Will This Year Be Like 1958 or 1968?

BRANDON J. WEICHERT | THE WEICHERT REPORT

Americans everywhere have been subject to one of the most turbulent years in the country’s relatively short history. A global pandemic that may or may not have been the result of Chinese perfidy. An economic downturn that rivals the Great Depression. Race riots burning our cities down. Societal and political pressures leading to unforeseen changes. Potential for another great power war. As a corollary to that, there’s a potential for another civil war–if you can fathom such a travesty befalling us. There’s also a new space race on, as I document in my new book due out September 15, Winning Space: How America Remains a Superpower. Yes, the United States faces some of the most daunting challenges it has ever come to face.

Far be it for me to challenge the great Angelo Codevilla, who has long warned of a “cold civil war,” but perhaps all of the talk about 2020 being like 1858, the year that basically ensured the Civil War would occur, is somewhat of a stretch. Instead, we may be looking at a replication of either 1958 or 1968. Both years, like 1858, were momentous. And both years, like 1858, were chock full of hazards that few Americans even a year before were aware of.

Why 1958 or 1968 rather than 1858?

Well, thus far, 2020 has many similarities to these two years separated by a decade. Like 1958, the United States is an economic downturn (though it is far worse than the recession experienced during Eisenhower’s presidency that year). And like 1958, the Americans are playing catch-up in the new space race (this time, with China rather than the Soviet Union of old).

Despite unemployment reaching seven percent in 1958, because of the inflation rate, those Americans who are employed experience prosperity on hitherto unimagined levels. Income inequality between those who are employed in gainful industries–even between those who do have jobs and those who do not–are a constant factor in politics. In 1958, there were also caustic race riots over the decision to desegregate American schools. Today, there are deadly riots in response to perceived police brutality.

Yet, in 1958, there was hope–real hope–for the future. Like the 2020s, the 1950s would see the slow rise of the next generation of America: the Baby Boomers. In 1958, they were still kids but the progress and innovations–as well as the prosperity–that were starting to come about in 1958 helped to ensure that the Boomers became the most prosperous and upwardly mobile generation in America’s history.

1968 is another important year. That was the year that the country was torn apart by more race riots and antiwar riots protesting the Vietnam War. Lyndon Johnson was the president and it was the year that had the highest casualties from the unpopular Vietnam War. This was also the momentous year that LBJ, riven with grief and fear about his political future, opted not to run for reelection, setting the stage for the return of Republican Richard Nixon to the White House.

The Smithsonian magazine describes 1968 as the “Year That Shattered America.” At this point in time, the space program was afoot and the Americans were poised to defeat the Reds in the race to the moon. New technologies, courtesy of the revolution in computing technology, were coming online as were new innovations that would define the United States–and the world–in later decades.

The key point to take away from both 1958 and 1968–the same patterns which will resonate here in 2020–is that these two years were years of serious change. Whereas 1958 set the country up for a dynamic decade that initially promised economic growth as never before; national security dominance; and societal change, 1968 took these same factors and warped the trajectory of the country from one of positive change to, basically, self-destruction.

Today, in 2020, we stand both at the precipice of self-destruction as we did in 1968 but also the possibility of an American revitalization not seen since the postwar decade in 1958. The Baby Boomers, who have been the dominant group in socioeconomics and politics, are reaching the end of their dominance. For most generations, this process would have happened 10-15 years ago. Thanks to advances in medical science, the Boomers’ great aggregation of wealth and power, the Boomers have managed to stay dominant an average of 10-15 years beyond what previous generations were able to do.

But medical science and wealth could only extend the longevity of the Boomers’ power for so long. What we are witnessing in 2020 is the long-delayed shift in power from Boomer to the next generation (Gen X-Millennial-Zoomer). Had the power shift occurred as it had on time scales similar to previous generations, the shift would have explicitly started around 2004-05. Yet, the shift was mostly deferred to a later, unknown date, meaning that society ticked on autopilot, leading to some fairly catastrophic events, both in the near-term (Great Recession of 2008) and also in the long-term (mostly arrested development of an entire generation by at least a decade).

The shift is happening in earnest now.

The reason I say that we could be at the precipice of a major revitalization of our economy is not only because, until the outbreak of the novel coronavirus from Wuhan, China, the United States under President Donald J. Trump was embracing economic policies of growth and opportunity, but also because we are set to experience the greatest transfer of wealth from wealthy Boomers to their grown children. As the Boomers pass on, their money will transfer to the next generation, which might very well become the basis of a new spate of investment, which might spur new rounds of innovation and another economic expansion.

