It’s Not So Bad
EVERY GENERATION HAS its own unique perspective—one that’s shaped by its environment, but also limited by a lack of appreciation for the past. Are things all that bad in the 2020s? I think not.
A recent Bloomberg radio discussion mentioned that, when families go out to dinner, they become keenly aware of inflation when they pay, which in turn affects their view of the economy. It took me a minute to digest that. Is going out to dinner no longer a luxury? Growing up, my family’s idea of going out to eat was 12-cent hamburgers—equivalent to just $1.36 in 2023 dollars—at White Castle on Sunday after church.
For the 12 months through November, the U.S. inflation rate was pegged at 3.1%. Is that so horrible? Inflation goes up and down. Today’s rate pales next to the 13.6% we had in 1980. While rising wages have lately been somewhat offset by inflation, inflation is coming down but today’s higher wages will continue to compound into the future.
We came out of the pandemic in pretty good shape. Net worth for the typical U.S. household grew 37%, after inflation, from 2019 to 2022, according to the Federal Reserve. Americans saved a great deal of money—$2.6 trillion—over a couple of years, although it appears most of that has now been spent. Going out to dinner too often, perhaps? I wonder how much of the complaining about the economy is the result of individual decisions, missed opportunities and tainted political rhetoric.
Yup, the price of gasoline is high, but do Americans understand the international nature of oil pricing and its impact on gas prices? Americans complaining about today’s cost of gas probably weren’t among those waiting in line for five or 10 gallons during the 1973-74 oil crisis. Back then, the price of oil quadrupled in just four months.
The U.S. has experienced financial and economic crises that were far worse than what we’ve seen of late:
The Panic of 1873 led to a sharp decline in industrial production and a rise in unemployment. Ditto for the Panic of 1907.
The Great Depression of the 1930s was the longest, most severe economic downturn in recent U.S. history. Gross domestic product, the standard measure of the nation’s economic activity, plummeted 27%. Unemployment peaked at 25% and millions of Americans were forced into poverty.
The 1980-82 recession gave us sky-high interest rates, a decline in consumer spending, a slowdown in economic growth and a jump in unemployment.
The 2008-09 Great Recession saw a collapse in the housing market, a deep stock market selloff, and a banking crisis that required an all-out emergency response by the U.S. government.
Mortgage interest rates are high now, you say? The average 30-year fixed-rate mortgage is 6.95%. When I bought my first house in 1971, the rate was 7.5%. On two other home purchases, in 1975 and 1987, we had rates of 9.5% and 9.75%, with 20% down payments required. In 1981, the 30-year mortgage rate touched 16.6%.
Today, it’s still possible to buy a house with a 3.5% down payment using a Federal Housing Administration (FHA) loan. Elsewhere, a 5% to 10% down payment is common.
Although it may not feel like it, with endless crises here and there, things have been rather peaceful lately compared to the past century. Young Americans no longer worry about a military draft disrupting their lives.
Think of the impact on Americans of World War I, World War II, the Korean War and Vietnam. Sixteen million Americans served in World War II. Today, the entire active-duty military is about 1.3 million volunteers.
We worry about the price of dining out. I wonder if Americans today would accept using a ration book to buy sugar, meat, canned goods and tires, as they had to during World War II?
The “tough times” are even blamed for not having children. For millennials, the Great Recession, soaring student debt, precarious gig employment, skyrocketing home prices and the COVID-19 crisis are apparently all reasons not to have children, according to an article in The Washington Post. I guess I’m lucky. I was born in the middle of World War II. That could have been a whopper of an excuse.
Don’t get me started on student debt. Having earned Veterans Affairs tuition benefits by serving in the Army, and later paying for our four children's college, I know a college education is a good investment—but I also know it’s one that needs to be paid for.
How are things at work? “They stink,” I was recently told by a worker at my old employer. I have no doubt the workplace is different than it was in my day. Any semblance of corporate paternalism is gone. The link between employment and long-term financial security is tenuous. In reality, that link only ever applied to large employers, and not to the small businesses where the majority of Americans work.
Even as job security has weakened, many Americans have adopted a different view of work. Younger generations seek a better work-life balance while also wanting early retirement. Today, 12.7% of employees work from home fulltime, and another 28.2% work from home sometimes, and their ranks are growing. If I had asked my boss to work from home—preferably on Fridays and Mondays—he would have laughed, or worse.
As with other aspects of our lives, the workplace was far worse in times past. You don’t have to go back to the days of steel barons Andrew Carnegie and Henry Frick to find intolerable workplaces. When I began work, the unspoken road to the top was being white and Protestant. Women were second-class citizens and minorities were openly avoided.
While every generation has its challenges, 2023 doesn’t strike me as all that bad.
Richard Quinn blogs at QuinnsCommentary.net. Before retiring in 2010, Dick was a compensation and benefits executive. Follow him on X (Twitter) @QuinnsComments and check out his earlier articles.
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