If you think the national mood is low now, go back to the 1970s. Gas prices doubled, and still drivers queued up. Stocks fell 48% between January 1973 and December 1974. Vice President Spiro Agnew resigned in disgrace in October 1973, and President Richard Nixon followed in August 1974. Saigon collapsed in April 1975, after U.S. Armed Forces withdrew from a war they were not permitted to win. In November 1976 Americans elected as President a man almost no one outside of politics or the state of Georgia had known just one year earlier. Democrats captured 61 seats in the Senate, some of them such pacifists that they wanted to shut down the CIA. The Democrats also took two-thirds of the seats in the House. Economic growth was distinctly out of favor during the 1970s. America's bellwether state, California, had a governor, Jerry Brown, who practiced Zen Buddhism and slept on a mattress on the floor. Brown liked to recommend a book titled Small Is Beautiful by E.F. Schumacher. A "consensus" among correct-thinking scientists and environmentalists during the 1970s was that the world's oil reserves would soon run dry, possibly by the 1980s and surely by the 1990s. The novelist Kurt Vonnegut, worried about the resource drain, told college students that getting married and having babies was immoral. Newsweek ran a story on the latest bogeyman: global cooling.
Our current mess looks like the 1970s more than anything. There are, of course, some notable differences: House speculation, poorly understood credit derivatives, crazy leverage, bad accounting rules and lax SEC enforcement created today's woes; in the 1970s it was oil shocks, inflation, tax-bracket creep and a growing welfare state. Those differences aside, we seem to have wound up in the same place. We are led by a government that once again distrusts markets, embraces oddly contradictory Keynesian deficit spending and Malthusian limits to growth (except in government) and is run by a President with a deep regard for his own virtue. Then, as now, the U.S. economy will recover. But it's hard to imagine anything stronger than a tepid recovery -- occasional bright periods of 2%-to-3% growth, interrupted by numerous minirecessions. On the whole, this will produce European-style growth of 1% to 2%. If you doubt this, then think of the American industries whose top companies will shift capital from growth investment to regulatory compliance: banking, for one; automobiles; oil and gas; electric utilities; pharmaceuticals. Picture yourself attending a board meeting at any top company in these fields. You will hear defensive talk overwhelming growth talk.
How did ordinary Americans cope in the 1970s? Many turned inward. Writer Tom Wolfe captured the decade's mood in a 1976 essay called "The 'Me' Decade and the Third Great Awakening." Wolfe used the term "awakening" as satire. What he described was far from the religious awakenings led by Jonathan Edwards in the early 18th century or by the abolitionists in the 19th century. Rather, the great awakening of the 1970s was a national plunge into self-absorption. These were the years of psychological analysis, self-therapy, the jogging craze and cults. "Everyone, it seemed, had an analyst, adviser, guru, genie, prophet, priest or spirit," writes the Web site eNotes. The 1960s sexual revolution hit Main Street in the 1970s, and divorce exploded. So did sexually transmitted diseases. What happened during the 1970s is that the first wonder of the world, human energy and creativity, got diverted from economic pursuits to the pursuit of pleasure. Tax, regulatory and inflationary hurdles made economic pursuits, on balance, too bothersome for too many during the 1970s. I am reminded of the movie Cabaret, which is about debauched and inflation-ridden Germany during the Weimar Republic. Hollywood period movies are never solely about the historical period portrayed. They are also contemporary statements. Cabaret premiered in 1972.
Not all Americans depleted their energies chanting "Om" or swapping spouses. Some brave souls started companies. FedEx, Southwest Airlines, Charles Schwab, Microsoft, Apple, Genentech, SAS Institute, Oracle and others were launched into the headwinds of the 1970s. The same thing could happen again. One hopes, anyway, and crosses one's fingers. Feckless as President Jimmy Carter turned out to be, he had the virtue of being an entrepreneur himself -- a peanut farmer. He had the wisdom to know that deregulation was better than regulation. Hence, Carter deregulated America's airline and trucking industries and let them compete on price. Barack Obama is not an entrepreneur. And neither is anyone close to him -- not a single aide, adviser, Cabinet member or House Committee chair. Obama almost never mentions small business in his economic speeches. It is clear that he would like to divert some portion of America's creativity away from private economic pursuits and channel it toward community building. That's just who Obama is, and this can be a noble goal. But Obama won't achieve it. The lessons of the 1970s are clear for America and the world: If you put up barriers to private economic gain, you don't get more community gain. You' will send an entire nation off a cliff into self-absorption and trivial pursuits.
Dit stuk van Rich Karlgaard verscheen oorspronkelijk in "Forbes Magazine" en werd nadien ook elders op het internet gepubliceerd.
Meer teksten van hem op www.forbes.com.
