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Why America Abandoned the Greatest Economy in History (theatlantic.com)
54 points by safaa1993 6 months ago | hide | past | favorite | 52 comments



It's really disheartening to think too much about the state of American society. Our country is deeply broken on such a scale that fixing it will take generations if it's possible at all. And there's the absolute certainty that we will fail to act until it's too late: climate, war, civil instability, something will happen, we won't act, and everything will get so much worse.

The problem is so big that is seems utterly impossible.

Even if we elect some bright-eyed big dreamer utpoist as president, the very structure of our government is so rotten that it will not permit any change. It's so broken that it really seems like it'd be less work to tear it all down and start over. Otherwise it's a generations-long battle to reform everything. Can you even imagine what it would take to get Congress to agree to term limits? They can't even agree to pay the national debt.

What can we do? Voting isn't enough, protesting isn't enough, what's left?

I really hate living here. The cognitive dissonance between the rah rah america best types and the people starving in the streets is just sickening. Something is very wrong in the world and it's so huge that you can't even imagine it getting better


>> Even if we elect some bright-eyed big dreamer utpoist as president,...

I hope you are joking, or do you really believe this would be a solution to anything?

>> I really hate living here. The cognitive dissonance between the rah rah america best types and the people starving in the streets is just sickening. Something is very wrong in the world and it's so huge that you can't even imagine it getting better

I think you are living in a negative news bubble. Historically, the world is doing better than ever. Go travel, meet people outside of you circle if they are the gloom and doom types.

>> What can we do? Voting isn't enough, protesting isn't enough, what's left?

Start by working on your self, family, house, garden, friends, neighborhood, city,...


Re: “historically, the world is doing better than ever.”

Yes, that’s true. If you read “Enlightenment Now”, there are tons of wonderful graphs showing life improving. And for almost every country, as it gets richer, it gets happier. But the one exception is the USA. We’ve gotten richer lately, but not happier.

Our government’s decision making ability is messed up. We have an excellent economy, but debt is increasing. Our government has income, but we nearly defaulted on our debt. Healthcare has been a problem for 30+ years.

My state of Texas is run by Republican primary voters, which are an extreme 10% of the population.

We need to end gerrymandering with single-party primaries. (I like jungle primaries with ranked choice voting.) We need popular elections for President (not everything riding on swing states). We need to remove the filibuster. We need to weaken the Speaker’s power, which caused omnibus bills rather than real debate.

I’ve seen good activism and change at the city level. YIMBY’s are making progress. They’re now working at the state level. But it is still hard to see us making the necessary fixes at the federal level. I have horrible worries about what will happen if we don’t fix those very soon.


It wasn’t just the US. The energy crisis seems to have had extraordinary long tail effects. Everything was stagnating in the 70s and then we end up with Reagan, Thatcher, Gorbachev, etc.

It might just be that the structure and productivity of the post war economies, a lot of them heavily focused on manufacturing, had just become increasingly unprofitable?


> It might just be that the structure and productivity of the post war economies, a lot of them heavily focused on manufacturing, had just become increasingly unprofitable?

It was. You can see it in the demographics of places like Johnstown or Scranton starting about 1950. They had a continual decline in population of about 10% per decade every decade. It didn't just start in 1980--it was well underway by 1980.

And people like to sing paeans to Reagan like everybody loved him, but roughly 40 million of us saw right through him both times and voted against that sack of shit. While those areas were going to decline no matter what, Reagan's policies absolutely strangled the old manufacturing economies while doing absolutely not one damn thing for the people being hurt.

I always want to slap people when they say "Things were better in the past(tm)". "Oy, I lived through Reagan. I remember 22.7% unemployment. It sucked to be poor; it sucked to be a minority; it sucked to be a laborer. In what fucking way was your poor, ignorant ass better off back then as opposed to now?"

Finally, over time, automation didn't help. The Natrona Heights, PA steel plant was brought back online recently. A plant that used to employ 10,000 men now employs a couple hundred engineers.


Pennsylvania feels like a husk of its former self. Keystone State no more. The Lehigh valley is growing but the jobs are not. It seems like most new jobs are spillovers from ny finance looking for cheaper areas, logistics and warehousing, and remenants of Telco giants.

