Commentary on Political Economy

Tuesday 2 January 2024


A major economic and social crisis seems inevitable.

(Washington Post staff illustration; iStock)
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On the list of words in danger of cheapening from overuse — think “focus,” “iconic,” “existential,” you have your own favorites — “crisis” must rank near the top. A Foreign Policy article in 2020 urged some “crisis” caution, listing health care, housing, energy, drugs, education, marriage, police violence and others as declared “crises” that might not fully qualify for such an extreme label.

A host of prognosticators, coming from diverse disciplinary directions, seems to think something truly worthy of the term is coming. They foresee cataclysmic economic and social change dead ahead, and they align closely regarding the timing of the crash’s arrival. Unsettling as these forecasts are, the even more troubling thought is that maybe a true crisis is not just inevitable but also necessary to future national success and social cohesion.

The causal diagnoses differ somewhat. Looking through a political lens, James Piereson in “Shattered Consensus” observes a collapse of the postwar understanding of government’s role, namely to promote full employment and to police a disorderly world. He expects a “fourth revolution” around the end of this decade, following the Jeffersonian upheaval of 1800, the Civil War and the New Deal. Such a revolution, he writes, is required or else “the polity will begin to disintegrate for lack of fundamental agreement.”

In “The Fourth Turning Is Here,” published this summer, demographic historian Neil Howe arrived at a similar conclusion. His view springs from a conviction that human history follows highly predictable cycles based on the “saeculum,” or typical human life span of 80 years or so, and the differing experiences of four generations within that span. The next “turning,” he predicts, is due in about 2033. It will resemble those in the 1760s, 1850s and 1920s, Howe writes, that produced “bone-jarring Crises so monumental that, by their end, American society emerged wholly transformed.”

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Others see disaster’s origins in economics. Failure to resume strong growth and to produce greater economic equality will bring forth authoritarian regimes both left and right. This year, in his book “The Crisis of Democratic Capitalism,” Financial Times editor Martin Wolf advocated for an array of reforms, including carbon taxation, a presumption against horizontal mergers, a virtual ban on corporate share buybacks, compulsory voting, and extra votes for younger citizens and parents of children. He fears that, absent such measures, “the light of political and personal freedom might once again disappear from the world.”

Then there’s that little matter of our unconscionable and unpayable national debt, current and committed. Erskine Bowles led the last serious effort to rein it in, before his commission’s report in 2010 was torpedoed by President Barack Obama. Bowles called what’s coming “the most predictable economic crisis” — there’s that word again, aptly applied — “in history.” And that was many trillions of borrowing ago.

Now, market guru John Mauldin has begun forecasting a “great reset” when these unsustainable bills cannot be paid, when “the economy comes crashing down around our ears.” Writing in August, he said he sees this happening “roughly 7-10 years from now.”

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Encouragingly, if vaguely, most of these seers retain their optimism. Piereson closes by imagining “a new order on the foundations of the old.” Confessing that he doesn’t “know exactly how it will work,” Mauldin expects us to “muddle through” somehow.

Howe, because he sees his sweeping, socially driven generational cycles recurring all the way back to the Greeks, is the most cavalier. Although “the old American republic is collapsing,” he says, we will soon pass through a “great gate in history,” resolve our challenges and emerge with a “new collective identity.”

Acknowledging the chance of unfavorable outcomes, including a war we neither win nor recover from, he still leans toward expecting a new era of optimism, national unity and civic engagement. Like economist Mancur Olson in the 1980s, he notes the flourishing of societies where disasters — natural or man-made — swept away encrusted bureaucracies and vested interests.

Paradoxically, these ominous projections can help worrywarts like me move through what might be called the stages of political grief. A decade ago, an optimist could tell himself that a democratically mature people could summon the will or the leaders to stop plundering its children’s futures, and to reconcile or at least agree to tolerate sincerely held cultural disagreements.

For a while after that, it seemed plausible to hope for incremental reforms that would enable the keeping of most of our safety-net promises, and for a cooling or exhaustion of our poisonous polarization.

Now, I’m grudgingly ready to surrender and accept that the cliché must be true: Washington will not face up to its duty except in a genuine crisis. Then and only then will we, as some would say, focus on the existential threats to our iconic institutions.

So maybe we might as well get on with it, and hope that we at least “muddle through.” I’ve arrived at the final stage: Crisis? Ready when you are.

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