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“Americans surprised when their economic and political system worked exactly in line with historical trends.” What did we expect? That the year 2000 was magica

“Americans surprised when their economic and political system worked exactly in line with historical trends.” What did we expect? That the year 2000 was magically going to bring about a golden age?

jfengel 2y ago
It definitely brought about a lot of positive changes. It's fair to be disappointed that some of the things we hoped for didn't materialize, and that a lot of negatives were even worse than expected. The historical trend is for improvements followed by lulls. But we never can predict in advance how far the improvements will go. We do feel that there was a lot left on the table.
- exe34 2y ago
  > The historical trend is for improvements followed by lulls And regressions to the mean. Wealth inequality and fascism come to mind.
hn_throwaway_99 2y ago
> Americans surprised when their economic and political system worked exactly in line with historical trends. But that's not accurate. Post WWII up until the mid 70s saw an explosion of middle class earnings and relative wealth, and a large shrinking of wealth inequality in the US.
- dmoy 2y ago
  Something to be said for those 70-80% marginal tax rates
  - tetris11 2y ago
    I'm not sure about that. Very little was digital back then. It was far easier to claim lack of earnings back then than it is now, even with the high rates
  - Gormo 2y ago
    Many things to be said for sure, but most of them inappropriate in polite company.
  - hgomersall 2y ago
    Or something against neoliberalism.
    - CaptainFever 2y ago
      Define neoliberalism.
      - hgomersall 2y ago
        The political philosophy guided by neoclassical economics; the political economic philosophy that has governed most public discourse since the early 80s.
        CaptainFever 2y ago
        Thanks for the good-faith answer. For more information: https://www.investopedia.com/terms/n/neoclassical.asp https://www.investopedia.com/terms/n/neoclassical.asp Investopedia seems to agree with you: "Neoclassical economics theories underlie modern-day economics, along with the tenets of Keynesian economics. Although the neoclassical approach is the most widely taught theory of economics, it has its detractors." This surprises me, as I thought Keynesian economics was the main view nowadays ("The central belief of Keynesian economics is that government intervention can stabilize the economy" https://www.investopedia.com/terms/k/keynesianeconomics.asp#toc-what-is-keynesian-economics https://www.investopedia.com/terms/k/keynesianeconomics.asp#...). According to https://www.reddit.com/r/AskEconomics/comments/5wdup7/are_economists_purely_either_keynesian_or_neo/ https://www.reddit.com/r/AskEconomics/comments/5wdup7/are_ec..., however: "The vast majority of all economists today work in the New neoclassical synthesis. This paradigm is essentially a combination of the best ideas from the New Keynesian and neoclassical trains of thought. The idea of separate schools isn't nearly as relevant as it used to be - these days ideas that work get added to the synthesis regardless of where they come from."
        hgomersall 2y ago
        There's not much in so called "New Keynesianism" that Keynes would acknowledge as being consistent with his theories. Be very wary of anything you read on /r/AskEconomics; contributors are regularly banned for asking challenging questions that point out deficiencies with the orthodoxy. It's essentially an echo chamber with the top level replies carefully vetted. What it highlights through that is the deep (and justified) insecurity that permeates the economic orthodoxy. The Neoclassical school is laughably simplistic in its model of the world. To reduce an entire economy, with all its diversity and irrationality, to a handful of variables connected by simple relationships is frankly absurd [1], and really a reflection of economics' physics envy. They make strong claims about how the models are built robustly from micro-foundations whilst ignoring fundamentals such as irrational agents and missing variables, and blithely ignoring important problems such as the SMD result [2] which basically means only a single representative agent and a single representative commodity can be considered (I've seen models that claim much more than this, but practically the higher dimensions are immediately integrated out). That St. Louis fed model is considered advanced because they have 2 representative agents! Moreover, the models don't maintain important invariants, such as stock-flow consistency, that absolutely must be true as a matter of accounting. One might give some allowances for all these theoretical problems if the models validated and made reliable predictions, but when it comes to anything of importance, they're little better than a first order Markov model. It's frankly absurd, and a testament to the power of rhetoric and vested interests, that we've built so much of our political economics on such shaky foundations. There's basically no alternative being seriously entertained in mainstream politics, even on the left, to what amounts to an academic justification for inequality, and that is why we are in the mess we are in, Trump and all. [1] https://s3.amazonaws.com/real.stlouisfed.org/wp/2024/2024-014.pdf https://s3.amazonaws.com/real.stlouisfed.org/wp/2024/2024-01... [2] https://en.m.wikipedia.org/wiki/Sonnenschein%E2%80%93Mantel%E2%80%93Debreu_theorem https://en.m.wikipedia.org/wiki/Sonnenschein%E2%80%93Mantel%...
