2011 – Was it the Best of Times?

Though Dickens had another era in mind when he wrote the phrase, “It was the best of times, it was the worst of times,” post-WWII America certainly looked like the good times were rolling and would never stop. But the good times were created by a confluence of events that allowed America to emerge as the world’s economic and military super power but most of those events have vanished.

 

My grandparents emigrated from Eastern Europe and Lithuania in the early 1900′s. No doubt they left dire circumstances in the “old country” and came to America, like so many others, for opportunity and to escape religious persecution. Ingrained in their being was a sense of value for their own possessions, a sense of respect for others’ belongings and a vein of frugality born of necessity. 

 

My parents were both born in America during WWI and lived through the Great Depression, WWII and the Korean War. They lived through shortages and rationing and were part of a cohesive national effort to manage the country’s resources through the worst of times. Ours was by no means a unique family, but that Greatest Generation of newer Americans had an innate ability to live with little and to treasure small joys in their lives.

 

As a product of that upbringing, I still wear clothes until they are worn out and use things until they are broken beyond repair. I am a relic from a bygone era.

 

Being poor or rich are relative designations. As a teenager, none of my friends took ski trips, vacationed in Europe or played tennis at a local country club. We played stick ball, tag and street hockey during the summer, and we looked forward to the winter when we could make money by shoveling snow from merchants’ sidewalks and neighbors’ driveways. Most of us had one pair of shoes, which were considered worn out once the sole began to flap like Mick Jagger’s tongue. We wore and passed on hand-me-downs, and it was not embarrassing to wear a relative’s clothes regardless of a tight or loose fit.

 

At some point after the Korean War, Consumerism took hold of the country. Although some of us fear Socialism, Communism, Fascism, Anarchy, Libertarianism, Conservatism, Liberalism or the in vogue Progressive Movement, Consumerism has become the core economic factor in America during the last 50 years and it is a destructive system for those addicted to it. 

 

Our government, the world’s largest debtor, in conjunction with the marketplace, has created a faux prosperity by encouraging debt primarily to people that could least afford it. It has become an American right to acquire everything that one desires. The lines have become blurred between our needs, wants and entitlements and the result is the steady disintegration of the middle class under the weight of their own debt.

 

The rules of the game changed in the 1950′s, a time when merchants began offering lay-away plans to buy clothes, appliances or other goods. You could simply select a dress or a refrigerator and the store would set up a payment schedule over weeks or months; when you finished paying for the item, you received it. It didn’t take long for that system to morph into the credit card environment we know today or a marketplace of buying now and paying later.

 

The credit card frenzy gathered steam during the 1960′s. Once you got one credit card, catapulting to 10 or more cards was easy. Each new store or company that offered credit believed the previous issuer of credit did their due diligence. It was a great system; people could even kite credit cards by  paying off one card by borrowing money from another.

 

A decade or two later, home equity loans, second mortgages and home refinancing came into vogue, and many Americans, duly encouraged by banks and credit card companies, leveraged their largest asset – their homes. Washington spent like crazy, too; currently 40% of our current national borrowing is used to service our existing national debt.

 

America has changed greatly since my childhood from a fiscally sound country producing and manufacturing goods to a country more inclined to consuming goods often produced abroad. Fully 70% of our economy in today’s America is considered a product of services. Another astounding statistic is that the largest portion of the billions made by credit card companies are from  late payment fees, not simply from the exorbitant high interest rates.

 

Since so many countries around the world have emulated the American dream and lifestyle, it’s no wonder that personal and sovereign debt have become consistent headlines. Of course consuming is the motor that drives manufacturing, but a more likely path back to prosperity in America would be to foster innovation, creativity and efficiency instead of devising farcical programs designed to get people into shopping malls. If the current political bandwagon continues, we are simply encouraging a system that will result in some people living well at the expense of their neighbors.

 

In Washington, our leaders continually fail to address the simplest issues; that is to restructure our tax code and modify entitlements. Doing these two things would take us baby steps toward national solvency but simultaneously jeopardize most politican’s careers and thus, gridlock is the preferred route.

 

Self-interest on the part of our politicians along with media rhetoric that aims to influence rather than educate continually labels change agents as extremists which in turn has hamstrung any meaningful progress. I believe most Americans—those in a position to do so—would be happy to sacrifice or contribute to create real opportunities for their children and grandchildren and forgo the fallacy of our government’s course of spending our way back into the best of times.

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