Friday, May 15, 2009

What MTV and the GOP have in Common

MTV premièred in August 1981, seven months after Ronald Reagan was inaugurated as America's 40th president. It revolutionized TV and the music industry as much as Reagan changed the country's politics.

And now, just as the election of Barack Obama to the presidency signaled the end of that political era and the beginning of another, MTV is belatedly shifting gears as well.

The network, long known for cynical and vapid content, has suddenly understood the importance of being earnest. Booze and bikinis are out. Do-good singers and hard-working art students are in.

MTV acknowledged that its programming had become out of step with the progressive, service-oriented values of today's youth, the Millennial Generation. "It was very clear we were at one of those transformational moments, when this new generation of Millennials [born between 1982 and 2003] were demanding a new MTV," a channel executive explained.

After losing ground for years, MTV finally got it. But many other corporations and institutions – the Republican Party comes to mind – still don't. As a result, they risk alienating the approximately 95 million young Americans who will be defining the nation's politics and culture for decades to come.

MTV's mistake was to assume that the members of particular demographic groups, in this instance young people in their mid-teens through their mid-20s, behave the same and hold the same attitudes at all times. If only MTV's executives had gone to the movies more often, they might have recognized these generational changes much sooner.

For baby boomers (born 1946-1964), a generation of idealists driven by strong personal values, no coming-of-age-movie captured their rebellious and moralistic spirit better than "The Graduate." The protagonist, Benjamin Braddock, is a depressed loner who rejects his parents' "plastic" values. In his dalliance with Mrs. Robinson, Benjamin seeks emotional attachment and deeper meaning, whereas she is in the "relationship" only for physical release.

The movie ends as Benjamin rescues his true love, Elaine (Mrs. Robinson's daughter) from an "arranged" marriage by blocking the door from the church with a cross. Benjamin and Elaine ride away on a bus, embracing a new idealistic lifestyle while forever turning their backs on the shallow and meaningless existence of their parents.

But the tone of coming-of-age movies shifted dramatically when Generation X (born 1965-1981) became teenagers and 20-somethings in the 1980s. This generation was best represented in "Risky Business."

Tom Cruise portrays Joel Goodsen, an alienated young man who, like many real-life Gen-Xers, is a latchkey kid abandoned by his vacationing parents at their suburban home.

Unlike Benjamin Braddock, Joel does not use his alienation from the grown-up world as a reason to pursue deeper values. Instead, he uses his time alone to perform an iconic dance in his underwear while lip-synching to "Old Time Rock and Roll." He wrecks the family car, hires a hooker, and, in true Gen-X entrepreneurial fashion, provides a "for hire" outlet to satisfy his friends' sexual desires, using the family home as his place of business.

Contrast those stories with the emblematic Millennial movie "The Devil Wears Prada."

Millennials are the American generation least bound by gender role expectations, so it isn't surprising that the protagonist is a young woman with an androgynous name, Andy (Sachs). Because Millennials are also the most tolerant American generation, it's not surprising that Andy's best friends are an African-American woman, a gay man, and her sensitive boyfriend who aspires to be a chef. In true Millennial fashion, Andy constantly relies on her friends and parents, whom she adores, for love, advice, and support.

Andy is temporarily attracted by the glitter of the world of high fashion. However, like others of this generation who are driven by a desire to solve society's problems, she realizes her true calling is far different.

She breaks with her boss, Miranda Priestly, at the fashion magazine where she works, so that she can take a job writing for a liberal newspaper. But, as a polite and conventional Millennial, the break is not harsh. In fact, her old boss, the devil herself, provides the crucial reference for Andy's new job.

Everyone in politics and pop culture should learn the lesson MTV belatedly has. To really understand the preferences of young people, take a look at their generation and not simply their age. That will tell you everything you need to know.

Saturday, May 9, 2009

How to Lose a Generation

If the Republican Party thinks it has problems now, just wait. The party's incredibly poor performance among young voters in the 2008 election raises questions about the long-term competitiveness of the GOP.

The "millennials" -- the generation of Americans born between 1982 and 2003 -- now identify as Democrats by a ratio of 2 to 1. They are the first in four generations to contain more self-perceived liberals than conservatives.

And a recent Daily Kos tracking poll should send shudders down the spine of any Republican who understands how powerful a voting bloc this generation could become over the next decade.

Only 9% of millennials polled expressed a favorable opinion of the Republican Party. Only 7% were positive about the GOP's congressional leaders. By contrast, 65% of millennials had a favorable opinion of the Democratic Party, and a majority also approved of congressional Democrats.

Though many people question the political sophistication of the millennials, they have been instilled with egalitarian and participatory values by their parents since birth.

This child-rearing produced a generation that was wide open to the personal appeal and message of Barack Obama and his party. Moving forward, the initial preference of millennials for President Obama and the Democrats will remain in place for a lifetime unless Republicans can quickly adapt their message and find a messenger who can speak to this powerful new force in American politics.

