Friday, November 28, 2008

Boomer Consumers and the New Fru

A few weeks ago we reported on the "New Age of Frugality" that folks like BusinessWeek and others sensed was on the horizon.

Well, the "New Fru," as we like to call it, is here. Today's Wall Street Journal has three items that prove it:

  1. Full-page ad by DeBeers on the back page of the front section with the headline "Here's to Less." The short copy is all about our misguided interest in possessions that "we do not treasure." Enter the diamond, something that can be "passed down for generations."
  2. Article about the dramatic fall-off in luxury car sales in October and the first half of November. The reasons given are the recession, as well as a lack of desire by those with enough money to buy a luxury car to be so showy these days. Maybe this is a trickle-up mindset the very rich are learning from the rest of us.
  3. Essay about the rediscovery of a class of Americans who have been shunned for decades: those prudent Americans -- the ones who pay their credit card bills and save money.
In addition, a guest Op/Ed in today's New York Times by the chairman of Morgan Stanley Asia about the "Dying of Consumption" contains similar sentiments.

Based on all the signs, we're ready to predict the New Fru isn't going to go away when the recession ends, whenever that is.

The New Fru is a permanent shift in consumer behavior, driven by the "Perfect Storm" of a variety of factors:
  • The "Great Depression"-like recession we're in is certainly the kick-start to this shift in consumer behavior. If you don't have much money to spend, you spend much less.
  • The emerging "Green" movement away from consumables and more toward renewables is another factor. Fully 80% of Americans in our recent "Green Matters" study either think or act in environmentally responsible ways. Our grandparents and great-grandparents never threw anything of use away. They couldn't afford to. In short order, our kids and grandkids will be doing the same. It's a life lesson they won't forget.
  • Boomers, the consume-now-and-pay-never generation, have reached that stage of life where the goal is less about acquiring more materials things and more about acquiring better and more enriching experiences.
Modern marketing as we've known it since the emergence of TV has been all about consume, consume, consume. The more you consume, the better a citizen you are -- you're fueling the economy. But that's going to change as consumers embrace the New Fru mindset.

Interestingly, consumers understand the New Fru better than our government leaders do -- they still want to bail out banks and the auto industry, and send us "stimulus checks" so we'rell go spend and be good consuming citizens. But we're not going to spend. We're going to pay down debt and save. Pretty soon, we're going to want the government to do the same (probably within two years -- to borrow from Joe Biden, mark our words).

We're report more on the New Fru mindset and try to offer suggestions to help marketers make the shift. Some, as we've reported, are ahead of others.

One good starting point is to spend 20 minutes watching The Story of Stuff over this holiday weekend. Even if the facts cited are off by 50%, it's quite an eye-opener for anyone trying to understand consumer behavior.

Wednesday, November 26, 2008

Financing the Age Wave

When all those millionaires, mutual fund managers and hedge fund investors yank their money out of the stock market, they have to put it somewhere. With the backing of billionaire private equity investor Thomas H. Lee, Bethesda, Md.-based Midcap Financial is one place that money is winding up.

Midcap Financial announced its formation Monday with $500 million in private equity commitments. "Demand for healthcare services is expected to increase markedly as the Baby Boomer generation ages, creating higher demand for the full range of healthcare services," said CEO Howard Widra, founder of Merrill Lynch's healthcare finance division and former president of GE Healthcare Financial Services.

According to Eric Wicklund at Healthcare Finance News, the company will fund the following types of opportunities:
  • Real estate loans to senior housing, skilled nursing facilities and medical office buildings.

  • Working capital loans collateralized by third-party accounts receivable and their assets.

  • Leveraged loans to healthcare companies backed by private equity sponsors.

  • Life sciences loans, primarily to pharmaceutical, biotech and medical device companies.

You'll Miss Us When We're Gone: Boomers in the Electric Utility Industry

It's a digital world, baby, and the GenYs are masters of the digital universe. GenY brains are wired to think, perceive, emote and interact in a technology-saturated world. The achievements of Baby Boomers pale in comparison to the microchip-leveraged accomplishments we can expect to flow from the younger generations.

There's just one caveat: Digital technologies require a mundane, 19th-century technology to function: electricity. And guess who makes electricity? Baby Boomers.

Without a massive investment in new electrical generating and transmission capacity, industry experts say the United States faces delibitating brownouts and blackouts in just a few years. There are many barriers to increasing electricity supplies, but there's one that people aren't much talking about: The Boomer retirement wave.

