Great Expectations

As the politicians posture over the budget, Americans sense that something deeper has gone wrong. They're right. Robert J. Samuelson examines the exaggerated hopes and fears of the Age of Entitlement--and what our leaders must do to instill a sense of reality. ..MR0-

The paradox of our time is that we are feeling bad about doing well. By objective standards, the last half century of our national life has been hugely successful. We have achieved unprecedented prosperity and personal freedom. We are healthier, work at less exhausting jobs and live longer than ever. Government provides a safety net for the elderly and poor that never before existed. Many discriminations-based on race, sex or religion-have diminished sharply. In short, America has become a vastly better place. Yet, we disparage our leaders and despair at our prospects. There's an immense contempt for politicians, corporate executives and other leaders.

It is this free-floating gloom that is now the great unspoken issue of the 1996 election. In earlier elections, our angers have focused on identifiable grievances: Vietnam, Watergate, high inflation, a deep recession. But today's discontent is different. It is roving and (it seems) indestructible. It skips from grievance to grievance -threatened living standards, besieged social programs, corrupt "special interests"--but it never dissipates. People sense something fundamental has ended, and they're fearful of an unseen future. The acid test of this election is whether the candidates can honestly deal with this shapeless anxiety or whether they simply pander to it.

The endless and often petty wrangling between the White House and congressional Republicans over the budget is not an encouraging sign. Both sides seem more interested in posturing than confronting the underlying issues of government versus individual responsibility. The ritualistic political exchanges don't speak to Americans' deeper fears. For popular intuition is correct; something fundamental is ending. It is an era in our history, and as it fades away, we are being stripped of its reassuring assumptions and securities. The political process responds best to dear problems and conflicts. Battle lines can be drawn, arguments marshaled, solutions proposed. But our discontent is not of this type, and one danger is that politicians will offer up stylized scapegoats--"liberals," "conservatives," "overpaid executives" and the like-to explain our frustration. The recriminations will further stir public rancor without truly addressing the source of our anxiety.

Call our era the Age of Entitlement. Stretching from the close of World War II to the mid-1990s, it is best defined by its soaring ambitions. We had a grand vision. We didn't merely expect things to get better. We expected all social problems to be solved. In our new society, most workers would have rising incomes and stable jobs. Business cycles would disappear. Poverty, racism and crime would recede. Compassionate government would protect the poor, old and unlucky. We expected almost limitless personal freedom and self-fulfillment. We not only expected these things. After a while, we thought we were entitled to them as a matter of right.

What frightens and infuriates us now is that we haven't arrived at this new, improved America. We feel betrayed and bewildered, because our flawed society falls so far short of the one we visualized. Constant "corporate downsizing" spawns mass job insecurity. Congress's budget debate-and possible cuts in programs like Medicare and Medicaid--feeds fears that the social safety net is about to be savaged. And reactions to last year's O. J. Simpson verdict exposed wide racial divides. America lacks so many things that we expected. What happened to our American dream?

It turned out to be a fantasy. Our imagined society was a utopia. It was too perfect to happen, and the belief in its practicality has created the social equivalent of the mechanical bunny-something constantly chased and never caught. It presumed that we could engineer a perpetual economic boom (which we can't) and that such a powerful prosperity would automatically erase all social and personal problems (which it wouldn't). But the absence of this idealized society--and its comforting certainty and order--is the basic wellspring of popular disillusion. Other explanations are mostly convenient lightning rods for our diffuse dissatisfactions.

Take the common claim that living standards have stagnated or even fallen since the 1970s. It's true that growth has slowed, but stagnation hardly describes the explosion of new products that has benefited millions of Americans since 1970: the profusion of VCRs, personal computers, cable TV, microwave ovens. Since 1970, air travel has roughly tripled, an increase 10 times the rise in population. In the same period, the share of adults who are college graduates doubled, from 11 to 22 percent (table, page 27). Indeed, for all our angst, the economy is doing fairly well. Since 1985, it's created 18 million new jobs and expanded its output by nearly 30 percent to $7.1 trillion. And accelerating improvements in productivity growth (output per hour) imply higher future incomes.

