Katie Dean, press assistant for the Student Association for Voter Empowerment, didn't agree with some of Suze Orman's strong statements posted in my recent interview with her ("Suze Orman: Why the Recession Is a Good Thing"). She took particular exception to Orman's assertion that today, young people "have it so great it's not even funny." First, Orman's explanation:
If the economy kept running the way it was, you guys would have been broke for the rest of your life. Real estate was going up and up. You would never have qualified for real estate, and companies were shipping jobs offshore. So where were you going to get a job? The price of tuition was so high [that graduates] owed $150,000 in student loans. The price of milk and other prices were so off the charts. What were you people going to do? The stock market was at 14,000, so every time you put money into your 401(k), you bought less and less shares.
Dean thinks otherwise. She writes:
Although the economic overhaul may ultimately be to our advantage, Orman seems to ignore the overwhelmingly negative immediate consequences that young people are facing due to the recession.
While it is true that the few Americans fortunate enough to have a stable financial situation have been able to take advantage of the investment opportunities resulting from the recession, the vast majority of young people are suffering greatly under the economic downturn.
Orman claims that before the recession hit, the economy was growing so rapidly that consumer buying power became weak enough to preclude young people from ever affording real estate or even repaying college loans. I understand Orman's intentions in pointing out that the recession brought an upswing in buying power because, in theory, it should enable young people to afford things which were previously unavailable. However, most young people are not in a situation that allows them to take advantage of this increased buying power and thus Orman's focus on the positive elements of the recession makes her remiss in her analysis.
Dean makes a good point. It's true that young people are suffering right now. The job market is particularly tough for those under age 30, who face a higher-than-average 20 percent unemployment rate. It's hard to argue that young people are thriving right now.
- For more, read: "Survey: Young People Hit the Hardest."