Brian Wesbury, the chief economist with First Trust Advisors, has a great column in today's Wall Street Journal on the American economy the last quarter of a century.

You. In 1982, Time magazine's Person of the Year was a machine--the personal computer. Twenty-four years later, after being empowered by the computer, the 2006 Person of the year is-- "You." Time's cover sports a small mirror so we can contemplate ourselves--the controller of the information age--and think about all our blogs, pages on MySpace or Facebook and videos on YouTube.

The most interesting thing about this progression is that it did not result from consumer demand. Demand does not create wealth. Consumers were not marching in the streets 30 years ago complaining about the fact that there was no way to share their daily activities and innermost thoughts with thousands of their closest friends. People were not begging for personal computers, email, broadband, the Web, or blogs. Entrepreneurs, futurists, scientists and the very early adopters birthed this technology: Today's average consumer was either clueless or still in diapers.....

In the early 1980s, tax rates were cut, government interference in the economy was reduced, and the Fed followed a tight money policy. As stagflation was cured, entrepreneurs got to work. In garages, basements and cinderblock buildings, today's technology promptly came to life even before its full usefulness was understood. It took more than a decade for the Internet and email to become real consumer products. It was the supply of this technology that fueled its growth, not the demand for it.....

If France had chosen to cut tax rates, regulation and the size of its government in the early 1980s while the U.S. continued on its path towards a social welfare state, it would be the French who would be complaining about excess corporate profits and the income gap. Americans, on the other hand, would fret about a 10% unemployment rate and march in the streets demanding job guarantees and shorter workweeks.

While Iraq has dominated the political headlines and was certainly the driving force behind the Democratic takeover of Congress in November, the current good economy won't continue uninterrupted forever. The reality is at some point the U.S. will face another recession (perhaps sooner than we think) and there is an increased risk from a political standpoint that the rise of populism and the increase in Dobbsian rhetoric has the potential to undo many of the pro-growth economic policies of the last 25 years that have provided the foundation for America's economic success the last quarter of century. The danger becomes a normal run of the mill recession provides the political fodder for a step backward toward economic polices that sound good to the public in 30 second sound bites but lead to stagnation, high unemployment and ironically worse living standard for the lower and middle class workers the polices are supposedly intended to help.