Kevin McCarty talks about the problem in Electric Light & Power:

The energy utility industry averages the second-highest average employee age among 54 industries studied. Nearly one-fifth (19.2 percent) of industry workers are within five to seven years of retirement. The most alarming statistic involves age distribution. ... The average age of an energy utility employee is steadily rising; since 1995, the number of industry workers age 55 and older has increased 225 percent.
After years of cost cutting and downsizing, electric power companies have recruited very few young people. As it happens, few young people are drawn to the industry, which is regarded, with some reason, as antique if not downright antiquated. They don't think much of the industry's corporate culture either, which they regard as stodgy and hierarchical.

Those stereotypes may or may not be true. But GenYs won't be feeling terribly smug when the lights -- and computers, and the Internet, and FaceBook, and Twitter and the entire digital infrastructure of their lives -- blinks off.

Friday, November 21, 2008

Today's Boomers: Tomorrow's Over 65ers

South Dakota has peered into its demographic future and doesn't like what it sees. By 2025, the number of South Dakotans older than 65 will double, constituting a quarter of the population. The number with disabilities will increase from 42,000 to 50,000. The state needs to redistribute nursing home beds from rural areas to urban, and it needs to increase at-home care services by a factor of four.

The Continuum of Care Needs of the Elderly in South Dakota Task Force (or CCNESDTF for short -- just kidding!), has made numerous recommendations based on the study's findings. According to the Rapid City Journal, one recommendation is to create a single-entry system -- an office that can direct patients and caregivers to needed services.

States across the country are finally beginning to wrestle with these issues. If we might be so immodest, we'll take this opportunity to put in a plug for the approach taken by our home state, the Commonwealth of Virginia. Government can address only pieces of the puzzle. Meeting the Age Wave challenge requires a comprehensive effort. The privately funded Older Dominion Partnership is engaging not only government agencies, but the private sector (hospitals, health care providers, insurance carriers and more) as well as not-for-profits to develop a coordinated response to several hot-button issues.

Recognizing that today's Baby Boomers are tomorrow's over-65 set, the Boomer Project's own John Martin has been a key player in pushing the Older Dominion initiative forward. We'll have more exciting news to report in the new future.

Thursday, November 20, 2008

The Retirement/Unretirement Line Gets Even Blurrier

It's helpful when someone does the research to demonstrate the truth of what you think you already know. That seems to be the case with a study just published by a research team led by Angela Curl, a professor of social work at Case Western University.

Tapping into the National Institute of Aging's longitudinal study, the Health and Retirement Survey, Curl gathered information about how 1,118 married, two-income couples handled retirement. The conclusions won't shock anyone who's been paying the slightest attention: The line dividing retirement from "unretirement" (as Sun Life Financial calls it) is blurring.

Curl and her research team found 41 different retirement patterns for men and 49 for women. Said Curl: "People can go in and out of retirement, and women may leave the workforce at an earlier age than men for a variety of reasons, including caring for a sick family member."

Not much new there. But it doesn't hurt to have a reality check.

We did find this nugget of interest: About 40 percent of the individuals tracked had the same retirement pattern as their spouse. Reports the article, published in the Journal of Workplace Behaviorial Health: "What became evident is that retirement is a couple-level event."

Baby Boomers and the Scourge of Bit Rot

Here's another reason to miss us Baby Boomers when we cash in our chips (assuming we can ever afford to) and move to retirement haciendas in Central America: Bit rot.

Bit rot is akin to the Y2K problem in that it describes a ubiquitous problem lurking in legacy software systems. According to Gary Beach writing for, the computing term describes either gradual decay of storage media or the spontaneous degradation of a software program over time. "Millions of lines of legacy code that have operated smoothly for decades and then one day just don't work. Often this happens because obscure, latent code embedded deep within a strategically important legacy application doesn't play nice with new software you are installing."

These problems can be dealt with as long as the Baby Boomers, who mastered fusty old programming languages like Unix, Cobol and Basic, stick around. But when they're gone, there could be hell to pay. Companies that fail to take preventive action could see their IT infrastructure fall apart "bit by bit."

If Boomers with antiquated programming skills decide they can't afford to retire, bit rot may be the key to their continued employability... Or better yet, maybe they can sit by their tropical seaside pools in Nicaragua (See "Retirement Bliss for Retiring Lefties") and hire themselves out by the hour.
(Photo credit: AMD.)

