A Time Magazine Cover Essay—The End of Excess: Is This Crisis Good for America?

Posted by Kendall Harmon

Don't pretend we didn't see this coming for a long, long time.

In the early 1980s, around the time Ronald Reagan became President and Wall Street's great modern bull market began, we started gambling (and winning!) and thinking magically. From 1980 to 2007, the median price of a new American home quadrupled. The Dow Jones industrial average climbed from 803 in the summer of 1982 to 14,165 in the fall of 2007. From the beginning of the '80s through 2007, the share of disposable income that each household spent servicing its mortgage and consumer debt increased 35%. Back in 1982, the average household saved 11% of its disposable income. By 2007 that number was less than 1%.

The same zeitgeist made gambling ubiquitous: until the late '80s, only Nevada and New Jersey had casinos, but now 12 states do, and 48 have some form of legalized betting. It's as if we decided that Mardi Gras and Christmas are so much fun, we ought to make them a year-round way of life. And we started living large literally as well as figuratively. From the beginning to the end of the long boom, the size of the average new house increased by about half. Meanwhile, the average American gained about a pound a year, so that an adult of a given age is now at least 20 lb. heavier than someone the same age back then. In the late '70s, 15% of Americans were obese; now a third are. (Read "What's the Best Diet? Eating Less Food.")

We saw what was happening for years, for decades, but we ignored it or shrugged it off, preferring to imagine that we weren't really headed over the falls.

Read it all.

Filed under: * Culture-Watch • * Economics, Politics • Economy • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • * International News & Commentary • America/U.S.A.

4 Comments
Posted March 28, 2009 at 4:00 pm [Printer Friendly] [Print w/ comments]



1. A Senior Priest wrote:

Excess is a failing intrinsic to human beings (not that we are “made” evil, of course). This economic hiccup, as inconvenient and occasionally tragic as it is, will not change the way people have behaved for the past several thousand years, or will behave until the Messiah comes again.

March 28, 5:55 pm | [comment link]
2. DonGander wrote:

Why doesn’t he address production and utilization of resources?

Does all this wealth just suddenly appear because everyone made the same good bet?  Of course not!

We are in the middle of a great delusion. Please do not park your brains as you turn on TV or read current opinion.

Don

March 28, 7:12 pm | [comment link]
3. TACit wrote:

The crisis is ‘good’ for America in the sense that a wake-up call at 6AM is good for the person who has an 8AM meeting to get to.  Americans’ consumption is obscene and Americans’ willingness to believe that material success and abundance show that God favors us also borders on the obscene.  But, this article is a case of ghastly historical revisionism (and all it needed to remind me of that that was the photo at the top of the screen which appeared to show (?)Jackie Kennedy - is she on the cover?).  The 1960s and ‘Camelot’ courtesy of the uniquely corrupt and high-living Kennedy clan that flaunted their Catholicism and cheated taxpayers left and right was the modern beginning to Americans’ decades of binging whenever there was an opportunity and deserting their religious basis for values.  Not surprising considering that old Joe Kennedy made his fortune bootlegging during Prohibition and then got appointed Ambassador to the Court of St. James for his efforts!  I’m not sure I should go on but I may in a later comment.

March 28, 7:51 pm | [comment link]
4. libraryjim wrote:

Rahm Emmanual sees the crisis as very good, because for him and his political party it is a chance to re-work America after their image without having to work through the political process. They can just push their agenda through as ‘needed stimulus packages’ without any substantial opposition—except from talk radio, and give them enough time, and they will silence that, as well.

March 29, 3:14 pm | [comment link]
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