America Hits the Reset Button

The nation’s economic future is not as dire as it seems, Kurt Andersen argues in Reset. The country has been here before—and will survive again.

Mario Tama / Getty Images

Remember the fable of the ant and the grasshopper? The ant is sober and disciplined, the grasshopper eats and plays and parties as if the good times will last forever—and then a killing winter descends. (In some tellings, the grasshopper dies; in some, the ant saves him.) Americans are, God bless us, energetic grasshoppers as well as energetic ants, a sui generis crossbreed, which is why we’ve been so successful as a nation. Our moxie comes in two basic types. On the one hand, we possess those Yankee virtues embodied by the Founders: sobriety, hard work, practical ingenuity, common sense, fair play. But then there’s our irrepressibly wilder, faster, and looser side, that packet of attributes that make us American instead of Canadian: impatient, hell-bent, self-invented gamblers, with a weakness for confidence games, and for blue smoke and mirrors. A certain fired-up imprudence was present from the beginning—sailing across the Atlantic in the early 17th century? In little wooden ships? To fashion radically new lives? In an uncharted wilderness? Crazy, man.

Just as our two-sided national character has always toggled back and forth between its steady and its skylarking aspects, so, too, does our national history run in cycles.

But it took us a couple of centuries for the dreamiest, most extravagant version of the American Dream to take hold of the national imagination. The accidental discovery of gold in Northern California in 1848 provoked a mad scramble by tens of thousands of ambitious fortune seekers from all over America and the world to descend on San Francisco and the nearby hills and valleys. For the first time, there were riches for the plucking by anyone, and no adult supervision. Real life briefly resembled a fairytale.

And ever since, we Americans have been repeatedly wont to abandon prudence and the tedium of saving and building in favor of the fantastic idea that anybody, given enough pluck and luck and liberty, can make a fortune overnight. How perfect it was that in the 1990s, the freshly discovered marvels of digital technology provoked a mad scramble by tens of thousands of ambitious fortune seekers from all over America and the world to descend on San Francisco and vicinity in pursuit of the latest ultra-dreamy version of the American Dream. Of course, just as the Gold Rush had ended by the early 1850s, in 2000 the dot-com bubble popped. In both instances, a lucky minority had gotten rich, and most of the unfortunate majority dusted themselves off and got on with their lives. Today, once again, the bursting bubble has been bigger in Northern California, with house prices dropping and foreclosures increasing far more there than in America at large.

The point is that while our country and our national self-perception must now change significantly, we have been here before. It’s simply time to ratchet back our wild and crazy grasshopper side and get in touch with our inner ant, to be more artisan/enterpriser and less prospector/speculator, more heroic greatest generation and less self-indulgent baby boomer, to return from Oz to Kansas, to become fully reality-based once more.

And not coincidentally, just as our two-sided national character has always toggled back and forth between its steady and its skylarking aspects, so, too, does our national history run in cycles. These cyclical tides in the political zeitgeist were spotted by Ralph Waldo Emerson and Henry Adams in the 19th century, and by the historians Arthur Schlesinger Sr. and Jr. in the 20th. According to the Schlesinger model, we are now at the start of the 15th alternating cycle since the founding of the United States, currently making yet another of our periodic shifts from an unfettered zeal for individual getting and spending to a rediscovery of the common good. The switch has flipped again, and “the business of America is business” no longer seems inarguably true, but narrow, callous, a little crazy. It’s the way our history has always unfolded, back and forth and back and forth again.

Yet in fact, according to my reading of American history, there are two interconnected but semi-independent cyclical waves, one for politics and the general national spirit, the other for economic growth and contraction. Think of the two wave systems as running along the same timeline but moving perpendicular to each other, politics on the horizontal weaving right to left to right, economics on the vertical weaving up and down. Each wave system affects the other, but unpredictably, since each one has its own waxing and waning dynamic, and its own frequency.

