You have /5 articles left.
Sign up for a free account or log in.
An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy by Marc Levinson
Published in November of 2016.
I was totally wrong about Trump. I never thought that he’d get elected. My failure to anticipate the potential of Trump’s Electoral College victory has caused me to doubt my own ability to analyze and predict. This loss of confidence is not good for someone who basically makes his living by making arguments about the future.
Maybe if I had read Marc Levinson’s superb new book, An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy, before the election then I would have been less surprised by the results.
The reason that I did not read An Extraordinary Time until this month, (it sat on my Wish List for a couple of months), is that I thought that I knew the post-1973 economic story well. Hell, I’ve lived the post-1973 economic story - having been born in 1969 and having spent my working life navigating the busts and booms that define our age. Plus, I had recently read Robert Gordon’s magisterial The Rise and Fall of American Growth (see my review here), and I wasn’t sure that I was up to getting depressed all over again about our economic future.
It turns out that Levinson has lots of new things to teach us about recent economic history.
The big lesson from An Extraordinary Time is the progressive policies tend follow, rather than cause, economic growth. Public policy that is aimed at providing widespread opportunity, such as investments in postsecondary education or commitments to improving population health, depend on the relative abundance that is created by a strong economy. Strong wage gains and low unemployment (not to mention the expansion of affordable quality housing) in the 1950s the 1960s provided a foundation for policy changes, (such as the creation Medicare and Medicaid), and the space for social progress (such as the Civil Rights Movement).
Looking at the Trump election through the lens of recent economic history, it is understandable for economic and political retrenchment to go hand-in-hand.
Levinson shows how the intellectual foundations for the modern welfare state - one of progressive taxation and the goal of providing some measure of economic security to the most vulnerable - depended on an improving economy made possible by rapid improvements in productivity. Since 1973, America has struggled with declining productivity gains (for reasons that are still somewhat obscure), as well as rising energy costs and the pressures of economic globalization. Secure jobs with good wages for non-college educated workers have disappeared, a trend accelerated by the decline of private sector unions.
The strong economy of the 1960s allowed LBJ to pursue a policy of guns and butter (the War on Poverty and the war in Vietnam). It will be interesting to see if our current fragile economy allows Trump to pursue his stated goals of guns (big increases in defense spending) and bridges (big increases in infrastructure spending). How Trump plans to pay for both bridges and butter without dramatically increased public borrowing, while simultaneously doing away with the progressive taxation structure, is a mystery.
An Extraordinary Time provides a well-balanced (and surprisingly entertaining) tour of global economic and political history since 1973. What the book does not offer are any predictions about the economy of the next few decades.
One lesson that is clear from this excellent book, however, is that much of America’s economic growth in the post-war era can be attributed to the extraordinary investments that our country made in expanding public postsecondary education.
An educated workforce, rather than trade barriers or the government choosing particular industries to protect, is a necessary long-term catalyst for productivity growth.
I have no confidence, alas, that the Trump administration will grasp the connection between investing in education and economic growth.
Excellent book. Highly recommended.
What are you reading?
