In 1986, I was sitting in the American Center in Belgrade when I was approached by a distraught young man. In his hand, he held a copy of an American newspaper with a full-page ad for electronics.
"Is it true?" he asked. "Are these prices true?"
I glanced at the page, which included an ad for a Sony boom box for less than one hundred dollars. It was about what I'd expect to pay at the time.
"Yes, it's true."
"But here it is three, four times that. How is it possible in America it is so cheap?"
That is a question I've been thinking about for a long time.
Economists will offer a macroeconomic explanation for the cheapness of that boom box. They will tell you that the dollar was strong relative to nearly all other currencies, to say nothing of the Yugoslav lev, as a result of the coincidence of relatively high interest rates and a resurgent American economy in which inflation had been brought under control. They will speak in abstract terms of the fluctuation of percentages and other numerical figures. But those numbers and abstractions are not the cause of the economic resurgence of the 1980s; they are merely the result.
The real cause of the disparity in living standards between communist Eastern Europe and America was the renewal of faith in democratic capitalism that was taking place under Ronald Reagan. After four dismal years of the Carter administration, with Carter bashing his country at home and abroad, Reagan restored the nation's faith in its ability to compete in a global economy. More than that, he restored faith in the quintessentially American quality of can-do optimism. Once again, Americans were proud of their country and hopeful about the future. The result was confidence in financial markets, surging productivity, and renewed prestige abroad. It was this restored patriotism that produced the great advance in living standards in the eighties and nineties and, by providing the material and political basis for a strong national defense, that resulted in the fall of the Soviet empire.
I'm afraid I was unable to communicate all of this to the young man in Belgrade during the few minutes I spent with him. At the time, I did not fully understand it myself, or appreciate its importance. But I did understand that under communism there were shortages, high prices, and demoralization everywhere. Through the winter, there were no fresh vegetables, there was little meat, and for a time, there was no milk. At the university, there were unheated classrooms and offices. There was even a shortage of chalk. In the local hospital, if one had the misfortune to fall ill, there were antiquated facilities and a shortage of basic supplies. Medical staff were being trained with textbooks decades out of date. This was not the fault of the Yugoslav people; it was the inevitable consequence of communism.
The rage that one young man felt over the price of a boom box was just one small example of the failure of communism. Nearly everyone felt the same sort of rage. The gray masses shuffled about the dirty streets of Belgrade in their outworn clothes, warming themselves in stand-up bars with shots of cheap alcohol and endless cups of sweetened tea. Everywhere there was disillusionment with the government, but few dared to speak out. As a senior professor, a famous translator and distinguished academic, told me privately, "Forty years and I have nothing. Nothing but a Volkswagen that is almost that old, but I can never leave."
It was the difference between capitalism and communism that explained the great affluence of America and the poverty of Eastern Europe. But it was not just this. It was also America's faith in capitalism. A capitalist economy held back by taxes and regulation, and by a president who has no faith in capitalism to begin with, won't do much better than a communist one.
It was not just that America in the 1980s was a capitalist nation; it was that she had rediscovered the miracle of the free market, and as a result, all good things were beginning to come her way. There is a world of difference between a capitalist nation led by a derisive, detached, anti-business Marxist and the same nation led by president who believes with all his heart in the virtue of the free market and the rights of ordinary citizens to choose for themselves. That was the difference between Carter and Reagan, and it is the difference between Obama and a man like John Boehner.
As the midterm elections proved, many Americans are now disillusioned with government, just as they were in 1978. They have good reason to be. Unemployment stands at 9.6% and is predicted to increase over the next six months. GDP growth is running at between 1.5% and 2%, as opposed to over 10% growth in China and 6% in India and other parts of the developing world. Even Germany is expanding at twice the rate of the United States.
Americans have every reason to be angry, but it is not just unemployment rates or GDP numbers that are to blame. It is a profound sense that our nation's leaders have betrayed America's founding principles. Like Carter, they seem to think that America stands guilty before the world -- guilty of imperialism, of racism, or of militarism. Like Carter, they think that the solution to a failing economy is more government and specifically more redistribution of wealth. Like Carter, they wish to hamper successful businesses with more regulation. They confiscate the profits of small businesses while their owners are alive and finish them off with the death tax when their owners die. No wonder Americans are demoralized and the economy is going nowhere. A lot of American cities are starting to look like Belgrade.
Along with the outrage, though, there are stirrings of hope. We have arrived at the beginning of the end of Obama's presidency and of the socialism that he has been peddling. Soon, like Carter, Obama will be out of office, another befuddled do-gooder schmoozing with his leftist friends as he drifts further into irrelevance.
What follows Obama, hopefully, is renewal of faith in America as a capitalist democracy. Soon, as Reagan declared in 1984, it may be "morning again in America." Americans may be returning to work, and faith in our great nation may be restored.
Jeffrey Folks is author of many books and articles on American culture and politics.