- tempest_ 2y ago
  So we just need a nice all encompassing global conflict again that largely leaves the American industrial base alone and then when it is the only one standing there can be another growth in the American middle class.
  - johnnyanmac 2y ago
    Pretty much. I'm unsure if even American can escape WW3 unscathed though.
  - hn_throwaway_99 2y ago
    This isn't an accurate take, because it wasn't just America. There are lots of post-war "miracle" stories: Italian Economic Miracle: https://en.m.wikipedia.org/wiki/Italian_economic_miracle https://en.m.wikipedia.org/wiki/Italian_economic_miracle Japanese Economic Miracle: https://en.m.wikipedia.org/wiki/Japanese_economic_miracle https://en.m.wikipedia.org/wiki/Japanese_economic_miracle Spanish Miracle: https://en.m.wikipedia.org/wiki/Spanish_miracle https://en.m.wikipedia.org/wiki/Spanish_miracle Miracle on the Rhine: https://en.m.wikipedia.org/wiki/Wirtschaftswunder https://en.m.wikipedia.org/wiki/Wirtschaftswunder In all of these cases real incomes grew enormously. Yes, a big part of that was starting from a low base after the destruction of WWII. But I'd argue it was also a strong consequence of the technology of the time: the was an explosion in consumer goods enabled by new tech, but companies still needed lots of employees to create these products. In the past ~25 years I believe tech has instead allowed more wealth to accrue to a smaller and smaller subset of people.
    - BlueTemplar 2y ago
      Yes, all fueled by ridiculously abundant/cheap oil. This is something that might not happen in Earth's history ever again, not to mention the climate change issues (which at least weren't clear until much later, 80s rather than 50s for oil depletion issues).
  - drchickensalad 2y ago
    Yeah, I'm personally of the opinion that the 50s-60s economical benefits are not generally sustainable. Similar to China's rise up until now, it's the result of a one time boom often as a zero-sum game with other parts of the world. The humans on the planet are definitely getting a more comfortable life over time, but any individual state with our current political systems I don't feel ever leads to that 50s-60s level of purchasing power for a long time.
TheRealPomax 2y ago
If you were alive back then: yeah, pretty much? The expectation was that merely getting a tech education would seamlessly and immediately roll you into a six figure job no matter which industry you were interested in, because much like AI today, tech was literally seen as the magic ingredient that had been missing all this time. Hindsight's cynicism is the enemy of understanding history in this case, obviously there was no golden age, but at the time the graph was going up, and money and not just the promise of an easy life but constant stories of people making it big because of their skills (unlike, say, crypto) made a lot of people go "this time it'll be different". And because in a rare few cases it was, everyone bought into it.
- fragmede 2y ago
  In the year 2000, Google was fresh, the Internet was becoming a normal thing for people to use and it was supposed to get rid of the old power structures and bring about a new age of egalitarianism and meritocracy. Plus I was younger and much more idealistic. And to be fair, it has caused revolutions and caused new power structures to be established, and torn down old ones. But as the old adage goes, it turns out that power corrupts. So meet the new boss, same as the old boss. I'd like to pretend I'd do better with my money if I'd invented PageRank back in the 90's, but having seen how money corrupts people, I'm not convinced that I would.
CalRobert 2y ago
Kind of, yeah. I remember being a teenager in the 90's and it really felt like things were going to be radically different, and better. The cold war was over (well, we thought it was), anybody could talk to anybody else anywhere, anybody could publish anything, and surely this would mean regular people would be more empowered than ever before, right? https://www.eff.org/cyberspace-independence https://www.eff.org/cyberspace-independence was not meant ironically. It's hard to explain how _cool_ Google was circa 2000-2010 or so. How they genuinely seemed a bit cyberpunk and they had figured out how to do cool amazing things and make money and not be evil. Sadly, it was not to be. But maybe I was just a naive teenager.
- Baeocystin 2y ago
  Nah man. That kind of pervasive optimism truly was part of the zeitgeist. Adults felt it as well. Unfortunately, that worldview died with 9/11.
  - CalRobert 2y ago
    I kinda miss when the internet was a small part of my life and felt big, instead of being a big part of my life and feeling small.
    - hunter-gatherer 2y ago
      As a 90s teenager myself your comments struck a chord. Very well articulated.
      - CalRobert 2y ago
        Thanks. I don't know how much the internet changed or I changed. Finding some niche forums on Prodigy (so not even the internet) and talking to a small group of people felt a lot different than just going to reddit and finding a forum for whatever random thing I'm looking up.
  - nozzlegear 2y ago

jfengel 2y ago

It definitely brought about a lot of positive changes. It's fair to be disappointed that some of the things we hoped for didn't materialize, and that a lot of negatives were even worse than expected. The historical trend is for improvements followed by lulls. But we never can predict in advance how far the improvements will go. We do feel that there was a lot left on the table.

