We don't need an economic boom, but that's what we may be getting. Since the 2016 election, the stock market is up roughly 24 percent, reports Wilshire Associates. The price of the cybercurrency bitcoin soared more than 1,000 percent before retreating. The unemployment rate of 4.1 percent is the lowest since 2000. The economy's growth has exceeded 3 percent for the past two quarters.
Anyone familiar with the post-World War II economy is bound to feel ambivalent about these dazzling developments. On the one hand, after so many years of disappointment following the Great Recession of 2007-09, it's nice to see the economy outperforming. Since the low point in late 2009, non-farm jobs have increased by 17 million. On the other hand, extended booms give rise to long busts that have been hugely destructive in human terms — meaning higher unemployment and lower incomes.
Since World War II, there have been two instances of these grand boom-bust cycles. The 106-month expansion in the 1960s was followed by more than a decade of economic turmoil: double-digit inflation, four recessions (unemployment peaked at 10.8 percent in late 1982) and a stagnant stock market corrected for inflation. The second grand cycle started with the tech boom of the 1990s that lasted exactly a decade. It led to the economic carnage of the 2008 financial crisis and Great Recession.