Can we Make America Great - and Was It Great Back Then?

Lars Poulsen - 2020-12-07

Like most men my age, I think back to my adolescent years, and remember fondly some things about America, that we seem to have lost. Donald Trump rode that feeling all the way to the White House. But the more thoughtful ones among us, always knew his promises to restore the Golden Age were a hollow fraud.

When We Were Booming

World War II (1939 to 1945) was a hard time for most people in the US (and even harder for people in Europe). Most men were away from home and sorely missed. But when they came home, there was a widespread sense that something great had been accomplished even if at a great cost, and now it was time to rebuild. The brilliantly designed Marshall Plan was not only aid to Western Europe, it was also indirectly a domestic jobs program: When Europe got money for their reconstruction, much of it was spent importing heavy goods from the USA.

When the men returned from the war, they got married and had babies, and the new families needed homes. Homes were in short supply, because few had been built while the men were away at war. A massive program was put in place to accelerate housing construction. I live in a house in a subdivision built in 1951 for those families of WW-II veterans. It is 1100 square feet (about 110 square meters for my Danish family), and when it was built, it sold for about USD 18,000, with a mortgage payment of USD 200 per month. (That works out to $180,250 and $2,003 in 2020's money.)

The new families also needed furniture and appliances for their new houses, and a car as soon as they could afford it.

Building the houses, furniture and appliances created jobs.

It was a period of prolonged economic growth, set off by an explosion in birth rates: From 1930-1942, about 2.5 million babies were born per year. In 1946, it was 3.47 million, peaking at 4.3 million in 1957 and 1961. By 1973, it was back down to 3.14 million.

Prosperity and Progress (The Reader's Digest version)

I was born in 1950, far away in Denmark, so I did not experience the America of the 1950s and 1960s, but from age 5, I was an avid reader, and my family's home was a house with books. It has been said that the greatest predictor of a child's success in life is revealed by a simple question: Did s/he grow up in a home with at least 25 books?

Among the reading materials in my home was a monthly magazine named "Det Bedste" ("The Best"). Actually, the full title was "The Best of Reader's Digest"; it was a locally translated edition of that American monthly magazine, covering life in America in a mostly optimistic tone, often describing new ideas in urban planning and healthcare and new technology making a positive impact on people's lives. Reader's Digest was instrumental in projecting this image of how the USA was a successful country worthy of imitation to 70 million people around the world. But I think it fairly described the life and worldview of most middle-class Americans.

And while there was a large working class for whom that successful life was mostly just an aspiration, the general feeling was that it was within reach.

President Dwight Eisenhower ("Ike") was leading his country with a steady hand. He was a WW-II army general with a deep desire to serve his country and a deep understanding of what exactly made America great. When his term was up in 1960, I remember my 10-year old self rooting for Richard Nixon, because he seemed the safe bet. He seemed a safe and known quality who had learned by Ike's right hand how to steer the ship. By contrast, we had never heard of John Kennedy.

I think this is the golden age that "conservatives" are trying to get back to.

1964-1968: The Ruptures of the Vietnam War

In retrospect it seems to me, that even though I greatly admire John Kennedy - who looms even larger by comparison with his successors - it now seems likely that most of the success he enjoyed in his brief presidency grew from seeds planted by Eisenhower. And many of the problems that surfaced in the Johnson years had begun under Kennedy's watch. And huge problems did surface:

A stupid war in Vietnam - France was losing the colonial war in Indo-China trying to hold on to the last of its empire, and instead of helping the the Vietnamese to build a democratic nation tied to the West, as Ho Chi Minh fervently asked us to do, the US somehow decided that Ho Chi Minh was a communist, who had to be defeated at all costs. It became a self-fulfilling prophecy, as Ho Chi Minh was driven into the arms of Mao Tse Tung's China, and what had been seen as a small put-down of a local insurrection became a proxy war between the US and China. The most horrible thing about this was that the war was started in order to PREVENT a democratic election, which Ho Chi Minh was fairly certain to win. The government never could explain to the young men that were sent to fight the war, why this was a fight worth sacrificing American lives.
Racial Disparities - The booming economy had not benefited everyone equally. It became clear that upward social mobility was much less available to people of color than to whites, and black people as well as white people of conscience started work aimed at dismantling the "Jim Crow" racial segregation laws in the South. The backlash against this turned into street fighting and assassinations. Martin Luther King was murdered. It seemed that America was headed towards a revolution, which scared the hitherto comfortable middle class. Many liberal people felt that Robert Kennedy had the best potential for leading the country through what they saw as a necessary restructuring, but just as he was winning the Presidential primary election, he too was murdered. In 1968, Nixon won election on a promise of "Law and Order".

The Seeds of Today's Problems

The Vietnam War was very costly; the deficit spending to pay for it led to inflation. During Gerald Ford's presidency, the average inflation rate was 8% per year. Under Jimmy Carter, it grew to 13.5% per year. Carter felt obliged to stop this, and accepted the unanimous advice of economic scholars, that interest rates must be raised. This did curb the inflation - by causing a deep recession. I remember that at one point in 1981, I opened a savings account that paid 18% interest (for a while).

In 1980, Ronald Reagan was elected on a promise of "Morning in America". He did end the recession - by resuming the deficit spending. He also mostly destroyed the labor unions, and gave great tax cuts to the richest people. This ended the long term rise of the working class and set the stage for today's large income and wealth inequalities, which is putting us back on a potential path to revolution.

A Way Forward

Rather than elaborating on the current state of the great rifts, I want to end with a look at what I think it would take to get our country back to that glowing feeling of progress that we remember from our childhood.