We're told we're being overwhelmed by social problems and strains. Well, we have plenty of domestic ills, and some are worse than they need be. But they also tend to be exaggerated. Violent crime--though still appallingly high--has recently receded. There's even some little-noticed improvement in race relations. Studies ask blacks and whites if they have a "close personal friend" of the other race. In 1981, 69 percent of blacks and 54 percent of whites said yes. By 1989, those figures were 80 and 66 percent.

Indeed, it is possible to overstate Americans' discontent. When asked, about four filths of us say we are satisfied with our personal lives. This ranks the United States among the most contented of nations. In a survey, only Iceland scored noticeably higher, though a few other countries (Canada, Germany) were equally happy. By contrast, only 64 percent of the French and 60 percent of the Japanese find their lives satisfying. But what defines our pessimism is the loss of one particularly American attribute: confidence in the future. When asked how "the next generation of children will live," 60 percent of us believed their lives will be worse. Only 23 percent of us think they will be better. What worries us is the future we didn't create.

Is it fair to blame our political leaders for not constructing this utopia? On one level, obviously not. They can't be blamed for what can't be done. But on another level, the blame is deserved, because leaders of both parties, stretching over decades, are heavily implicated in our hyper-expectations. They peddled visions of the perfect society and promised more than they could deliver The result is a cycle of cynicism. Promise regularly exceeds performance, and voters conclude that all politicians are dishonest.

The promise of entitlement was not only false but ultimately disruptive. It subtly subverted personal and institutional responsibility. There was a growing tendency for everyone to look somewhere else for solutions to their largest problems. Government looked to a surging economy to pay for new programs. Companies looked to government to prevent recessions. Workers and families looked to corporate and government welfare benefits to guarantee their security and living standards. The interconnections and mutual dependencies are unavoidable, but they were taken to undesirable extremes.

If our leaders are to break the cycle of cynicism, the 1996 campaign will have to be different. It won't do to propose agendas that purport to address all of Americans' anxieties. No politician can do that. We need more candor about what government can and can't do. And we need teaching, not just preaching. The fatal defect of our postwar vision-entitlement--was that it rested on a dreamlike concept of progress. We expected that life in all its aspects would constantly improve. Our present extreme pessimism is merely the mirror image of this earlier extreme optimism. Neither is justified. To regain our confidence, we need to understand how entitlement came about and why it could never succeed.

To say that we feel entitled is not to say that we came to this feeling at one decisive moment in 1945. Our postwar sensibility emerged over three decades as a result of the Great Depression, World War II and the early postwar decades of heady prosperity. The Great Depression destroyed the then prevailing social consensus that government should be small and that business-what we today call "the market"could be counted upon to create and sustain prosperity. The horror of the Depression discredited business and overwhelmed private charities. But Franklin Roosevelt's New Deal did not prove that government was the answer, either. It did not decisively end the Depression. In 1989, the unemployment rate was still 17 percent. What ended the Depression was the war. It forced business and government to work together at the truly prodigious production of weaponry. Unemployment was virtually eliminated and, despite rationing, average living standards probably rose.

The war effort gave Americans a new model for national improvement: an unstated alliance between business and government. Government would set broad national goals (as in the war) to be met by the bounty of business (as in the war). And early postwar affluence solidified faith in the consensus. In the late 1940s, many Americans feared another depression. It didn't happen. By the millions, families moved from crowded cities into more spacious suburbs. Their homes were increasingly jammed with new appliances. In 1945, television was almost unknown. By 1960, nearly 90 percent of households had one. The postwar recessions (in 1948,1958 and 1957) were nothing like the Depression. The worst unemployment occurred in 1958, when it averaged 6.8 percent. By contrast, the average for the entire decade of the 1930s had been 18 percent.

