It has been almost four years since Covid-19 hit the world. In the United States, the pandemic killed more than a million people and left several million with persistent health problems. Much of normal life came to a standstill, partly due to official lockdowns, but mostly because fear of infection kept people at home. In the years that followed, the big question was whether the country would fully recover from this crisis. In 2023 we got the answer: yes. In fact, our economy and our society have recovered exceptionally well. The big question remains when, if ever, the public will be ready to accept the good news.
In the short term, of course, the pandemic had serious economic and social impacts. Employment fell by 25 million in just a few weeks. Massive public aid reduced economic hardship for families, but maintaining Americans' purchasing power in the face of a disrupted economy meant that demand often exceeded supply, leading to overstretched supply chains and the outbreak of inflation. At the same time, the pandemic limited social relationships and left many people isolated. The psychological costs are difficult to measure, but the weakening of social bonds contributed to a number of negative trends, such as increases in violent crime.
It was easy to imagine that the experience of the pandemic would leave long-term scars; that ongoing Covid and early retirements would result in the workforce being permanently decimated; that bringing down inflation would require years of high unemployment; that the increase in crime heralded a sustained deterioration in public order. But none of that happened.
You may have heard about the good economic news. Labor force participation — the share of adults in the current labor force — is actually slightly higher than the Congressional Budget Office predicted before the pandemic. Core inflation measures have more or less returned to the Federal Reserve's 2 percent target, even as unemployment is near its lowest level in 50 years. Adjusted for inflation, most workers' wages have increased.
For some reason I've heard less of the crime news, but it's also exceptionally good. FBI data shows violent crime is down: it's already back to 2019 levels and appears to be continuing to decline. Homicide rates are probably not back to 2019 levels, but they are falling sharply. None of this eliminates the Covid death toll or the severe learning loss suffered by millions of students. But overall, both our economy and our society are doing much better right now than most people would have predicted in the early days of the pandemic or than most Americans are willing to admit.
Not only was the resilience of the United States in the face of the crisis caused by the pandemic remarkable, but also the pessimism of public opinion. By now, anyone who writes about the economy has become accustomed to receiving emails and social media messages suggesting that official statistics about low unemployment and inflation are misleading, if not outright lies. No, the CPI does not ignore food and energy, although some analytical measures do; No, food prices are still not sky high.
Instead of engaging in further arguments with people desperate to justify the negative economic sentiment, I think it's more useful to point out that whatever American consumers say about the state of the economy, they do so as if their finances are in good shape Constitution. More recently, holiday sales seem to have been going quite well. And crime? This is an area where public perception has long been completely at odds with reality, with interviewers being told that crime is increasing even though it is falling rapidly.
And Americans don't act like they're afraid of crime. As I've written before, weekend foot traffic – broadly the number of people visiting the city for pleasure rather than work – has returned to pre-pandemic levels in major urban centers, according to Americans wouldn't expect while fleeing violent urban infernos.
Whatever Americans tell interviewers, they behave as if they lived in a prosperous and (by historical standards) fairly safe country, the country represented in official statistics but not in opinion polls. (Disclaimer: Yes, we have great inequalities and social injustices. But that is no more true today than it was in years past, when Americans were much more optimistic.)
The big question, of course, is whether the discouraging stories will prevail over the relatively promising reality in the 2024 election. Survey data suggests that the good economic news is starting to take hold, but I don't know if there are similar signs when it comes to crime. What they definitely need to know is that the United States has responded exceptionally well to the economic and social challenges of a deadly pandemic. In most cases, we are a nation on the mend. Let's hope we don't lose our democracy before people notice.
Paul Krugman is a Nobel Prize winner in economics
© The New York Times, 2024
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