Sunday, December 04, 2005


Krugman's Monday column is about why American's aren't thrilled about the Bush boom. To me it's rather simple.

I'm just barely old enough to remember the early 80s recession which came at the tail end of the economic upheaval of the 70s, something I studied in fairly large detail throughout my academic career. The 70s were a time when one set of workers were seeing their perceived social contract being demolished as union manufacturing lifers found themselves out on their asses. The early 80s recession hit everyone hard, and while the subsequent recovery and "Reagan boom" wasn't all that impressive except as measured by the performance of the stock market, for a time people perceived that opportunities remained, that their kids could go to college and get nice white collars jobs. It wasn't quite "morning in America" but certainly there were people in the 80s who were making money - not just Gordon Gecko but a lot of the people who worked for him.

The belief in that sort of opportunity fizzled with the Bush I economy/recession. People talk a lot about how the economy had started to recover before the '92 election rolled around, and that's certainly true. It wasn't an especially deep or long recession in any case. However it just cemented a feeling which had been developing over some period of time, that the American economy didn't offer enough opportunities. College graduates who had been promised that they wouldn't have the problem the previous manufacturing generations had were facing rather abysmal starting wages and more importantly rather abysmal career paths. The future just did not look so bright.

The tech boom changed all that. When I graduated college ('93) it was hard to score a job, and when I started teaching ('98-99 or so) people had multiple offers without even applying. The labor market was tight, and opportunities were everywhere. Maybe not everyone would get rich, but everyone would get a good job offering them good experience and improved future opportunities.

We're back now to a period where opportunities are fairly limited, like they were in the late Bush I/early Clinton years. More than that, we're in a period where it's becoming conventional wisdom that "perks" like medical insurance and retirement benefits are unreasonable demands (unless you're Marc Cooper of course) and declining standard of living for many is once again perceived to be inevitable. Not only that, but those "perks" which at least provided security, if not riches, such as quality health insurance are falling out of favor.