It is hard to overstate the impact of so much unexpected prosperity on the psyches of Americans. To the children of the baby boom, born between the mid-1940s and the early 1960s, it made perpetual prosperity the norm: something they took for granted. To older Americans, it signaled a new and wonderful era in which old anxieties about job security and inadequate incomes were being banished. Relieved from economic uncertainty, people would be free to pursue happiness. Social problems would be swept away on a tide of rising prosperity.

We began to see most national problems as miniature wars. Just as in World War II, almost any problem could be defeated with ample resources and the proper strategy. In this sense, problem-solving (and not liberalism or conservatism) became our dominant postwar ideology. Politicians argued over which problems could be solved, how and by whom. But the debates concerned means more than ends. If problems could be solved (and most could), they would and should be solved. We were entitled to solutions. We had more and more faith that American management and technology, whether wielded by corporate executives or government social engineers, could do almost anything. And so this confidence naturally spawned a vision of a society in which most serious problems would be relentlessly eliminated.

The practical shape of this new society was never outlined in one document, but it slowly fixed itself in popular consciousness. Government, relying on economists, would end disruptive business cycles through policy changes. Meanwhile, Big Business would grow enlightened. We visualized the spread of the Good Corporation: companies like IBM or Delta Air Lines that married efficiency and social responsibility. They would provide good wages, job security and generous fringe benefits (health insurance, pensions, vacations). Thus, most workers would realize the benefits of Europe's welfare state through corporate welfare. Finally, the robust economy would allow caring government to solve any remaining problems- whether attending (through the social safety net) to the old, disabled or unlucky; or policing (through regulations) any business abuses.

In the early postwar decades, we seemed to be advancing effortlessly toward this perfect society. Wages rose, fringe benefits burgeoned, government expanded, poverty declined. But then the process slowed or stopped. Since the late 1960s, we have had five recessions, two of which were severe (those of 1973-75 and 198182). In late 1982, the monthly unemployment rate hit a postwar peak of nearly 11 percent. Along the way, inflation rose and fell, reaching a high of 13.3 percent in 1979. Income growth slowed, the poverty rate stagnated and budget deficits ballooned. Meanwhile, the Good Corporations retreated under competitive pressures, forcing firms like General Motors and Digital Equipment to resort to large layoffs. Finally, many social indicators got worse. Crime rose, and family breakdown (more divorce, out-of-wedlock births) became more apparent.

Superficially, our problems seemed rooted in slower economic growth. Certainly, everything got worse when the economy got worse. Corporate stability was imperiled. Higher poverty and crime rates called for more government help, just when government could help less. But, actually, the explanation is far more complicated. Entitlement was based on a false analogy. In fact, all economic and social problems are not like wars. Wars have beginnings and ends, victors and vanquished. Clarity ultimately asserts itself. This was especially true of the defeat of fascist Germany and Japan in World War II, which to Americans demonstrated the superiority of their system. Unfortunately, not all domestic problems can be beaten so decisively. Many (crime, poverty, racial conflicts) are permanent. They may get better or worse, but they don't go away.

Compounding this error was an equally mistaken view of the economy. President Kennedy once likened it to a great "machinery" that, tended properly, could always be kept "moving ahead." Increasingly, that's how Americans came to see it as well. Economic and business management were technologies, like bridge building. Well, not exactly. Again, the analogy was wrong. The economy is no machine. A more revealing image is that of a vast river, where fish and plants flourish and perish and where occasional floods occur. In much the same way, the economy moves by rhythms of growth and decay. Some industries thrive; others decline. We can influence these rhythms, for better or worse, through government policies and business practices. But we can't abolish them entirely.

