanent corporate initiative After a few years

of squeezing out the obvious inefficiencies, two things became quite clear:(1) re-engineering was here to stay and (2) future efficiencies would morethan likely be paid for with human capital And a good portion of thathuman capital came in the form of Boomer jobs By 1985, Boomers ranged

in age from 21 to 39 and made up close to one-half of the U.S labor force

at the time

According to New York Times economic reporter Louis Uchitelle,

more than 30 million Boomers lost their jobs12as part of aggressive engineering efforts by maturing U.S corporations—especially publiccorporations Boomers were the first generation in history to enter alabor force that was actively downsizing the infrastructure that it hadbeen building up since the end of World War II And no one perfectedthe skill better than General Electric’s (GE) own “Neutron Jack”Welch—quite possibly the single individual responsible for moreBoomer job loss than any other chief executive in history because of hispenchant for buying companies with large numbers of employees andconsolidating a smaller number of them into the GE culture GeneralElectric’s strategy paid off handsomely for its shareholders, and Welchbecame a Wall Street darling The real irony was that GE’s earningsbonanza during the 1990s was paid for—at least in part—by the liveli-hoods of many Boomers Welch’s acquisition strategy could be likened

re-to performance-enhancing steroid use by professional athletes in themid to late 1990s Corporate “juicing” certainly worked for Jack, but not

so much for the company he left behind Ever since a 3-to-1 stock split

on May 8, 2000, GE’s stock has languished, losing more than 50 percent

of its value—even when accounting for dividends—during the roughestdecade for the industrial giant since the 1980s

Certainly not all Boomers were victims of the epidemic of downsizingduring the 1990s Many Boomers flourished during the “go-go” days thatsaw the introduction of the World Wide Web and, along with it, an Inter-net Bubble that went as fast as it came It was also a time of rarified air forthe Dow Jones Industrial Average (DJIA), which more than quadrupledduring the decade—from 2810.15 on January 2, 1990 to 11,497.12 onDecember 31, 1999 Just to put that in perspective, in order for the Dow tomake a similar move during the first decade of the 2000s, it would have toclose at more than 47,000.00 on December 31, 2009—highly unlikely since

the Dow retreated by more than 25 percent over the first nine years of thedecade (2000–2008).13

As the new millennium dawned, the oldest Boomers were approaching

60 years old, and marketers shifted their focus from “What can we sellBoomers in mid-life?” to “What can we sell Boomers in old age?” Thegeneration of people who grew up as the rising adults with a reputation oftrusting no one over 30 was now turning twice that age, with conventionalretirement age within striking distance But would a generation that waswired like no other before it view retirement in the same way as theirparents did?

Boomer Life Cycle

In 100 years, the entry of the Boomer into American society will doubtless

be viewed as quite the anomaly: more than 76 million babies, born in just

18 years, with a population half the size of the United States today—thatphenomenon is very unlikely ever to occur again

Boomers follow the same life cycle as any other creature of nature.They are born, they grow, they mature, they decline, and they die (see Fig.1.2) More than 76 million were originally born in the United States and,over the course of seven decades, not only has that number failed todecrease, it has actually increased because of legal immigration There arenow more than 78 million Boomers in the United States (probably well

in excess of 85 million, counting undocumented workers), which onlyadds to the complexity of developing solutions in a world with dwindlingresources

As infants, the Boomers arrived in record numbers during the war expansion As rising adults, they learned how to shop, and theybecame an economic tour de force, the most sought-after demographicsegment in history In mid-life, they were productivity machines, think-ing nothing of spending 60 hours in the office and working another 20hours at home and on weekends As seniors, they will continue to play

post-an importpost-ant role in society However, their consumption levels willcontract and, with attrition, slowly lose their impact on an economythat is already on the wane Ultimately, by 2050, most Boomers will begone—a distant memory of yesteryear—when Wally and the Beavercame home from school with Eddie Haskell and Larry Mondello for somecookies and milk But it may be a little early to write the obituary on thisgeneration

The Boomer drive to get ahead helped create enormous productivitythrough the 1980s, 1990s, and into the 2000s Now, as more and moreBoomers turn 60, they begin to plan a life beyond their conventionalcareers Some will certainly retire and stop working altogether But it’s farmore likely that we haven’t heard the last from this generation Boomersare very unlikely to go quietly—and that might be a good thing.

