This piece originally appeared here in Alabama Political Reporter.
Millennials are hurting. Recently The Wall Street Journal ran an article titled “Americans in their 30s are piling on debt.” The author, Gina Heeb, claimed that Americans “in their 30s have racked up debt at a historic clip since the pandemic.” “Their balances,” she wrote, “hit more than $3.8 trillion in the fourth quarter.”
Heeb warned that “the debt buildup could worsen a generational wealth gap that was already on the rise for millennials.” She factored inflation, interest rates, childcare, home prices, cost of living, and student loan debt as causes.
There’s more to the story: millennials, the largest demographic in our workforce, began their careers during the Great Recession, a period of low wages and high unemployment. Their struggle to find good jobs and build careers made it difficult for them to pay off loans and debt. Businesses during the recession froze hiring and cut staff, salaries, and benefits. Millennials fell behind. As of 2020, over half of adults between 18 and 29 still lived with their parents.
Student loans, university administrative staff, the race to improve and expand facilities—these magnified the costs of higher education. As a result, millennials took on substantial debt to pay for college.
Those whose parents could afford the price of college began careers ahead of students from low-income families who depended on loans and worked through college, sacrificing study time to earn rent money through odd jobs and menial labor.
Some millennials believe they can’t find jobs as easily as their parents did. They don’t want to work for an employer for decades until they earn a company watch or their names on a plaque. Many of them work freelance jobs or part-time gigs lacking health insurance benefits or retirement contributions. Some may enjoy the flexibility that contract work provides, but others would prefer more stability.
What’s to be done?
Mass student-loan forgiveness isn’t the answer, although anyone with student loan debt should research whether they’re eligible for income-based repayment plans or loan forgiveness under current rules.
Families should continue supporting their adult children or relatives. Maybe it’s good that so many young adults still live with their parents. After all, aren’t families supposed to be close and nurturing? For centuries extended families cohabitated, if not in the same house, then at least on the same land. If parents aid their children well into adulthood, might the children one day reciprocate, taking care of their parents who reach old age? Is it so bad to see hearth and home return to the center of community?
Regardless, millennials must learn to budget, save, and invest, ensuring that expenses don’t exceed incomes. They must put away for retirement even if retirement seems far off.
Rather than ordering new credit cards, millennials should avoid debt by living within their means. If they receive tax refunds, they should save or invest them, or use them to pay off debt, but they shouldn’t spend them on luxury goods or exotic vacations. They should build an emergency fund for unforeseeable exigencies such as home or vehicle repairs.
Millennials are sometimes accused of embracing socialism, but that does not appear to be so. A 2019 Gallup poll suggested that half of young adults viewed socialism favorably. Yet the same poll indicated that 83 percent viewed “free enterprise” favorably.
That’s promising. Free enterprise will help millennials as older generations age out of the workforce. Free enterprise yields competition, which, in turn, incentivizes companies to innovate, produce goods more efficiently, and allocate resources more effectively. The net result is to boost production, increase demand for labor, and multiply opportunities.
Millennials should embrace entrepreneurship and challenge barriers to entry that stifle innovation. People should be free to discover and create, find needed fixes to difficult problems, improve existing technologies, invent new products, and cultivate partnerships in different markets.
But before millennials, or other younger generations for that matter, can change society, let alone the world, they must change themselves. They must work hard, improve their credit scores, pay bills on time, avoid bank overdrafts and excessive borrowing, consolidate debt into lower interest loans, establish sound financial goals, and invest (if possible) in diversified funds or assets that appreciate in value.
Millennials, heed the words of Benjamin Franklin: “Beware of little expenses; a small leak will sink a great ship.” And hang in there! I’m a millennial too, and I can feel it: Spring is just around the corner.
This piece originally appeared here in 1819 News.
Recently I spoke to Bryan Dawson of 1819 News about the Environmental, Social, and Justice (ESG) movement that permeates corporate America. You can watch our interview here.
ESG can be understood in two ways: first, as a framework or strategy that individual corporations undertake internally and, second, as the nonfinancial standards, metrics, or factors that asset management firms, financial institutions, and institutional investors, among others, consider when they allocate capital or assess risk.
