Prosperity is a word that you seldom hear used any more. It seems the politicians that we hire to run our country for us have decided that we have had too much prosperity in the past and they were going to change that. I can remember before America discovered prosperity. Some people had found it, but they kept it to themselves. Common folk could see it from a distance but were not allowed to share. Everybody knew who the mill owner was as he drove by in his Cadillac. He didn’t know them.
In the days before WWII, few people owned their own homes. Working people rented “flats” in two and three deckers. They worked with their hands in mills and factories. Every Friday each employee would get a little manila envelope with their weeks pay in cash. Most of the women that worked, took employment in stores as clerks and other basic jobs since they got little or no training in school. If they did get any training it was generally in secretarial work. It was a short trip from high school to the work force in those days.
Suddenly, along came the war and the men went off to fight. The factory work had to be done more than ever, due to the war effort. So the women went off to the factories to produce what the world needed to survive. My grandmother, then in her mid forties and weighing about 90 pounds soaking wet, was a laborer in a wire factory. They were tough days.
But then the war ended and GI s that came back had an opportunity to get an education under the GI Bill. Many took that opportunity. Instead of being mechanics they became engineers, or doctors, or lawyers. Prosperity for the average family hadn’t arrived yet but it was right around the corner. Those ex GI s had seen the world. They got an education and moved up in the world. They wanted to own their own homes, not live in flats like their parents.
About the same time Dwight Eisenhower was elected President. He had a vision of a national network of highways. Being a military man, he realized that if we were ever attacked our system of roads would hamper moving war materiel and men efficiently. The interstate highway system was started.
With the housing boom and huge road construction projects, prosperity had arrived. Women stayed out in the workforce and men found better work than their fathers. Most homes had two incomes. The term “disposable income” was being bandied about. People were investing. Life spans were lengthening so people thought about retirement. Instead of one used car, families could own two new cars. Life was good going into the sixties.
As it usually happens, if people have something, other people want it. Suddenly our country was afflicted by career politicians. Many of these people had never worked in a private sector job in their life. They ensconced themselves in the Washington milieu and traded in favors, groupthink, and personal power. They convinced themselves that they were the best and the brightest. They knew better than the citizens that elected them how the public’s money should be spent.
They saw it as their holy duty to get their hands on as much money as they could, to spend on their vision of America as the new Eden. And if they couldn’t get enough money from taxes, they felt obliged to put the country in debt to accomplish their ends. After all their demi-god, John Maynard Keynes said it was OK, and besides, they wouldn’t be around when the bill came due.
Now, prosperity hasn’t gone away yet. It is still here, just far weaker than it was. Just as a family can’t get out of debt with a credit card, a country can’t get out of debt on borrowed money. Interest rates and inflation can’t stay artificially low forever. When the Bernanke bubble finally bursts, that may be the end of prosperity.