exe34 2y ago
> The historical trend is for improvements followed by lulls And regressions to the mean. Wealth inequality and fascism come to mind.

hn_throwaway_99 2y ago

> Americans surprised when their economic and political system worked exactly in line with historical trends. But that's not accurate. Post WWII up until the mid 70s saw an explosion of middle class earnings and relative wealth, and a large shrinking of wealth inequality in the US.

dmoy 2y ago
Something to be said for those 70-80% marginal tax rates
- tetris11 2y ago
  I'm not sure about that. Very little was digital back then. It was far easier to claim lack of earnings back then than it is now, even with the high rates
- Gormo 2y ago
  Many things to be said for sure, but most of them inappropriate in polite company.
- hgomersall 2y ago
  Or something against neoliberalism.
  - CaptainFever 2y ago
    Define neoliberalism.
    - hgomersall 2y ago
      The political philosophy guided by neoclassical economics; the political economic philosophy that has governed most public discourse since the early 80s.
      - CaptainFever 2y ago
        Thanks for the good-faith answer. For more information: https://www.investopedia.com/terms/n/neoclassical.asp https://www.investopedia.com/terms/n/neoclassical.asp Investopedia seems to agree with you: "Neoclassical economics theories underlie modern-day economics, along with the tenets of Keynesian economics. Although the neoclassical approach is the most widely taught theory of economics, it has its detractors." This surprises me, as I thought Keynesian economics was the main view nowadays ("The central belief of Keynesian economics is that government intervention can stabilize the economy" https://www.investopedia.com/terms/k/keynesianeconomics.asp#toc-what-is-keynesian-economics https://www.investopedia.com/terms/k/keynesianeconomics.asp#...). According to https://www.reddit.com/r/AskEconomics/comments/5wdup7/are_economists_purely_either_keynesian_or_neo/ https://www.reddit.com/r/AskEconomics/comments/5wdup7/are_ec..., however: "The vast majority of all economists today work in the New neoclassical synthesis. This paradigm is essentially a combination of the best ideas from the New Keynesian and neoclassical trains of thought. The idea of separate schools isn't nearly as relevant as it used to be - these days ideas that work get added to the synthesis regardless of where they come from."
        hgomersall 2y ago
        There's not much in so called "New Keynesianism" that Keynes would acknowledge as being consistent with his theories. Be very wary of anything you read on /r/AskEconomics; contributors are regularly banned for asking challenging questions that point out deficiencies with the orthodoxy. It's essentially an echo chamber with the top level replies carefully vetted. What it highlights through that is the deep (and justified) insecurity that permeates the economic orthodoxy. The Neoclassical school is laughably simplistic in its model of the world. To reduce an entire economy, with all its diversity and irrationality, to a handful of variables connected by simple relationships is frankly absurd [1], and really a reflection of economics' physics envy. They make strong claims about how the models are built robustly from micro-foundations whilst ignoring fundamentals such as irrational agents and missing variables, and blithely ignoring important problems such as the SMD result [2] which basically means only a single representative agent and a single representative commodity can be considered (I've seen models that claim much more than this, but practically the higher dimensions are immediately integrated out). That St. Louis fed model is considered advanced because they have 2 representative agents! Moreover, the models don't maintain important invariants, such as stock-flow consistency, that absolutely must be true as a matter of accounting. One might give some allowances for all these theoretical problems if the models validated and made reliable predictions, but when it comes to anything of importance, they're little better than a first order Markov model. It's frankly absurd, and a testament to the power of rhetoric and vested interests, that we've built so much of our political economics on such shaky foundations. There's basically no alternative being seriously entertained in mainstream politics, even on the left, to what amounts to an academic justification for inequality, and that is why we are in the mess we are in, Trump and all. [1] https://s3.amazonaws.com/real.stlouisfed.org/wp/2024/2024-014.pdf https://s3.amazonaws.com/real.stlouisfed.org/wp/2024/2024-01... [2] https://en.m.wikipedia.org/wiki/Sonnenschein%E2%80%93Mantel%E2%80%93Debreu_theorem https://en.m.wikipedia.org/wiki/Sonnenschein%E2%80%93Mantel%...
tempest_ 2y ago
So we just need a nice all encompassing global conflict again that largely leaves the American industrial base alone and then when it is the only one standing there can be another growth in the American middle class.
- johnnyanmac 2y ago
  Pretty much. I'm unsure if even American can escape WW3 unscathed though.
- hn_throwaway_99 2y ago
  This isn't an accurate take, because it wasn't just America. There are lots of post-war "miracle" stories: Italian Economic Miracle: https://en.m.wikipedia.org/wiki/Italian_economic_miracle https://en.m.wikipedia.org/wiki/Italian_economic_miracle Japanese Economic Miracle: https://en.m.wikipedia.org/wiki/Japanese_economic_miracle https://en.m.wikipedia.org/wiki/Japanese_economic_miracle Spanish Miracle: https://en.m.wikipedia.org/wiki/Spanish_miracle https://en.m.wikipedia.org/wiki/Spanish_miracle Miracle on the Rhine: https://en.m.wikipedia.org/wiki/Wirtschaftswunder https://en.m.wikipedia.org/wiki/Wirtschaftswunder In all of these cases real incomes grew enormously. Yes, a big part of that was starting from a low base after the destruction of WWII. But I'd argue it was also a strong consequence of the technology of the time: the was an explosion in consumer goods enabled by new tech, but companies still needed lots of employees to create these products. In the past ~25 years I believe tech has instead allowed more wealth to accrue to a smaller and smaller subset of people.
  - BlueTemplar 2y ago
    Yes, all fueled by ridiculously abundant/cheap oil. This is something that might not happen in Earth's history ever again, not to mention the climate change issues (which at least weren't clear until much later, 80s rather than 50s for oil depletion issues).
- drchickensalad 2y ago
  Yeah, I'm personally of the opinion that the 50s-60s economical benefits are not generally sustainable. Similar to China's rise up until now, it's the result of a one time boom often as a zero-sum game with other parts of the world. The humans on the planet are definitely getting a more comfortable life over time, but any individual state with our current political systems I don't feel ever leads to that 50s-60s level of purchasing power for a long time.

