Why the 1960s can help us understand our confusing economic mood
Economic observers and historians are often casting about for different historic eras to help understand our current landscape.
The late 1970s come up frequently at the moment, with its fears of stagflation and an aggressive Federal Reserve response providing clear echoes to today.
But perhaps the swinging 1960s is a better lens to help unpack at least one key puzzle of our current era: America’s funky economic mood.
Economic and political observers have spent a good part of the last year trying to understand why a parade of good economic news — from a record-setting stock market to millions of new jobs to rapidly falling inflation — simply isn’t being reflected with the public in the way observers expect.
The parallels with the 1960s here are clear. That decade saw a combination of the third-longest stretch of uninterrupted expansion in US history with widespread public pessimism.
In the first half of the decade “the economy was just fabulous during the 1960s and nobody really talked about it,” says Terry Anderson, a history professor and author of a textbook on the era.
Social unrest and more existential concerns were far more pressing issues, Anderson added, with the economy not becoming central in the public imagination “until it got bad.”
Indeed, inflation was soon to intrude on the public consciousness. Economic worries stemming from rising prices seen later in the decade proved to be a drag on the public mood right alongside the more well-remembered worries of the era.
“Society is a whole cloth,” says professor Leonard Steinhorn of American University, adding that “the economy is one of those threads and in the ’60s it was certainly a thread even if it was not always the most visible thread.”
The complicated role of the economy in the public consciousness at the time points to a similar phenomenon that divides economists today. Are Americans currently upset about the US economy for good pocketbook reasons? Or are they are importing concerns about social issues and politics into their assessment of the nation’s finances?
At the moment, our current mood appears to be on the upswing, with the latest University of Michigan consumer sentiment survey showing its highest reading since 2021. But it has a long way to go, with consumer confidence still more than 20% below pre-pandemic levels.
It’s also yet to be seen whether what is a likely nasty campaign to come between President Joe Biden and former President Donald Trump — a matchup that polls show few Americans want — will further drag down the national mood.
How the economy shaped the 1960s — and our current era
The economy of the 1960s shaped that decade’s highs and lows to an extent that is perhaps underappreciated today and also echoes current trends.
A key impetus for Lyndon Johnson’s “Great Society” program to eradicate poverty was the sense that the flush economy made it possible, historian Heather Cox Richardson recently documented in her book “Democracy Awakening.”
“LBJ could afford to direct [the country] towards greater things,” she wrote.
Then-President Johnson linked his efforts to the economy when, in a 1964 speech at the University of Michigan, he implored graduates to help make social change instead of just money.
“There are those timid souls who say this battle cannot be won; that we are condemned to a soulless wealth,” he said. “I do not agree.”
Fast-forward to today and there are clear echoes in how Joe Biden and his team acted upon taking office. Biden’s motto of “Build Back Better” suggested using economic forces and the recovery from the pandemic as a way to make social change.
And as Biden labored to pass legislation around things like infrastructure, green energy, and economic development early in his term, the comparisons to LBJ were seemingly everywhere.
He, like LBJ, presided over a period marked by tumult. For LBJ it was the Vietnam War and the Civil Rights Movement. For Biden, it was a global pandemic, a “Black Lives Matter” protest movement, and fears that democracy itself is at risk.
While many cheered on the social changes happening in both eras, it also led to fretful public moods. Greg Ip of the Wall Street Journal has also documented the parallels between the two eras and highlights a remarkable observation from essayist Joan Didion.
“The market was steady and the G.N.P. high,” she wrote in a 1968 essay on the counterculture, adding “it might have been a spring of brave hopes and national promise, but it was not, and more and more people had the uneasy apprehension that it was not.”
The eras also shared an economic challenge directly aimed at pocketbooks: rising consumer prices.
Professor Steinhorn says a key data point to remember is how it was 1967 when Gallup first asked Americans about the most urgent problem facing themselves and their families.
Their top answer? Inflation, which had been creeping up since 1965.
Consumers remain concerned about the high prices of our current age, although inflation has declined considerably from a peak of 9.1% in June 2022.
It remains certain to be a central 2024 issue. Just in the last week, Republicans continued to signal that the lasting effects of price hikes will be a central election theme.
Will 2024 end up being remembered like 1968?
Perhaps the largest unanswered question when drawing a comparison between our two eras is whether 2024 has a chance of being remembered in a similar vein as 1968, a year that was iconic for its social upheaval.
Some comparisons are sure to prove irresistible in the months ahead.
One of the darkest moments of 1968 was that year’s Democratic convention in Chicago, where images of police battering anti-war protestors proved far more resonant than anything said at the convention hall itself.
This time around, Democrats are set to again hold their convention in the windy city.
The 2024 campaign could also be impacted by Robert F. Kennedy Jr.’s third-party candidacy. The assassination of his father on June 6, 1968, was another moment of national trauma still studied today.
But historians like Anderson and Steinhorn caution against drawing too many parallels to that traumatic year of American history marked by riots, war, and the killings of RFK and Civil Rights leader Martin Luther King Jr.
“We are involved in two worldwide conflicts but we do not have our young men and women fighting in them. We do not have, at this point, cities being burned. We have not seen the assassination of two of our greatest Americans,” Steinhorn said.
But there are still important lessons to be drawn, he added.
“In a larger meta sense, you can say that the divisions that were becoming evident and magnified and exacerbated in those years are playing themselves out right now,” he says, noting that the roots of everything from Donald Trump’s electoral coalition to modern liberalism take seed around 1968.
For Professor Anderson’s part, a key point of comparison between the eras is a pervasive sense of gloom — economic and otherwise — that has pervaded the public mood in both.
America in the 1960s was rattled by the war in Vietnam and the social movements of that time. It is similar today, the thinking goes, as America is still finding its feet after a historic pandemic, its own protest movements, and a divided politics that appears likely to get worse.
Anderson offers a sobering note about how long it took the American mood to change after the 1960s.
“It took a decade,” he says. “I’m sorry to tell you that.”
Ben Werschkul is Washington correspondent for Yahoo Finance.
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