Ronald Reagan was president. Michael Jackson dominated the airwaves. "The Cosby Show" was the top-rated TV sitcom. And an American myth was being weaved.
In retrospect, 1988 seems like it was a good year for America. The twin recessions and double-digit inflation of the late 1970s and early 1980s were long over. The economy was growing by more than 4% per year, after inflation. American power seemed to be growing, while the Soviet Union crumbled. Before long, the Berlin Wall would be shattered and the United States would be the world’s only superpower.
Donald Trump's popular campaign slogan -- "make America great again" -- raises an obvious question: If the United States isn't great now, when was it? Trump himself has been inconsistent on the matter. He says he "really liked" Ronald Reagan, except for his trade policies. But the glory days, Trump says, came at the beginning of the 20th century and in the 1940s and '50s, after World War II. Still, the middle class swelled from humble post-war origins into a large chunk of the U.S. population by the 1980s, becoming the repository of the nation's strength and wealth.
Since Trump's evocation of a grander past has clearly caught on, Yahoo Finance asked its readers when they feel America was last great. We did two rounds of surveys: First, we sought open-ended answers on our Facebook and Twitter accounts. Then we narrowed hundreds of responses down to six post-World War II years that each correspond with peaks in the business cycle: 1952, 1962, 1969, 1988, 1999 and 2016. Finally, we posted a multiple-choice poll, asking respondents to choose one year and explain why that was the last time America was great.
The year that drew the most responses was 2016, with 32% of respondents saying America is great now. But 68% of respondents still said America’s greatness is in the past, with the No. 2 answer in our unscientific survey being 1988. Here’s a breakdown of the 5,733 responses to our survey:
Since 1988 came in second, we decided to go back in time and examine how life in America in the final year of Reagan’s presidency compares with the present. On the surface, nostalgia for the late ‘80s is understandable. Globalization hadn’t yet sent millions of manufacturing jobs overseas, and digital disruption was still a decade or two in the future. The pay gap between top earners and those in the middle was far smaller than it is now. There were no iPhones or Netflix shows or Amazon deliveries, but it was still possible to support a family through blue-collar work, on one income in some places.
The 1980s were not universally blissful, however. “We were just getting into vicious elements of the culture wars, terrible things were being said about unwed mothers, and the Confederate flag was flying everywhere back then,” says historian Stephanie Coontz, author of "The Way We Never Were" and several other books. “A lot of this nostalgia takes legitimate criticism of things we need to change or correct in the present, but redirects it to a largely mythical past.”
The myth is that everything was just peachy under Reagan. It wasn’t, yet we tend to airbrush away the more troublesome aspects of the past. Workplace discrimination against women and minorities was more prevalent in 1988 than it is today, and downright blatant in the years Trump idolizes after World War II, before Congress passed the Civil Rights Act of 1964. Mortgage rates were close to 10% in 1988, making it harder to buy a home than it is now. Beyond the economy, the murder rate in 1988 was nearly twice what it is now. And the AIDS epidemic, which would kill more than 650,000 Americans, was intensifying, with effective treatment still two decades off.
Here’s a then-and-now comparison of a few key indicators:
Economically, it might be fair to call it a draw between 1988 and 2016. Certain intangibles, however, seem to favor 1988. “It was a time of peace, prosperity and patriotism,” says historian Gil Troy of McGill University, author of books on both the Reagan presidency and the Bill Clinton years that followed. “America was winning. There was a sense that America was back.” Consumer gizmos becoming popular included the microwave, the VHS player and the personal computer, which might seem ancient today but were cool and empowering at the time. ATMs became commonplace in the 1980s, with free-flowing cash symbolizing the baby boomers’ freewheeling prosperity.
The recent past often serves as a baseline for gauging our quality of life, and many Americans in 1988 could say they were far better off than they had been 5, 10 or even 20 years earlier. The 1970s were a troubling time of double-digit inflation, gasoline rationing and political scandal, topped by the ignominious withdrawal of U.S. forces from the Vietnam War in 1975. During the recession of 1982, the unemployment rate hit 10.8%, nearly a full point higher than the latest peak, in 2009. Reagan’s approval rating in 1983 bottomed at a weak 35%, putting re-election in the 1984 presidential race in doubt.
But the economy recovered quickly after the recession ended in ’82, with total employment hitting a new high in 1984, just 28 months after the prior peak. Many blue-collar workers who had been laid off during the recession went right back to the same jobs once the recession ended. “I can understand why white high-school educated men are nostalgic for the 1970s and 1980s,” says Coontz. “People who work with their hands had a sense of pride in being able to support a family.”
The recovery from the recession that ended in 2009 was completely different, since it was overlaid with the churn and disruption caused by globalization and digitization. It took 76 months for employment to hit a new peak – nearly three times longer than in the early ‘80s -- and many new jobs paid less than the ones that were lost. Incomes, meanwhile, began to stagnate in the early 2000s, while the cost of healthcare and college – key expenses for many families – continued to soar. As a result, many Americans today feel they’re worse off, not better off, than they were 10 or 15 years ago.
Reagan had a rare talent for making people feel good about their country -- matched by no president since – as when he spoke of the nation as a “shining city on a hill” during the 1984 presidential campaign. “He was very effective at singing a mainstream America song,” Troy says. It helped that the U.S. was relatively isolated from the world’s problems during the ‘80s—which is not the case now.
The 9-11 terrorist attacks in 2001 signaled a new American vulnerability, followed by more than a decade’s worth of involvement in two shooting wars with ambiguous outcomes. The rise of Islamic State – with American boots on the ground in Iraq once again, helping combat the terror group – signals ongoing worry about threats to the nation, something that clearly weighs on Americans’ sense of well-being.
There’s no single answer to the question of whether America was a better place in 1988 than it is in 2016. For middle-skill, middle-class workers, there was probably more economic opportunity in 1988. And the nation as a whole faced fewer worldwide dangers. But we’re safer today, in terms of crime, auto fatalities and healthcare improvements. The Internet has opened new worlds to nearly everyone. And it’s still possible for ordinary people to make an honest fortune, provided they have the drive and the right skills.
In his nationally broadcast farewell speech on Jan. 11, 1989, Reagan assessed the status of his shining city on a hill. “After 200 years, two centuries, she still stands strong and true on the granite ridge,” he said from the Oval Office. “Her glow has held steady no matter what storm. And she's still a beacon, still a magnet for all who must have freedom.” There were some Americans who didn’t see their country quite that way in 1989, but do now. And there are others who might have agreed with Reagan back then but are less sure now. Maybe 2016 isn’t so different from 1988 after all.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.