Fred LaSor: Just how well off are we as a nation?
Readers who remember “Y2K” – that point in time when the calendar turned from 1999 to the 21st century – will remember fears of a computer meltdown because programs had long designated the year with only two digits and there was concern that computers would see 00 (designating the year 2000) as meaning 1900. That didn’t happen, but many people held their breath as the century turned.
We’re now starting a new decade – the ’20s, as in 2020. Remember the clappers of the Roaring ’20s? That’s a rhetorical question – it is unlikely any of my readers actually remember the Roaring ’20s, as that would make them more than a century old. Well here we are starting the ’20s again, this time the 2020s.
A number of national commentators have pointed out just how good the past decade was economically and socially, in the United States and generally world-wide. It’s not a popular story for people who want Americans to believe that they are victims and need the government to care for them. But the talking heads are pointing to world poverty that is at an all-time low, a dramatic reduction in epidemics and major disease, and social amenities like health care/education/clean water that are now available to a greater part of the world’s population. Writing for the Foundation for Economic Education, Alexander Hammond points out that “94 percent of the world’s population lived in extreme poverty in 1820… fewer than 10 percent were in that situation in 2015.”
Here at home, the American economy has been doing particularly well. Unemployment is at a historic low (particularly among minorities), wages are rising, and in what has been the longest positive economic cycle in American history, the stock market is up dramatically. “That’s great for bankers,” you say, but in truth it benefits everyone who works for a large business or who has a personal retirement account.
Critics like to say the rich are getting richer while the poor are getting poorer. Economics commentator John Stossel addressed that criticism last year in an Orange County Register column: “In America over the last 40 years, the richest people got 200 percent richer, while poor Americans got just 32 percent richer… so what?” So what indeed. The rich are getting richer, but so are the poor. Despite what some politicians tell us, our economy is not a zero-sum game. And Stossel’s view spans 40 years – more recently the numbers have been even better for the poor.
Just 100 years ago America was riding similarly high. The war to end all wars was behind us, people were leaving the farm in record numbers and flocking to the city, the 19th Amendment gave women the vote, autos and air travel changed the way we thought about distances, and then, too, the stock market was creating millionaires in astounding numbers. Then things began to go south. The economic bubble burst on Black Tuesday, and thousands of investors saw their financial security wiped out in just weeks. The problem was unsecured speculation – investors were leveraged in a way that would not be legal today.
Will we see a repeat of the 1929 crash? A few financial advisers are predicting just that. One I read advises subscribers to sell stocks and buy gold. Another recommends putting your money in Bitcoin, which has actually decreased in value by about one-third since 2017. I think most investment advisers would be more optimistic than those two.
I’m not a financial adviser and won’t give investment advice. I will say I’m happy with the economy over the past decade and want to wish my readers a healthy and prosperous 2020!
Fred LaSor wishes everyone the very best in this new decade.