For convenience, let’s call the first “micro ESG” and the second “macro ESG.” Macro ESG consists of governments, central banks, non-governmental organizations (NGOs), asset management firms, finance ministries, financial institutions, sovereign wealth funds, and a global consortium of institutional investors that collaborate to operationalize ESG among and between businesses in all industries (i.e., at the micro level).
The combined entities comprising macro ESG exert extraordinary power over companies in various fields and countries. Because these entities manage assets and financial instruments from currency and loans to stocks and bonds, they control capital flow throughout the world. After all, every company—to say nothing of the individuals who comprise it—seeks to bank or invest. Therefore, companies of all sizes are subject to the systemic trends that macro ESG creates and sustains.
Those trends are, for the most part, politically leftist.
“Diversity,” however, is one concept characteristic of ESG that could, under certain circumstances, appeal to both the left and the right. Properly practiced, it can be good for organizations, which benefit from the creativity and innovation that result when different ideas and perspectives converge. Unfortunately, too many companies reduce “diversity” to the simplistic rubric of race and gender, neglecting other factors that would enrich the workplace.
The Alliance Defending Freedom (ADF), a faith-based legal organization known for its First Amendment litigation, has produced a Viewpoint Diversity Business Index to track how banks and financial institutions measure on free speech and religious freedom commitments. ADF reached out to 100 major companies to invite them to participate in a survey for the index. One such company, Regions Financial, is headquartered in Alabama and did not participate.
The Viewpoint Diversity Business Index is, according to its website, predicated on the following statement: “We recognize that powerful companies in the tech and financial services industry have emerged as de facto gatekeepers of essential services and become crucial mediums of expression in the digital public square. While many of these companies make important contributions to our economy and society, they undermine trust and the institutions of democratic self-government when they engage in censorship, enable cancel culture insider their organizations, or take divisive stands on controversial political issues.”
Because ESG emanates from financial intermediaries—banks, asset management companies, brokerage firms, trust companies, payment processing servicers, and so forth—The Viewpoint Diversity Business Index targets ESG. It seeks to stop banks from denying financial services to politically disfavored people and industries.
Are banks really doing that?
Yes. The practice is called “debanking.”
The Canadian government, on the alleged grounds of a public emergency, recently froze the private bank accounts of truckers protesting their government’s Covid-19 rules and restrictions. JPMorgan Chase closed the account of the National Committee for Religious Freedom (NCRF). Chase Bank terminated the accounts of performance artist Martina Markota, activist Laura Loomer, and Proud Boys members Joe Biggs and Enrique Tarrio. Bank of America refuses to fund oil and gas projects in the Artic National Wildlife Refuge, portions of which were authorized for drilling until President Biden suspended that practice by executive order in 2021.
Citybank has restricted credit and banking services for certain gun manufacturers. JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo have taken measures to undermine the firearms industry, which, of course, is otherwise fiscally responsible and creditworthy—and which remains one of the most heavily regulated industries in the entire world.
Visa, Mastercard, and American Express have created merchant category codes for gun shop sales, which will no longer be labeled “general merchandise.” PayPal has closed accounts of individuals associated with the January 6 Capitol Riot as well as of groups that the Southern Poverty Law Center deems hateful.
You don’t have to like or agree with the objects of debanking to recognize that it’s a problem with potential far-reaching consequences.
And it’s not just conservatives who should be concerned. One can imagine a future in which banks and payment processers deny services not only to organizations like Oath Keepers, but also to the Southern Poverty Law Center (SPLC) due to allegations that the SPLC spreads hate and misinformation. If banks go political, some will begin servicing only “rightwing” clients, and the the financial services industry could fracture along political lines. Politicians, in turn, might pursue new banking regulations that could be weaponized against political adversaries.
In short, ESG in financial services will sharpen political divides, taking the culture war to board rooms and then to all companies (because all companies depend on financial services). Historically, companies stayed out of politics and served clients with wide-ranging political principles on the understanding that business was about providing needed goods and services to as many people as possible.
The Viewpoint Diversity Index is a useful and creative step toward depoliticizing corporate America and raising awareness about ESG. Everyone should study its findings to determine whether his or her bank is healing or magnifying the political turmoil that is fundamentally changing the character of our country—and at costs that remain incalculable.
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