Democrats’ Future
The July 3 article on the Democrats’ divided economic vision contains an overly simplistic explanation for the growth of the U.S. economy in the period 1947-1973. The explanation that it was the result of the economic policies of the Democratic Party ignores two powerful forces that were at work in the same time period.
The first is that as a result of the destruction of World War II, the United States had little or no foreign competition for its manufactured goods; we could sell almost anything we made irrespective of the quality and price. This advantage faded and largely disappeared in the 1970s.
The second is that, contrary to what everyone knows, agricultural exports and raw materials, not manufactured products, have been the principal consistent contributors to the nation’s net favorable balance of trade. For a variety of reasons, there was a worldwide collapse of commodity prices and commodity exports in the early 1980s. Peter Drucker’s “The New Realities” contains a good account of what happened.
R.B. ORMSBY
Newhall
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