It's unfortunate. The main line would be awesome for transit. Really wish they'd build rail back up to Scranton from Philly too. PA has so much potential but the older generation needs to die off first and they gotta get the corruption out of the state legislature. Pennsyltucky isn't helping the situation.


Yeah, then do you remember 14% inflation under Carter? That wasn't a picnic, either. Part of the pain under Reagan was because he was letting Volcker deal with inflation.


I do remember.

However, there is a world of difference between "Things are getting a bit expensive" and "You have no job starting tomorrow and no hope of getting another one for the foreseeable future."


It sounds like you're blaming Reagan for things that were going to happen anyway. What did you expect/wish him to do, exactly?


Not allowing the pension funds to be raided by the big steel and mining companies before bankruptcy? Job retraining and education programs? Relocation assistance? Healthcare and assistance for children so families didn't break up?

You can help cushion some the results of a disaster even if you can't stop the disaster.

I can go on and on. None of it ever materialized.

Reagan and Co. were definitely in the "We've done not a damn thing, and it didn't work." camp.


Can't you blame every single president since then for the same thing? Why single out Reagan?

Keep in mind the Democrats controlled Congress during much of Reagans tenure. The President can't create laws, only support them.

Clinton ('93 to '95), Obama ('9 to '11) all had periods where the Democrats held every single office - the House, Senate and Presidency and could have passed whatever they wanted along party lines. Yet they didn't.


Because they weren't in charge during the problem? Because by the time Clinton got elected we had been through 12 years of Voodoo Economics?

By the time Clinton got elected, the damage was done. The pension funds had been looted. The companies had declared bankruptcy and were gone. Families were divorced and torn apart due to men working 200 miles away for 10+ years. etc.

And I DO have beef about Clinton--NAFTA in particular. But nothing that Clinton or Obama did is even remotely on the level of the devastation during Reagan/Bush.


> By the time Clinton got elected, the damage was done.

But presumably the damage can be reversed? If so, then you should blame every president after.

If it can't be reversed, then I guess it's not really worth arguing about?


Exactly. The 80's were a revival for the US. The 70's were stagflation, the president talking about the "great malaise", a humiliating defeat in Vietnam, and a general view that it was "the end of America".

Then comes along Reagan, defeats inflation (sure Carter started it, but Reagan didn't falter when the recession hit), then ushers in the biggest uninterrupted economic boom since the 60's and said "you should be proud to be American". He was elected with 51% of the vote in 1980 and remarkable 59% in 1984 (carried every state except MN).

Of course along with that came things the left finds abhorrent - belief in capitalism, minimal government, pride in being American (basically hate speech to the left), so Reagan became a punching bag for the left and despite 30+ years having passed, they still love to blame him for things that happen today.

But put into perspective, it shouldn't be surprising he was so popular at the time.


> plant that used to employ 10,000 men now employs a couple hundred engineers

This is the template for automation of all jobs in all fields.

Automating all work seems like a great idea, at least in an economy where humans can survive without working.


Don't get me wrong. I don't want to bring those jobs back.

At my age, my grandfather was five years from death, still laying on his back, out in the elements, welding facing up with slag dripping on him while boxcars rolled over his head. And it's not like he was making phenomenal money.

It is good that job is gone.

However, we never figured out what to do with all the people those jobs would employ.


> However, we never figured out what to do with all the people those jobs would employ

That's exactly the problem it seems.


Key point is increase in income distribution. Before Regan a top marginal rate of 70%. I remember hearing my dad and his friends squawk about this and how hard it would be to buy and maintain a larger yacht. We need to get it back up to 70% for top 1%.


It seems a lot of this had to due with the economic situation after WW2. The US was the only country that produced stuff, most of Europe and Japan were devastated. Then competition came back in the 70's coupled with inflation and the oil embargo, which hit the US hard. Reagan basically started deficit spending to pump up the military in the 80's.


> Robert F. Kennedy emerges as an unlikely hero in this telling.

I don't know why this is unlikely. He was the smart brother and the only one who gave a shit back then.

Arguably (and I believe it) Ted K legitimately grew a social conscience in the 80s.


The radical offshoring of America’s manufacturing seems worth a look. When I think about those towns in the Northeast which were once prosperous, the biggest difference between 1975 and now? The plant closed.


