Book Review of The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen

This Book Review of The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen is brought to you from Luke Weissler from the Titans of Investing.

Genre: Social Classes & Economic Disparity
Author: Tyler Cowen
Title: The Complacent Class: The Self-Defeating Quest for the American Dream (Buy the Book)

Summary

What is the Complacent Class? Tyler Cowen defines it as “the growing number of people in our society who accept, welcome, or even enforce a resistance to things new, different, or challenging.” This class has been the dominant cause of many negative societal effects that have developed in the United States since the 1980s.

This book examines how specific facets of America have changed over the past 30-40 years, and the associated effects of these changes. Specifically, it explains why Americans move around the country less, why many kinds of segregation are reemerging, why America stopped creating and rioting, and why our government is less effective.

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Our national complacence is exemplified by our unwillingness to move. Changing where you sleep at night is the physical embodiment of a desire to improve many aspects of your life. People who move do so for many reasons: better jobs, marriages, climate, new or different friends, etc.

The personal inconveniences of moving are outweighed by its benefits on a societal level. This decrease in the proportion of Americans who move has led to the reemergence of segregation. It has not been deliberate, rather a function of the desire for sameness and comfort felt by the complacent class. This segregation has resulted in a decrease in American prosperity.

American productivity, increase in living standards and the number of start ups have all decreased over the last 20-50 years because of the complacent class. The number of start ups as a percentage of total firms has dropped from 13% to 8% in the last 40 years.

This declining trend for startups holds true for every region in America except one, and it is not Silicon Valley. Even our political system is less potent than before. One of Congress’s primary functions in our republic is to allocate tax dollars to social security, welfare, defense, healthcare, etc. However, they don’t do much budgeting anymore. Since in 1962, the percent of the federal budget Congress allocates at its own discretion has gone from 67% to 20%.

History continues to repeat itself, but in different ways. Our current period of peace and complacence will not last forever. When it ends there will be turmoil, which will cause beneficial social and economic transformations for our country. However, when that time comes, most Americans will wish they could go back to being complacent.

INTRODUCTION

What is the Complacent Class? Tyler Cowen defines it as “the growing number of people in our society who accept, welcome, or even enforce a resistance to things new, different, or challenging.” This class has been the dominant cause of many negative societal effects that have developed in the United States since the 1980s.

In many ways America is not what it once was and is getting worse because of our general self-assuredness. Most Americans over the age of 50 will recall a time when things just seemed different. They are not sure exactly what went wrong or when, but they know that at some point, we stopped pushing the envelope and decided to rest on our laurels.

This book enlightens the reader by examining how specific facets of America have changed over the past 30-40 years, and the associated effects of these changes. Specifically, it explains why Americans move around the country less, why many types of segregation are reemerging, why America stopped creating and rioting, and why our government is less effective.

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The Complacent Class is made up of a very diverse group of Americans: the well educated and wealthy, the middle class, and the poor and under-educated. All of these classes of people have two major things in common: they have accepted a slower rate of change and they all lack a sense of urgency.

The rich want to stay rich, so they generally battle against change to maintain their position.

Our middle class lives a very comfortable life compared to a majority of the world. They also want to keep their position while hoping for a better future with no specific timeline. Finally, the lowest class has come to accept their place with relatively little upheaval. This structure developed mid-1970s.

The complacent class started off very dissatisfied. They were tired of the tumultuous period between the 1960s and early 1970s. Americans rejected the drug culture and the high crime rates that had taken over most metropolitan areas. Americans were also troubled by images of riots and scenes of the Vietnam War that were being broadcasted into their living rooms for the first time.

People accepted a more safe and static culture, which was embodied in the Reagan Administration. Along with this decrease in social disturbances came a decrease in economic growth and technological innovation.

STALLED AMERICA

Our national complacence is exemplified by our unwillingness to move. Changing where you sleep at night is the physical embodiment of a desire to improve many aspects of your life. People who move do so for many reasons: better jobs, marriages, climate, new friends because they cannot stand the ones they have now, etc.

