Thursday, December 31, 2009

The 2000s: A Decade of Prosperity and Perseverance

The new decade begins at the start of 2011 because the first decade A.D. was from the Year One to the Year 10, the second from 11-20, and so on. However, in common parlance it makes sense in the nomenclature of decades to count them differently. For example, although the last decade of the Twentieth Century was from 1991-2000, a reference to the decade of the “Nineties” means 1990-1999.

The first decade of the Twenty-First Century is called “the 2000s” (the “Two Thousands”), just as the first decade of the Twentieth Century is called the “1900s” (the “Nineteen Hundreds”). The second decade will be the 2010s (the “Two Thousand Teens”), just as the 1910s are called the “Nineteen Teens.”

I do not prefer retrospectives of arbitrary periods, but in order to make the point about the true start of decades and their nomenclature, I am taking this opportunity to post about “the 2000s,” which is why I included the term in the title.

It is necessary to refute those historical revisionists who have quickly forgotten the prosperity of just a few years ago by putting the 2000s in proper perspective. An economic downturn began in 2000, after the bursting of the “tech bubble of the 1990s,” but it began to ease after United States President George W. Bush’s tax cuts in 2001, until the September 11, 2001 Terrorist Attacks. The economy gradually rebounded from that blow. It prospered from 2003-2008 – one of the longest periods of economic growth in American history – with strong, steady increases in the gross domestic product, with low interest rates, low unemployment and low inflation. Amazingly, inflation remained tame even after the sharp spike in oil prices in 2005. In contrast to the stagflation typical of the 1970s to the early 1980s, inflation has been low since 1981.

The prosperity of the 2000s is hardly diminished by the Panic of 2008, which has led to a severe recession, just as the Roaring Twenties are remembered as a decade of prosperity, despite the crash of the stock market in 1929 that triggered the Great Depression. Unlike then, when protectionism reduced trade through higher tariffs, the dramatic increase in trade in the 2000s will help lead to economic recovery. Indeed, the end of the 2000s may well be remembered as a time when a depression was averted more so than for the recession that did happen.

Like the 1980s and 1990s, the 2000s reflect a smoothing out of the natural business cycle of boom and bust. The “Reagan boom” was aided by lower tax rates, increased trade, better efficiency and productivity. The same recent recession that reminds us that the cyclical nature of the economy has not been broken will yield to recovery and prosperity, barring significant natural or man-made disasters, that is, unless government policy continues to distort the market. In other words, the current recession reminds us that it is difficult for the economy to remain permanently in a state of equilibrium, of growth without inflation, but it likely would return to it without artificial interference.

It is worth stating the truism that the reason the current recession has caused unemployment to reach levels not seen since 1982 is because the U.S. has been prosperous during that time. The historical revisionists seem to have forgotten that long periods of economic growth – especially without inflation – are extraordinary. Instead of being grateful for the prosperity, a period they should have used to prepare for harder times, they are whining about the recession, which, despite the difficulties it causes, they ought to regard as presenting new economic opportunities.

The prosperity of the Bush era is reflective of the perseverance Americans demonstrated after September 11. I mean that not only did the American people defeat al-Qaeda after September 11 by following the Bush Administration’s advice to continue to shop and to fly on airplanes, and not only by continuing to travel and attending public events, but by refusing to be intimidated into giving in to the terrorists’ demands. Americans also defeated terrorists in many battlefields, militarily and by other means, around the world during the 2000s, which also liberated millions of people from tyranny. The 2000s may be remembered as the time of the turning point of the latest phase of the war of militant Muslims against the world, as long as the United States maintains its resolve to resist its enemies effectively.

Conservatives should not allow liberals to mischaracterize the 2000s by focusing only on the negative for political purposes. Instead, let us remind everyone that although the 2000s were a challenging decade, like most others, they proved the strength of America and the character of her people.

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