Page 220 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

And you have to put all of that in the context of how much fear there was
between Vietnam, riots, and the assassinations of Martin Luther King, and
COBACOBA
John and Bobby Kennedy.

It got bleak.

America dominated the world economy in the two decades after the war.
Many of the largest countries had their manufacturing capacity bombed into

rubble. But as the 1970s emerged, that changed. Japan was booming.
China’s economy was opening up. The Middle East was flexing its oil
muscles.

A combination of lucky economic advantages and a culture shared by the
Greatest Generation—hardened by the Depression and anchored in
systematic cooperation from the war—shifted when Baby Boomers began
coming of age. A new generation that had a different view of what’s normal
hit at the same time a lot of the economic tailwinds of the previous two
decades ended.

Everything in finance is data within the context of expectations. One of the
biggest shifts of the last century happened when the economic winds began

blowing in a different, uneven direction, but people’s expectations were still
rooted in a post-war culture of equality. Not necessarily equality of income,
although there was that. But equality in lifestyle and consumption
expectations; the idea that someone earning a 50th percentile income
shouldn’t live a life dramatically different than someone in the 80th or 90th
percentile. And that someone in the 99th percentile lived a better life, but

still a life that someone in the 50th percentile could comprehend. That’s how
America worked for most of the 1945–1980 period. It doesn’t matter
whether you think that’s morally right or wrong. It just matters that it
happened.

Expectations always move slower than facts. And the economic facts of the
years between the early 1970s through the early 2000s were that growth
continued, but became more uneven, yet people’s expectations of how their
lifestyle should compare to their peers did not change.