Moving improves productivity, incomes and standard of living. Dynamic populations have a more uniform spread of ideas and thoughts throughout their country, decreasing the likelihood of polarization and civil war. The personal inconveniences of moving are outweighed by the benefits on a societal level.

Traditionally Americans were the world’s civilized nomads.

Between 1850 and 1900 two thirds of American men over the age of 30 made cross-country moves. The second most mobile society over the same time period was Great Britain, where only one quarter of men made cross- country moves. Bear in mind that America is much larger than Great Britain; our moves were not only more frequent, but over much greater distances.

Americans were always destined to be more mobile than their European ancestors. American families had no generational or cultural ties to a geographic location like many European families did. The New World also benefitted from having a large barrier to entry. Crossing the Atlantic Ocean itself required a large move, so the most mobile and courageous Europeans were the ones who became Americans.

If we expand on that line of thinking, then California should be the place where the most mobile Americans ended up. The fact that California is home to Silicon Valley, Hollywood, and is the springboard of most social revolutions gives some credit to the idea that mobile people are more innovative.

Many great works of American literature and film demonstrated our migratory culture: Huckleberry Finn, Moby Dick, and even I Love Lucy all tell stories of great adventures or cross country relocations. This facet of our national identity began to change in the 1980s with the rise of the complacent class.

For comparison, both sitcoms Friends and Seinfeld mainly take place in only two buildings in New York City. Our literature has shifted from physical expeditions to mental and cultural quests. However, a change in creative theme is the least of our problems with this new physical stasis.

There are many statistics that indicate that Americans are moving less.

In the 1970s, one fifth of American households moved in any given year, but the current interstate migration rate is about 50% below the 1948-1971 average. Moving has decreased for all age groups and all income levels. This decrease in mobility is even more striking because it has occurred during a time of increasing levels of educational attainment.

Those with a college degree are twice as likely to move than high school graduates, and the proportion of college graduates has only increased. It is also worth noting that African Americans have gone from the most mobile group to the least mobile group in America. Between 1922-1952 they were the most likely demographic to move. Most of the moves were from South to North in order to escape Jim Crow laws. However, during and after the Civil Rights movement, between 1952-1982, African Americans were the least mobile.

Why are Americans staying put?

The primary reason is that we are switching jobs less frequently than at any time in our history. The hiring rate is declining faster than the firing rate in most industries. This causes employees to stay put rather than seek a better opportunity. Another reason why we are moving less is because this country has lost its geographic diversity of industry.

For example, Detroit is no longer the only place to go if you want an automotive factory job. Earning a job in manufacturing required workers to move near the factory. This is still the case today, but factories are no longer only in the Mid-West and Northeast, meaning people can make shorter moves to earn the same jobs.

Also, the number of manufacturing jobs in America as a whole is decreasing faster than any other sector. These were the jobs that would pay a premium to unskilled and uneducated workers. This loss of middle income manufacturing jobs has led to the expansion of high income, high productivity jobs and low income, low productivity jobs.

There was an interesting study conducted by economists Raj Chetty, Nathaniel Hendren, and Laurence Katz on the government program Moving to Opportunity in the 1990s. Under this program the government paid for the moving expenses of poor families so they could relocate to slightly less poor neighborhoods.

The results were astonishing. Children whose families took advantage of this program earned 31% higher incomes when they were adults as compared to children from the neighborhoods they moved from. These children were also 32% more likely to attend college. The net present value of all future incomes was $99,000 higher for the children that moved.

Improvements were documented for all cities where this program was implemented. In Chicago, children who moved from government funded housing to the suburbs were twice as likely to attend college compared to those who stayed.

So if these government funded programs have such great results, why are people not moving on their own? That was commonplace in America 50 years ago. People sought opportunity wherever it was, but that is no longer happening on a large scale for several reasons.

