Tyler Cowen, a well known economist, recently published a book in which he warned against the apparent surging complacency among Americans. He argues that Americans today are not the risk-takers that they once were. They are not moving to new jobs as they once had before. In fact, he points out that white males in 2015 earned less than they did in 1969, which does seem a little alarming.
One of his most compelling pieces of evidence of growing economic stagnancy is the massive decrease in new businesses created each year:
It is important to note that the spikes and drops in the graph above with relation to new businesses created are direct results of the state of the economy at the time. For instance, the rise in the 1980s is most likely due to the vast amount of women entering the workforce, while the large drop between 2006-2010 is due to the housing market crash.
People are greatly influenced by the state of the economy, which could be why Cowen is arguing that Americans are growing complacent. The Great Recession hit many Americans hard. Consumer spending and investment greatly decreased, which lead to massive job loss. It’s understandable that many Americans therefore became discouraged and less likely to take risks– but calling this complacency may be a stretch. The economy in 2008 was not in a state for people to be creating new businesses or taking other huge risks, but rather being cautious and waiting for the economy to stabilize.
Cowen also states that he believes Americans need some sort of “push” to move them out of complacency. Anything that would urge Americans to become more confident in spending and investing would certainly be a good thing in order to boost the economy, but I do not completely agree that Americans are in a dangerous phase of complacency. Unemployment has been decreasing while GDP has been steadily increasing over the past few years, and though the numbers are not extraordinary, they certainly should not be reduced to complacency. Now more than ever are people becoming more innovative and creative, making enormous advancements in medicine, technology, and other sectors–far from being complacent.