TheRealPomax 2y ago

If you were alive back then: yeah, pretty much? The expectation was that merely getting a tech education would seamlessly and immediately roll you into a six figure job no matter which industry you were interested in, because much like AI today, tech was literally seen as the magic ingredient that had been missing all this time. Hindsight's cynicism is the enemy of understanding history in this case, obviously there was no golden age, but at the time the graph was going up, and money and not just the promise of an easy life but constant stories of people making it big because of their skills (unlike, say, crypto) made a lot of people go "this time it'll be different". And because in a rare few cases it was, everyone bought into it.

fragmede 2y ago
In the year 2000, Google was fresh, the Internet was becoming a normal thing for people to use and it was supposed to get rid of the old power structures and bring about a new age of egalitarianism and meritocracy. Plus I was younger and much more idealistic. And to be fair, it has caused revolutions and caused new power structures to be established, and torn down old ones. But as the old adage goes, it turns out that power corrupts. So meet the new boss, same as the old boss. I'd like to pretend I'd do better with my money if I'd invented PageRank back in the 90's, but having seen how money corrupts people, I'm not convinced that I would.

CalRobert 2y ago

Kind of, yeah. I remember being a teenager in the 90's and it really felt like things were going to be radically different, and better. The cold war was over (well, we thought it was), anybody could talk to anybody else anywhere, anybody could publish anything, and surely this would mean regular people would be more empowered than ever before, right? https://www.eff.org/cyberspace-independence https://www.eff.org/cyberspace-independence was not meant ironically. It's hard to explain how _cool_ Google was circa 2000-2010 or so. How they genuinely seemed a bit cyberpunk and they had figured out how to do cool amazing things and make money and not be evil. Sadly, it was not to be. But maybe I was just a naive teenager.

Baeocystin 2y ago
Nah man. That kind of pervasive optimism truly was part of the zeitgeist. Adults felt it as well. Unfortunately, that worldview died with 9/11.
- CalRobert 2y ago
  I kinda miss when the internet was a small part of my life and felt big, instead of being a big part of my life and feeling small.
  - hunter-gatherer 2y ago
    As a 90s teenager myself your comments struck a chord. Very well articulated.
    - CalRobert 2y ago
      Thanks. I don't know how much the internet changed or I changed. Finding some niche forums on Prodigy (so not even the internet) and talking to a small group of people felt a lot different than just going to reddit and finding a forum for whatever random thing I'm looking up.
- nozzlegear 2y ago