High rents and restrictive building codes in America’s most successful cities are hindering these potential moves.

In the 1950s the average apartment in New York City was $530/month after adjusting for inflation. Today apartments in the South Bronx are going for $3,750/month. In 1950 the US median wage was ~$44,000 after adjusting for inflation, so the average New Yorker spent 14% of their income on rent.

Today the average New Yorker spends 84% of the US median income on rent. A study conducted by Chang-Tai Hsieh and Enrico Moretti estimates that if it were cheaper to move into America’s higher-productivity cities, the US GDP would be 9.5% higher due to gains from better jobs. Not only are high rents stifling our growth, they are also causing an increase in segregation by race, income, education and social status, resulting in huge negative consequences.

SEGREGATION IS BACK

The reemergence of segregation has not been deliberate. It is simply a function of a desire for sameness and comfort felt by the complacent class. Your level of success is now more dependent on where you live and who your peers are than it has been in America since the end of Jim Crow.

This segregation has resulted in a decrease in American innovation and prosperity. Many believed that the election of President Obama signaled that America had overcome its racist roots. However, the Ferguson, Missouri race riots have shocked many white Americans into facing the fact that America is becoming more divided along residential and educational lines.

Where is income segregation the most extreme?

The four major metropolitan areas in Texas are all in the top ten. In the last 30 years many people have been moving to cities in Texas, which indicates they have opted to make segregation a part of their futures. The top four cities for segregation by education are: Los Angeles, Austin, Dallas-Ft. Worth, and Washington D.C. The next six are Raleigh, San Francisco, San Jose, Houston, Charlotte and Columbus.

Is this a list of the trendiest cities in America or the most segregated? It’s hard to tell the difference. These are the cities that are most often featured in travel shows and Texas Monthly. Few would disagree that the cities on this list will be the birthplaces of America’s future. Do we want segregation to be the backdrop of our future?

The root of all forms of modern segregation is the natural tendency to cluster with similar people.

The wealthy and well educated are more likely to move into areas with similar people because they have the means to do so. Democrats are more likely to cluster together than Republicans. Democrats are moving toward the large metropolitan areas along our nation’s coasts, which has major consequences.

Hillary Clinton won the popular vote in the 2016 presidential race but lost the election by carrying enormous margins in states like California and New York but losing by small margins in states like Wisconsin, Pennsylvania, and Michigan. Ironically, many of the cosmopolitan, wealthy, well-educated Democrats who predominantly live in the most segregated neighborhoods are the ones who often complain the loudest about inequality in America.

One side effect of segregation is not being able to understand the circumstances of differing socioeconomic strata. One example of this fact is again the 2016 presidential race. Before the night of November 8, 2016, the elite political commentators considered it a near impossibility that Trump would be elected.

Sadly many of the most segregated cities in America are college towns, despite the fact that they are politically progressive, pro-multicultural, and anti-discriminatory. They all have large percentages of well-educated people who enjoy living with other well-educated people. The towns with the highest level of racial and educational segregation are: Ann Arbor, Durham- Chapel Hill, Tucson, College Station, and Gainesville.

It seems the less educated citizens of college towns just don’t think living next door to a college professor is worth paying higher rent.

\When looking at the metrics of income, education, race, and occupation, the most segregated city in America is Austin, Texas. If you have ever spent time in Austin you have seen this for yourself. Downtown is full of young professionals who buy their groceries at the largest Whole Foods store in America, live in the most expensive real estate in Texas, and go out for white tablecloth barbecue.

Then you cross to the East side of Interstate 35 and you cannot believe you are in the same city. The predominantly Hispanic and African American neighborhoods are full of strip malls, pawn shops, car parts stores, and people sitting on their front porches because they do not have air conditioning.

This gentrification of Austin has tarnished its reputation as the “Live Music Capital of the World.” Most of Austin’s musicians simply cannot afford to live there anymore. The median home value is $327,000, which is up nearly 20% since this book was written. The upside has been an increased education level. In 1970 only 17% of Austinites were college-graduates now 46% of its population has a college degree.