First, we must redress the exaggerated inequalities in our country. Fundamentally economical, but also the racial and ethnic grudges that have a basis in very real mistreatment of minorities - historically, but continuing to this day.

A Living Wage Guarantee - The minimum wage should be a wage you can live on. Much has been said of $15/hour. We should enact that immediately, not as a 5-year goal.

Universal Health Care - We need to give everyone access to decent healthcare. I believe that the goal should be "Medicare for All", but that will take more than 4 years to get to, so as an immediate step, we should have "Medicare for all who want it", i.e. creating a "public option" for health insurance by making Medicare coverage with income-adjusted premiums (which already exists for wealthier retirees) available as policy option in every county on the ACA exchanges, and eligible for the same subsidies as the commercial options on the exchanges. We could even split this into smaller steps by first making it available only to people aged 55 and older, then lowering the threshold age gradually.

Steeper Progressive Tax Rates - I believe that personal incomes over $50 million per year are obscene and should be taxed severely with the goal of reducing inequalities in the country. The revenue from this will help pay for needed improvements in healthcare, education and infrastructure, but I feel that taking the money away from those who have earned it by taking away opportunity from the less fortunate is in itself a value to society.

Racial Equality - Affirmative Action - We need to acknowledge that our history of slavery, genocide and white supremacy is casting a long shadow, and to level the playing field, we are going to have to give a hand up to those who have inherited disadvantages. Fairness is complex. I would like a pure meritocracy, but we must endeavor to make up for past inequity.

Primary Education - Half of our children attend schools that do not prepare them adequately for our modern society. They need to not only learn to read and write, add and subtract; they also need to learn critical thinking, reading comprehension and rudimentary programming skills, so they actually understand in principle how computers work. And they need to learn how our democratic system of government works. And before leaving 12th grade, they should know how to manage money: How to reconcile a bank account and how simple transactions such as buying a car or hiring a helper work. And high school graduation should follow comprehensive standardized tests similar to the "International Baccalaureate" examinations.
The uniquely American idea that schools schould be funded by property taxes ensures that poor people's kids will go to poor schools. While the USA has some fantastic schools, it also has many embarrassingly bad ones.

Vocational Education - America has failed to produce a skilled working class. If your business needs someone who can read a drawing to build something, it often has to choose between hiring an unskilled laborer or a mechanical engineer. We need to train people for the jobs that exist today. This might be the new mission for community colleges.

Higher Education - We need to stop pretending that everyone needs a university degree. The attempt is costing fortunes, and many of the people coming out struggle to find jobs, which is especially a problem if they have been put into lifelong debt by student loans.
I suggest that public universities should be free for their students (including housing and meals), but have limited enrollment, designed to ensure that those who graduate can find jobs. Admission should be competitive, based on high school graduation tests.

Homelessness - We should strive to guarantee all Americans a basic standard of living, including basic housing and food. It is unacceptable to have hundreds of thousands of people living on the streets, begging for food and sleeping under bushes in parks. Most of those people have severe long-term mental health problems that should be treated.

Obstacles

Each of these angles of attack on our problems is complicated by so much of our history, and most of them will be very complex to make progress on.

For example, fixing higher education will need to resolve the dilemma of small Midwestern (and New England) private 4-year colleges, like the one where my daughter teaches. It has been a great place of learning for moderate-income kids who are not Ivy-league academically competitive, and benefit from a smaller school with smaller class sizes, and who benefit from a school focused on teaching rather than research. In a world where tuition is free at public colleges, and private schools are for the kids of rich parents who can afford to pay the costs out of packet, these schools are out of business. If we want them to survive, we will have to absorb them into the state university systems as "special heritage campuses".

Another example: There is a dissonance between wanting affirmative action to compensate for historical racial and class inequities, and wanting an objective merit-based competition for a limited number of college entrance slots. But this is completely dwarfed the problem of actually measuring the academic performace of high school graduates on an objective scale that allows comparisons between students from different high schools in different states. Most European countries can do this, but in the USA, school districts have pursued lawsuits to prevent parents to find out how their school-wide average scores on standardized tests place them compared to other schools, because they felt sure that if middle class parent know how poorly their local public schools performed, they would pull their kids out, causing these school systems to collapse. There are so many problems right there.

And another: The housing costs today are far above the housing costs in that "Golden Age". The 1951 house that cost $20,00 in 1951 ($200,000 in 2020 dollars) costs $900,000 today. We could probably build it for $200,000 if the land was free, but in coastal California, land is scarce and expensive. We could probably build reasonably similar 2-bedroom "garden apartments" in 2-story blocks for $250,000 if we were willing to commit to keep building them until the demand was filled, but at least here in coastal California, the neighbors will not allow that. They will talk endlessly about how they want to protect the environment, but the actual problem is, that once there is a ready supply of affordable apartments, the market price of "starter homes" will plummet, which means that the equity they have built in their houses over the last decade will evaporate.

Every one of the suggestions above will have equally complex problems that need to be resolved to move forward. But I think the rewards will be well worth the effort.

It will be a massive effort to do these things, but just getting started will lift the spirits of most of us. Let's get to work!

Data References:

[1] US Birthrates by Year (Infoplease.com)

[2] Baby Boomers (Wikipedia)

[3] Inflation Calculator (www.in2013dollars.com)

[4] Baby Boom (ThoughtCo.com)

[5] Reader's Digest (Wikipedia) - also Reader's Digest Home Page (rd.com)

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