Our current mess looks like the 1970s more than anything. There are, of course, some notable differences: House speculation, poorly understood credit derivatives, crazy leverage, bad accounting rules and lax SEC enforcement created today's woes; in the 1970s it was oil shocks, inflation, tax-bracket creep and a growing welfare state. Those differences aside, we seem to have wound up in the same place. We are led by a government that once again distrusts markets, embraces oddly contradictory Keynesian deficit spending and Malthusian limits to growth (except in government) and is run by a President with a deep regard for his own virtue. Then, as now, the U.S. economy will recover. But it's hard to imagine anything stronger than a tepid recovery -- occasional bright periods of 2%-to-3% growth, interrupted by numerous minirecessions. On the whole, this will produce European-style growth of 1% to 2%. If you doubt this, then think of the American industries whose top companies will shift capital from growth investment to regulatory compliance: banking, for one; automobiles; oil and gas; electric utilities; pharmaceuticals. Picture yourself attending a board meeting at any top company in these fields. You will hear defensive talk overwhelming growth talk.
How did ordinary Americans cope in the 1970s? Many turned inward. Writer Tom Wolfe captured the decade's mood in a 1976 essay called "The 'Me' Decade and the Third Great Awakening." Wolfe used the term "awakening" as satire. What he described was far from the religious awakenings led by Jonathan Edwards in the early 18th century or by the abolitionists in the 19th century. Rather, the great awakening of the 1970s was a national plunge into self-absorption. These were the years of psychological analysis, self-therapy, the jogging craze and cults. "Everyone, it seemed, had an analyst, adviser, guru, genie, prophet, priest or spirit," writes the Web site eNotes. The 1960s sexual revolution hit Main Street in the 1970s, and divorce exploded. So did sexually transmitted diseases. What happened during the 1970s is that the first wonder of the world, human energy and creativity, got diverted from economic pursuits to the pursuit of pleasure. Tax, regulatory and inflationary hurdles made economic pursuits, on balance, too bothersome for too many during the 1970s. I am reminded of the movie Cabaret, which is about debauched and inflation-ridden Germany during the Weimar Republic. Hollywood period movies are never solely about the historical period portrayed. They are also contemporary statements. Cabaret premiered in 1972.
Not all Americans depleted their energies chanting "Om" or swapping spouses. Some brave souls started companies. FedEx, Southwest Airlines, Charles Schwab, Microsoft, Apple, Genentech, SAS Institute, Oracle and others were launched into the headwinds of the 1970s. The same thing could happen again. One hopes, anyway, and crosses one's fingers. Feckless as President Jimmy Carter turned out to be, he had the virtue of being an entrepreneur himself -- a peanut farmer. He had the wisdom to know that deregulation was better than regulation. Hence, Carter deregulated America's airline and trucking industries and let them compete on price. Barack Obama is not an entrepreneur. And neither is anyone close to him -- not a single aide, adviser, Cabinet member or House Committee chair. Obama almost never mentions small business in his economic speeches. It is clear that he would like to divert some portion of America's creativity away from private economic pursuits and channel it toward community building. That's just who Obama is, and this can be a noble goal. But Obama won't achieve it. The lessons of the 1970s are clear for America and the world: If you put up barriers to private economic gain, you don't get more community gain. You' will send an entire nation off a cliff into self-absorption and trivial pursuits.
Dit stuk van Rich Karlgaard verscheen oorspronkelijk in "Forbes Magazine" en werd nadien ook elders op het internet gepubliceerd.
Meer teksten van hem op www.forbes.com.
6 Reacties:
- At 16:38 Anoniem said...
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Global cooling in de jaren '70?? Show us some evidence please!!
- At 01:09 Vincent De Roeck said...
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Zie hier de PDF van het bewuste Newsweek-nummer over "The Cooling World". Zie hier een scan van de cover "The Cooling of America" van Newsweek. Graag gedaan, anonieme.
- At 10:32 Michel said...
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Zeer mooie samenvatting van de situatie van de jaren 1970. Alleen zie ik als libertariër niets ergs in de politieke evolutie of militaire mislukkingen in dat tijdperk. De auteur is duidelijk geen libertariër. Die zijn tegen de politiek en voor non-interventionisme. Het stoppen van de Vietnam-oorlog is dus ok. Het in office houden van corrupte en misdadige personen is ook ok. Dat bewijst net hoe slecht elke vorm van politiek bestuur wel is!
- At 13:50 Anoniem said...
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Vreemd dat niemand die global cooling-global warming nonsens aankaart. Dit is de eerste blog waar ik deze informatie terugvind. Vreemd niet?
- At 12:52 Danish Dynamite said...
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@ Anoniem
Dit is vrij gekende info hoor. Conservatieve blogs in de VS pronken al maanden met deze Newsweek-artikelen. Onze mainstream-pers verzwijgt dat en onze blogs zijn, op Vincent na dan misschien, nu eenmaal gebaseerd op de mainstream-media. Dat terwijl de bloggers in Vlaanderen, zoals een LVB, net wel claimen anders te zijn dan de mainstream. - At 23:40 Anoniem said...
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Go Ron Paul!!
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