Tuesday, November 18, 2008

"Live Solid, Bank Solid"

Major retailers have begun responding to recession-driven consumer pessimism by repositioning their advertising. Conspicuous consumption is out. Thrift is in. The best example we've seen so far comes from Target, which shows clever ways to save money by buying its products.

The question we ask at the Boomer Project is whether this corporate repositioning is purely tactical (a temporary response to a temporary downturn in consumer spending) or strategic (a long-term response to a profound shift in consumer behavior that will outlast the recession).

We've been making the argument that economic events have shocked American consumers, Baby Boomers especially, into a fundamental re-evaluation of personal priorities -- a trend that was already building momentum from (a) the embrace of environmental sustainability and (b) the life-cycle tendency of older Boomers to define themselves by non-material values. In other words, the United States appears to be entering a lasting era of frugality.

We find it reassuring that SunTrust, the Atlanta, Ga.,-based bank holding company, has reached conclusions entirely consistent with this interpretation. The bank has unveiled a branding campaign built around the tagline, "Live Solid. Bank Solid," which speaks to "a new era of thrift, security and financial responsibility." This campaign is especially significant because it was based upon months of consumer research that identified attitudinal trends that were gathering strength before October's financial meltdown. Among SunTrust's conclusions:

  • Nearly 80 percent of those surveyed would rather be envied for spending wisely than for spending freely
  • 83 percent believe it's not about how much money you have, it's about what you do with the money that you already have
  • Eight in 10 believe that while having more money won't necessarily make you happier, feeling in control of the money you have will increase happiness
The "Live Solid. Bank Solid" campaign launched Nov. 16 with premiere spots airing during NBC's Sunday Night Football. It will include new primetime television advertising through 2009, as well as on the radio, in print and the Internet.

Said John Fitzgerald, president of the Winston-Salem, N.C., ad agency behind the rebranding campaign: "Consumers ... are moving to lives of more substance, reason, and long-term thinking, and feel a stronger sense of personal responsibility for the direction of their lives."

Now, while we've been talking about the new frugality as a result of the current Wall Street meltdown, our friend and "Ageless Marketing" guru, David Wolfe, has been predicting it for years. His hypothesis, now proving to be spot on, is that as America on the whole grows older -- the median age for the country continues a relentless march upward, almost at age 40 -- there will be fewer dollars flowing in the U.S. economy and a new frugality will emerge.

SunTrust, Target, and we suspect many more companies, will reach similar conclusions, creating new marketing messages that better connect with this changing mindset.

Monday, November 17, 2008

Consider the Source with
Boomer Word of Mouth

Big news released today from Prevention magazine on a year-long research study on how women use "word of mouth" (WOM) to share information about brands, products and services.

The big news:

The study, which involved an analysis of the conversations of more than 14,000 women over the course of a year, found that Baby Boomer women (43-62) have higher quality WOM than younger women (18-39)--what boomer women say is more credible, they're more likely to pass on what they hear to others, they're more likely to seek additional information and they're more likely to purchase.
And to that, we say consider the source.

No, we don't mean Prevention isn't a good source. But older women are much better resources for brand, product and services information than younger women. The reason is likely less generational (and unique to Boomers) and more age-based (and unique to older women).

That's because with age comes wisdom. Younger women instinctively know what they hear from their friends and other women has to be taken with a grain of salt. Older women are more trusting in the info from their older peers. Why? Because the source is older and wiser. How do they know it? Because they themselves are older and wiser.

We'll call this a blinding glimpse of the obvious and get back to crafting sharp commentary on the death of any "Boomer" oriented social networking sites that lack focus.

For those who want more rants on "word of mouth," visit Chuck Nyren's Advertising to Boomers blog. It really gets him worked up.

The Ideal Boomer Vacation: Cooking Classes in Tuscany?

With Baby Boomers retrenching from the recession and the shrinkage of their retirement savings, they may not be spending as lavishly on vacations as they used to. All the more reason for tourism destinations to refine their product and their marketing spiel to appeal to Boomer sensitivities.

Writing on, Debra O'Connor does a great job of capturing the new zeitgeist. Boomers don't go on vacation to relax, she says. They go on vacation to experience things. That's not to say there's no market for chilling out by the beach and plowing through a bookshelf of trashy novels. But Boomers are far more desirous of immersing themselves in a local culture, challenging themselves physically or learning something new.