They are simply part of market capitalism, dominated by profit-driven firms and private consumers. Instability, insecurity and excess are inherent. People and companies blunder. They overborrow or overinvest. Spending does not proceed in a straight line. The result is the business cycle, with its sometimes unpredictable ups and downs. The same process of trial and error generates higher incomes and living standards. New technologies and business methods displace old ones; more efficient firms replace the less efficient. Economist Joseph Schumpeter termed this churning "creative destruction." In short, the things that Americans want most from the economy-higher incomes and more security--are often at odds. An economy that provides total security is not one in which Intel and Microsoft (and the personal computer) can topple IBM (and the mainframe). It is not one in which Toyota can compel Ford to lower costs and raise quality. The process can be harsh and crude, and although some suffer, more benefit.

The notion that all this could be controlled was a mirage. Economists intent on abolishing the business cycle thought they had the tools to do so. Computerized forecasts would show whether the economy was slowing or "overheating." Countermeasures could then be taken (lower interest rates, tax cuts or spending increases for recession; the reverse for inflation). The image was that government could "step on the gas" or "apply the brakes" to stabilize economic growth. But in practice, steering was hard. Forecasts often proved imperfect. A recession or burst of inflation would be missed. Even when economists knew what to do, presidents and congresses often disregarded their advice--or adopted only the pleasant parts. This made policy inflationary. It was easier to lower taxes, raise spending or lower interest rates than to do the opposite.

The conceit that modern management made the Good Corporation inevitable rested on equally false beliefs. It presumed that large firms were uniquely efficient and that only they, through their size and sophistication, could exploit new technologies. "Entrepreneurs"--romantic figures who created new products and enterprises-were relics. But it is simply not true (and never was) that entrepreneurs were an extinct economic species. Postwar America is littered with their successes: Ray Kroc started McDonald's; William McGowan challenged AT&T with MCI; Sam Walton overtook Sears with Wal-Mart. Innovation is not (and never was) the monopoly of major Corporations. The modern copying machine was pioneered by a then-small firm, Xerox. Finally, big firms are not (and never were) uniquely efficient. Often, quite the opposite. Their size abets costly bureaucracy and sloppy practices, making them more vulnerable to new competition.

Still, one wonders: why did Corporate America, which had seemed so successful and stable in the 1950s and 1960s later become so convulsed? A partial answer is that the earlier picture of tranquillity is exaggerated. Even then, there were setbacks. The best-known were Edsel and Penn Central: the first was Ford's illfated new car of 1957 (it was discontinued); the second was the bankruptcy in 1970 off.the then largest railroad (it had overborrowed to diversify). But the larger answer seems to be that many big companies were hit simultaneously by similar forces: harsh recessions, new competitors and the legacies of past overconfidence-poor products and high costs. Beginning in the 1970s, profit margins (profits as a share of sales) plunged. In the 1950s, they averaged nearly 17 percent; by the 1980s, they were less than 9 percent (chart). The declines triggered waves of cost cutting, including layoffs. If companies hadn't cut costs, they faced market loss, hostile takeovers or even bankruptcy.

The intoxicating faith in a perpetual boom did more than warp our view of the economy. It also transformed politics and spawned a giddy sense of personal possibilities. Government began to operate on the assumption that resources, if not infinite, were nearly so. Future costs would be covered by new tax revenues, which would flow from faster economic growth. Today's budget deficit would become tomorrow's surplus. Thus reassured, government could spend more on the old, the poor, the cities and the schools. In 1965, Congress enacted Medicare and Medicaid: health insurance for the old and poor. In the early 1970s, President Nixon dramatically expanded food stamps. In 1972, Congress indexed social-security benefits to inflation. Buoyant economic growth would reconcile Americans' historic dislike of government with their postwar taste for more government.

