Back in the 1950s and 60s, the American dream was in full effect. With $10 grand in your pocket – that’s a bit more than $100 grand today, considering inflation – you could get a university degree, buy a car, open a mortgage, and feel comfortable starting a family. Nowadays, that same money will barely get you two years in college.
When I stumbled upon this information, the first thought that came into my head was, “What the fuck happened?”
I’m well aware America had its biggest economic boom post World War II and, therefore, it makes sense you could get a lot for your buck during that time. However, what boggles me is how far we’ve come. The young people of today have to work twice as hard to earn half as much – if not less.
I’m not the biggest fan of economics. Numbers tend to give me a headache. But after looking at the amount of student debt I have piled up, I began to wonder how the hell anyone makes it in such a society without slaving their life away.
So, purely out of curiosity, I’ve researched the information and provided it to you. To be quite honest, I apologize in advance. Any level-headed person will probably be just as pissed as I was upon seeing all this.
The West’s Great Success
To get a visual sense of America’s economy within the last half-century, just take a look at this graph provided by the U.S. Census Bureau:
It’s safe to say where all our eyes immediately gravitated. It’s even safer to assume you all had the same thought as I did, “What the fuck?”
Let’s take it back to the beginning. To really get an idea of how it all came to be.
Post World War II America. What a time. As much of the world was reconstructing from the devastation of the great war, America discovered a prosperity they could only dream of in prior years. The reason for all this was as follows:
- Advances in technology creation made productivity at an all-time high.
- More people gained access to an education – including veterans through the G1 bill – making the workforce more sophisticated.
- Oil prices fell down, spurring industry like never before.
Furthermore, our president, Dwight D. Eisenhower, was making all the right decisions. He pushed Roosevelt’s New Deal to around 10 million people. He invested in one of the largest public spending projects all throughout history, the Interstate Highway System. Though there were big scares of a nuclear attack from the Soviets (and even bigger tax demands for protection), Eisenhower found a way to balance the federal budget.
Americans took the opportunity of this new economy. They swarmed to the suburbs in their newly purchased cars. Stocking their modern-modeled homes with all the latest consumer goods. Only to have the largest amount of children any generation has seen.
Everyone was living in the moment. Very few wanted to think about a future where such prosperity didn’t exist. And the unfortunate truth is, it was right around the corner.
From Success to Failure
When it comes to the history of America’s economy, stories of the Great Depression often override those of the Great Inflation in the 1970s.
Though the stock market didn’t crash, it was an absolute nightmare. Losing 40% in just an 18-month period. With that, fewer people were interested in purchasing stocks and the entire country’s economy became fragile. Unemployment skyrocketed and it seemed as though the dreams of the 50s were long gone.
The question arises, why’d this happen?
As mentioned above, the 1950s saw a surplus of job openings. This was a plan of the American central bank which was created for the sake of producing a large workforce. Though they were successful at the time, it came back at them in the 1970s with high inflation.
The central bank was well aware of this and wanted to redo its policies. In turn, this left the nation with a 20% inflation. Many industries were hit hard – especially, housing and cars. They couldn’t curate products like they used to and people couldn’t consume as fervently as they once did.
There were numerous other causes that went into this, such as:
- An increase in social welfare.
- Johnson spending too much money on his idea of the Great Society.
- Nixon continuing to finance the Vietnam war.
The ultimate reasons for this economic crash were faulty leadership – people with power making poor decisions. I always found it a shame the decisions of a few could so harmfully affect the many.
Back to Success?
And yet, despite poor leadership, there’s always a hope just waiting to be grasped. During the 1980s, America hoped on Reagan. Admittedly, the poor bastard was given office during a time when the country’s economy was in a shithole. He made his attempts to reverse this nightmare by:
- Cutting government spending.
- Decreasing federal income tax and capital gains tax.
- Reducing the government’s regulation.
- Tensing the money supply with the desire to reverse inflation.
There’s been strong criticism surrounding Reagan’s decisions. Some feel his work was profitable as it ended the stagnation of inflation, developed a more powerful GDP growth, and opened the doors for entrepreneurs such as Steve Jobs and Bill Gates.
Yet, as the graph below will show you, Reaganomics also had its downsides:
- National debt nearly tripled.
- The wage gap grew exponentially.
The purpose of learning the country’s economic history is to better understand the situation we now find ourselves in. If we’re keen on the faulty decisions of previous leaders, we can work to do better for future generations.
Yet, as was stated in my introduction, anything but that seems to be happening. In fact, quite the opposite is in the works.
The Current Situation
This wage gap Reagon started is now one of the greatest catastrophes this country has ever seen. The middle class is slowly dwindling and, pretty soon, you’re only going to have the poor and the rich.
According to Forbes, the average CEO makes around 361 times more than his (let’s be real, it’s probably not her) average employee. Compare that to the 20 times difference back in the 1950s and you begin to see the issue. In fact, it’s been reported that a median-salary employee would need to work 45 years just to earn what the CEO receives after one year.
That’s more than half the average lifespan.
This is precisely why the middle class is vanishing. Income inequality has become so much an issue, even people like Bernie Sanders are taking a strong note. A recent tweet of his explains it nicely:
While Donald Trump and the "masters of the universe" assemble in #Davos, the 6 richest people own as much wealth as the bottom half of the world's population – 3.7 billion people. We need a global economy that works for all, not just multi-national corporations and the very rich.
— Bernie Sanders (@SenSanders) January 26, 2018
Frankly, I can go on and on with explanations as to how fucked up this whole situation is. But the bottom line is explanations won’t get us out of this mess.
So, what will?
To look towards politicians and lawmakers for a solution is absolutely useless. These bastards are the ones who threw the current generation into this situation and there’s no way in hell they’re going to dig us out of it. Especially when you consider they’re sitting their fat asses on a pile of gold, watching our struggle from a comfortable luxury.
No, you can’t look up to those people for help. They’ll throw you a couple bucks and tell you to shut up.
In a matter as financially devastating as such, you can only look to yourself. Live your life as you’ve dreamed to live it and things will find a way of working themselves out. In the words of one of my favorite authors:
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.
“He who has the gold makes the rules, money makes the world go round… you know the drill. We’ve all heard these quotes, and sentiments just like them. Money truly does get you places, but it is only just the catalyst. It may get you where you want to go, but it’s up to you from there. In other words, you can’t replace money with good sense. Money will never make up for lack of imagination, or lack of brainpower. Don’t necessarily shoot for money, shoot for knowledge, shoot for the stars, and the money will follow.” – Ayn Rand