Paul Krugman: What if things were about to get better? | Business

It has been the summer of discontent. At the beginning of the year, many of us expected to experience drastic improvements in our quality of life. Miracle vaccines offered hope of quickly ending the pandemic and returning to normal life. We hoped that a return to normalcy would lay the foundations for a speedy economic recovery. When President Joe Biden predicted a “summer of bliss,” it didn’t seem unreasonable.

But it could not be. The speed of vaccination, after the first successes, stalled due to widespread resistance, intensified by misrepresented information and politically motivated misinformation; and in a poorly vaccinated country, the delta variant caused a third wave of infections. While employment growth has been rapid by historical standards, the economy is affected by both the persistence of COVID-19 and tangles in supply chains. And the rise in homicides has revived some of the old dystopian fears of social breakdown.

The result has been widespread frustration with many people predicting that things will continue to be bad or get worse in the coming months.

But what if the current melancholy was excessive? As regular readers know, I am not an optimist by nature; I am as terrified as anyone should be at the threat that right-wing radicalism poses to American democracy. But there are good reasons to think that in the fairly near future we will see a considerable advance against the three Cs: covid, containers (that is, issues related to the supply chain) and crime. We didn’t have our summer of bliss, but we could be heading into a spring of relief.

Let’s start with the pandemic situation. Right now, the surge caused by the delta variant is clearly in retreat in the United States. What’s more, there is reason to hope that this is not a false dawn, because the federal government and a growing number of private companies have gotten serious and are demanding that workers get vaccinated.

And the wall of resistance against the vaccine has turned out to be much less robust than it appeared. A few months ago, polls indicated that workers would rather leave work than accept mandatory vaccination. The truth is that employers who have already imposed this obligation —for example, in health care— generally find that only 1% or 2% of their workers comply with the threat.

None of this means that the covid will stop worrying us in the immediate future. But it does seem that we are finally moving toward a situation where vaccinated Americans can feel quite safe resuming face-to-face work, going out to eat, and – most importantly – sending kids to school.

And what about supply chain problems? It seems fair to say that almost no one predicted the “Great Tangle”, the logistical chaos that has lines of freighters sailing off the coast of California waiting for a place to dock, automotive companies unable to meet the demand due to a shortage of semiconductor chips , and more. But two of the main factors that have caused this chaos appear to be abating.

First, the rollback of the pandemic should help mitigate supply problems, because at least some disruptions have been caused by covid-related shutdowns and the inability or refusal of some workers to perform risky activities. As contagions fall, these interruptions should be reduced.

Probably even more important is that many of our supply chain problems were caused by the unusual form of demand during the pandemic, which caused consumers to buy fewer services, but more merchandise: exercise machines because they couldn’t go to the gym. , home entertainment systems because they couldn’t go to the movies. Purchases of consumer durables soared from the pre-pandemic trend, and the world did not have the capacity to move all of those goods without major delays.

But the merchandise-buying fever has dropped dramatically in recent months, and it should ease further as normal life returns. This should decrease the pressure on the system. Christmas presents may still be a bit difficult to come by, but it would be surprising if the tension did not ease considerably early next year.

Homicides

Finally, the crime. Last year saw a dramatic increase in homicides, although murder rates remain well below those in the 1990s. But did the rise in homicides herald a return to the bad times, or was it just an aberration related to the pandemic?

Well, the New York data at least indicates that 2020 was not the beginning of a trend. The homicide rate so far this year is below the corresponding period last year; in the last four weeks it was 14% below that of the previous year. On the whole, there are good enough reasons to believe that life will look a lot better to us early next year than it does now.

Naturally, such an improvement in the nation’s mood would have great political repercussions, and we should hope that the Republicans will do everything they can to make things worse again; Mitch McConnell may have shrunk from the prospect of creating a global financial crisis over the spending ceiling, but there are certainly plenty of tricks ahead of us. Still, I am cautiously optimistic. Could it have been something I have eaten?

Paul Krugman He is a Nobel Prize in Economics. © The New York Times, 2021. News Clips translation