As part of my post-bacc program to get elementary teaching certification, I have to take a course in American History, which I haven't studied since high school. As I do my reading, I have been struck by how many issues through history still resonate in 21st century America. Many of the political/ philosophical debates and sociological trends that are going on today have their roots way in the past. Rather than survey all the "discoveries" I have made while relearning history from an adult rather than adolescent point of view, I want to focus on one argument made in my textbook (American Past and Present, Brief 7th edition; Divine, Breen, et al). Follow me over the fold and I'll explain why I do not feel the recession is really over, or if this one technically is, why another "adjustment" even bigger is looming.
Today's history reading is about the beginnings of the 1930s Great Depression, and the precursors of the 1920s that led to it. The authors of the textbook boil down the reasons for the Great Depression to this: "...At bottom people simply did not have enough money to buy the consumer products coming off the assembly lines." The increases in factory productivity in the 1920s did not produce corresponding increases in wages and purchasing power, much as recent American and worldwide productivity increases have not resulted in wage increases.
Where did the money that didn't go to wages in the 1920s go? Into profits, dividends, and stock market speculation. Last year it seemed as though the collapse of markets in derivative trading and and stock default swaps had humbled the financial sector, but now it looks as though little has really changed, and instead we are all watching eagerly for the stock market to rise, not really caring on what basis the increase is founded. At the heart of it though, I suspect there are still too many consumer goods, too many houses being built. At some point, almost everyone has a flat screen tv, a cell phone, a computer, and sales only come from built-in obsolescence or marketing-driven desire for the newest thing. At some point, everyone who can afford a shiny new home in the suburban development with stainless steel appliances has gotten one (or has tried to and ended up in foreclosure). "...At bottom people simply did (do) not have enough money to buy the consumer products coming off the assembly lines." Not without increasing their share of consumer debt, anyways.
I don't see any quick and easy answers to this problem, though moving in the direction of green energy is probably a good start. In order to fuel another round of economic growth, there needs to be some technological development that results in entirely new products and that revolutionizes life just as the computer has. Maybe that means hydrogen powered vehicles, green energy homes, or maybe what we need is beyond my limited imagination. I don't think, however, a Google based cell phone, or Windows 7, or more but slightly smaller McMansions will take us to the next technological "revolution". Maybe we can spin our wheels until that revolution takes place, or maybe there's going to be more bad times before that happens.