Of course, it didn't quite work out that way. The result has been the politics of over-promise. By making more promises than it can keep, government systematically generates distrust. People who get benefits often find them inadequate- or fear they may be cut. People who don't receive benefits often resent those who do. Almost everyone fears higher taxes. The irony is that, as government has grown, popular esteem for it has fallen. The more it does (or promises to do), the more chance it has to offend. By the 1990s, roughly 90 percent of Americans found the federal government wasteful. There was less suspicion in the past, despite Americans' traditional mistrust of government. A 1941 poll asked whether there was "too much power in Washington"; 56 percent of the respondents said "no." In 1965, a poll asked whether the federal government "does too much for people"; more Americans still said "no" than "yes."

Too much was expected of prosperity as a cure for social ills. Money cannot transform human nature, nor neutralize all social upheavals. For example, the stagnation of the poverty rate since the early 1970s stems heavily (though not exclusively) from two trends largely disconnected from the economy: the explosion of single-parent families with low incomes; and a huge inflow of poor immigrants. Other problems are similarly resistant. If prosperity cured crime, there would be less crime than a century ago, when America was poorer. In fact, crime has increased. In 1900, the murder rate was about i per 100,000 people. Now it is about 10 per 100,000. Whatever the causes of the surge of violent crime since the 1950s-drugs, family breakdown, TV and the availability of guns are common theories--they have defied rising prosperity.

Prosperity was also supposed to set us tree to pursue the good life. But the explosion of choices has not been the unalloyed good that we once imagined. Consider women's greater freedom to move from housework to paid work, which was greatly enhanced by the advent of washers, dryers, dishwashers and other appliances. Once this change was seen as unqualified "liberation." Now there is more ambivalence. Many mothers feel torn between staying at home with their children and taking outside jobs. The point is not that one choice is good and that the other is bad. It is that genuine choices, by their nature, involve giving up as well as receiving. But in the expansiveness of the times, we ignored or minimized such conflicts.

Finally, our sense of entitlement also accentuated some social divisions. Of course, many of our most fundamental conflicts are enduring ones. The race problem started with slavery, and in one form or another, "women's rights" have long been an issue. But people have grown increasingly dependent on government benefits, ranging from crop subsidies to social-security checks. Inevitably, government distributes these benefits by group--to the elderly, to the disabled, to farmers or veterans, blacks or women. The effect has been to strengthen a sense of group identity that transcends ordinary citizenship and at times is rivalrous. Personal responsibility is diminished and a culture of dependency and "victimology" takes over. People expect government to solve all their grievances, economic or otherwise, and blame government when it fails to deliver.

By now, it's obvious that we can't have it all. Not all the resulting entitlements and "rights"--or expectations of entitlements-can be fulfilled. Some are mutually inconsistent. Expanded government benefits for some can't be had except at the cost of higher taxes for others or higher budget deficits for all. Affirmative action implies preferences for jobs or contracts for blacks, women or other minorities that threaten those who don't have such preferences. Universal job security threatens the economic flexibility that underlies higher incomes. And a little faster economic growth won't noticeably affect the rate of out-of-wedlock births or remedy many other social problems.

It is the cumulative weight of all these dashed expectations that now presses down on Americans' self-confidence. The social glue that bound Americans together in the 1950s, 1960s and even the 1970s-- when much else actually divided us-was the common vision of our imagined future. The loss of this vision now undermines our cohesion. Americans seemed more satisfied in the 1950s and 1960s not only because their incomes were rising faster but also because the gains contrasted with Depression-dampened expectations. Because we then bought into the idea of perfect affluence, we calibrated future wants to incomes that, to our surprise, haven't materialized. Worse, we imagined that these incomes might buy almost anything, as if everything of value in life has a price. "We are in a period of every man and every woman as an aristocrat," the writer Tom Wolfe once said. "In every walk of life people more and more feel free to indulge themselves in the whims, the instincts, the freedoms that formerly only aristocrats dared to assume." We were entitled-except that we weren't.

