I am what you might call an “economic determinist”, at least in part. I believe that economic factors such as the material wealth of a society and how that society distributes that wealth determines a lot about that society. Of course, the real world is a two-way street. Social factors effect economics just as much as economics effect social factors. But both social dynamics and economic realities ultimately respond to the environment that the society and its economy live in. And of the two, I believe that economics responds quickly when things change, e.g. war, climate change, new discoveries, depletion of resources; and that social change then follows the lead of economics.

So, I am going to tell the story here of my own life and times in terms of economics, as a way to help understand all the social change that I’ve seen in my 57+ years. When I was born, the USA was recovering from the effects of a major world war. Technology developed in the course of WW2 was being applied to make new products and services, and to make existing products and services more cheaply. Also, the GI bill gave the work force an injection of higher education, providing another boost for the economy. Energy supplies were cheap, especially since the USA now had unhindered access to oil, minerals and other resources throughout the globe. Things were good and getting better.

The rise of the Soviet Union in the 1950s put a burden on the USA, creating the need for large military forces ready to fight the Cold War. However, worries about the Soviets also spurred a renewed focus on science and technology, which accelerated as the space race began in the late 50s (when the Soviets and their big rockets put satellites and then men into space many months before the USA could). Also, the Interstate road system (justified as a defense readiness measure) and the development of air transport (a side-effect of technology development from WW2 and the Cold War) helped support economic growth and rising prosperity, despite the worries about Communist domination.

This economic formula continued into the 1960s. Disenfranchised groups dared to claim a stake in the new prosperity, e.g. the black civil rights movement of the early 60s. Given the growing size of the “economic pie”, the white establishment slowly (and sometimes recalcitrantly) acknowledged these claims and allowed for civil rights protections, school desegregation, and eventually affirmative action.

As the 60s wore on, the children of the war generation (i.e., the Baby Boomers) came of age. As they reached young adulthood, they developed a collective notion that they were no longer bound by the social strictures and values that got their parents through the crisis of the 1930s and the 40s; i.e., the same values that laid the groundwork for the prosperity that college-bound Boomers now enjoyed. Boomers, myself included, thought that it was always like this and would always be like this; and thus, there was no reason for the conservative values and localized perspectives that our parents held. Given that the “greatest generation” grew up in much different, much more challenging economic and social circumstances, this caused them to look at us with wonder and dismay (recall the “generation gap” of the 60’s and 70’s).

So there was free love, the summer of love, and peace, pot and microdot. CSN&Y told us that we could change the world, rearrange the world, and so we used our growing political power to stop a nasty little proxy-war gone wrong in SE Asia. Vietnam was the USA’s first real attempt at nation-building and counter-insurgency, and we didn’t do too well. But the economic good times seemed to go on nonetheless, as LBJ promised and delivered “guns and butter”. The Republicans defeated the Democrats in the 1968 elections, but Richard Nixon mostly stayed the course of previous Democratic policies.

The US economy finally hit a wall in 1975, with the Arab oil embargo. For the first time in decades, America seemed economically vulnerable to external forces. By 1980 it seemed like this was just a fluke and the good times were back. But then it happened again; the oil was stopped and people got ugly as gas lines formed in suburbia. However, Ronald Reagan came along and convinced us that it was all just a bad dream, and that America was still great. The oil flowed again, the Iranian hostage crisis was resolved, and the “Evil Empire” of the Soviets seemed increasingly amenable to cooperation with the west.

On the economic level, however, Reagan had to start a “Revolution” in order to regain this greatness. He lowered taxes, reined in redistributive government programs and slashed regulations and controls on the business sector. At the same time, the Federal Reserve put the money supply under discipline and after a painful but relatively short recession, the nasty effects of hyperinflation triggered by the previous oil shocks was sweated out of the economy.

The economy did respond to this Revolution, making way for Bill Clinton and the economic miracle of the 1990s. The days of growth and opportunity were back. But over time, it became clear that there was a growing and rather ugly side effect; i.e., the worsening distribution of wealth, the growing unfairness of our economy. It became clear that a deal had been made with the devil; give up fairness and equality in return for overall wealth and growth. A small handful became very rich, the average family got a small cut, and a significant minority had to struggle even more with less and less.

Politically, Bill Clinton learned that the average family was now happy enough with this arrangement and did not want to contribute to continued government efforts to rein in the wealthy and lift up the poor. The middle class was increasingly convinced that they needed government less and less. Interestingly, much of this middle class was now composed of Baby Boomers who sympathized, more or less, with the seemingly collectivist leanings of the “Woodstock nation”. As it turned out, the Woodstock heritage was more narcissistic than socialist.

But then came nine-eleven and terrorism. Federal budget surpluses, which disappeared in the 60s but made a nice comeback in the 90s, once again became a thing of the past. We needed to defend the homeland. But as with LBJ, we needed butter too. And GWB gave it to us. The late 90s were powered by a small techno bubble focused around the internet (another one of those techno-spin offs from the Cold War; maybe the last big one). The internet would eventually become a money-maker, but investors got about a decade ahead of reality.

Still, the effect on prosperity was small. The bubble popped after 9-11, but the economy made a credible recovery by 2004. However, because of the slowing growth of new jobs and the disappearance of unionized manufacturing jobs, there was even more unfairness and uneven wealth distribution. This trend, i.e. wealth growth for the wealthy with just enough left over to buy-off the middle, was fueled by the Bush tax cut.
And then the big bubble kicked in; i.e. real estate, abundant credit, CDO’s, low investment reserve margins, unregulated derivatives, etc. Families figured that home prices would never stop appreciating, so they stopped saving real money and spent every earned penny; SUV’s and big-screen entertainment centers became de riguer. This revved the economy way beyond its sustainable speed. It had to have a heart attack, and eventually it did.

So where to now? A lost decade? A replay of the great depression? We have some preliminary indications: i.e., growth is back, but jobs are not. The stock market hints that the greater economy seems to be headed for a new equilibrium based on even greater unfairness. It looks as though the economy will grow even though high unemployment (and thus, higher levels of poverty and disenfranchisement) are here to stay.

This seems to be the new equilibrium. If you’re already inside, if you’ve got a career, you’re probably OK. If you’re not, you probably ain’t gonna get in; the doors are closed, unless you really want those really bad jobs that the world poor still seem to covet, e.g. picking strawberries or babysitting infants and Alzheimer elderly.

Too bad that the children of today’s immigrants aren’t going to get the same opportunities that immigrant children and grandchildren, such as myself, once had. One wonders if the throngs of illegal immigrants still flooding the Mexican border would still take all the risks if they knew what 21st Century America really had in store for their kids.

So, as we Baby Boomers slowly start fading from the scene, we ponder the America that we leave behind. I personally am rather sad about how things turned out. I hoped that by my ‘golden years’, America would have eliminated poverty within its borders, and would be transforming the rest of the planet so that all humankind could enjoy lives of relative comfort and opportunity and culture. But it looks like we got too greedy and will be made to pay for that.

America will be powerful for many decades to come, but we will not be the light that transforms the world. I once hoped to live in and be part of a truly historical, revolutionary and transformative time – a true planetary “Woodstock”, not just a bunch of rich kids getting high and making love in the mud with plenty of background music. Oh well. Maybe in another life.