There were 240 million registered vehicles in the U.S. after five decades of interstate highway construction. Suburban populations, which now make up more than half of the entire national population, have grown by more than 100 million people since the interstate highway system began. This national suburbanization has had enormous effects on the American economy.
Source: User Minesweeper on Wikipedia Commons.
In 1960, seven of the 10 largest American companies (by revenue) were either automakers or oil producers. The largest pure consumer-goods company, Kraft Foods Group Inc (NASDAQ:KRFT), made only 15% as much revenue as the largest company, General Motors Company (NYSE:GM). The list of leading companies reads like a web of automotive interconnections: automakers, parts suppliers, steelmakers, tire manufacturers, oil refiners, and paint and plastics makers. Not one of the 100 largest companies in America was a retailer.
Five decades later, things were a bit different. Three oil producers and one automaker still placed among the top 10 American companies. Now, however, General Motors Company (NYSE:GM) doesn’t lead the pack: Wal-Mart Stores, Inc. (NYSE:WMT) sits at the top, earning more than $100 billion more in annual revenue than the largest oil company. Insurers and financial companies had come into their own to finance and protect America’s widely dispersed consumer culture — five of the top 25 American companies are part of the finance industry. Wal-Mart Stores, Inc. (NYSE:WMT) also had plenty of company, as 14 of America’s 100 largest companies were retailers — including one online-only retailer, a concept that would be impossible without a vast network of paved roads for delivery services.
Real (adjusted for inflation) GDP per capita more than doubled in the U.S. from 1960 to 2010. The country also enjoyed a period of strong stock market growth to go with its economic boom. Despite enduring a couple of rather terrible recessions, the Dow Jones Industrial Average (Dow Jones Indices:.DJI) gained 5.7% a year from 1960 to 2010. The Dow Jones Industrial Average (Dow Jones Indices:.DJI), like the national economy, also underwent some rather notable changes to reflect America’s changing balance of corporate power. Wal-Mart Stores, Inc. (NYSE:WMT) is, of course, part of the index now, along with The Home Depot, Inc. (NYSE:HD), which has become the bellwether of America’s suburban housing health. Two insurers and three financial companies have also earned a place on the Dow Jones Industrial Average (Dow Jones Indices:.DJI), replacing the three automakers and two steelmakers that were once among the index’s most closely watched components in 1960.
You might very well be reading this article at a suburban home, office, or shopping center somewhere in America. If so, Dwight Eisenhower’s foresight deserves some credit for the infrastructure that made it possible.
The article The Best $500 Billion the United States Has Ever Spent originally appeared on Fool.com and is written by Alex Planes.
Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends General Motors and Home Depot.
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