No one familiar with American history can say that our present predicament is novel. We go through cycles of strenuous striving, followed by periods of disillusion. This is our national temperament. The late historian Richard Hofstadter once put it this way: "A great part of both the strength and weakness of our national existence lies in the fact that Americans do not abide very quietly the evils of life. We are forever restlessly pitting ourselves against them, demanding changes, improvements, remedies, but not often with sufficient sense of the limits that the human condition will in the end insistently impose upon us." Precisely that has happened to us since World War II.

We blurred the distinction between progress and perfection and made plenty of the first but, naturally, failed to attain the second. The central question that hangs over the 1996 election is whether our political leaders can help us to come to terms with America as it is--and not as we imagined it would be. Will we learn from experience and, as a society, move on? Or will we continue to try to do the undoable and, when we inevitably fail, continue to flail ourselves and our leaders?

Undoubtedly, the new post-entitlement society is often a cold shower. A more competitive economy keeps pressure on wages, generates greater income inequality (table, page 80) and fosters more job insecurity. Government is edging away from some social programs. But the extent of the changes can be exaggerated. Most middle-aged workers still have career jobs. (Indeed, studies disagree on just how much job stability has been lost; one finds a modest amount, several others almost none.) The notion that most people's incomes and living standards are stagnating or declining is simply false. Not only is it contradicted by the outpouring of new consumer products and services. It is also contradicted by official statistics, which, once corrected for slight overstatement of inflation, show sizable gains. No one knows precisely the extent of the overstatement of inflation. A good guess is 10 to 20 percent over the past two decades, which means that incomes are understated by that amount. Further, some income gains have gone into fringe benefits (such as health insurance) or the collective good (such as a cleaner environment).

The same alarmist hype has unduly upset those who depend on government benefits. Whatever happens in the budget debate, most major programs (Medicare and Medicaid, for example) will not only survive. They will grow. Still, we face difficult choices trying to reconcile our needs and wants with our ability to pay. To say that government can't solve all our problems doesn't mean that government doesn't play a huge role in our daily lives. It matters just how much-and how--the government aids the poor. Can states do a better job than the federal government? Or will they progressively scale back protections on the possibly pious theory that being more stingy will make the poor more self-sufficient? And other issues affect even more Americans. Given that more than a third of federal spending now goes to the elderly (mainly through social security and Medicare), the retirement of the baby-boom generation in the next century will make these costs soar. If benefits aren't curbed, federal taxes and/or budget deficits will explode.

In one way or another, most modern societies face comparable pressures. Governments everywhere are overextended. People neither want to surrender benefits nor pay the taxes to support them. Compared with Europe's, our problems seem modest. In 1995, government spending in the United States (at all levels) equaled $4 percent of gross domestic product, estimates the Organization for Economic Cooperation and Development in Paris,, By contrast, it was 50 percent in Germany, 54 percent in France and 67 percent in Sweden. With unemployment at nearly 11 percent, Europe has probably passed the point where oversized government hurts economic growth and job creation. And recent strikes in France, triggered by the government's proposals to cut its budget deficit, emphasize the huge potential for social strife if these issues are allowed to fester too long.

Will we wait until that happens?

It's hard to know. Politicians like to tell people what they want to hear, and what they want to hear is what won't happen: that all their expected entitlements--whether private or public, whether legal or merely informal--will somehow be met. President Clinton no longer has a coherent agenda, ff he ever did. Mainly, he favors everything that might make people feel good and opposes anything that might make them feel bad. He (reluctantly) supports a balanced budget while denouncing proposed congressional cuts in popular programs like Medicare, Medicaid and food stamps. Clinton exploits these issues without illuminating the practical choices government faces. By action or inaction, choices will be made. All the things that Americans want (generous benefits, lower taxes, no deficits) aren't compatible.

Republicans are generally more candid, but in many ways, the choices they pose are also misleading. To curb federal spending, they admit that even popular programs like Medicare can't be spared. But the proffered reward from all this tough-minded discipline-a much smaller government that will allow deep tax cuts-is a mirage. The "tax cut" in their 1995 budget plan is tiny, only about 2 percent of government revenues. Even ff benefits are cut, the aging population will exert upward pressure on total spending. Government's size isn't likely to shrink much, ff at all. Despite anti-government rhetoric, Americans support the specific programs (social security, Medicare, environmental regulation) that keep government big. Most Republicans have yet to face the contradiction between their rhetoric and the underlying social consensus.

