Talk of a “K-shaped economy” took off during the pandemic recovery. Economist Peter Atwater popularized the term in the spring of 2020 to describe an economy in which higher-income households and asset owners bounced back while lower-paid workers and struggling businesses fell further behind.

Six years later, Ed Yardeni, president and chief investment strategist at Yardeni Research, sees another split, this one by age. Older people are richer than younger people. Of course they are. They’ve had more time to earn, save and buy things. What’s unusual now is how much the economy rewards having already done those things. Stocks are expensive, homes are expensive and the job market is getting tougher for people just entering it.

Yardeni calls it the “gen-shaped economy.” Baby boomers have amassed a record $85.4 trillion in net worth, about half of all household wealth. Some of that is just what happens when people get old. But not all of it. The typical boomer household had $432,200 in wealth in 2022, nearly 30% more than a same-aged Silent Generation household had in 2001, even after adjusting for inflation according to the Pew Research Center.

The nice thing about already owning expensive assets is that when those assets get more expensive, you get richer. Boomers can draw on that wealth and keep spending after the paychecks stop. Younger Americans are playing the game from the other direction. Find a job, pay the rent, save a down payment, then try to buy a home that now costs nearly five times the typical household’s annual income, up from about three times in the 1990s.

There’s no single explanation for how boomers ended up here. They will, correctly, point out that mortgage rates were brutal (peaking at 18.5% in 1981) when many of them bought their first homes. But those high rates also........

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