The economy’s strength and stability — defying many of the most optimistic predictions — represents a remarkable development after seemingly endless crises
As 2023 winds to a close, Powell and his colleagues are far from declaring victory on inflation. They routinely caution that their actions could be thwarted by any number of threats, from war in the Middle East to China’s economic slowdown. Americans are upset about high costs for rent, groceries and other basics, which aren’t going back to pre-pandemic levels. The White House, too, is quick to emphasize that much work remains.
Yet the economy is ending the year in a remarkably better position than almost anyone on Wall Street or in mainstream economics predicted, having bested just about all expectations time and again. Inflation has dropped to 3.1 percent, from a peak of 9.1. The unemployment rate is at a hot 3.7 percent, and the economy grew at a healthy clip in the most recent quarter. The Fed is probably finished hiking interest rates and is eyeing cuts next year. Financial markets are at or near all-time highs, and the S&P 500 could hit a new record this week, too.
I studied environmental politics and climate change in grad school. When the global economy went into meltdown in 07/08, a lot of us in academia mused that maybe the great breakdown of existing power structures would free up cognitive space to try to reimagine a better, more sustainable path forward. During our conferences there were a few cynics who repeatedly pointed out that when bills are hard to pay, and when opportunity is scarce, and when systems are stressed, people respond by being less innovative and flexible, not more. When shit hit the fan, it turned out, the cynics were absolutely right:
https://carnegieendowment.org/2009/04/11/environmental-impact-of-financial-crisis-challenges-and-opportunities-event-1328
https://landscapepartnership.org/maps-data/climate-context/cc-resources/ClimateSciPDFs/EmissionsRecessionsnclimate.pdf/app-download-file/file/EmissionsRecessionsnclimate.pdf
https://blogs.lse.ac.uk/covid19/2021/08/06/lets-not-make-the-same-mistakes-we-did-after-the-2008-crisis/
https://www.imf.org/external/pubs/ft/fandd/2009/12/jones.htm
https://www.sussex.ac.uk/broadcast/read/49910
When times get tough, programs like the Green New Deal get shredded and forgotten, because putting food on the table takes immediate precedence over longer-term visions for a different future. If you want to blow a gigantic hole in every environmental initiative that’s generated a modicum of attention over the past few decades and hasten the demise of the clean energy sector in favor of fossil fuel-based industries, then by all means cheer for the collapse of the economy. It’s just about the most surefire thing you could possibly imagine if you’re interested in seeing the Green New Deal relegated to the dustbin of history.
I agree that initially people respond to crisis with conservatism and leaning on the current system, but that conservatism runs out though. If the system is able to solve the crisis, or at least show progress in solving it then it can be re-entrenched. If it can’t and proves utterly incapable of solving it, or even perpetuating it then people start to get radical. In 1929 and 1930 many people still believed laissez-faire could fix the depression but as conditions stayed the same or worsened people started to realize it’s flaws. By 1932 they were ready to give up on it and try anything to end it. 2007 was different as the neo liberal system was able to muster a response to the problem of speculative financial collapse in the form of financial bail outs which did bottom out the recession and start an upward trend.
The crisis I’d “root for”, as much as I can root for something that’d cause immediate suffering to many people, is one that neo liberalism can’t handle and therefore discredits it as a governing system. That crisis will come eventually, just as the depression ended laissez-faire and stagflation ended keynesianism and if that pattern holds up we’ll probably see a swing to the left this time on this metronome of economic consensus.
It’s amazing to me that people can make proclamations like this with absolute certainty and yet have absolutely no evidence to support them. Your hypothetical is just as likely to lead to a fascist dystopia as it is to lead to a leftist utopia. If your pattern doesn’t “hold up”, we all die. Whose life are you gambling with, exactly?
I am not gambling anyone’s life. I have almost no power and can’t do anything to create or delay a crisis. The best I will do with my limited power is try and make it so the organization on the ground is ready to attempt that leftward shift if/when the crisis comes.
It could end in a fascist dystopia, but I think that’s less likely. At least in the u.s. where fascism never took off in its heyday before it had any stigma. If your talking about something with no evidence then that fascist speculation would be something, at least there’s precedent for a Keynesian new deal in the U.S. I do recognize it as a possibility though and that’s why I said probably, not with “absolute certainty”.
If the crisis doesn’t happen we may all die as well as neither party seems willing to deal with the climate catastrophe. That outcome seems way more certain to me, as shown by the repeated calls for action in the last 2 decades falling in deaf ears, than fascists taking over if a crisis does happen.
The way I see it is there’s a 90% chance of severe climate catastrophe on the current course, and a 30% chance there will be a fascist takeover if there’s a crisis, but a 50% chance for a green new deal. These are all completely speculative, but so is any guess on the future and I like to believe my guess has some backing in historical reality.