Among the vacations that Boomers like to take:

Adventure: Exotic destinations and/or physically challenging activities

Midlife odyssey: Jump-starting a personal or professional change via arduous circumstances, which may include fasting or a spiritual journey, such as a hike across the Sinai Desert

Education: Constantly upgrading their knowledge; for example, lectures on board a cruise ship and scholarly tours of the Vatican

Experiential: Cooking classes in Tuscany, bungee-jumping in New Zealand, grape-stomping in Napa Valley

Volunteer opportunities: "Voluntourism" ranging from helping the poor in Peru for weeks to spending a few days helping to restore a church in Provence

Luxury: On cruises, that means smaller ships with concierges and staterooms with balconies; in the woods or on safari, it's "glamping" — glamour camping — staying in tents that have maid service

(Image credit: Organic Tuscany.)

Friday, November 14, 2008

Grandma Robinson's Moving In

It's not often that the Boomer Project finds itself reading People Magazine's Celebrity Baby Blog, but we intrepidly follow new Boomer-related gossip wherever it takes us. In this case, our antennae are all aquiver over the news that Marian Robinson, the 71-year-old mother of Michelle Obama, will leave her home in Chicago to move into the White House with the first family.

As reported by the Mail Online among other places, Robinson was an integral part of the Obama campaign: babysitter for 10-year-old Malia and seven-year-old Sasha while mom and dad jetted around the country. Apparently, the Obamas don't expect life to get any easier when mom and dad take up the duties of president and first lady. Michelle reportedly "begged" her mother to move in and help with the kids.

This story is more significant than an Obama-besotted media looking for another human interest story. The media is heralding the upcoming Obama administration as a "new Camelot," a second coming of the reign (er, administration) of Jackie and JFK. We anticipate lavish and laudatory coverage of the couple's familial arrangements -- arrangements that include the heart-warming story line of a live-in grandmother helping take care of the kids. This arrangement will draw attention to, and legitimize, the growing phenomenon of three generations living together.

While very few Americans live the pressure-filled lives that awaits the Obamas, two-career couples with children do have their hands full. Enlarging the family to include vital and active 70-year-old grandparents often makes sense. An extended family puts the caretaking of the munchkins in the hands of someone who can be totally trusted. It also gives grandparents an added sense of purpose, and it builds strong family bonds.

With the first family providing positive visibility for the idea of live-in grandparents, we expect the practice to take off. Baby Boomers have paved the way for revival of the "extended family" by letting adult children live in their old rooms (See "Boomer Sociology and Housing Demand") and, increasingly, taking ailing parents into the home. The Obamas are just taking the idea one step further by incorporating an active parent into the household.

As the U.S. Boomers enter a new age of frugality, cutting spending and reducing indebtedness in preparation for the "retirement" phase of their lives, sharing housing costs with extended family members makes economic sense as well. We'll keep our eyes peeled for other examples of the ever-morphing family structure.

(Photo credit of Granny Robinson with Malia:

Thursday, November 13, 2008

Computer Games Rock -- Even for Boomers

Video games aren't just for pimply teenage boys with a sword-and-sorcery addiction. Women and Baby Boomers are driving traffic in the fastest-growing component of the entertainment sector. A recent report by IBISWorld, reports PC World, finds that 38 percent of US gamers are women, the average player is 35 years old, and 24 percent are over 50.

All trends point to continuing growth, especially if game designers transcend the adolescent lust for gore and cater to middle-aged tastes.

I can confirm, from personal experience, that computer gaming is alive and well among 50+ males. In college, I remember being entranced by the world's simplest video game -- Pong -- in which the players tried to bounce a moving ball past the other's defenses. As a young adult, I escaped from work for extended lunch breaks to play Robotron and Missile Command. As a middle-aged adult, I've lost way too many hours of sleep playing Civilization and other strategy games into the wee hours of the morning.

In the coming age of frugality, simple economics make gaming an attractive entertainment option. A new video game retails for $50. For the same amount of money, you can rent 10 moves online (or buy them in the Wal Mart discount DVD bin). Ten movies provide about 20 hours of viewing pleasure. A serious gaming addict can burn through 20 hours in a day -- then wake up the next morning craving more. Here's another way to look at it: Gaming is also cheaper than buying crack.

