What went Right in the 1950s?

It is my opinion that America's best years were the 1950s. I admit that I ascribe to the nostalgic feelings of returning to those years when the economy boomed with new inventions, equality for most, and a booming outlook on life. (This is not to say it was all equal, as the racial inequity was as strong as ever and cannot be overlooked. In no way do I wish to return to the racial inequality of that era, but the economic prosperity should be achievable without the racial discrimination.) I have found it beyond ironic that I find agreement with the extremely-polarized Trump-ists to try and return to the prosperity of the 1950s, although I know we likely seek it for very different reasons. 

There were many reasons why the 1950s was such a golden era for America. And in some ways it was just luck that landed the country in such a glorious position within the world's stage. In other ways, strong policy by a well-led government paved the way for our biggest boom years. Regardless, all of the factors played into one another to create a country that excelled in many many ways for many of its citizens.

1st - World War II 

    While the world was not quite 'globalized' by this time, there was still a great deal of connection between the developed countries following World War 2. Europe's economy had practically collapsed due to the devastation of the second world war, with some 70% of its industrial infrastructure destroyed. It would take the countries within Europe more than a decade to rebuild and rebound, leaving room for America to fill in where Europe could not. This not only provided America the opportunity to grow its corporations' reach into markets previously unavailable to them, it also did so with relatively minimal or zero competition. Through the Marshall Plan to reconstruct Western Europe, corporations were able to invest capital into Europe without fear of European companies bidding against them. Likewise, American companies had few, if any, competitors for general goods within their own markets and the growing consumerism of Americans was filled nearly entirely by their own companies.

2nd - Funds to Spare

    The post-war period signaled the largest growth period for America in its history. The adults of the 1950s had grown up in general poverty during the Great Depression and then continued to live under rationing restrictions during World War II. By the 1950s, they were ready to spend! And at last, they had the liquid cash to be able to do so. During this time, the government bonds that had been purchased to help fund the war effort matured, which transferred cash from governments into the hands of American households. Additionally, the GI Bill gave veterans access to affordable college education, and the Housing Act of 1949 made home ownership more readily available for many families (mostly white). Since Americans did not have to deal with rebuilding costs like their counterparts in Europe, they had the freedom to simply spend their quickly-growing funds wherever they liked, leading to a massive growth in consumer demand which fueled the large economic growth for the country. Good paying jobs were both accessible and widely available. More and more companies were created to supply the growing demand, further providing more jobs for the market. And the cycle just kept going.

3rd - High Taxes

    During both world wars, there were strong progressive taxation and capital levies to help distribute the sacrifices required by the wars more evenly. While the tax rates dipped between the wars, they did not return to pre-war levels. And following the end of World War II, taxes remained high. The top marginal tax rate in 1944-1945 reached its highest peak of 94% tax on income above $200,000. This did drop a bit in the following decades, but did not go below 70% until 1981 under Reagan. This extremely high tax rate allowed for greater redistribution of wealth from the wealthy to the needy and helped fuel strong government programs, such as social security, medicare, and the highway building program, as well as the government-sponsored research that would eventually lead to many inventions we now rely on today. Likewise, this allowed President Eisenhower during his tenure to maintain a balanced budget which helped keep inflation under control during the mad spending spree of the general populace.

It is easy to see how so many things went right in the 1950s to create such an outstanding boom period for America. It is also understandable that such perfect conditions may be hard to achieve again, especially in today's disastrous polarized economy. However, of the conditions explained above that provided the booming economy of that era, it does seem that at least one of them could be established merely by choice - Higher Taxes. While the low competition and excess funds available may be hard to come by without extraordinary circumstances, there is no reason that the redistributive high taxes could not be implemented by choice. The only reason they are not is purely due to who holds the power within America currently. And unfortunately, with the way things are going, the longer they hold power, the more power they hold. But that is for another blog post.