Do you think that the marketing of the “American Dream” began in earnest in just the last 20-30 years? I honestly don’t know, because I am a foreigner, and wasn’t here before 1981.
My own guess, picked up – probably hopelessly inaccurately – from movies and historical accounts, is that the vigorous pursuit of the American dream was alive and well in the 1960’s and 1950’s, and maybe even earlier. The real differentiator since 1981 or so is the emergence of the baby boomers as a dominant economic and political force. This is a large and diverse group, doubtless, but their sheer numbers, and the common views many of them share because of the forces that were at work during their formative years, make them a force that can and did move the entire country, including our economics.
When most baby boomers were growing up, it was a time of unparalled optimism in the US. The country dominated world wealth and knowledge as never before. Growth rates here and around the world were persistently high. People began to ask not how they could sustain their own personal wellbeing, but what they could do with that wellbeing. Wealth and growth were taken for granted.
When asset prices started their 20-27 year upward trajectory in the early 1980’s, and it just kept going and going, those baby boomers began to believe that the production growth of their youth could be replicated in asset price growth, leading to comfortable consumption and retirement patterns without the inconvenience of consuming much less than they produced during their working lifetimes.
None of us knows for sure, but I think what we are seeing now is the inevitable breakdown in that giant “free lunch” dream of an entire generation. Trouble is, instead of a uniform, fairly apportioned reversal of the unsustainable gains, there will be many winners and losers. Some baby boomers will walk away with gains well in excess of their savings; others will not; and many members of younger generations will lose through higher future income taxes and inflation.
BTW, Allan, always love your incisive and erudite comments.
