[justinmk]

> because the US no longer rewards loyalty in either the public or private spheres

The comfort of 1950s US was an accident of the WW2 windfall resulting from our happy position as the creditor for most of Europe. Pointing to that accident as a model for future progress is childish.

[Amezarak]

Can you explain to me how the federal government being a creditor to European nations after World War II ensured happy times for employee/employer relations? If creditor/debtor status of the federal government makes such a difference, why didn't the massive US federal debt (around 110% of GDP) negate that creditor status? This argument has never made sense to me since a) most European countries had almost fully recovered by the mid-50s, yet this boom lasted much longer, b) our exports (and imports) were way down during the post-war period and basically irrelevant c) the loans were mostly inflated away. I don't understand what mechanism would have had the observed effect.

If anything I'd have thought the wage and price controls from WWII were a bigger factor, since in the absence of higher pay, companies had to offer more benefits and cultivate better relationships with their employees to keep them around - and there seems to have been a lot of inertia from those policies.

[anigbrowl]

US federal debt was largely domestically held. Also 'most European countries had almost fully recovered by the mid-50s' seems quite wrong to me as a European. Certainly, they had functional economies again and cleaned up the mess of the war, but that's hardly a full recovery. European countries were paying off war debt far longer than that too. The US had a huge economic advantage for several decades.

Things like price controls and the GI bill and the Cold War all helped in their way, but I'm not sure that that's a formula you can deploy going forward.

[pcrh]

After WWII, the US was pretty much the only functioning manufacturing nation for a decade. In addition, new markets opened up to US manufacturing due to the dropping of trade barriers with, and competition from, the markets of the British and French Empires as well as Japan. This advantage also lead to faster technological development in the US compared to other markets for a while.

These advantages slowly eroded as other economies were rebuilt. They nevertheless lasted well into the 1970's.

[Amezarak]

While that might have helped the domestic manufacturing market, international trade was not a substantial part of the US economy for a long time - in 1950-1960, imports and exports were 4-5% of GDP (with exports usually just barely north of imports.) They're triple that today. The pre-World War II import/export statistics aren't much different from the post-World War II import/export statistics, but the economy was much different. I don't see how any argument about international trade can apply, based on the data.

After all, it's not just competitors that are gone, it's customers too.

[FD3SA]

That, in combination with the ~50% tax rate on income and capital gains. Turns out, when you redistribute wealth, consumption increases so rapidly that the economy takes off.

That no longer is much of an option, as wealthy individuals have not only managed to reduce capital gains to ridiculously low levels, but also diversified their holdings throughout the globe. This makes taxation a poor tactic, as capital will just flow to tax havens as the rate increases.

Turns out that feudalism is the natural state of man, and reprieves from it are quite temporary anomalies.

For those interested in details, Thomas Piketty's Capital is an excellent reference on the subject. Also, the movie Inequality for All is a far more approachable presentation based on the book.

[fennecfoxen]

Naaah. The post-war revival in the economy was largely a result of having dismantled the FDR New Deal and its attendant control economy. No, not the Social Security part or anything like that - the part where politicians and regulators thought competition was bad for consumers, and spent the decade propping up their preferred cronies with price controls and selective bailouts and other such nonsense. With the politicians, of course, receiving ample campaign contributions in return. Taxes still damage the economy, it just turns out there are things that can damage an economy more than taxes. :)

Ah, the New Deal, when our leaders thought they could lead us out of famine and into prosperity by burning crops. Birthplace of big-agribusiness! Et cetera.

[djur]

Most of the price control/cartel parts of the New Deal were partly or entirely dismantled before the war. Of course, a new set of price controls were set up during wartime, but those were not New Deal programs.

What survived from the New Deal were the Keynesian stimulus programs, which were generally very successful, lasted through the war and up through the '70s, and some to this day.

[CamperBob2]

Turns out, when you redistribute wealth under specific historical circumstances that no longer prevail, consumption increases so rapidly that the economy takes off.

[hagbardgroup]

I disagree with you in part, but would rather not debate it online.

[x0x0]

I think it was more we where one of the few advanced economies not bombed into the ground.

[coldtea]

And yet the US has had far more wealth the next decades, per capita and in aggregate (adjusted for inflation) that it ever had back then, right?

So it's not like the new ruthless environment is a result of budgetary restrictions.

[hagbardgroup]

Sorta. It is too complex an issue to debate in detail on HN without a formal moderator. You are grasping an important part of it.