Replacing Boomers in the labor force will largely be members of the Gen Xand Millennial generations—people who learned that they don’t want to

be married to their work the way that their parents were Instead, youngergenerations more often view work as a means to an end—not the enditself—and, consequently, they will likely forge very unconventional careerpaths that may involve a number of companies and perhaps even a variety

of industries The result in the economy may be a drop in productivity—

as the driven Boomers are replaced by generations more focused onbuilding a more balanced quality of life centering on family, home, andcommunity, rather than on work as their parents did

Boomer Seniors

A 2005 study by the Met Life Mature Market Institute14 found that aboutone-third of all Boomers were “planning a second career during their GoldenYears.” The members of a generation that defines itself as having a “feeling ofyouthfulness and optimism” expect to work longer than their parents did,

Childhood

Young adulthood

Mid life

Senior Leadership

Senior years

FIGURE 1.2 Boomer Life Cycle

Boomers helped build the economy in more ways than one since 1950 They will be hard to replace.

with many creating second or third careers around their passions and specialinterests Most do not view retirement as a time to withdraw abruptly fromworking life as their parents did Instead, an entire cottage industry hasemerged just to help the aging Boomer transition from a conventional careerbefore retirement to another career after retirement.

Boomers are now rapidly moving toward elderhood and toward the lastphase of life—a phase that will in no way resemble the phenomenal period

of growth in their first phase of life By 2006, a majority of Boomers werealready 50 or older and eligible for membership in the American Association

of Retired Persons (AARP) Today, more than 10,000 Boomers per day areturning 60 Boomers will live longer than their parents, and those whomake it to 65 can expect to live at least to the age of 83, according to theU.S Bureau of the Census So, for the generation as a whole, there is plenty

of life left The question is this: what will they do with the life that is left?The decision to continue to work beyond the age of 65 will be a matter

of choice for some Boomers For others, it will be a matter of necessity—especially if they intend to maintain the standard of living to which theyhave grown accustomed But one selfish motivator that Boomers collec-tively share may play an increasing important role in driving them to make

a much larger contribution to the future of America than they ever couldwith the purchase of Viagra, an oceanfront condo in Boca, or a platinummembership in the Hair Club for Men Boomers are beginning to thinkseriously about the world that they are leaving to their children and grand-children It certainly bears little resemblance to the world into which theyentered And it may very well be these concerns that finally motivateBoomers to take action based on someone else’s needs And, in the process,Boomers may get a chance to write a final chapter of their storied existencethat no one expected

Boomers’ Rendezvous with Destiny

As the first decade of the new century draws to a close, what many call themost selfish generation of all time is staring its own mortality square in theface The largest generation—even with a continuous inflow of Boomerimmigrants—will also start to shrink in number over the years ahead, andone can only wonder how the epitaph will read on this generation’s head-stone once this generation is gone

When FDR took office in 1933, little did he know that in 12 short years

he would successfully lead the United States through the worst American

crisis since the Civil War Little did he know that he and his generationalcohorts would write an enduring legacy in a little over a decade’s time thatwould change the course of American history After FDR’s first term inoffice, unemployment was still at 18 percent and the country was still in thedepths of the Great Depression In his acceptance speech at the 1936Democratic National Convention in Philadelphia, Roosevelt brilliantlycaptured the essence of his time in American history with a call to actionfor a generation: “There is a mysterious cycle to human events To somegenerations much is given Of other generations much is expected Thisgeneration has a rendezvous with destiny.”

The president, of course, was easily reelected for a second term in 1936—despite a persisting Depression—and used this proclamation as a rally cryfor the difficult nine years ahead In many ways, FDR’s call to arms serves as

a timeless reminder to those who find themselves leading a country in sis—as Abraham Lincoln did and Benjamin Franklin did before him Now,

cri-it serves as a reminder to a generation that grew up trusting no one over 30.Like it or not, the generation that invented the phrase “shop ’til youdrop” is now facing a new reality for the limited number of years that theyhave left on this Earth Unfamiliar with a world that puts civic duty ahead

of self, the Boomer generation—with its new Boomer president—nowstands precisely where FDR stood almost 80 years ago—in front of anAmerican people who are on the verge of a crisis, desperately hungry forleadership, and with their final legacy yet to be written

How will that legacy read when the crisis is over? Who will be its primaryauthor? America is about to find out

Repeating Cycles in American History

Excess generally causes reaction, and produces a change in the opposite direction, whether it be in the seasons, or in individuals, or in governments.

—Plato

A pine cone falls to the ground and sheds its seeds The seeds germinateand grow into seedlings, then into saplings, and eventually into matureadult trees, which bear fruit in the form of seed-filled pine cones, which, inturn, fall to the ground and start the life cycle of the pine tree all over again.Birth, growth, maturity, death—it is a common life cycle that is all around

us We see it in our families—children take cues from their older brothersand sisters, who, in turn, are guided by their parents, who, in turn, care for

their aging parents.

