As each year comes to a close we like to reflect on the past. Optimists will count their blessings while pessimists express their fear of what the future may hold. We live in a world with many problems, but how does our current situation stack up against the problems of those who have gone before?
My father passed away a little over six years ago as he approached his 91st birthday. As with most elderly folks I have known he would frequently refer to the “good old days” and how the world was “going to hell in a hand basket.” I would listen and acknowledge all the current problems he articulated, but then I would ask “What was the world like for most of your life, those “good old days?”
I would then do a brief review of history for each decade of his life starting with 1911-1920. (He was born in 1913.) I found that this review not only changed his perspective, but it was useful with clients as well. Fear of the future can destroy a well-structured investment plan.
So let’s take a look at the past and then ask, “Are things really so bad today?”
World War I— 15 million deaths and 20 million wounded.
Influenza— 50–100 million people perished.
The Roaring Twenties were a period of strong economic growth and a higher standard of living, but nothing close to the life we enjoy today.
The Great Depression- Personal income, tax revenue, profits and prices dropped, while international trade plunged by more than 50%. Unemployment in the U.S. rose to 25%, and in other countries it was as high as 33%.
“Let the good times roll!”
World War II- 50-70 million deaths.
The first use of weapons of mass destruction.
The Cold War began.
“Were these the “good old days” you were talking about Dad?”
A period of strong economic growth, but now I can speak from my own memories. Racism was an accepted social norm. Pollution was so bad rivers would burst into flame, and the air in some cities could choke you if you were not accustomed to the pollutants.
As children we lived in fear of a nuclear war and were taught to “duck and cover” under our desk at school, as if that was going to protect us from a nuclear blast.
The Vietnam War tore the country apart while claiming more than 50,000 American lives, and over a million Vietnamese lives. President Kennedy, Martin Luther King and Bobby Kennedy were all assassinated. Violent political-protests were commonplace throughout the country.
A two-year recession and eight years of anemic economic growth sent the unemployment rate above 10%, mortgage rates to 17% and the inflation rate to 13%.
This 20-year period should perhaps be called The Golden Age of the U.S. The U.S. Stock Market averaged a gain of 15.3% while inflation averaged only 3.6%. The Cold War ended with the collapse of the Soviet Union, an absolutely great time to be an American.
Perhaps we all were spoiled by the prior 20 years, and we set our expectations to high, but “relatively speaking” we are at peace, our environment is cleaner, our life expectancy continues to advance and our standard of living could not have been imagined by anyone, even 40 years ago.
As I look back over the past century I realize that prior generations overcame challenges that are hard for me to comprehend, and they have given us a better world than they had. So as we give thanks this holiday season for all the blessings we have received let’s have a little confidence in ourselves to make this world an even better place.