For those who feel guilty neglecting their family playing solo games, the gaming industry has invented a whole new category of family-friendly titles. My 10-year-old son and I have played more than a few hours of Guitar Hero together. (As a bonus, I've exposed him to a number of Baby Boomer rock anthems he never would have heard otherwise.)

Computer games, unlike golf, vacations, books or other ways to wile away your leisure time, benefit from the phenomenal increase in microprocessor performance. Video game graphics are improving with awesome speed. Characters in games with interactive plots are depicted with ever greater authenticity. Players can interact with one another in imaginary worlds. The immersive experience is becoming ever richer.

Who needs Las Vegas or Disney World at $500 per night when a $50 computer game gives you the whole world -- or the whole universe, for that matter?

(Hat tip: Paul Briand with

Wednesday, November 12, 2008

Repeat After Me -- Baby Boomers Are Not an Affinity Group, a Wisconsin-based web site predicated on the idea that Baby Boomers would flock to a site that allowed them to interact with one another, apparently has died and gone to that big digital cloud in the sky.

The web site is no longer accessible, reports Paul Briand, the Baby Boomer correspondent for, and the Wisconsin Better Business Bureau is getting complaints about unpaid gift cards earned by participating in the Web site.

The BoomerTowne development follows the repositioning of, a Baby Boomer-centric web site that had chopped its workforce and opened up registration to non-Boomers in order to expand participation.

Here at the Boomer Project, we believe that generational differences are significant, and marketers need to understand them, but we see little evidence that the 78-million cohort functions as a meaningful affinity group. The shared values and attitudes common to Boomers -- the generational optimism, for instance, or finding self identity through work -- typically function at an unconscious level. Those traits, while very real, are not the kind of thing that people would want to gather online and dish about.

We wish the Boomer web sites well. But we think businesses will do better to focus on specific age-related challenges -- retirement finances, health, vitality, spirituality, grandparenting, empty nester lifestyles, etc. -- than try appealing to some vague sense of Boomerdom.

Tuesday, November 11, 2008

Boomers, Frugality and the Revolt against Consumerism

by James A. Bacon

Only in New York: Reeling from the financial catastrophe on Wall Street and fearing a collapse of the Sex in the City-style conspicuous consumption, fashion mavens have conjured up a new phrase, “recessionista,” to describe free spenders who are going down-market. Instead of buying $1,235 patent-leather satchels with golden accoutrements designed by Anya Hindmarch, reports the New York Times, these trendy young women are heading to Target (as in, tar-jay) to purchase similar purses by the same designer, but made of polyvinyl chloride, for $49.99.

Mass over consumption dies hard in the United States.

But New York may be not be typical. The rest of the country seems to be responding at a more profound level to hard times. In New Hope, Pa., the Ingram-Behre family overhauled a year ago its profligate lifestyle – dining out, shopping for entertainment, expensive cruises and trips to Disney World – with the goal of paying down debt and building its net worth. Predicting a “new age of frugality,” BusinessWeek described how the Ingram-Behres household now buys clothes at consignment shops, turns out the lights and often walks places instead of driving there. Earlier this year, the family saved enough money to pay off one of its auto loans.

The question is whether the new-found frugality is a temporary response to the shock of plummeting real estate and stock values, or does it foreshadow a fundamental shift in values and priorities? Are Americans going the “recessionista” route, in which extravagant spending will likely rebound as soon as the economy does, or are they following the Ingram-Behres by eschewing the ethic of “he who dies with the most stuff wins”?

Clearly, financial turmoil has filled Americans with a fear that impacts the here and now. The Consumer Confidence Index, updated Tuesday, stands at the lowest level since its inception in 1967. The Index plummeted to 38 in October from a reading of 61.4 in September.

But at the Boomer Project, we sense that there’s more to the story: Americans from all generations are turning their backs on the materialist, consumer-driven culture of the past. Read more.

("Viva the Vital" column republished from the Oct. 30, 2008, edition of the Richmond Times-Dispatch. Photo credit: The Great Dickens Christmas Fair.)

Thursday, November 6, 2008

You Go, Girl -- on Vacation, That Is

Women running off on vacation together isn't just for Daytona-bound co-eds anymore. As the Associated Press recently reported, middle-aged women are taking knitting trips, adventure trips and spa trips. And they're leaving the munchkins and menfolk to fend for themselves.