This article missed one huge change in the economy: the shipping container.

Incomes of the workers continued to increase, they were just outside the USA. Rich Americans were running a world economy, not just the American economy, so their incomes increased. American workers did well - their incomes remained high while competing with everyone in the globe.


This article is based on so many flawed premises that I'm not sure where to start.

First off, since when the "American Dream", earning "more than your parents"? The American Dream, as far as I know, what always "start with nothing and have a comfortable middle class existence".

And it's funny that the article complains about moving away from the New Deal politics. Europe, which didn't move away from New Deal politics, saw worse economic growth than the US did over the past few decades and if anything, Europe as well move away from the more extreme elements of socialism because it was choking their economy.

It's also full of "facts" that imply something that isn't true. "The top marginal income-tax rate was 70 percent when Reagan took office and 28 percent when he left.". This is an old trope that completely ignores the different tax structure back when rates were 70% (i.e. nobody actually paid them).

It then lambasts "Reagonomics" as "taking hard earned white money and giving it to black welfare queens" (yikes), yet ignores the fact that growth in minority incomes has been higher than whites over the past few decades and in fact, whites aren't even the highest income ethnic group any more.

This feels more like an emotional analysis than anything fact based. Of course you'll never find out the real reason for this economic changes if you don't look at the facts.


This is such a complex topic that an entire volume of books could be written on it. Unsurprisingly the article just scratches the surface barely enough to do it justice.

I wrote up a long “better” explanation I hope to share here later, but suffice it to say, this article greatly overstates the causation coming from the public’s political views when it really was a consequence of more material changes. Namely, communications technology, computers, and financial innovation started allowing smaller groups of people to produce value (obsoleting many low/mid provincial middle class jobs in the process) for much larger markets just as the rest of the developed world started to catch back up in manufacturing. As a double whammy plastics and aluminum hit prime time and disrupted the massive existing steel/textile base businesses they competed against. And the USSR began falling behind for their own reasons so nobody really worried about losing the lower/middle classes to socialism - but short of extreme isolationism it’s not like anything could really fix the competitiveness problem.


Because in part the greatest economy came out of being the only economy left after 2 world wars wiped out pretty much everyone else's and the Iron Curtain was brought down to trap 1/3 of the worlds population under a genocidal communist dictatorship.


It’s easy to have a labor utopia when the vast majority of the rest of the developed world is far behind. But just like with the recent rate hike you see what was actually a solid business model once the free money dries up.


"Only economy left?" You know, despite being called a "world" war, no American countries south of the USA were involved, nor most of Africa, India nor European powers like Portugal, Spain, Switzerland or Turkey, and probably others I forget. And this was despite two globe-girdling empires dragging in many of their subject states (e.g. Australia and Canada were dragged into the European theatre).

Also the article was discussing "greatest economy ever for the USA".


Most of Africa, India, South America, and the Mediterranean was still agrarian in 1945.

Portuguese industrialization only began in the post-war period, Spain was still rebuilding from the destructive civil war in the 1930s, Türkiye was rebuilding from it's civil war in the 1920s, and South America largely had extraction economies that industrialized thanks to mass immigration from Europe throughout the 20th century

Post WW2, the only standing untouched industrial countries were the US, Canada, and Australia. And those 3 countries led developmental indicators until the early 2000s when Western Europe finally caught up.


there were countries in South America in the war. Brazil was one such country.

I don’t know about other South American countries.

I wouldn’t call Portugal an European power, they never had a significant population. Same for Switzerland.

Spain was completely destroyed just before world war 2 during a civil war

Most of Asia and Africa had been put under European control before world war 2, which actually was one of the reasons there was war: Germans had almost no colonies and wanted to expand

Turkey had lost world war 1 a few years back (Ottoman Empire)


India? India was part of the UK at the time. Also, India got both carrier raids and land invasion from Japan.


The land invasion was only in Northeast India (Manipur and Nagaland specifically) - which isn't industrialized to this day either. During WW2, British India's primary industrial hubs were Bengal (Calcutta, Dhaka), Bombay Presidency (Bombay), Punjab (Ludhiana, Jalandhar, Lahore, Delhi outskirts), Sindh (Karachi), Hyderabad Sultanate (Hyderabad), and portions of UP (Kanpur, Lucknow).