We also see it in our economy—a continuously rolling cycle from

expansion to peak to contraction and trough, and expansion again We see

it in the products that we consume—from their celebrated introduction torobust growth to frustrating maturity to inevitable decline

We see it in the seasons—spring bursts forth with new life, signaling thebeginning of a new cycle of life A maple tree produces chlorophyll to helpnew leaves grow The leaves reach maturity under the summer sun, untilautumn’s cool temperatures slow the production of chlorophyll and theleaves turn orange and yellow and fall to the ground In winter, the maplesleeps a temporary sleep until warmer weather awakens it from slumber inspring

Besides the sequential and progressive nature of each cycle, anothersimilarity is the subtlety with which each phase evolves and blends into thenext Like the frog in the pot of water whose temperature slowly rises one

degree at a time until the frog boils to death, so, too, do we experience thetransition from one phase of a cycle to another.

Many cycle shifts are so subtle that they often go unnoticed until wellafter the fact It’s like celebrating your birthday—even though the calendarsays you’re a year older, you feel no different than you did yesterday TheEarth is constantly in motion, but it is so large that we can’t feel its movement.Similarly, measuring the morphing of other entities, such as economies orthe seasons, can be extremely difficult It’s no different with the changesthat occur in society over a number of years Everyone knows what wemean when we say “back in the sixties.” That phrase represents a unique era

in U.S history Almost like a photograph, “the sixties” conjures images ofbeads and peace symbols, helicopters and napalm, and Jimi Hendrix,wearing a headband and playing “All Along the Watchtower”: “There must

be some way out of here ”

The change from one season to the next is usually not a dramatic one.Over time, spring morphs gradually into summer, and, even though thecalendar might say that it’s spring, the temperature might suggest other-wise on a blustery day in April Similarly, a growing business morphs into

maturity over the years, or a child moves through adolescence and grows

into a young adult, and we barely notice until an event—a graduation, awedding, a funeral—shakes us from the hypnotic state of our daily lives

It can often take months—sometimes years—for the economy to movefrom an expansion into a contraction, and, more often than not, thechange can only be accurately identified well after the event Let’s look atthe last complete economic cycle in the United States that included a reces-sion Beginning in the first quarter of 2000, real GDP grew at 2.6 percentand reached a peak in the second quarter of 2000 at 4.8 percent growth.1Itwasn’t until after the results of the third quarter of 2000 that economistsrealized that the economy was cooling and had probably peaked during thesecond quarter of 2000

TABLE 2.1 Cycles

With first-quarter 2001 GDP growth posted at – 0.6 percent, it was notonly clear that the peak had been reached, but that the economy was now

in contraction But, because results had been negative for only one quarter,

it was not yet clear whether or not the economy was officially in recession.Then second-quarter 2001 results confirmed that the economy was indeed

in recession: GDP growth was announced at –1.6 percent for the quarter.Although it was clear that the economy was in recession in the secondquarter of 2001 (well before 9/11, by the way), what was not clear waswhether or not the recession had bottomed out One quarter later, withGDP results still negative and the country still in recession, the economyshowed signs of expansion by moving out of the trough and back towardpositive growth and a brand new economic cycle

In this scenario, confirmation of the precise status of the economy wasdelayed at each 90-day gateway The first question is this: was the economycontinuing to expand? That question was not answered until 3 monthsafter the fact The second question is this: was the economy in recession?This question wasn’t answered until at least 6 months after the economyappeared to be contracting

The gradual transition between one phase of an economic cycle and thenext is no different than the behavioral shifts that occur in our society Wewere unable to see the 1960s coming, and only in retrospect did we recog-nize the decade’s unique turbulence But on closer study, maybe the socialupheaval of the 1960s was not so unique after all—and neither are devas-tating wars or economic expansions Just like the seasons, there appears to

be a rhythmic and sequential progression from one societal era to another.From a time of expansion, to a time of upheaval, to a time of decline, and,ultimately, to a time of crisis—a syncopated pattern in American historycan be traced back to the very beginning of the Republic Not only does ithelp us better understand the past, but it also helps us predict the future oflife in America

Societal Cycles

The concept of the societal cycle was introduced by historians William

Strauss and Neil Howe in their best-selling book Generations: The

History of America’s Future, a book that Newsweek called “a provocative,

erudite and engaging analysis of the rhythms of American life.”2 In

Generations, the authors present an exhaustive and compelling case,

viewed by sociologists and historians alike as the seminal work on the

topic of groups of people of common age, common experiences, andcommon attitudes.

This societal cycle parallels that of the seasonal, economic, business, andhuman life cycles, beginning with a period of expansion (spring), followed

by a period of awareness and growth (summer), then a period of maturity(autumn), and finally a period of decline, or even death (winter), before

spring returns (see Table 2.1 on page 26).