The trend is so prominent that people are building business enterprises around it. There has been a 230 percent increase in the number of women-only travel companies in the past seven years. Marybeth Bond has written two books: "50 Best Girlfriends Getaways in North American" and a sequel, "50 Best Girlfriends Getaways Worldwide." The Fine Living Network launched a series recently entitled, "All Girl Getaways."

Writes the AP:

Thirty years ago, women didn't vacation without their families, said Susan Eckert, founder and president of AdventureWomen, a travel company for women ages 30 and older. A woman who did travel without her husband was asked whether there was something wrong in the marriage, she said.

Traditionally, women planned family vacations where they were the ones "making sure everyone is happy, everyone is safe, everyone is entertained," Oswald said. Meanwhile, men went camping, fishing or golfing with the guys, and teenagers started traveling, too, with school and youth groups while their parents footed the bill. Now women are saying, "'It's my turn.'"

I got bushwacked by the girls-only travel trend about two years ago. My wife, 48, announced that she and seven or eight members of her monthly bunco club were heading to Las Vegas for a long weekend. That was such a hit, the gals decided to go on a Caribbean cruise -- an event they plan to repeat this February.

The husbands of the aforesaid bunco-club wives did assemble a monthly men's group dedicated to hearty eating, drinking and discussion of weighty intellectual matters (we're real dweebs). But we haven't yet organized ourselves to actually go on vacation together. The women are way ahead of us. I don't think they'll stop until they take over the world.

Some Like It Hot

Consumption of spicy food is on the rise, and Baby Boomers are responsible, blogs the author of "Going Like Sixty." Aging dulls the senses of taste and smell, and Boomers are compensating by eating foods that once would have set their tongues aflame.

Chili Pepper consumption -- per person -- is up from 4.7 lbs in 1998 to 6.3 lbs in 2007, according to the AARP magazine. Sharper cheeses like feta and garganzola are gaining in popularity. There's even a website -- -- where you can buy all manner of peppers, spices, and condiments.

As a bonus, Going Like Sixty quotes Dave Dewitt at Fiery Foods:

Garlic, onion, allspice, and oregano were the best all-around microbe killers, killing almost everything. Next were thyme, cinnamon, tarragon, and cumin, which kill about 80 percent of all bacteria. Chile peppers were in the next group, with about a 75 percent kill rate. In the lower ranges of 25 percent were black pepper, ginger, and lime juice.
At last, something that tastes good is actually healthy, too! You'll know the trend has finally gone mainstream when McDonalds starts serving Red Hot Chili Pepper Burgers.

Wednesday, November 5, 2008

Boomers and Change: the 2008 Presidential Vote

The United States made history yesterday in electing the first African-American, Barack Obama, to the presidency. Based upon the mythology of the Baby Boomer generation -- the generation that grew up during the Civil Rights era and reshaped cultural history -- one might have expected Boomers to lead the way in voting for "change."

But they didn't. CNN exit polls showed that Boomers split their votes evenly between Obama and John McCain: 50 percent to 49 percent. The GenY (Millennial) generation voted most lopsidedly for Obama, by a two to one margin, while GenX favored him by a smaller margin. The Silent Generation was the only age cohort that went for McCain, who is, after all, one of them.

A superficial conclusion based upon the CNN poll results would suggest that the proclivity for voting for Obama varied in direct proportion to the age of the voter. But that would obscure the reality that ethnicity was the driving factor. The reason the GenY generation voted so overwhelmingly for Obama is that GenY is more ethnically diverse (as in, non-white) than older generations.

Blacks voted almost unanimously for Obama across all age brackets, with little variation (between 94 and 96 percent). Latinos skewed toward Obama by large margins, though not as lopsidedly as for blacks. Same with Asians. Among whites, only the GenYs favored Obama -- 54 percent to 44 percent. All other white age cohorts favored McCain by the same margin of three to two.

Here at the Boomer Project, we look at social, economic and political phenomena through a generational lens, and it gives us something new and fresh to say when we can demonstrate that an individual's generational location is a significant determinant of behavior. But we can't honestly do that with this election. Children generally voted like their parents. The differences between the GenX, Boomers and Silent Generation within ethnic categories were not significant. Adjusted for ethnicity, GenY leans more blue than red, but by a smaller margin than commonly imagined.

In reality, the Democratic leanings of the "youth" vote reflects the changing ethnic composition of the United States and the shift from a predominantly white nation to a multi-ethnic nation.

(For details on voting by age and ethnicity, click here and scroll down to "Vote by Age and Race.")