A political or economic era can be as brief as 10 or a dozen years or as long as a quarter-century, but the cycles of politics and economics only occasionally fall into sync. A period of prosperity, for instance, sometimes reinforces a “natural” cyclical political shift toward the right, as it did after World War II and for most of the last 25 years. But it can also accelerate a turn to the left, as it did in the early 1960s. Nor do the more Democratic eras necessarily produce Democratic presidents, or vice versa. Jimmy Carter and Bill Clinton, elected during the long greed-is-good cycle, Carter near the beginning and Clinton near the end, presided over the most conservative Democratic administrations of the 20th century. And Richard Nixon, because he was elected during the last public-spirited cycle, was by far the most liberal Republican president of our lifetimes, creating the Environmental Protection Agency, establishing relations with China, embarking on nuclear-arms treaties, even instituting wage and price controls. And then there are the occasional social and cultural discombobulations provoked by a radical zig, such as the countercultural upheavals of the late 1960s and early 1970s, which can then make the countervailing zag that follows longer and more extreme, as was the case with the political period we’ve just passed through.

Every now and then, however, an abrupt and severe end of flush economic times happens to coincide with the natural end of a conservative political era, making the historical waves fall powerfully into sync. That’s what happened in the 1930s, following three straight conservative presidencies, a period of whiz-bang technological progress—electrification, radio, automobiles, aviation—and a culture of bon temps rouler. And that’s what’s happening now.

This time around, as it happens, the waves of American political and economic history are coinciding as three huge, worldwide, and mutually reinforcing trends are also transforming the nature of the game. First, the ubiquity of networked digital devices, the constantly falling cost of digital memory, and the profusion of broadband channels—that is, the tech revolution—are transforming business and daily life. Second, during the last couple of decades, telecommunications technology and cheaper, oil-fueled travel truly and irrevocably globalized the planet. And the third big phenomenon, climate change— exacerbated by the wondrous, globalizing growth of coal and oil-burning economies like China’s and India’s—is redrawing the parameters of sensible economics and politics.

We’ll see soon enough how well Barack Obama copes with this perfect storm. However, even before last year’s collapse of real-estate prices and credit markets and Wall Street, he had a good sense of the nature of the historical moment. His Democratic opponents were all over him last year when he gave the Reagan Revolution its due, but he was exactly right. “Ronald Reagan,” Obama said when he was still fighting to win the Democratic nomination, “changed the trajectory of America... He tapped into what people were already feeling... [He] transformed American politics and set the agenda for a long time... [I]n political terms, we may be in one of those moments where we can get a seismic shift in how the country views itself and our future. And we have to take advantage of that.”

“History doesn’t repeat itself,” Mark Twain is supposed to have said, “but it rhymes.” What’s happening today isn’t a repetition of 1932, when the Dow Jones Industrial Average had dropped 90 percent from its peak three years earlier and the unemployment rate exceeded 23 percent. But now most definitely rhymes with then: the crash, the severe economic contraction and crisis, the graceful and inspiring new president (and first lady), the possibility of a radical reshaping of not only our economic and financial systems but also the ways that Americans think about their country and themselves.

Get The Beast In Your Inbox!

Daily Digest

Start and finish your day with the top stories from The Daily Beast.

Cheat Sheet

A speedy, smart summary of all the news you need to know (and nothing you don't).

By clicking “Subscribe,” you agree to have read the Terms of Use and Privacy Policy
Thank You!
You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason.

But America in 2009 also looks as if it might rhyme, uncomfortably, with Great Britain circa 1909. A hundred years ago, the British were coming off a proud century as the most important nation on earth—economically, politically, militarily, culturally. But the United States was coming on fast, having already overtaken the mother country economically (in per capita gross domestic product), and about to do so on all the other major axes of national power and influence. The United States surpassed the United Kingdom in the 20th century for many reasons: a much larger area and population, fewer fetters on individual gumption, a younger nation’s ability to make faster social and economic turns. Between the beginning of World War I and the end of World War II, as America emerged as the unequivocal world leader, Great Britain became an admirable also-ran, still significant but radically diminished as a global player. Applying that template to the 21st century, China would be the new us—feverish with individual and national drive, manufacturer to the world, growing like crazy, bigger and much more populous than the reigning superpower. And thus our next half century would, according to this analogy, unfold like Britain’s in the first half of the 20th century, requiring an extreme new humility as we reduce our national ambitions and self-conception.

One can imagine far worse American scenarios than becoming a supersized Great Britain. But even that diminution isn’t certain. Historical destinies are directional, not precisely preordained. As I say, history tends to rhyme, not repeat. To a great extent, our national future will unfold over this century according to the collective and individual choices we make now.

Plus: Check out Book Beast, for more news on hot titles and authors and excerpts from the latest books.

Kurt Andersen's new book, RESET: How This Crisis Can Restore Our Values and Renew America is published by Random House.