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Grumpy old Boomers are a big drag on America's economic mood

·Michael Santoli

People have always turned grouchier as they grow older, as regrets overtake aspirations and the “old days” look ever better from a distance.

Yet as American Baby Boomers turn gray, they are even more bummed out about the state of the economy and the prospects for the country than earlier generations were as they reached senior status.

Perhaps the most striking result from this week's Wall Street Journal/NBC poll was that a record 76% of Americans said they were not confident that “life for our children’s generation will be better than it has been for us.”

That’s an all-time high proportion of the population essentially saying the American dream is a long shot, and is up from 60% in 2007 and 63% in 2012 who were downbeat about opportunities for advancement.

Yet a peek at the breakdown of poll respondents, courtesy of Wall Street Journal researchers, shows that the increase in skepticism has been most stark among the older age groups now dominated by Baby Boomers, who are now between 50 and 68 years old.

This biggest jump in pessimism – to 82% from 64% two years earlier -- came among respondents between ages 50 and 64. Anxiety over the future also surged among those 65 and older, with 86% saying they were less confident over the prospects of younger generations, up from 69% in 2012.

The rise in negativity to 64% from 55%, was more muted for Millennials, or those between 18 and 34, and for people 35 to 49 the results were virtually unchanged after accounting for the poll’s margin for error.

As an interesting aside, unlike some consumer surveys the WSJ/NBC poll shows no statistical difference in confidence about the future across income levels. So the gradations in mood seem firmly rooted in generational attitudes.

This pattern, in which Boomers are increasingly looking on the dim side of an issue, is confirmed by the Conference Board’s consumer confidence survey data, which have been produced monthly since the 1980s.

Americans aged 55 and above have generally been less optimistic about the economy over the decades, and those under 35 have had the brightest outlooks -- but to widely varying degrees over time.

For instance, in the tech boom years of the late ‘90s, seniors and near-seniors were nearly as upbeat as everyone else. There were even a couple of months, in 1999 and 2000, when they were even more optimistic.

In the past few years, though, older folks have had a far darker view of the economic picture than in earlier periods.

I calculated the average spread between the consumer confidence reading for 55-and-overs and under-35s in separate economic-recovery periods. From 2003 to 2007 – a similarly slow-paced economic expansion to the current one – consumer confidence of the oldest Americans was, on average, 16.5 points lower than among the youngest. Since 2010, with Baby Boomers now dominating the over-55 cohort, the spread nearly doubled to 30.8.

[Consumer confidence here is expressed as an index, with 100 fixed at the 1985 level. The overall July 2014 reading was a post-crisis high of 90.9.]

Sliced another way, the last time the broad consumer confidence reading was at the latest level near 90 was in December 2007. Last month, confidence for 55-and-older respondents was 77.1, whereas in December 2007 it was 85.2.

Consumer confidence among everyone 55 and younger is now substantially above December 2007 levels, but the grumpiness of Boomers is weighing down the headline number.

It’s not too difficult to surmise reasons for their skepticism about the country’s direction.

In a broad sense, this generation was in its prime as the United States’ influence was peaking. This generation self-consciously believed it was empowered to change the world, and its entry into the workforce coincided with rapidly advancing and broadly shared prosperity. Their expectations, in other words, were set high, so they might experience the pervasive sense of American decline more acutely.

More tangibly, as Rick Newman notes, incomes for the middle class have not improved, a stark change from the kind of predictable advance in standards of living Boomers may have assumed was a birthright.

Pre-retirement 50-somethings as a group were hit hard by the Great Recession, too, with many of them unwillingly idled as part of the “shadow labor force,” unable to find a comparable job to the one they lost and saddled with daunting expenses for health care and retirement.

The delayed adulthood of the Millennial generation following the recession has seemingly been harder psychologically on their Boomer parents and grandparents than on the younger people themselves.

Of course, one could argue that the Boomers have internalized that version of American history that says it was all directed at producing the maximum prosperity and security of a single generation – theirs. They got the cheap education, the thriving job market and the generous entitlements that now seem undercut or imperiled for those who’ve come behind them.

Whatever the reasons, it’s probably wise to adjust all economic data for the “Boomer factor.” Just as economic growth stands to remain slower for longer as the population ages, measures of the public mood will probably look more dour than what has long been considered normal due to those bummed-out Boomers.