Here’s Mark Hall of Forbes:

Baby Boomers, the generation of people born between 1944 and 1964, are expected to transfer $30 trillion in wealth to younger generations over the next many years. This jaw-dropping amount has led many journalists and financial experts to refer to the gradual event as the “great wealth transfer.”

And,

So, when this $30 trillion starts to change hands, what will this mean for everyone else?

The answer is complex and will be different depending on who you are and how much of that money is controlled by you, your parents or grandparents. Still, the effects will be far-reaching and will create opportunities for everyone.

What’s more, the coronavirus has forced something that the Boomers had resisted for more than decade: remote workplaces. Long resistant to the kind of total change in society, notably work environments, that the internet was bound to create, the Boomers no longer have the ability to shrug off the natural and inevitable changes. James Altucher has predicted (much to Jerry Seinfeld’s chagrin) that a large chunk of people living in his hometown of New York City, for example, are set to abandon the overpriced and overcrowded city as riots terrorize the streets and the coronavirus response shuts down any real economic opportunities there.

Courtesy of Fox Business Network

As work becomes more remote, in Altucher’s postulation, it will be increasingly clear to those (usually younger) New Yorkers that they no longer are bound to the high cost-of-living city–or even the outlying suburbs. Thanks to the internet and the embrace of the New Age mobility it can allow for, one can work from anywhere in the country and do what must be done in as efficient an amount of time as they could from their dreary old cubicle at the brick and mortar (or steel and glass) office buildings they used to spend the majority of their waking hours in.

When this Great Migration reaches critical apogee (and it will because it cannot be stopped now), many of the young workers from the cities who were struggling to get by will suddenly find their wages go much farther in rural, small-and-medium-sized-town America. From that point, many of the young people–who are either staggeringly single or painfully childless, even well into their 30s–will likely begin to get settled in ways their parents and grandparents had done in generations past (admittedly at earlier stages in life).

Thus, the flowering of America’s Heartland will continue apace and a rebirth and equalization of the country will have been achieved.

What’s more, Edward Glaeser’s 2012 book, Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, Happier can finally be declared, like so many supposedly “pop-economics” books, totally off-base and irrelevant. So, thank you, COVID-19 for that one, I guess.

Should the country embrace the 1958 model as opposed to the 1968 model, then, the policies of the last four years will be needed. All of the hallmarks of a resurgence and revitalization of America’s ailing socioeconomic situation are in the offing today. We just have to have the temerity to give the changes we are set to enjoy over the next decade time to mature. Coming out of the 1958 recession, the United States was well positioned for economic growth and innovation of the 1960s. Something similar could happen if we do the right thing and keep our heads about us as an electorate.

Compare this to 1968. Not only was the aforementioned social turmoil and political instability present, but there was also economic damage. According to Robert M. Collins who wrote the 1996 book, The Economic Crisis of 1968 and the Waning of the ‘American Century’, 1968 saw the “most serious economic crisis since the Great Depression” befall the United States. That was the year that the postwar economic boom came to a crashing halt. According to Collins, 1968 saw a major speculative run on gold (Time Magazine, according to Collins’ book ran a cover story calling it “the largest gold rush in history”).

So, 1968 was not only a time of terrifying socio-politico change but it was also a terribly bad time for the economy. Crises compounded upon one another until the country came stumbling out of the 1960s battered and bruised. We landed men on the Moon and beat the Reds there, but we also basically lost the Vietnam War and were made to endure the morals of Woodstock for the rest of our lives on some level, with promiscuity, drug use, and family breakdown, etc. becoming ubiquitous, even the new normal.

1958 and 1968 had much in common. What changed was the way that the American electorate reacted to the challenges. Today, 2020 stands in a similar way to those two years in the previous century. If we vote the wrong way in 2020 we will ensure that 2020 becomes more like 1968–and that would spell certain doom for the rest of the decade. I cannot stress this enough: the revolution in our society spurred on by COVID-19 could easily work to the advantage of young people looking to start families and live relatively normal lives, with decent paying jobs but working remotely. The diffusion of wealth from the gilded cities to more prosperous, cheaper parts of the country could revitalize and rebuild the Heartland in ways previously believed to be impossible.

Or, we can keep clobbering each other and exacerbate the income inequality by feeding into the failed policies of the last century; by trying to cling on to the dead dreams of city life. I prefer 1958 to 1968, personally.

How about you?

©2020, The Weichert Report. All Rights Reserved.

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