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 think your overestimating how much people will tolerate deprivation before turning on the system. After a certain point people will reject the system, sometimes violently , and seek a new way of organizing society. It’s why the great depression didn’t turn into the corporate hellscape you envision even though companies were just as powerful at the end of the 1920s. Barring some sort of military coup you can’t subject a majority of the population to slavery and poverty without those people revolting.
The system relies on the at least tacit consent of the majority of the population, if you break that it becomes unstable and in that instability new ideas can come in. This is why most successful revolutions follow a crisis, one that discredits the current ruling order and allows something new to take it’s place.
It can be dangerous though, that new thing could be FDR or it could be Hitler, but it’s bound to happen eventually and our best hope now is to lay the groundwork so that when it does we get a leader ready to usher in a new green economy.
I think that’s different from a total collapse of the system. It’s moreso reforms, which I see as different.