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HomeFinanceLearning from history: How this all happened

Learning from history: How this all happened


The older I get, the more interested I am in history.

When I was young, history and myth seemed to be interchangeable to me. To ten-year-old me, there was little difference between, say, Abraham Lincoln and the Greek gods sitting atop Mount Olympus. All of it was abstract stuff that happened to imaginary people long ago.

Somewhere along the way — in my late teens, I think — history began to seem relevant. During my junior year of college, I took a course on Pacific Northwest history and my eyes were opened. I could see in my own life how events decades ago (or hundreds of years ago or thousands of years ago) created the actual world in which I lived my day-to-day existence.

Now that I’m firmly entrenched in middle age, history has never seemed more relevant.

And one of my most common complaints — a complaint I’m not shy about vocalizing to my poor friends and family — is that we in the United States seem willfully ignorant of history. We, as a collective, seem to be blind even to recent history, to events that have occurred in my lifetime! So much of our modern strife could be mitigated if we, as a society, paid more attention to our past.

Okay, that’s a l-o-n-g preamble to a simple article summary. But it’s one of my favorite rants, so I can’t help myself.

You see, over at the Collaborative Fund blog, Morgan Housel recently published yet another gem. (Housel is consistently one of my favorite money writers.) In an article called “How This All Happened”, Housel explores the history of the U.S. economy since the end of World War II.

He writes:

If you fell asleep in 1945 and woke up in 2018 you would not recognize the world around you. The amount of growth that took place during that period is virtually unprecedented. If you learned that there have been no nuclear attacks since 1945, you’d be shocked. If you saw the level of wealth in New York and San Francisco, you’d be shocked. If you compared it to the poverty of Detroit, you’d be shocked. If you saw the price of homes, college tuition, and health care, you’d be shocked.

Our politics would blow your mind. And if you tried to think of a reasonable narrative of how it all happened, my guess is you’d be totally wrong. Because it isn’t intuitive, and it wasn’t foreseeable 73 years ago.

Here’s how this all happened.

This is one of my favorite essays from 2021. I like it because it’s Big Picture stuff, but it’s Big Picture stuff analyzed through the lens of how it applies to the Small Picture. It’s a look at how broader economic cycles and changes have influenced personal finance for people like you and me.

I also like that Housel tries to find a thread that ties all of this change together:

A central theme of this story is that expectations move slower than reality on the ground. That was true when people clung to 1950s expectations as the economy changed over the next 35 years. And even if a middle-class boom began today, expectations that the odds are stacked against everyone but those at the top may stick around.

Expectations move slower than reality. That’s a fascinating thesis, but the more I think about it, the more it seems true both at a personal level and a broader societal level.

Anyhow, this is a long essay (about 5000 words), but it’s well worth reading. And although I don’t know Housel, I’m very tempted to reach out to him to see if he’d allow me to record a video version of his article. It seems like the sort of piece that would lend itself well to video footage of the events he discusses. This is exactly the sort of stuff I want to create at the GRS YouTube channel in the months and years ahead.



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