Only 41% of all millennials were eligible to vote in 2008, yet their overwhelming support for Obama transformed his win from what would have been a squeaker into a solid victory. Obama's popular-vote margin over John McCain was about 9.5 million nationally; millennials accounted for nearly 7.6 million of those votes.

In the 2010 off-year election, half of millennials will be eligible to vote, representing about a fifth of the overall electorate. By 2012, 60% will be eligible to vote, and they could make up about a quarter of the American electorate when Obama runs for reelection. By 2020, when virtually all millennials will be over 18, they will represent 36% of the electorate and will completely dominate elections and the political agenda of America.

And it seems likely that this civic generation, like its "Greatest Generation" great-grandparents, will vote in big numbers. Turnout among voters under 30 has been rising steadily since millennials began to replace the alienated and more cynical Gen-Xers in this age group. From a low of 37% in 1996, turnout increased to 53% of all eligible millennials, and 59% in the key battleground states in 2008.

Their unity of opinion and their numbers will make millennials' preferences for economic activism, a non-intrusive approach to social issues by government at any level and a multilateral interventionism by America in foreign affairs the policy paths to political success during the next decade.

It is simply inconceivable that the Republican Party can craft a winning strategy between now and then that doesn't accommodate these ideas.

But so far, Republicans appear to be tone-deaf on the issues that millennials care about.

Millennials have been reared with a desire to serve their community, and the Edward M. Kennedy Serve America Act provides them an opportunity to do just that, while at the same time dealing with their single biggest financial worry -- the high cost of a college education. Unfortunately, all but 25 House Republicans voted against the bill, despite its co-sponsorship by Sen. Orrin Hatch (R-Utah).

Millennials also are experiencing higher levels of unemployment than any other generation. They expect the federal government to take an active role in fixing that problem and support redistributing income if necessary. But the almost-unanimous Republican opposition to the "recovery" act helped convince millennials that only one party actually understood their problems and was prepared to act in accordance with their beliefs.

Polls consistently show millennials are more committed to environmental protection than any generation in American history, willing to sacrifice economic growth or endure higher prices in order to save the planet. Given the millennials' overwhelming concern with the environment, House Minority Leader John Boehner's comments recently that carbon dioxide isn't a real threat because "we all breathe it out" and, besides, "cows give out a lot of gas too," went beyond inanity into the realm of political suicide.

The only tentative Republican gesture to millennial power to date is the GOP's sudden fascination with a new social network platform, Twitter. By choosing Twitter -- with its limitations on content -- to connect to millennials, Republicans are actually demonstrating how little they know about this generation's commitment to engaging in the content-rich challenges of rebuilding the nation's civic institutions and national unification.

Republicans will need to find a new message and much better messengers than their last presidential ticket or their current congressional leaders if they want to truly connect with today's young voters. Failure to do so will leave Republicans, to paraphrase Abraham Lincoln, locked in the dogmas of their quiet past, unable to think and therefore act anew.

Wednesday, May 6, 2009

obama's honeymoon likely to last awhile

Buoyed by his strong personal appeal, history suggests President Barack Obama is in for a long and enjoyable honeymoon. Civic eras, like the one that began with the President's election last November, start when a generation such as today’s young Millennials (born 1982-2003) enters the electorate with an overwhelming preference for one party’s presidential candidate and his policy agenda. This solid endorsement by an emerging generation causes the President’s popularity to go up or remain stable at a high level, not down, in a civic era as the newly elected candidate takes steps to implement his campaign pledges.
For example, Franklin Roosevelt, who kicked off America's last previous civic era in 1932, never really did see an end to his honeymoon in terms of decreasing popularity, at least not until well into his second term. FDR's Democrats even gained seats in both the House and Senate in 1934, the only time in U.S. history that the party of a newly elected president has ever gained seats in the mid-term elections that followed his winning the presidency. And, Roosevelt won reelection to a second term in 1936 by an even larger margin than he did in 1932.
President Obama's approval score at this point in his presidency is higher than for any president since Dwight Eisenhower and John Kennedy, two presidents who served toward the end of the last civic era in American history, a period that ended with the election of Richard Nixon in 1968. In civic eras, Americans have much more positive attitudes toward political institutions and leaders than in politically divided and gridlocked idealist eras such as the Baby Boomer-dominated one we just left. In civic eras, the public wants and expects governmental action. By contrast, in idealist eras, like the one the country just left, Presidential approval ratings tend to fall fairly quickly in a President's term, signaling the end of the honeymoon. This happens as soon as the President begins to take action that is bound to offend at least one half of the divided electorate.
But, led by the Millennial Generation, today’s electorate is anything but divided. Millennials voted for Barack Obama over John McCain by a 66% to 32% margin. Seven in ten Millennials currently approve of his performance as President and more than 80% have favorable attitudes toward him as an individual.
Polling conducted throughout the first 100-days of the Obama administration indicates that as the Republican Party has almost unanimously resisted the President's initiatives, voter attitudes toward the GOP have become ever more unfavorable. Currently less than 10% of Millennials hold favorable attitudes toward the GOP and Congressional Republicans. For the moment at least, Republicans have ceased to be a viable alternative to the President among all voters but a relative handful of conservatives.
This puts the onus squarely on the President's fellow Democrats in Congress. As long as they support Obama’s blueprint for change, he should continue to accomplish big things, which will only have the effect of reinforcing, not decreasing, his popularity. While many inside the beltway may not recognize that we have entered a new era in American politics, both the President and the public do. Barack Obama should have the popularity to prove it for some time to come.

