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:
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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“We came out of the pandemic in pretty good shape”
Not even close. Over a million dead is not “pretty good”.
That is the deadliest toll the US has ever faced.
Talking economically. But even the deaths could have been much worse.
During the flu epidemic of 1918 .5% of the population died in terms of current population that means 1,650,000
Yes, I agree with Mr. Quinn and fellow commenters. And not only do I think similarly to Mr. Quinn, I see from his photo that we go to the same barber!
To go even farther back in history and to thereby marvel at our present good fortune, I highly recommend the latest David Grann book, “The Wager.”
Regarding our current culture of complaint, isn’t it fairly clear that the gas on the fire consists of electronic media algorithms and (often coupled with) the apparently recent discovery that fear and inflammation can generate stupendous profit?
For many years my barber was a bargain, never exceeding $15.00 then he retired to his beach house. Now with tip I pay $55.00 which to my way of thinking makes barbers the highest hourly paid job in the world.
I am far wealthier since my wife began cutting my hair about 22 years ago.
I agree with some, not all.
Certainly, Americans, in general, are far better off – in nominal and real economic status – compared to the time we grew up in the 1950’s and 1960’s – and entered the workforce in the 1960’s and 1970’s.
You state: 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.
Actually, almost the entire improvement and all of those “savings” were the result of borrowing from the future and transfers via CARES and ARPA. Note our $34 Trillion in debt. And, credit card and consumer debt in general is at an all time high.
The price of gasoline is NOT high – I paid $1.29 a gallon at the U-Totem on Fairmont Parkway in Pasadena Texas in July 1982. Back then, my car got about 20 miles to a gallon. A few days ago, I paid $2.78 a gallon. My current car gets about 30 miles to the gallon. Adjusted for inflation, and changes in performance, I’m paying about 43% less per mile than I paid in 1982.
While every generation has its challenges, 2023 doesn’t strike me as all that bad, either. But, many Americans are living on borrowed money/time…
Dick,
Your memo is a great reminder to us to live in gratitude! Like you, I remember truly hard times, and came up the hard way. Your words help me (and hopefully a lot of us) to remember to be grateful! Thanks again.
I agree with everything written. Coming up humble myself, 5 of us in a 3 bedroom rancher, I can relate. One major difference however, mostly physiological, is that while I grew up lower middle class. I never felt that I was relatively poor. There was not this constant comparison to those who were better off that is ever present in the media today. Everyone in the neighborhood seemed to be on the same economic level. The disparity between rich/poor what not shoved in our face daily. It is what we believe to be the relative difference in economic position that leads to discontent. I do believe the relative difference between the rich and poor is much more than it was in earlier decades. One example being the ratio of CEO pay vs. average salary. Despite this, there are also so many more ways to make a living today (internet) and free learning (U-tube) – a huge advantage vs. the pre-internet days.
Yes thank you! One mans misery is another’s joy. Perspective is key! Always good Sir Richard.
That indeed was a great article. Today’s generation needs to understand more history to get perspective. Things can always be worse…and they were.
AMEN!
Great article. I was recently reflecting on my first mortgage in 1994 which was a 7.25%, 15 year with a 5-year ARM. Didn’t think anything of it at the time. Recency bias and political rhetoric have clouded the thinking of many. We have the lowest inflation of any developed country right now, gas in Alabama can be had for $2.60 a gallon ($3.00 national average), anybody who wants a job can get one, yet so many think it’s a mess? What the Fed did, however, was make asset holders richer with ridiculously low interest rates for far too long–in my view. Many of the folks complaining now are the types with more liabilities than assets and thus will struggle. Very much appreciated the perspective, Mr. Quinn. Happy Holidays to all Humble Dollar readers.
One report I recently read told of a young couple who bought a house during the low motion rates during COVID (as low as 3%) and now can’t afford to pay their mortgage because they have returned to paying their student loans, and they want the government to pay off their student loans. No one forgave our student loans when we bought a house in1982 with an interest rate of 13.5%.
No they didn’t. Ronald Reagan wouldn’t have dreamed of that. Back then, actions had consequences. Happy Holidays!
The Economist released an analysis that the USA had the third best overall economy over the past year behind only Greece and South Korea.
And yet a WSJ/U of Chicago survey in March of this year found that 80% of respondents consider our economy as poor or bad and a similar percent do not think their children will be as well off as they are.
https://thehill.com/homenews/3916583-most-americans-dont-think-their-childrens-lives-will-be-better-survey/
Every older generation thinks the younger has it easy. “Back in MY day…” Uphill to school both ways, yada yada. Times change, and so too does society and culture. No one could work from home 25 years ago because there wasn’t the technology to do so, nor were jobs conducive to WFH. OTOH, are gas prices really “high”? 25 years ago, the average price / gallon was $0.65 = $3.75 in 2023 $.
Yeah, and my salary was $13,500
Wow! I was $12,500 in 1976…
The point was not easy, the point was, today not being harder or worse than in the past. Every generation has its challenges.
I think the biggest problem in America today is people who think everything stinks.
Or maybe the biggest problem are the people who keep telling other people everything stinks.
Yes, why don’t people think for themselves, rather than following along like sheep?
Nice history review. There have always been problems and challenges, yet there has never been a better time to be born than today, nor a better place than the US.
I agree and yet how often do we hear there are few opportunities.
Thank you very much for the historical perspective, Mr. Quinn. I think most people’s current perspective is shaped from what has happened recently. (“Recency bias”)
I read somewhere recently that the perspective a lot of people have on inflation is the 4-year inflation increase. That is because it is recent enough that most people can remember “that thing” being “that price” in their head. (Eggs, hamburgers, whatever.) The 1-year reported number has come down dramatically but the 4-year rate is still very high.
Thank you for placing current economic perspective into historical context. The viewpoint is greatly appreciated!
I remember my parent’s stories of coupon books and product shortages during WW2, and life during the depression. Closest I’ve come to war-time sacrifice was in 1970 when I turned age 18. That was the year of the draft lottery and my birthday drew number 282, meaning I was never drafted. How do you imagine today’s people would have reacted if POTUS had instituted today’s airport security measures before the 9/11 attracts?
Say what you will about the draft, but it was part of the melting pot… after a tour the draftee could at least speak English and had a common experience with their fellow Americans. It should be brought back.
I try to imagine if someone even mentioned a requirement for some type of service to the country after high school. Not necessarily military but something. I suspect many of those “patriots” flying flags on the back of their pickups would be heading for the hills.
Indeed