Segregation is continuing to occur along racial lines, specifically in schools more than neighborhoods.

Having segregated schools may result in a less promising future because students do better in integrated schools. Segregation has been proven to harm large groups of people from achieving success: happy marriages, higher earnings, and longer/healthier lives.

This problem has also manifested itself in the political arena. Republicans and Democrats are both more likely to live in areas where a majority of the population is comprised of their own party. This leads to more polarized representatives and government gridlock.

In the South, the proportion of black students in schools with a white majority has fallen from 48.5% in 1988 to 23.2% in 2011. That is lower than the rate in 1968 during the Civil Rights movement. Since 1980, the proportion of black students attending schools that are 90-100% black is up in nearly every southern state. Refer to the table below for more details:

The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen

This problem is not restricted to the South. The average black student in America attends a school that is 48.8% black and only 8.3% white. The top five states for “% black in 90-100% Minority Schools” are New York, Illinois, Maryland, Michigan, and New Jersey in that order. New York City has the most segregated school districts in America.

Only 6.5% of its school districts were deemed racially diverse and stable enough to maintain that diversity into the future. 73% of NYC’s charter schools have less than 1% white enrollment. In many ways, segregation has become the new normal for American society. Income levels, rent rates, home prices and real estate codes have replaced racist laws as the enforcers of segregation.

AMERICA LOST ITS MOJO

American productivity, increase in living standards and the number of start ups have all decreased over the last 20-50 years because of the complacent class. The oil price shock in 1973 was the first major blow to American creativity and innovation. In less than a year Americans went from watching the last moon landing in December 1972 to waiting in line for gasoline in October 1973 – a true paradigm shift. Over the course of the 1970s our national aspirations declined. We no longer wanted to push the envelope. Our country was exhausted from constant riots, bomb threats, mass shootings, high crime rates, government scandals, and the Vietnam War. We were willing to sacrifice our dynamism for a return to calmer and safer times.

Many modern business and political leaders argue that the technological revolution and Silicon Valley success stories are signs that the American economy is still vibrant. However, this is not the case. When compared to its state in the 1990s the US economy today is much more static in many ways.

The number of start ups as a percentage of firms in our economy has dropped from 13% to 8% in the last 40 years.

This declining trend for startups holds true for every sector and city in America except one. Yes, even the heralded messiah of startups, Silicon Valley, has a decreasing number of startups. The only metropolitan city with growing corporate dynamism and startup presence is McAllen, Texas, not San Francisco, California.

One result of this loss of new ventures is that “four-year college graduates earned higher starting salaries in 2000 than they do today.” The number of failed businesses is also declining, signalling a more stable set of companies.

Consumers enjoy consistency and sameness now more than ever.

They would rather shop at chain stores because they know what to expect. Shopping at chains and knowing they will always be there is taking the uncertainty out of shopping. This static set of companies is not driving innovation and product improvement.

It is the young firms that create change in most sectors. This is why the largest companies have huge M&A budgets, to acquire young firms and purchase dynamism. The net effect of this change in consumer tendencies toward stability and predictability is the monopolization of American industries. For example, Wal-Mart has driven many Mom-and-Pop stores out of business.

There are only two major cell phone carriers, three major health insurance companies and four major airlines in the US today. Even in the realm of higher education, the best schools in America have cemented their positions.

A report on the best schools in America written by Mr. Kendrick Charles in 1911 is shockingly similar to this year’s Forbes list of top Universities: Harvard, Princeton, Columbia, etc. Besides Stanford there have been no “unicorn” universities in the last 100 years.

This trend helps explain our economy’s shift from manufacturing to services.

Service sector jobs are much more stable than manufacturing jobs, which fluctuate with the economy and times of the year. One shocking sign that our population is less innovative is the fact that “the United States creates 25% fewer triadic patents per person than it did in 1999. “ Overall, productivity is also not looking bright. One statistic used to measure the effects new innovations have on GDP is the Total Factor Productivity (TFP).

