By Joe Petrowski
Economists generally agree that the 30 years from 1945 to 1975 were a period of unprecedented economic growth, full employment and wealth creation. Much of the economic activity was driven by the need to rebuild after the deprivation and destruction of World War II, and technological progress (remember as late as 1960 25% of homes were without any auto and only 25% of homes had a wash machine). However, while some of those circumstances were unique to the times, that is not the case with much of the boom that drove the stock market to grow seven fold over that period while the real economy grew at 9% compounded with unemployment between 2% and 7% (despite absorbing the bulk of baby boomers). These factors included:
1) There were low energy prices—energy expenditures ranged 4% to 6% of GDP and the United States was actually a net exporter of energy.
2) We had a manufacturing and export driven economy underpinned by low energy prices.
3) There was significant capital investment led by the development of the interstate highway system and suburban construction.
4) There were technological advances driving productivity gains in data processing, communications and household maintenance (estimated at 200 billion alone).
5) There was unprecedented consumer spending driven by household formation.
Some of those factors, or similar variants, are present today. Should we get a business friendly administration and congress (tax and regulation) as we had in the late 40’s and 50’s combined with an immigration policy that emphasizes legal and talent-biased immigration, our technological prowess, cheap energy and supporting architecture will position us for another glorious 30 years. While we will not be immune to recessions (we had six of them in that 30 year period) they will be the garden variety inventory led ones, short, self-correcting and not worthy of book writing, movie making or finger pointing.
Joe Petrowski has had a long career in international commodity trading, energy and retail management and public policy development. In 2005, he was named President and CEO of Gulf Oil LP and elected to the Gulf Oil LP Board of Directors. In October of 2008 he was named CEO of the now combined Gulf Oil and Cumberland Farms whose annual revenues exceed $11 billion and that now operates in 27 states. In September 2013, Petrowski stepped down as CEO of The Cumberland Gulf Group. He is now managing director of Mercantor Partners, a private equity firm investing in convenience and energy distribution.