It's Obama, Not Romney, Who's Stuck in the 1950s
In a recent piece on the presidential campaign in New York magazine, an Obama aide described Mitt Romney this way: “He’s the fifties, he is retro, he is backward, and we are forward.”
Yet President Obama is the one touting his economic vision as a bridge to the 1950s.
Here is what Obama said in Ohio yesterday:
In the decades after World War II there was a general consensus that the market couldn’t solve all of our problems on its own. …This consensus, this shared vision led to the strongest economic growth and the largest middle class that the world has ever known. It led to a shared prosperity.
The 1950s and 1960s — taxes were high, unions were strong, incomes more equal. And the U.S. economy grew by 3.7% a year. So, Obama seems to suggest, let’s just dial up the economic Way Back Machine — raise taxes on the rich, reregulate industry, boost union power – and we can go back to the future.
But there’s no going back, Mr. President. The post-World War II decades were affected by a host of unique factors, not the least of which was that they came right after a devastating global war that left America’s competitors in ruins. A National Bureau of Economic Research study described the situation this way: “At the end of World War II, the United States was the dominant industrial producer in the world. … This was obviously a transitory situation.”
And as former Bain Capital executive Edward Conard notes in his new book, Unintended Consequences, the size of the U.S. labor force was constrained during those decades by both the 1930s baby bust and casualties from the war. So a surge in jobs and a restricted supply of labor produced fat wage growth. Hoping for a return to that era is futile, Conard concludes:
The United States was prosperous for a unique set of reasons that are impossible to duplicate today, including a decade-long depression, the destruction of the rest of the world’s infrastructure, a failure of potential foreign competitors to educate their people, and a highly restricted supply of labor. For the sake of mankind, let’s hope those conditions aren’t repeated. It seems to me anyone who makes comparisons between todays’ economy and that of the 1950s and 1960s without fully disclosing their differences is deceiving their readers.
Demographics, technology and globalization — has Obama noticed how any of these have changed over the past half century? It was hard to tell from that Ohio speech. Instead of modernizing the American social insurance system, regulatory regime and tax code to shift the Welfare State into an Innovation State, the president seems to be doubling down on an obsolete economic model where growth is driven by expanding public sector union employment and a clean-energy version of industrial policy.
Looking backward — and drawing the wrong conclusions — is no way to move forward.
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Comments:
Sep '11
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
I've always thought of him as a new Huey Long.
Obama's an early 1930's labor strike. Mitt's one of those mid-century modern homes- you know the ones that are 70% glass and have space wings?
Jul '11
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
We're gonna party like it's 1939!
-E
May '10
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
Every lefty whoever tries to argue his position starts history at 1945. Yep, you can get along for quite a while with oligopolistic businesses and monopoly labor working together to push up prices and freeze out competitors as long as your country is the industrial colossus of the world and every other former power is on economic life support.
I wish that just once they'd start their data quotations with, say, 1870.
Sep '11
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
The collectivism v. individualism argument was around in early Egypt, I am sure.
Nov '10
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
I would like to focus on the statement "the market can't solve all of our problems". Isn't that a bit like saying "trees are made of wood"? Yes we know that the market can't solve all of our problems But does that mean we need ever expansive government? I would turn the table and say "The government can't solve any of our problems."
Sep '11
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
That's the basis for all of their arguments-
Things aren't PERFECT this way , so let's destroy everything .
Apr '12
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
I'm gonna say he's even more outdated that that - his characterizations of business are typical of late 19th century perceptions.
Jul '11
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
First of all, what "consensus"? "Consensus" about what? That we should cut federal spending by 50% or so? Because that's what happened, and bang - economic growth out the wazoo. So if that's "consensus" in the 1950's, can we pretty please now apply some of that wonderful, magikal, forward-leaning-if-not-entirely-stooping thinking right now, Barry?
Barry, take a chance. Take a chance on me. I'm the Market. I've worked since before you never had a job. Like full-on eons ago, brother, so let me do what I do best. Just head on back to that college or whatever, and leave the heavy lifting to those who have spent a lifetime doing it, not talking about it, and mis-representing realities in order to stay in a comfy place, continuing to lie about how the world works.
It's ok. It's not your fault, and no, you can't blame this on Bush, too. It's just that you've spent most of your adult life in college, and when in the hell has that ever taught anyone anything useful?
Jul '11
Re: It's Obama, Not Romney, Who's Stuck in the 1950s
"...United States was the dominant industrial producer..."
Part of the reason why our industry was dominant was the amount of capital equipment that had been produced as part of the war effort. The lathes, mills, and grinding machines that were paid for by military contracts were still nearly new and available for making peacetime products.
At a time when the rest of the world was a huge market for almost all of the products that make a modern industrial economy, American industry was sitting on a treasure trove of industrial machinery. That kind of machinery lasts a long time. Much of it was still going strong in the early 1970s when I first worked in an industrial machine shop. As recently as ten years ago I was working in a shop where a WWII vintage grinding machine was being used in refurbishing large aircraft landing gear. The machine had been puchased used, and had been rebuilt for much less than the cost of a new machine.
That cost advantage in machine tools is one factor that no longer exists, and is part of why we cannot go back to a 1950s economy.