Also, British India had de facto autonomy during WW2.

WW2 did help India industrialize, but British India was starting from such a relatively low base that it was basically playing catch up.

I'd recommend reading India's War by Srinath Raghavan to get an economic history of India during the interwar and WW2 period.


India was most definitely never “part of the UK”! Not even the Channel Islands, Man, etc are.


The USA wasn't "the only economy left" except for the immediate postwar years. The 1950s and 1960s, the period when the US was doing so well according to the linked article, also saw economic booms for France (les trente glorieuses) and West Germany (Wirtschaftswunder), for example.

The socialist world wasn't necessarily stuck in place either: Yugoslavia's high point, the years of the vikendica and middle-class leisure travel across Europe and Asia, was the 1960s-1970s. Granted, Yugoslavia was outside the Iron Curtain, but even the USSR is instructive here: living standards were rising even there during the Krushchev era, which is why the Brezhnev era is regarded as such stagnation.


You could say the same thing about China under Mao.


It was a revolt against accountability, nothing else.


Nonsense. It was a cooling-off from the war economy. Raising taxes post-WWII was needed to cool off a red-hot economy because inflation was climbing. The problem was that as administrations changed, they didn't want to let up on that tax lever, because "look! we're rolling in dough! let's spend it!"

The people in charge of the economy ignored the reasons behind the actions of previous administrations, and when those measures began to hurt the economy you got a backlash from the voters. Nowadays, too few voters understand the economy to make any real economic arguments as campaign issues. The result is the left-right BS we get as an excuse for platforms.


A pet fantasy that I have is to coin a phrase. Now I don't know if this is a coincidence, but since I started using the phrase "free market fundamentalism" a couple of years ago I've seen other people use it. For example, its used in the subtitle in this article.


Was it the other way around that you read “free market fundamentalism” or something similar and co-opted it into your daily usage, and now you’re seeing it everywhere?

There’s even a name for this bias - Baader Meinhoff effect


It's wasn't that. If it had been that I wouldn't be suggesting that I came up with it.


You almost certainly didn’t come up with it. I’ve heard it being used in the 90s at least and its usage was rampant in the 2007-2009 financial crisis.

Here’s a Google trend: https://trends.google.com/trends/explore?date=all&geo=US&q=f...

It shows the usage of the term peaked in 2004 (Google only has data past 2004).


People can invent things independently and multiple times. Please, don't tell people what they did or not because there's a bias.


I think the point is that you can't attribute the coining of the phrase to the gp for that exact reason though

I'm with you that independent invention happens pretty frequently (which makes sense, because figuring things out 'which makes sense' tautologically makes sense), but that also means you gotta humble yourself when making claims of 'first!'


Noam Chomsky used the phrase in the 1990s...


I couldn't find that, but googling I've found there's even a Wikipedia page [1]. Oh well... Not sure saying I "re-invented" it is even worth bragging about.

[1] https://en.m.wikipedia.org/wiki/Market_fundamentalism


> When I was five, I imagined that there was such a thing as a unicorn. And this was before I had even heard of one, or seen one. I just drew a picture, of a horse, that could fly over rainbows, and a had a huge spike in its head. I was five! Five-years-old. Couldn't even talk yet. [1]

It's a common phenomenon

[1] https://www.youtube.com/watch?v=dkeAOtn6OLs


You might be interested in capital realism. Rather than the fundamentalism of free market being the correct or best way among other options, realism forecloses on alternatives. Free market capitalism is the only way that exists, a product of the natural laws of the universe, and reality itself.


Racism and class warfare fueled the decline. Look at every single location that has declined, it can be attributed to one or the other. Hate is causing the country to implode and we can't even see it.


"left-leaning parties [...] have become dominated by college-educated voters and lost working-class support", which then proceeded to elect college-educated right-wingers with fanciful (and wrong, or more accurately deceptive) economic theories.


In fact, left parties were savagely demolished by the CIA, under direction of American capitalists.


"The Jakarta Method."


> which then proceeded to elect college-educated right-wingers

Source though? In what time period?

College doesn't make you better or anything but looking at my own family and where I grew up, it's not the college educated making up the biggest blocks of conservative voters ...


I think they meant that the conservative politicians are college-educated.




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