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richardhutnik on 23 September 2011
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mrstickball said:
richardhutnik said:

I am pretty sure if you took the factors that came after World War II, it led up to the situation that it had, which is probably abnormal and shouldn't be expected.  What you saw was:

* Frugality from being in a depression

* Development of community thrift and conserving in the name of a war effort.

* Large pent up demand coming off a war.

* Destruction of about every single manufacturing base outside of the United States, so America was the manufacturing center of the world.

Combine these factors together and you get levels of wealth not seen since, which led up to the 1960s, the Great Society and the belief that just enough government involvement (heck the U.S Government helped to win a World War) and there could be Utopia and no more world problems.  Just keep the tech coming and you will have the Star Trek Federation of Planets utopia (remember that world?) of Gene Roddenbury.  All that got lost in war after war after war.

To be fair though, the boom essentially lasted until government intervened so heavily that markets had to react negatively. Look at all the horrible things Nixon did as president (price controls, gold standard, ect).

Although I agree that the demand from the war, as well as Bretton Woods helped out significantly, I still believe that if we had continued in the spirit of thrift and less government paternalism, we wouldn't have had the stagflation of the 70s and would of continued to grow the middle class.

LBJ deciding to do Vietman and produce a perfect society locally was a driving factor in killing off Bretton Woods.  Back in the day, they declared war on Poverty.  That was the first post-WWII absurdity of something to declare war on.  It was followed up with wars on drugs and terror.  What happened was hubris of the times, believing everything could be perfected and overextending.  I recall seeing an article in Playboy magazine from the 60s where the belief was that all taxes could go away if you taxed religion, and legalized drugs, and maybe tax oil companies higher (I forget the third).  

It is also very likely stagflation couldn't of been avoided in the 1970s, because of the oil crisis resulted in prices spiking, and also economic slowdown.  This is independent of anything else, for the most part.  Well, America building the highway system, and also being a top oil exported, got America addicted to oil.