Strauss and Howe (S and H) call each of these phases in the cycle

turnings—and each turning lasts about 20 years or so before morphing

into the next turning And, like so many other cycles in nature, turningsoccur in four phases: the First Turning represents a period of expansion or

a High; the Second Turning, a period of Awakening; the Third Turning, a period of Unraveling; and the Fourth Turning, a period of Crisis Together,

all four turnings complete a full cycle, which usually lasts between 80 and

100 years, although there is some evidence to suggest that the cycle isbecoming compressed mainly due to technological advances in transporta-tion and communications

Generations and Life Stages

Just as there are four phases to a full societal cycle, there are fourgenerations—each in a different phase of life—that make up the active core

of society during that cycle Each life phase is represented by one generationfor the length of the turning—roughly 20 years—after which time a newgeneration begins to arrive, replacing the last generation of children.Similarly, the last generation of children begins to move up to replace thelast generation of young adults, which in turn replaces the mid-lifers whichreplace the senior leaders of society Concurrently, the senior leaders of soci-ety move out of an active work role and into either conventional retirement

or oftentimes into a voluntary support role At any given time, these fourdifferent generations occupy one of each of those four life stages:

• Childhood: Children are the dependent offspring of those in young hood or mid-life In 2010, the generation occupying this life stage in thegenerational constellation will be the New Silent Generation—those bornfrom around 2005 to 2024

adult-• Young adulthood: Young adults play the role of the rank and file—the force In 2010, the generation occupying this life stage in the generationalconstellation will be the Millennial generation—those born from around

work-1985 to 2004

• Mid-life: Mid-lifers play the role of managers of the young adults in society.

In 2010, the generation occupying this life stage in the generational lation will be Generation X—those born from around 1965 to 1984

constel-• Senior Leaders: Senior leaders play the role of the wise and seasoned tors of society, providing wisdom and guidance In 2010, the generationoccupying this life stage in the generational constellation will be theBoomers—those born from around 1946 to 1964

men-Marketers and researchers have long used labels to describe the habitsand behaviors of the demographics of prospective customer segments

Terms such as the Pepsi Generation, the Me Generation, and even the labels

Gen X and Gen Y are inventions of pop culture and are intended to make

it easier to identify and sell to the “consumer du jour.”

Each generation is far more than a collection of people bound by mon birth dates Every 20-year turning in American history can be charac-terized by a distinct and identifiable mood—a predominant parenting style,and a prevalent set of attitudes and behaviors, according to S and H

com-In any given cycle, there are four unique birthing locations that coincidewith each of the turnings, and, because the mood of the country and theevents of the day are so significantly different from one turning to the next,each generation is nurtured differently than the last The nurturing styles

of parents through the turnings effectively train each generationdifferently—to expect a lot, to expect little, to ask questions, not to speakuntil spoken to

Age Location

Strauss and Howe were the first historians to introduce the theory that agelocation—the era during which a generation is born—greatly shapes ageneration’s personality, based on two critical behavioral components:

1 How they are nurtured by their parents during childhood; and

2 When they experience their first major “social shock”—either during anAwakening or during a Crisis

These markedly different experiences have an enormous influence inshaping the generation’s early behaviors and attitudes Table 2.2 identifiesthe timing of the arrival of each of the last five American generations byturning; from left to right, FDR and the Missionary Generation cohortswere born from around 1865 to 1884 during the expansion High just after

the Civil War Dwight D Eisenhower and the Lost Generation cohorts wereborn during an Awakening Then JFK and the GI Generation cohorts wereborn during an Unraveling John McCain and the Silent Generationcohorts were born during a Crisis And, finally, Barack Obama and theBoomer Generation cohorts were born during a High, which started thecycle all over again.

Age location also determines when a generation experiences the two majorsocietal shocks that will occur during the cycle These alternating major socialshocks coincide with the Second Turning (Awakening) and the Fourth Turn-ing (Crisis) The last such social moment in America was the Awakening ofthe 1960s and 1970s, when young adult Boomers and civil rights activists

of all ages vocalized their discontent with the establishment on the campus ofKent State and in the streets of Chicago and Birmingham

The other type of social moment is a Fourth Turning—a Crisis—duringwhich selfishness grows in importance and institutions begin to breakdown The American people thirst for real change The last Americaninstance of a Crisis was the devastating 16-year-period that coupled theGreat Depression with World War II

Every generation experiences an Awakening and a Crisis at some pointduring its own life However, not all generations experience the same socialmoments during the same life phase And, more important, not all gener-ations experience two social moments as adults Only two of the fourgenerations experience major social shocks as adults during the cycle

Born during a High

A generation that is born during a High enjoys the unique perspective ofexperiencing its three adult phases of life during the Second, Third, andFourth Turning, respectively Such generations are the only ones who live

TABLE 2.2 Age Location: Obama Born during a High, McCain Born During

a Crisis

First Turning: Second Turning: Third Turning: Fourth Turning: First Turning: