Why Are Boomers So Rich? Theft? Selfishness? Shrewd Investing? Hard Work? Luck?

The dog park near my CA home is populated entirely by boomers with free-and-clear $3+ million homes – and very fat retirement accounts.

Granted, this is an extreme case because of CA appreciation, but what makes it most interesting is that none of them ever came close to earning the type of money my two millennial sons make.

And my sons could not dream of living as opulently as my local boomers.

My local boomers are wonderful, charming people who did live responsibly and frugally, so I don’t want to impugn them in any way. (Full disclosure: I am a certified boomer).

But they are also convinced that their wealth is 100% the result of hard work and perseverance – even though I suspect none of them ever came close to working as hard as my sons do (they put in insanely long hours).

And – this is why so many millennials and zoomers resent boomers.

Their perspective is this: A bunch of drug-addled hippies woke up after Woodstock too hungover to work – so they selfishly voted themselves goodies that made them rich – at the expense of millennials and zoomers.

So, the question is: how did the boomer generation get so rich? And is that resentment justified?

The most interesting aspect of this problem, though, is that proposed solutions will just exacerbate it.

Your local AI engine will tell you that boomers got so rich because:

1. Housing was so much cheaper back in the day
2. They rode the wave of credit expansion, as it became much easier to borrow – fueling asset prices
3. The stock market soared over the last 45 years
4. It was far cheaper to get an education
5. They rode a demographic surge that increased demand for assets.
6. They inherited the wealth of the “Greatest Generation,” who saved every penny, worried about the next Depression…

Those are all valid reasons, but AI is missing bigger reasons that fueled the asset price appreciation that benefited boomers so much.

1. Inflation: Nixon took us off the gold standard in 1971 – which fueled the inflation that pushed up asset prices after the 1970s.Yes, asset prices did not do well in the 1970s, but after the 1970s they rose steadily under a more moderate inflation regime that America readily tolerated.

   Reminder: asset holders often benefit from inflation, while wage earners and fixed-income people get hurt.

2. Nimbyism and regulations: Zoning and excess regulations and fees made home building much more difficult – resulting in shortages that pushed up prices (on top of inflation).
3. Financialization of our economy: This is a result of getting off the gold standard, as we shifted from making things to making Wall Street happy – with looser credit standards, more flexible 401(k) rules, and much else that pushed up asset prices for boomers.

So, one could say boomers were “selfish” in that they voted for the politicians who brought on those changes. But – I doubt any one boomer intended to bring on any of those changes.

The solution proposed by many is even scarier than the problem: asset redistribution and even more government.

Massive asset redistributions via taxation will just result in more government, more wasteful spending, more regulations (that always come with a bigger government), a slower economy, even more debt, and then … even more inflation.

The only viable solution seems to be way less government at all levels and way less spending.

Less federal deficit spending will result in less inflation and a faster-growing economy – allowing zoomers and millennials to tap into more opportunities.

More restrained local governments will allow for more home-building.

And smaller government will be less subservient to Wall Street, meaning less financialization and healthier growth that will also benefit zoomers and millennials.

TLDR: Boomers were more lucky than anything else, as they rode a series of waves they probably had no idea they were helping to create.