Market Thinking

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OK Boomer?

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The US Election marks the passing of the Boomers, three of the last four US Presidents were born within two months of each other in 1946

Last night was the first of the US Presidential debates and, as ever, the pundits are torn over their significance. Ever since the televised debate between Nixon and JFK, when Nixon was deemed to have won the radio poll but lost the TV version on account of looking ‘sweaty and shifty’, one half of the  political commentariat have regarded the debates as critical, while the other has deemed them irrelevant and doing little to change opinion.

What is perhaps most different this time (in this already very ‘different’ of years), is that the contender is older than the incumbent and that, unlike when 69 year old Ronald Reagan joked in one of the debates with Vice President Mondale that he wasn’t going to make the age and inexperience of his opponent an issue (Mondale was 56 at the time), there are undoubtedly some questions not so much about Joe Biden’s age, as about his health and acuity. As such, the debate’s main significance in our opinion is less about any policies discussed or any killer, scripted, line, (although saying “I have done more in 47 months than you have done in 47 years” is a pretty good one) but rather what it says, or indeed doesn’t say say, about Joe Biden’s abilities to govern from a mental and physical standpoint.

This is not about longevity – Jimmy Carter is still alive at 95 and George H W Bush died at 94, and when he was elected in 2016 at the age of 70, Donald Trump was already the oldest ever President at election, but rather about mental and physical ability. And also generational attitude as, interestingly, three of the last four Presidents of the United States were all born literally within 2 months of one another in 1946 ; Donald Trump (June), George W Bush (July) and Bill Clinton (August). The exception, obviously, was Barack Obama who was born in 1961 – the tail end of the Boomer generation, sometimes referred to as Boomers ll -raising the obvious point that the President after next will be a Generation X (1966-1976) or even possibly a Millennial (1977-1994).

On balance Joe Biden did OK, certainly he didn’t appear to lose his thread – although President Trump interrupted him so often it was difficult to tell and it may well turn out to be a non event – rather like the Trump ‘tax bombshell’ that wasn’t. However, after months of Joe Biden being kept away from the spotlight and only reading scripted statements, the doubts weren’t really resolved either way. The next debate is the Vice Presidential one, which is usually ignored, but will, obviously, be all about Kamala Harris, who many see as the real Presidential Candidate with much speculation that the ‘October Surprise’ will be a switch to that effect. It will be interesting to see if she can make any of the attack lines on Covid and the economy work any better than Biden did and in turn how she defends the Trump camp line that the Obama/Biden team failed to do anything in eight years that the Biden/Harris team are now claiming Trump should have done in the last four. In a strange way, the very political longevity of Biden means he has to defend his track record almost as much as Trump has to defend his, leaving Trump able to play a ‘challenger role’. Then in the final debate we can expect the Trump campaign to focus on some of the things he set the scene for today, especially Law and Order and the fact that Biden is part of the same team that played ‘dirty tricks’ before, during and after the last Election.

In terms of who won the debate today, both sides chose to appeal to their ‘base’ (although neither side actually needed to) and the talking/shouting points clearly reflected that. As to the undecideds, the betting markets showed an improvement in the odds for Biden. Make of that what you will.- although it should be noted that they have been considerably more Pro Trump than any of the polls so it may just be some laying off of bets.

As to policies, leaving aside the usual lobbying and other vested interests, whoever wins this will be the last Boomer President, and the handover of power to the next generation begins now, it’s really just a question of speed. Should Biden win it looks likely that while paying lip service to the Millennials he would still govern like a Boomer, i.e more of the same. As to Trump you can never really tell (!) but there is a possibility that he will actually be more Gen X. Thus while the attitude ‘OK Boomer’ is used to dismiss the ‘old fashioned’ approach of the post war generation to issues such as Climate change, we should be wary of thinking that attitudes and policies will skip two generations. Indeed, we may find that the Gen X’ers may have only been paying lip service to the Millennials as part of their own efforts to displace the Boomers.

Gen X is taking over and they will not indulge the Millennials as much as the Boomer generation did. They will look out for their own kids.

Certainly economic power and Political power still rests with late boomers and Generation X and they aren’t letting the millennials run the show just yet. Indeed, the next few years may well be characterised by a different sort of generational conflict as the Boomers lose the economic and political power to protect their relatively ‘spoiled’ and protected and socially minded children from the more individualistic Gen X’ers who in turn will be looking out for their own Generation Z (1996-2010) offspring.

This will be key for long term trends, but the most obvious aspect of this will be the Tech industry, the ultimate Millennial run business. Millennials don’t really care about the way the advertising model of Big Tech harvests their data, but Gen X’s do care and they also really care about the exploitation, as they see it, of Gen Z. The Netflix Documentary The Social Dilemma paints a deeply worrying picture as to how the AI embedded in the Big Tech companies’ business models is, quite literally, affecting the way young people’s brains are developing. Thus while lots of noise and good gesturing may be made over millennial issues such as climate change and sustainable investing, the pragmatic Gen Xers will not be as utopian as the Millennials may want. However, regulation of Big Tech is coming. Whoever wins.

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