We are caught between the promises and expectations of the past and the insistent social and economic conditions of the present. Sooner or later, something will give. It must. Either we will revise our expectations or condemn ourselves to constant disappointment. R seems quite possible that Americans will gradually recognize that their situation is not as dire as it's constantly portrayed. They will see their economy is fairly robust and that, although it cannot eliminate stark inequalities, it can provide jobs for most people and gradually raise most people's incomes. It seems possible that more demanding social policies will reduce welfare dependency and out-of-wedlock births. And it seems possible that the long-range problems of an aging society will be prudently addressed and that we will grope our way to a new consensus about government in the messy way that we often do.

All this is plausible, but perhaps no more so than a much grimmer picture. In it, today's discontents mushroom into much larger schisms tomorrow. Government can't mediate between the young and old. Competition for mutually exclusive entitlements escalates, as do mutual recriminations. Groups feel more victimized and search more vigorously for villains to explain their victimization. Family breakdown breeds more crime and family breakdown. Civility and our sense of national cohesion continue to fray, and the sense of common ideals and purpose that binds America together is increasingly lost and forgotten. And without this underlying unifying force, the vast differences that have always characterized American culture--in religion, ethnic background, race and geographic interests-increasingly assert themselves to pull society apart.

History cannot be foretold. No one knows which of these visions will occur--or, more likely perhaps, whether something else entirely will happen. But what is certain is that the postwar era is over. In it, we expected tomorrow always would be better than today. With better as the destination, there was never any arrival and a continual frustration over the endlessness of the journey. That's often been the American experience, and that's how it was in the Age of Entitlement.

Adapted and excerpted from "The Good Life and Its Discontents: The American Dream in the Age of Entitlement 1945-I995," by Robert J. Samuelson (298 pages. Times Books. $25).

Today's America has little in common with the country that emerged triumphant from World War II. The last 50 years have seen great economic, cultural and technological shifts in American life, most for the better, but some for the worse.

                              1945          1970            1995

Population             132 million   203 million     263 million

Life expectancy               65.9         70.8          75.7[c]

Per capita income (1987     $6,367       $9,875       $14,696[c]

constant dollars)

Adults who are high-        25%[a]          55%           81%[c]

school grads

Adults who are college       5%[a]          11%           22%[c]


Households with phones        46%           87%           94%[c]

Households with

televisions                    0%           95%           98%[c]

Households with cable TV       0%            4%              59%

Women in labor force          29%           38%           46%[c]

Annual airline          7 million   170 million   538 million[d]


Poverty rate              39.7[b]         12.6%          14.5[c]

Divorce rate (per             3.5           3.5              4.6

1,000 people)

Children born out            3.9%         16.7%           31%[e]

of wedlock

a 1940 FIGURE. b 1949 FIGURE. c 1994 FIGURE. d ESTIMATE. e 1993 FIGURE.


Since 1970, rising wage inequality, an increase in immigration and more single-parent families have increased the income gap between the very rich and the very poor.

Poorest fifth                       2.9%

Second fifth                        7.0%

Third fifth                        13.9%

Fourth fifth                       21.5%

Richest fifth                      31.3%

Richest 5%                         35.3%[*]


Feelings of disappointment have devastated faith in national leaders and institutions. In 1966, 42% of Americans had a "great deal" of confidence in Congress. In 1994, only 8% did.

                              1966      1975      1985      1994

Congress                       42%       13%       16%        8%

Executive branch               41        13        15        12

The press                      29        26        16        13

Major companies                55        19        17        19

Colleges, universities         61        36        35        25

Medicine                       73        43        35        23