In the quest to comprehend our current economic landscape, analysts and historians often turn to different historical periods for insights. While the late 1970s, with its concerns of stagflation and a robust Federal Reserve response, is frequently referenced, a closer examination of the swinging 1960s might offer a more nuanced perspective on a key puzzle of our contemporary era – America’s enigmatic economic mood.
Over the past year, economic and political observers have grappled with understanding why positive economic indicators, such as a record-setting stock market, substantial job creation, and rapidly declining inflation, fail to resonate with the public as expected. The parallels with the 1960s are evident, where a decade marked by the third-longest uninterrupted economic expansion in US history coincided with widespread public pessimism.
During the first half of the 1960s, despite a fabulously performing economy, public discourse seldom focused on economic prosperity. Social unrest and existential concerns took precedence, and the economy only gained centrality in public perception when conditions worsened.
The intricate role of the economy in shaping public consciousness during that time mirrors a contemporary phenomenon that perplexes economists – whether Americans’ dissatisfaction with the economy is rooted in genuine pocketbook concerns or if broader social and political issues are influencing their assessment of the nation’s finances.
Presently, consumer sentiment seems to be on an upswing, as indicated by the latest University of Michigan consumer sentiment survey, which reported its highest reading since 2021. However, consumer confidence remains over 20% below pre-pandemic levels, and uncertainties linger about the potential impact of the upcoming contentious campaign between President Joe Biden and former President Donald Trump.
Examining the economic landscape of the 1960s provides valuable insights into our current era. Lyndon Johnson’s “Great Society” program, aimed at eradicating poverty, gained impetus from the flourishing economy. The connection between economic forces and social change was evident in Johnson’s endeavors.
Drawing a parallel, Joe Biden’s administration, facing challenges like the pandemic, the “Black Lives Matter” movement, and concerns about the state of democracy, has similarly emphasized using economic recovery as a catalyst for societal progress. The comparison to LBJ’s era becomes apparent as Biden navigates a period marked by global upheaval.
Both eras shared economic challenges impacting household finances, with rising consumer prices posing concerns in the 1960s. Today, consumers continue to grapple with high prices, although inflation has considerably decreased from its peak in June 2022.
As the 2024 campaign unfolds, reminiscent of the historical year 1968, questions arise about whether the parallels between the two eras will persist. Some potential similarities, such as the location of the Democratic convention in Chicago and a third-party candidacy by Robert F. Kennedy Jr., offer intriguing comparisons. However, caution is advised against drawing too many parallels to the traumatic events of 1968.
Historians underscore important lessons to be drawn from these eras, recognizing that the divisions and tensions evident in the 1960s continue to influence contemporary developments. While America grapples with the aftermath of a historic pandemic, protest movements, and a polarized political landscape, the prevailing sense of gloom – both economic and otherwise – draws a compelling link between the two decades. Professor Anderson notes that the American mood took a decade to change after the 1960s, offering a sobering perspective on the potential duration of the current sense of uncertainty and pessimism.