From 1919 to 1973, TFP averaged 2% per year, and from 1973 to 1995 TFP dropped to 0.5% per year. From 1995 to 2001, TFP was back to its pre-1973 average because of the rise of the computer and IT industries, and since 2001 TFP has averaged 1% per year. We are currently below our 20th century average and should be working to restore creativity to our economy.

Our quality of life is also improving at a slower rate than it did 20 years ago.

The median household income has decreased since 2000. Another shocking statistic is that the median male wage was higher in 1969 than it is today. Both of these facts are due to a decrease in the number of middle income manufacturing jobs that could be earned by people with only a high school degree. Our middle class has been squeezed as we have exported our manufacturing jobs to emerging countries, primarily China and Mexico.

Until the 1970s America witnessed a doubling of living standards every 25-30 years. If we take out the growth of our top earners, the take-home wages for the average employed American has fallen since 2009. Yet, people are calling this an economic recovery.

If America had been able to maintain its pre-1973 growth rate, the median household income would be $30,000 more, nearly 53% higher than todays rate. The high school graduation rate has not improved since the late 1960s. How can anyone argue that America is improving when none of these statistics point to a higher living standard?

AMERICAN INNOVATION THEN AND NOW

Let’s now step away from the statistics and try to see the same narrative by looking at how the lives of Americans have changed since 1900. In 1900 most Americans lived on farms without electricity or indoor plumbing. There were no antibiotics or vaccines. The airplane had not been invented, and automobiles were not yet mass produced.

Over the next 50 years all of these milestones were achieved and implemented widely.

A radio and telephone were in every home, and in just a few more years, TVs would replace the radio. Computers were invented by 1950, although they were huge and used mostly by government agencies. Nuclear power plants were being built and provided a near pollutant-free source of power. Just about everything we take for granted today was invented by 1950.

Now, let’s look at the past 50 years between 1967 and 2017. Cars are safer today than they were 50 years ago. We are still flying in the Boeing 747 which was designed in the 1960s. The single major area of improvement is in the technology sector. Smartphones give us access to an unimaginable amount of information in the palms of our hands.

We are able to hail a cab to show up outside our door, book a room in any city in the world, trade securities, research the history of Machu Picchu, video chat with friends and family thousands of miles away, store thousands of pictures and songs, and slingshot angry birds at evil pigs all without leaving our couches. The ability to do these things with a 3”x5” box was unimaginable even 15 years ago.

In other areas we have stagnated or regressed. One such sector is transportation. Since 1970 travel around the US has actually slowed due to traffic. We have stopped trying to go faster and are content with how things are now. Some think there is nothing anyone can do to improve the speed and ease of our means of transportation.

The only commercial use of supersonic air travel, The Concorde, was retired in 2003. It could fly from JFK and Heathrow in a little over 3 hours; that same flight today takes nearly 7 hours.

Elon Musk is the only major entrepreneur challenging the status quo of how we move through physical space.

His two major projects so far are SpaceX, which is essentially just a revival of what NASA used to do, and Tesla, which is a sporty version of other electric cars, rather than a completely reinvented traveling experience. We are not fundamentally changing how we move ourselves.

As the Department of Transportation stated, “All indicators show declines in personal travel for every age group, particularly among young people since the early 2000s.” This economic trend away from creativity and toward acceptance of how things are has crept into other facets of our national culture. It is especially prominent in our decreasing challenge of authority, which will be the focus of the next section.

MAKE BLOGS NOT RIOTS

No matter what you may hear on the news about mass shootings or trucks plowing into crowds, America is more peaceful today than it has been since the 1970s. The complacent class emerged to achieve this goal and has been successful.

To give an idea of how different things were back then here are some startling statistics. During the 18 month period between 1971-1972 there were 2,500 domestic bombings reported. That averages out to more than five a day. There were also many more riots when compared to today. In May 1970, close to 4 million college students held demonstrations on 1,250 campuses causing 536 universities to shut down.

