Not just the economy, stupid

The linkage of contentment with prosperity is too simplistic for contemporary America

December 22, 2010|By Andrew L. Yarrow

It's become a commonplace to equate Americans' sour mood with economic hard times, at least since Bill Clinton's "It's the economy, stupid" in 1992, and before that Jimmy Carter's 1979 "crisis of confidence." Indeed, the nation's current unhappiness and anger are widely attributed to the worst economy since the Great Depression. After all, weren't happy days here again, at least for many, in Ronald Reagan's mid-1980s and President Clinton's late 1990s? And, who rightfully wouldn't be unhappy if they lost a job, took a pay cut, watched the stock and housing markets collapse, and saw their benefits dwindle?

But does — or should — the economy so profoundly define our happiness? Certainly, poll results about whether the country is "headed in the right/wrong direction" closely mirror surveys of Americans' satisfaction with the economy. Yet, only a quasi-Marxist or an extreme anti-Washington, anti-incumbent politician would so emphasize economics as the measure of American well-being.

There are a lot of other things going right and wrong with the nation: We're living longer than ever; our lives are rimmed with the benefits of high technology; rights have been extended to ever more Americans; crime is much lower than 20 years ago. Alternately, our schools are not turning out enough well-educated students; many families are broken or fragile; and our moral and spiritual lives seem shallow. Shouldn't positive and negative factors such as these affect our mood at least as much as GDP, employment, trade, housing, and other economic indices? We should avoid the trap of Henny Youngman's old joke: "What good is happiness; it can't buy money."

The deep link between our economy and our contentment is reasonable but also a historical and cultural creation of post-World War II America. Prior to the 1940s, macroeconomic statistics were nonexistent or fuzzy estimates, and no one really knew how much income was or wasn't rising or what percentage of able-bodied Americans were working. That all changed with the pioneering work of economist Simon Kuznets and others in the 1930s and 1940s on national income accounting and other economic measurements. Prior to the 1940s, GNP was unheard of and economic growth was an unmeasurable abstraction.

These economic statistics might have remained in the bowels of government or university economics departments, if not for the powerful effects of culture. Beginning in the 1940s, one thing was going particularly right for the United States: While the Cold War and nuclear tensions loomed and civil-rights struggles and red scares cast a pall over our ideals of justice and equality, the U.S. economy enjoyed an unprecedented, 30-year boom in which a rapidly "rising tide" truly lifted all boats, in John Kennedy's famous words.

As a result, government, business and media leaders started peddling a host of newly available economic statistics to show how great life was in postwar America. Headlines read "classless abundance for all," and politicians and business touted a "new America" of "people's capitalism." Economically, they were largely telling the truth — something we can't be so sure of about economic pronouncements today — and Americans happily bought the message that if the economy was forever improving, life must be pretty good. Moreover, since incomes were growing for virtually all, economic growth united Americans as a paramount national goal.

In short, economics became the way to measure American success.

This worked swimmingly until more recent decades, such as the 1970s, when stagflation hit, and the 2000s, when the economy all but failed to grow. It also worked well when most Americans enjoyed the fruits of increasing prosperity, something that has not been the case during much of the last 30 years, when incomes of the wealthy have soared while those of the middle class have barely increased. The Eisenhower-Kennedy-era "people's capitalism" turned into today's "some people's capitalism."

So, we're stuck with the same mindset, the same equation of economics and happiness, of the glory days of the mid-20th century even though we live in the less economically glorious days of the early 21st century. Given the likelihood that, at best, the United States will experience only modest growth in the near future, if we want to be a less sour nation, we need to rethink our metrics of American success. We should be more thankful for what's going right and more worried about other things going wrong, without ignoring our serious economic problems.

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