Washington, DC, May 21, 2013 --  

Ben Bernanke doesn't embrace the internet. Those who do likewise will be confined to a clunky, old-fashioned world.

Two decades into the internet revolution, its stunning benefits have failed to touch the lives of many Americans. Activists say the have-nots are victims of the "digital divide". But it's not just the poor who have been left behind.

So has Federal Reserve Chairman Ben Bernanke.

Giving Bard College's commencement last week, America's chief economist argued that technological change and economic development is slowing down. While not advocating it, he gave anecdotal evidence supporting the theory. As a nine-year-old in 1963, Bernanke said his life was much like today -- people had automobiles, dishwashers, central air conditioning, and flew in airplanes. Most telling were his comments on the internet:

"For entertainment, we did not have the internet… but we had plenty of books, radio, musical recordings, and a color TV... The comparison of the world of 1963 with that of today suggests quite substantial but perhaps not transformative economic change..."¹

These words are utterly divorced from what's happened in the last two decades. Does the Fed chairman really think that the internet is merely an entertainment medium?

I was nine in 1978 -- when I was the same age as Bernanke in 1963.

The first thing I would do after school was bring in the newspaper, a medium largely unchanged from a century earlier. It provided outdated, mostly provincial information, with day-old stock quotes. Today, I read a much wider variety of news around the world. It's always up to date, and costs far less than my parents paid for the daily Omaha World-Herald.

Televison then only had four channels, and you had to watch shows when they aired. Today, I never use my television and decline a cable subscription. Like many cord-cutters, I stream video over the internet. I watch what I want when I want. And instead of mass-market drivel, I can pick shows catering to my interests.

For back-to-school or Christmas shopping, I would head to the mall, where I bought cookie-cutter products available across American suburbia -- if I was lucky. Often, items were not available in my size or out of stock entirely. Those days are over. Online shopping gives me exactly what I want at lower prices. It gives me products that were completely inaccessible in 1978, like the silk sleeping bag liner from New Zealand or the out-of-print video delivered from the UK, or the exact replacement china plate bought at an auction from the other side of the country.

As an engineer, most of my professional life has been spent building software replacements for physical things like the newspaper printing press, classrooms, or encryption machines. But before I could start this work, I had to find a job in the big city in the 1990s. I would drive to a global newspaper shop in suburban Phoenix and pay outrageous prices for two-day-old Sunday editions. It took hours with a yellow highlighter to read through through the classifieds, type up a cover letter, buy stamps, then drop applications in the mail. If lucky, I'd get a postcard acknowledgement two weeks later. Job listings are now available online, for free, with an application just a click away.

Even romance has changed. In 1978, the rise of the singles bar and the sexual revolution were paying a heavy toll on the lives of my family and those of my classmates, many of whom went through divorces and ended up in single-parent households. The tradition of marrying family friends or school classmates was collapsing. It had often brought incompatible people together because of limited alternatives.

Today, many people find better matches on sites like Match.com from a pool of millions. I found my wife by a chance meeting, but the very presence of broad-based alternatives meant that we could afford to be far more choosey in our search for a mate. Not surprisingly, the divorce rate has plummeted.

There are many other inventions we did not have in 1978. I would be distraught without Google maps on my smartphone; without the ability to cheaply call anywhere in the world using Skype; without the ability to research with search engines; without the ability to work remotely using IM, email, and document sharing; without the ability to pay my bills online. Any one of these things is a major invention. Taken together, they are revolutionary.

These changes amount to a radical transformation in the way many Americans live. The fact that I know it and Bernanke does not is partly because I am fifteen years his junior.

My wired lifestyle may make me a an outlier in my 40-something age group, but the new graduates in Bernanke's commencement audience grew up with these technologies. They not only embrace them -- they aren't even old enough to know what life was like without them.

I am. I am old enough to remember exactly how clunky, primitive and bad things were in 1978, and I am young enough to tell you how profoundly easier and better life has become since then. That America's chief economist is blind to this obvious and stunning "transformative economic change" is evidence of how older Americans are missing the boat on the internet revolution.

Notes:

1. Federal Reserve, Economic Progress in the Long Run, May 18, 2013