In 1492, Columbus sailed the ocean blue (trying to get rich.)
The one major question to which I’ve yet to see a good reply, is really quite straightforward: what’s going to drive economic growth in the U.S.? What’s it going to be? Green energy? Space exploration? Interactive Cabbage-Patch Kids?
We’re at a crossroads here. Consumers aren’t spending. Businesses aren’t spending. The government, despite the fervent wishes of some of our representatives at the federal level, isn’t going to be spending much more, and at the state level they’re in full-on Greece austerity mode.
We won’t get past this recession, or soft patch, or malaise, or dip, or whatever you want to call it, until something comes along that spurs businesses and people to start spending money, their own money. Looking back over U.S. history, there has always been some fundamental thing driving us. Even before there was a United States, even before there were 13 British colonies. (Now before we go any further, let’s get one thing clear: this isn’t some college thesis, I’m just trying to make a general point; if I skip an epoch or two, don’t crucify me over it.)
I just don’t see that fundamental thing right now, although I don’t doubt (or at least, I hope) one will come along. People talk about emerging markets, but unless we’re going to restructure our economy, and become a manufacturing-based economy rather than a consumption-based one, I don’t see where emerging markets do much for the U.S. Are we really going to start selling cheap toasters to China?
Green energy has a chance, I suppose, but we’ve been pushing alternative energies for 30 years. Hasn’t gotten very far. What else? Space exploration seems far to expensive, and the returns far too skimpy, to lend a practical hand (although being old enough to remember the tail end of the Apollo program, I’m a big fan in theory.) Honestly, if you’ve an idea, send it along. Whoever figures this one out first is going to get rich.
Let’s go back to the very start. Columbus wasn’t looking for a new world, he was looking for a faster way to get to China. All the Europeans were. Columbus just decided to go west when everybody else was going east. Visions of Utopia became a guiding force for waves of Europeans, the Frontier, Manifest Destiny, Westward Ho and all that. This would be the fundamental thing that drove the nation for nearly 400 years (and before it was over it gave us far, far too many innovations to list here.)
Then you had the Gilded Age, World War I, the Roaring ’20s, the Great Depression and then World War II. Lots of ups and downs there (more downs than ups.) But, and here’s the important point, after World War II, the United States had a new guiding fundamental thing: rebuild the world. It was both a great humanitarian and economic success. It made the U.S. the world preeminent economic, as well as military and political, power. It created the great, stable middle class that became a hallmark of the nation. That middle class, incidentally, is what’s being buried in our current era (but that’s a subject for another post.)
In the ’60s you had the Cold War and the space race. This scramble also produced too many innovations to recount here; laptop computers, rocketry, Tang, even a little thing that would one day become another great economic driver. Then in the ’70s, it all started to fall apart. The United States had rebuilt the world, and suddenly the world started competing. It was all kind of a big shock.
When Reagan was elected President in 1980, he brought with him, along with a lot of folksy, inspirational rhetoric, a new economic paradigm. They called it supply-side, or trickle down. The detractors called it voodoo economics. Cut taxes, boost public spending. It worked, for a while.
Who knows what would have happened there if that little thing that was invented in the ’60s didn’t explode in the ’90s. You knew what I was talking about: the Internet. That sparked a huge boom, which sort of, well, exploded right around 2000 and led us into a recession. Who knows where that recession would’ve gone had not our highly lauded Fed chairman, Alan Greenspan, cut the fed funds rate to 1% and held it there for like a year.
That, and wasn’t the only cause but it was the spark, gave us the housing bubble, which is what drove things in the Aughts, and well, we all know how that one ended. So that’s about it. That brings us up to today.
So, what’s it going to be?
mutant_dog
Mark Stevens
Raymond Haines
Dr. Spiff
Rocky
Steven L.
timstevens
XRayD
R.NARAYANAN
July 28, 2010
So our empire peaked at the end of the 20th century. Well, maybe that is it. We served our purpose and now it is time for someone else to come along and lead the world, or maybe we will enter a period with no world leader, at least for a time. Why do we assume that we are immune to the cycles of history?