That Used to Be Us_ How America Fell Behind in thted and How We Can Come Back - Friedman, Thomas L. & Mandelbaum, Michael [119]
This term comes originally from child psychology. It refers to the developmental stage, beginning sometime after a child turns two, when the child becomes cranky, moody, and willful about almost everything. Pediatricians reassure anxious parents of such cantankerous toddlers that the behavior pattern is normal. They’ll grow out of it. American behavior in the Terrible Twos, by contrast, was anything but normal, and we have not yet grown out of it.
As a country, we lost the plot. We forgot who we were, how we had become the richest and most powerful country in the history of the world, where we wanted to go, and what we needed to do to get there. We failed to update our five-part formula for greatness—education, infrastructure, immigration, research and development, and appropriate regulation—just at a time when changes in the world, especially the expansion of globalization and the IT revolution, made adapting that formula to new circumstances as important as it had ever been. Then we fell into the pit of the Great Recession, while fighting two wars in the Middle East and being the first generation of Americans not only to fail to raise taxes to pay for a war but actually to cut them.
In short, we were the generation of Americans that threw out its umbrella just before the storm. In so doing, we broke with one of the main patterns of American history. “In the past we not only met challenges, we did it in ways that left people in our dust—so as to emphatically assert or reassert our leadership,” said Dov Seidman, the author of How. We did nothing of the sort in the Terrible Twos, and that has left us in very difficult circumstances. “Instead of being twenty years behind, we should be twenty years ahead right now—so we are actually forty years behind where we should be,” Seidman added.
And while the steroid-enhanced sluggers’ achievements remain, at least for now, part of baseball’s record books, the artificially created wealth of the Terrible Twos has evaporated. The numbers don’t lie. On January 2, 2010, as that radical decade was coming to an end, The Washington Post did the math—the real math. It ran an article by Neil Irwin entitled “Aughts Were a Lost Decade for U.S. Economy, Workers,” which is worth quoting at length:
For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different. The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation’s growth. It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism—there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable. There has been zero net job creation since December, 1999.
No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well. Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999—and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s. And the net worth of American households—the value of their houses, retirement funds and other assets minus debts—has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.
The financial shenanigans that produced the meltdown