Tuesday, November 4, 2008

Greedy, Grasping Children -- and, No, We're Not Talking About Baby Boomers

Depressing news for Baby Boomers in Great Britain... Let's hope this trend doesn't cross the Atlantic!

Here in the States, Boomer parents are accustomed to the idea of their adult children living at home. Other than their predilection for raiding the fridge and forgetting to turn out the lights, the offspring don't cost a lot of cash out of pocket.

In the UK, the little moochers are digging deeper into their parents' pockets, putting their empty-nester and retirement dreams at risk. A recent Skandia Insurance study finds that 59 percent of British parents "are still expected to give financial support to adult children ... while 89 per cent will sacrifice their own financial situation in order to meet their children's expectations."

According to the Skandia research, one in ten parents aged 50 to 65 are expected to contribute towards the cost of buying their children's first home, while 15 per cent anticipate being asked to fund their child's wedding.

Says Michelle Cracknell, strategy director at Skandia: "Whilst many parents now in their 50s and 60s may have planned to cut the financial purse strings to their off-spring by now so they can fund their own lifestyle, changing demographics and the cost of living mean that, for many, this has not been the case."

Wow. And we thought American Boomers raised demanding children.

Continues the report: The most common way for parents to meet their children's expectations is to raid their own savings (48 per cent), followed by making personal sacrifices on their own lifestyle (42 per cent). The situation is worst in London, where children of Boomer parents have highest expectations from their children. One in four Boomers say their children see them as a source of unlimited funds (24 per cent), compared to just 17 per cent in the rest of the country.

Meet their childrens' expectations? Sounds like these greedy progeny are unconcerned about their parents' well being -- and the parents are a bit resentful. Sounds like some Brit Boomers never learned to say, "No," to their kids. I would hope that Americans would display a little more backbone about indulging their little darlings, but I'm not confident that a similar poll here would show any big differences.

Monday, November 3, 2008

Boomers, Risk Aversion and the Stock Market Debacle

I've come across another theory that blames the global financial meltdown in part on Baby Boomers. While the author, Christopher Carroll at RGE Monitor offers not a shred of hard evidence to back it up, he does lay out a plausible argument, basing his logic on the established economic principles, not some supposed hideous moral flaw that mysteriously infected tens of millions of Boomers in different societies across the world.

The theory goes like this: October's massive losses on global stock markets cannot plausibly be blamed upon the creditwortheness of American subprime mortgage-backed securities alone. The value of vanished global wealth dwarfs the value of all subprime mortgages put together. Something else must account for the incredible shrinking stock market, and that "something," Carroll suggests, is a sharp global increase in risk aversion.

One potential source of that risk aversion is Baby Boomers. As Carroll puts it: "too many baby boomers and retirees (not just in America but around the world) trying to crowd through the risky-asset exit doors at the same time."

Crowding through the risky-asset exit doors is the defining characteristics of any bear market, however. Investors of all shades and striped were panicking, not just Baby Boomers. Why does Carroll pick on Boomers? Because the conventional wisdom holds that that people approaching retirement age should reduce their exposure to volatile investments, like stocks, and increase their commitment to more stable, less risky asset classes, like Treasuries.

Carroll thinks that a lot of Boomers failed to heed this advice before stock market took a nose dive. But when prices headed south and Boomers absorbed the implication of dwindling portfolios for their retirement plans, they stampeded like lemmings. Writes Carroll: "It seems increasingly plausible that the financial panic has pushed a lot of boomers and recent retirees over a tipping point of concern; they’d been thinking for years that it was time to start reducing their exposure to that risky stock market, but never quite got around to it. Now everyone wants out at once."

There's obviously much more to this story: We're still learning the role played by derivatives, swaps, overleveraged merchant banks and overleveraged hedge funds. But if 78 million American Boomers and tens of millions more across the post-industrial world decided to reduce the risk exposure of their retirement portfolios by shedding stocks, they could well have fueled the plunge in stock prices.

We'll keep an eye open for evidence that confirms or contradicts this theory.

Valuable Insights into the Hearts, Minds and Wallets of Today's Baby Boomers

This blog is by the authors of Boomer Consumer: Ten New Rules for Marketing to America's Largest, Wealthiest and Most Influential Group, on sale now.

Here is where you'll find information referenced in the book, as well as updates, news and perspectives from Matt Thornhill and John Martin, founders of the Boomer Project.