Friday, May 1, 2009

Shuttting Detroit Down

Once upon a time, not so long ago, in a city at the heart of the American continent, General Motors produced cars, like Pontiac’s “Little GTO,” celebrated in Beach Boys songs that captured the thrill of driving Detroit’s latest creations. Today, as GM struggles to appease the government’s auditors just to stay alive, Kris Kristofferson, with a little help from Mickey Rourke, curses the financial wizards from Wall Street that are “Shutting Detroit Down” while “livin’ it up in that New York town.”

Never has the inherent tension between the investor class and the country’s manufacturing sector been more pronounced or the stakes in this particular poker game higher for the future of America. Chrysler may have been forced into bankruptcy first, but it’s GM's downfall that represents the true mid-American earthquake.

Back in the late 1950s, General Motors so dominated the American automobile market that its corporate goals were focused on achieving a 60% market share. The hubris of its executives led them to decide to pick up more and more costs for medical insurance, pensions and retiree benefits, beginning GM’s slide down a slippery slope of poor financial performance

This posed a huge but not initially recognized risk to GM. By taking on these obligations that didn't show up as a cost or balance-sheet liability until the government changed its accounting rules in 1992 and required companies to show the cost of “other post-employment benefits” (OPEB) on their books, General Motors lit a ticking time bomb that has now exploded in its face. In 1972, as GM came the closest it would ever come to achieving its sixty-percent market share goal, GM was paying the entire health insurance bill for its employees, survivors and retirees, and had agreed to "30 and out" early retirement that granted workers full pensions after 30 years on the job, regardless of age. Its world then began to come apart.

In 1973, OPEC’s embargo tripled the price of oil. GM failed to respond quickly enough to the consumer’s sudden demand for fuel-efficient cars. At the same time, the Japanese with their then superior, lean manufacturing techniques stepped into the vacuum, gaining a foothold in the North American car market that they have continued to expand. Ironically, thirty years later the very same inability to shift product offerings during a spike in oil prices precipitated GM’s current difficulties.

GM’s reluctance to go green is often cited by its new government owners as the reason it’s in so much trouble now, but the crux of GM’s problems really go back to those heady days of market domination and financial profligacy.

In the 1960s GM’s annual operating margin (profits divided by revenues) averaged 8.7%. The turmoil of the seventies and the pressure from Japanese competition drove those average margins down to 5.5%. Margins fell by about half to an average of 3% in the 1980s, and about half again to 1.3% in the 1990s (not counting the $20 billion hit GM took when the new accounting rules for OPEB took effect.) Finally, in this decade the slide has actually taken the company into an average of negative margins. Now only the government’s suggested radical restructuring seems to offer a way to stop the bleeding.

It is estimated that the cost of OPEB, essentially GM’s retiree pension and health care programs, have cost the company about $7 billion each year since 1993 and are probably around $10 billion per year now. The bargain auto company management made back in the 60s with labor to provide generous off the balance sheet benefits has now become an albatross that threatens the manufacturing jobs for the Big Three’s own current workers and suppliers across the Midwest. It’s the kind of problem only government can solve.

But the Obama Administration’s early efforts to do so have been far from promising. First it selected Steve Rattner as its “car czar”, a politically well-connected private equity investor and turnaround artist from “that New York town,” someone with no significant automobile industry experience. In addition, the government's demands that GM dismantle more brands and shut down more dealerships suggests the process may get a lot uglier by the May 31 decision deadline.

Luckily the United Auto Workers remain on watch to try to ensure that whatever concessions are demanded of GM’s current and retired employees reflect an equitable shared sacrifice with the company’s bondholders and investors. The kind of GM that emerges from these negotiations will have a huge impact on these workers and on the many industrial towns that depend on the car business for their basic existence.

Ultimately, the decision on how best to “rescue” GM may turn out to be the most difficult call President Obama will make in his first year in office. He will be pulled by pressures from the green gentry left to force GM’s future products to conform to a pre-determined environmental agenda. He also will face predictable Republican calls to let the market work its will, even if it means the end of the company.

President Obama will need the wisdom of Solomon to recognize that today’s workers no more deserve to be punished for the mistakes of prior management than CIA agents do for carrying out the orders of their equally arrogant Republican counselors during George W. Bush's administration. To paraphrase the President’s words, it’s “time to move on” and offer GM the support it needs to “Catch a Wave” and start producing more “Good Vibrations” for America’s hard pressed, but still very critical manufacturing sector.