In that one month there were 95 cases of arson and bombings on college campuses, 30 of which were successful in damaging ROTC buildings. There was more anti-government violence between 1968 and 1975 than at anytime in American history other than the Civil War. College students still protest today, but they are more likely to ask for “safe spaces” than a new form of government. An obvious decrease in violence has occurred.

Why were the 1960s and 1970s such hysterical times for America?

The Vietnam War and the draft are both common explanations that don’t tell the whole story. America had drafted its citizens to fight in wars before. The majority of Americans supported the war in Vietnam until the early 1970s. The key difference about this war and this era is that it came immediately after the largest period of middle class income growth in history.

African American income grew more in the 1950s and 1960s than at any other time. Cowen argues that because of this new wealth and quality of life, Americans expected more. By the Mid-1960s most Americans had moved into the middle class. This large group now had higher aspirations that were not being met quickly enough by the government and society, which spawned rebellion.

Large portions of our population began questioning our political leaders for the first time in history. Young men would no longer follow orders to go to war like their fathers and grandfathers had.

That generation’s civil disobedience paid dividends. The civil rights movement was successful in ending institutional segregation in America. The anti-war movement was also successful in ending the draft and bringing the last American combat troops home by 1973. So why don’t groups protest today? Generally it is because Americans don’t want to be inconvenienced. Today we would rather vote to legalize marijuana and gay marriage than to have huge riots in the streets.

We also protest less today because it is more difficult. Our courts have been chipping away at our first amendment rights and we have been pretty complacent about it. The 1965 march from Selma to Montgomery, Alabama received the right to conduct a 52 mile, five day march down an interstate highway.

Can you imagine any group getting a permit like that today? Think about the tweets that would fly, decrying the grave inconveniences suffered by commuters. Now authorities tell the protesters when, where, and how they can organize.

Police are no longer cracking skulls with their batons or spraying people with fire hoses; they are simply denying the permits to protest. For example, in 2011 the Occupy Wall Street protesters were told they could protest in Zuccotti Park, but not Chase Manhattan Plaza like they wanted.

The City then told the protesters they had to leave because the park was getting too dirty. The protesters responded by cleaning the park themselves. Next, the local residents complained about the noise. In order to comply with this the protesters agreed to a curfew. Then, the NYFD stated that the generators they were using were a fire hazard. The protesters switched to human powered generators.

Finally, winter came and the City Planning Commission told the protesters they could stay in the park but could not erect tents, which finally ended the protest. Can you imagine Martin Luther King being told where and how he could protest? It almost defeats the purpose of protesting. The Civil Rights movement could not happen today because protests like the ones that took place in the 1960s would not be tolerated by our modern society.

DEMOCRACY IS FADING

Complacence has entered ever part of nation, even our government. One major sign of this is how Congress creates budgets. Congress’s primary function in our republic is to allocate tax dollars to social security, welfare, Defense, healthcare, etc. However, they really don’t do much budgeting anymore.

Since in 1962, the percent of the federal budget that Congress can allocate at its discretion has gone from 67% to 20%. Our representatives no longer have the ability to change where our tax dollars go without passing a law that ends an established government program.

Do you know what Ronald Reagan said about government programs? “Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!” We have seen this quote hold true time and time again, most recently with the Republican controlled

Congress’s failure to repeal the Affordable Care Act. We are in a death spiral that will only end when there is no discretionary spending at all. This is actually not too far away; by 2020 only 10% of the budget is expected to be discretionary.

Our government is hindered from trying new things because so much of its tax revenue is already locked in.

Winston Churchill said this about Americans; “You can always count on Americans to do the right thing… after they have tried everything else.” Yet we are not able to get to that “right thing” because we are losing our ability to “try everything else.” Congress has also shucked its oversight of the military by offering blank checks to every president since WW2 to engage in conflicts instead of declaring war themselves.

