Economic observers and historians often look to different historical periods to understand our current situation.
The late 1970s are now frequently talked about due to concerns about stagflation and the Federal Reserve's aggressive response, which is clearly reflected today.
But perhaps the turbulent 1960s are the right lens through which to unravel at least one important puzzle of our current era: America's funky economic situation.
Economic and political observers have spent much of the last year wondering why a flurry of good economic news, from a record stock market to millions of new jobs to rapidly declining inflation, hasn't been reflected in the public. I have spent time trying to understand. In the way the observer would expect.
The parallels to the 1960s here are clear. His decade was the third longest uninterrupted economic expansion in U.S. history, combined with widespread public pessimism.
In the early 1960s, “the economy of the 1960s was just great, and no one talked about it much,” says Terry Anderson, a history professor and author of textbooks from the era.
Anderson added that social unrest and existential concerns were far more pressing issues, and the economy didn't take center stage in the national imagination “until things got worse.”
In fact, inflation quickly began to seep into the public consciousness. Economic concerns stemming from the price increases seen in the second half of the decade proved to be a source of souring public mood, along with the better-remembered concerns of the era.
Professor Leonard Steinhorn of American University said, “Society is the whole fabric,'' and “the economy is one of its threads, and in the 60s, economics was certainly one of its threads, even if it wasn't necessarily the most visible thread. It was a thread,” he added.
The complex role of economics in national consciousness at the time illustrates a similar phenomenon that polarizes economists today. Are Americans currently angry about the American economy for economic reasons? Or are they bringing social and political concerns into their evaluation of national finances?
At the moment, our current mood appears to be on the upswing, with the University of Michigan's latest Consumer Sentiment Survey showing the highest numbers since 2021. However, consumer confidence is still more than 20% below and has a long way to go. Pandemic level.
Also, the likely thorny race between President Joe Biden and former President Donald Trump, a matchup that polls show most Americans don't want, is clouding the mood at home. It remains to be seen whether it will make things worse.
How the economy shaped the 1960s — and our current era
The economy of the 1960s shaped the highs and lows of that decade to an extent that is probably underestimated today, but it reflects current trends.
Historian Heather Cox Richardson recently wrote in her book, The Awakening of Democracy, that a key driver of Lyndon Johnson's Great Society plan to eradicate poverty was the flash economy's potential to do so. He records that he felt as if he had done something.
“LBJ had the luxury of directing.” [the country] Toward something bigger,” she wrote.
In a 1964 speech at the University of Michigan, then-President Johnson implored graduates to help create social change, not just money, linking his efforts to the economy.
“There are cowardly souls who say this battle cannot be won. We are doomed to soulless riches,” he said. “I disagree.”
Fast forward to today, and there are clear echoes of how Joe Biden and his team acted upon taking office. Biden's motto of “building back better” suggested using economic strength and the recovery from the pandemic as a vehicle for social change.
And as Biden worked to pass legislation on infrastructure, green energy, economic development and more early in his term, comparisons to LBJ seemed to be everywhere.
Like LBJ, he presided over a period of turmoil. For LBJ, it was the Vietnam War and the civil rights movement. For Biden, it's a global pandemic, the Black Lives Matter protests, and he worries that democracy itself is at risk.
Although many people welcomed the social changes that occurred during both eras, it also led to an anxious mood among the population. The Wall Street Journal's Greg Yip also documents the similarities between the two eras, highlighting essayist Joan Didion's notable points.
“Markets were stable and GNP was high,” she wrote in a 1968 essay on the counterculture, and “it could have been a fountain of brave hope and promise to the nation, but it was not. “More and more people were suffering from anxiety,” he added. That wasn't the case. ”
These eras also shared the economic challenge of rising consumer prices, which directly enriched people's pockets.
Professor Steinhorn said an important data point to remember is that Gallup first asked Americans in 1967 about the most pressing issues facing them and their families. states.
What is their best answer? Inflation has been steadily rising since 1965.
Although inflation has fallen significantly from its peak of 9.1% in June 2022, consumers remain concerned about the current high prices.
It remains certain that it will be the central issue in 2024. Just last week, Republicans continued to signal that the lasting effects of rising prices would be a central theme of the election.
Will 2024 be remembered like 1968?
Perhaps the biggest unanswered question when comparing our two eras is: Will 2024 be remembered in the same way as 1968, a symbolic year of social upheaval? I mean, please.
Some comparisons are sure to become fascinating in the coming months.
One of the darkest moments of 1968 was that year's Democratic convention in Chicago. There, footage of police beating anti-war demonstrators proved to have a far greater resonance than what was said in the convention hall itself.
The Democratic Party plans to hold its convention in the windy city again this time.
The 2024 campaign could also be affected by Robert F. Kennedy Jr.'s third-party candidacy. His father's assassination on June 6, 1968, was another moment of national trauma that is still studied today.
But historians like Anderson and Steinhorn have too much to do with that traumatic year in American history, marked by riots, war, and the murders of RFK and civil rights leader Martin Luther King Jr. also warns against having too many similarities.
“We're in two global conflicts, but young men and women aren't fighting in them. We're not burning cities to the ground right now. We're not fighting the assassinations of two great Americans. I haven’t seen it,” Steinhorn said. He said.
But there are still important lessons to be drawn, he added.
“In a larger meta sense, I would say that the divisions that were evident, widening, and worsening back then are unfolding now,” he said, moving from Donald Trump's electoral coalition to the modern He points out that the roots of everything, including liberalism, are as follows. Seeds from around 1968.
For Professor Anderson, the key point of comparison between these eras is the gloom that pervades the national mood in both eras, whether economic or otherwise.
America in the 1960s was in turmoil due to the Vietnam War and the social movements of the time. That's the case today, as America is still recovering from a historic pandemic, its own protests, and a divisive politics that seems likely to get worse.
Anderson offers a somber note about how long it took for the American atmosphere to change after the 1960s.
“It took 10 years,” he says. “I'm sorry for saying that.”
Ben Werschkul is Yahoo Finance's Washington correspondent.
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