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The New Economy

Solution to US debt woes isn't economic. It's social.

Economic problems like the housing debacle, Social Security and Medicare shortfalls have a social solution: stronger extended families.

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Moreover, when you step back and look at the big picture and the moving picture, it’s clear that boomerang kids are just another symptom of the greater cultural change affecting American society as we enter the 21st century: that is, the reunification of the extended family.

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Grandparents are also moving back in with their children. Three-generation households are on the rise in America, according to the Census Bureau. The Pew Research Center estimates that 16 percent of the population – 49 million Americans – lived in multigenerational housing in 2008, up from 28 million in 1980. The fundamental point is that people are moving back together again because the grand experiment of the World War II generation hasn’t worked. Three generations belong together, and not just for financial reasons.

Fundamentally, humans are psychologically and physiologically designed and have evolved to live this way. We’ve survived by living in such extended family arrangements. We are happiest in such groups. And, we are now quickly learning that other institutions (companies, unions, governments, religious organizations, etc.) ultimately cannot take care of us. Only our families can and will.

Up until the 1950s in this country and in northern Europe, three (sometimes even four) generations lived together in multigeneration families. It’s still that way in almost all of the rest of the world.

In prehistoric times these family groupings included all the living descendants in either the male or female line. Each family was practically self-sufficient with men providing most of the food, and women taking care of household duties, children, and elderly parents. The whole family had to cooperate in order to survive. Eventually, families organized themselves into clans and, still later, into cooperative tribes for protection. Even when people began depending on local, state, and national governments for protection, and on persons outside the family for food and education, multigenerational living survived.

The Industrial Revolution began to shift these patterns. People moved from farms to cities where new factories were being built. In the cities, people no longer worked together in extended family units. New kinds of jobs called for individual skills. This meant that workers frequently moved away from their local communities and kinship groupings to live near their places of employment. Extended families began to dissipate in favor of nuclear families consisting of married couples and their children.

Women still stayed at home to raise the children. However, with the new mobility, multigenerational households declined, along with the expectation that children cared for elderly parents in their own homes. In the 20th century, this led to assisted living and skilled nursing facilities as new living arrangements to serve the needs of the infirm elderly.

The housing debacle – revisited

Housing also evolved. Single-family homes sprung up to accommodate the new and independent family unit. This tradition of single-family dwellings accelerated in the United States after the end of World War II. Since then, America’s residential landscape has shifted from city or small-town to suburban living. A general prosperity, cheap land rendered from new agricultural technologies, easier building techniques, and access to automobiles all combined to initiate the development of suburban tracts of single-family homes for nuclear families. Americans value these homes for the space, security, status, and privacy they provide.

The single-family suburban home did work for a time, while mothers stayed at home to raise children and life spans were shorter. However, with the advent of extended life expectancy, and with both parents working, the single-family home for nuclear families is no longer meeting the needs of our changing population.

It’s no wonder that the current so-called economic malaise began with housing in 2007. That’s about the time the economic system began to realize that the American housing stock is actually worth less because it doesn’t fit the coming needs of the marketplace.


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