As for our national debt, Congress keeps kicking the can down the road. They refuse to face the problems of our time. Unfortunately, this perpetual procrastination will have dire consequences. The day our country turns to Congress for a solution to a major issue of national importance will be the day we realize no Congressman has any experience solving any problems.

One solution would be to set term limits on our representatives. It would pressure our leaders to act quickly within their terms rather than push their agendas to a later date.

There was one man who was able to predict this fate for America: Alexis de Tocqueville.

He feared that a mature democracy would resemble a system where “citizens quit their state of dependence just long enough to choose their masters and then fall back into it.” He feared Americans would stop comparing themselves to the greatest heroes of history and start working solely for their own comforts. This line summarizes precisely what the complacent class has done to American aspirations.

CONCLUSION: THE BEGINNING OF THE END

In many ways we are seeing the complacent class start to crack. Those lowest members in our society are beginning to fight for a different status quo. The riots in Ferguson, Missouri might have been the first signal. The second was the 2016 presidential election when both parties had strong showings from anti-establishment candidates.

In nearly every other presidential race in history the candidate with more governing experience won. But not in 2016, and now the candidate with no prior public sector experience is the leader of the free world. Trump’s supporters were tired of how they have been treated by the leaders of both parties over the past 20-30 years.

The average Trump supporter earns a higher income and is better educated than the national average. This signals that some members of the middle and privileged classes are also starting to turn away from complacence.

Looking for the beginning of the end of the complacent class is especially important because of how ineffective the complacent class is at gaining support for itself. Think about how little intense support the Democratic party was able to raise for Hillary Clinton. The Remain campaign in the United Kingdom also failed to persuade a majority of the British population that the status quo should be continued.

Economists have given up on the ongoing progress hypothesis.

After the Great Recession of 2008 it was clear that cycles still happen. History and the markets are cyclical. Many people argue “the possibility of cyclical patterns in history is right now the single biggest source of systematic, undiversifiable risk.” The complacent class is unlikely to last forever simply because nothing in America has lasted a very long time. We are living in the second longest bull market in US history, but no one doubts the inevitable shift to a bear market.

The final reason why the complacent class will not last forever is the threat of war. Syria is in shambles, Russia has taken part of Ukraine, and North Korea is launching more rockets than ever before. These tragedies have happened because the lone super-power in the world and most of our NATO allies are filled will complacent citizens.

The West has a love of peace. Peace is good for businesses and governments. This love of peace has created a non-confrontational foreign policy giving leaders like Assad, Putin and Kim Jong Un more leeway with their actions. The last time the West had a similar foreign policy was between 1919 and 1939. In that time, Fascism rose to power in Italy, Germany and Spain. This period of peace was followed by the largest war in the history of the world.

History continues to repeat itself, but in different ways.

Our current period of peace and complacence will not last forever. When it does end there will be turmoil, which will cause dramatic social and economic transformations for our country. However, when that time comes, most Americans will wish they could go back to being complacent.

In The Complacent Class, Cowen shows us something scary about the America we live in today. Most of the issues he details are only worsening. The complacent class has been an enormous burden on the United States. Our self-satisfaction without an awareness of the defects in our society has caused: a reemergence of segregation, an economy handicapped by a lack of productivity and innovation, a population unwilling to use its 1st Amendment right, and an ineffective form of democracy.

Understanding these impacts and what causes them is the first step toward proactive change. The burden to not be complacent falls to all of us. We all need to stop looking at our iPhones and start making changes in our own lives.

HookedtoBooks.com would like to thank the Titans of Investing for allowing us to publish this content.  Titans is a student organization founded by Britt Harris. Learn more about the organization and the man behind it by clicking either of these links.

Britt always taught us Titans that Wisdom is Cheap, and principal can find treasure troves of the good stuff in books.  We hope only will also express their thanks to the Titans if the book review brought wisdom into their lives.

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