Don't Settle For Less

Never accept the consequences of bad policies as a fact of life.

Photo by Mick Haupt on Unsplash

Rob Kapito, President of BlackRock, the world’s largest asset manager with $10 trillion in client assets and investments, recently warned “entitled” younger Americans had to learn to sacrifice and suffer from shortages. 

Speaking at a conference, Kapito argued that the United States faces a “scarcity inflation,” caused by the shortage of everything from labor, supplies to energy.” He went on to say, “For the first time, this generation is going to go into a store and not be able to get what they want...And we have a very entitled generation that has never had to sacrifice.”

Kapito’s comments drew backlash on social media immediately. Many younger Americans pointed out that rather than being “entitled,” they might be “the unluckiest generation” in U.S. history. This generation had their childhood innocence robbed by the “911” terrorist attack. Some of them either sacrificed in the nation’s seemingly forever war in Iraq and Afghanistan or lost families or friends in those wars. 

They hit the Great Recession in 2008 as they entered the workforce. Research shows “while millennial employment recovered from the Great Recession within a decade, millennial earnings never did.” Then, between 2020 and 2021, their work and lives were disrupted again by a global pandemic. Yet elite like Kapito called this generation “entitled” and lectured them to accept lower living standards and shortages as a fact of life. 

If we are having an honest discussion about being “entitled,” few people in the world are as “entitled” as Mr. Kapito. Has he ever stood in line for hours, waiting to buy food but going home empty-handed and hungry because shelves at grocery stores were bare? Has he ever lived with routine electricity blackouts and often had to finish homework by the dim light from a single candle? Probably not. But I have.

Growing up in Communist China, shortages were common. The Chinese government issued various vouchers to restrict people’s consumption. My parents often had to get up early to wait in long lines outside our local grocery store, hoping to buy a pound of rice or several ounces of cooking oil. They knew if they showed up later, nothing would be left. 

I still remember my family’s experience of purchasing our first refrigerator in the 1980s. Buying appliances in China was not just a money issue. We also needed a government-issued voucher. Not every household got a voucher for the most in-demand items, such as refrigerators. Often you have to have connections. My mother eventually got one from a friend’s friend who worked for a refrigerator manufacturer. 

We took our savings and the voucher to the store and waited in a long line for hours. We couldn’t choose which refrigerator we wanted. There was only one size and color available (forest green). One hundred other people would be more than happy to take our fridge home if we said no. So we agreed to pick the first one we saw in the store.

After the fridge was delivered to our home, my parents put it in the most visible spot in our apartment because it was our most prized possession. Our neighbors made all kind of excuses to stop by so they could check it out.

After three-decade of economic hardship (from 1949 to 1979), including suffering one of the worst famines (1958-1962) in human history, Deng Xiaoping, a pragmatic Communist Party leader who succeeded Chairman Mao, finally had to admit that failed government policies were responsible for our economic hardship. Decades of central planning resulted in misallocated capital, disincentivizing productivity, and widespread shortages.

Deng launched economic reforms in the 1980s, embracing the western-style market economy elements, including privatizing some industries and sectors. These reforms have produced miraculous economic growth in China.

I immigrated to the United States before China’s economic boom. When people asked me what impressed me most in America, I always mentioned grocery stores. Many immigrants from socialist countries share my sentiment. We were amazed by the abundance of supply and lack of lines in grocery stores in the United States. Some of the stores even open 24-hours so customers can get what they want whenever they want.

The material wealth Americans enjoy is a manifestation of their freedom because prosperity and liberty go hand-in-hand. The more people are free to create, produce, serve, take risks, and know their private property rights are protected, the more products they develop and services they provide, which lifts the standard of living for everyone.

I found it offensive when Mr. Kapito’s lectured on how America’s younger generation is too “entitled” and should learn to sacrifice and be content with shortages and lower living standards. Like China, today’s economic woes and scarcity in the United States result from bad policies. The rising inflation is caused by out-of-control government spending and excessive money printing by the Federal Reserve. Milton Friedman famously said: “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” 

The Biden administration’s war on fossil fuels is the primary culprit of surging gas prices. There are about 10 million open positions available in the United States. But as long as the Biden administration and the Democrats in U.S. Congress continue to pay people not to work through generous welfare benefits, the labor shortage in this country will continue.

Instead of lecturing the younger generation to accept shortages as part of life and the lower living standard as the new normal, elites like Mr. Kapito should have advocated for better policies to ensure the next generation of Americans will continue to enjoy the level of prosperity which has become a hallmark of this great nation.

My advice for America’s younger generation is: Never accept the consequences of bad policies as a fact of life. Reject the limits others impose on you. Prosperity is both desirable and achievable. Don’t let anyone shame you into settling for less.