Economic language is packed with metaphors. It would be sunk without them. The economy is overheating. It’s depressed. It’s recessed. It’s hot. It’s cooling. It hit the skids. It’s in free fall. We had better put on the brakes! Housing is underwater. This stock is headed to the moon. Inflation is easing. The Fed is pulling back.
And so on it goes. Sometimes, one wonders: Is this a real science or just a bunch of wordplay? I once knew a student who became so frustrated that he decided the entire field was nothing but poetry masquerading as precision. So he changed his major. I kind of get the point.
Still, it’s a pity, because economics is in fact a robust social science that seeks to discern the laws that govern the material world independent of political wishes. The trouble is that for many centuries since economics was discovered, it has been abused by states and politics generally. The proliferation of metaphors is part of the game of obscurantism.
The latest prattle we’re seeing is that the Fed believes that it can soft-land the economy. Let’s unpack that one. Presumably, we’re meant to imagine that the economy is flying in the air but now must land on the ground. It can crash down and kill all the passengers, or it can put down the landing gear and deplane everyone safely.
Will it happen? I’m doubtful, but the real problem is the metaphor itself. The economy isn’t flying. So it’s unclear what it even means to soft-land. The economy never really took off after lockdowns. The supposed growth rates of 1 and 2 percent are entirely within the margin of error, especially given the impossible barriers to accurate data collection over the past three years. I personally don’t believe it. I suspect that in a few years’ time, it'll become obvious that we never left the recession of 2020.
Let’s have a look at real gross domestic product growth rates since World War II.
![(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2023%2F07%2F17%2Fid5402962-1_JAT_2023.07.17-1200x864.png&w=1200&q=75)
For many decades, growth rates of 5 and 7 percent were common. The momentum has been gradually declining for decades. We look back fondly on the 1980s, but they were only great compared with the late 1970s. By the standards of the 1950s, we still weren’t growing according to potential. After 2008, however, we’ve been sinking further and further into the pit of stagnation (to deploy more metaphors).
In other words, our standards of what constitutes growth have dramatically changed. We’re grateful for the Department of Commerce to generate above-zero growth rates, even if they have to throw in everything but the kitchen sink, including government spending, to get there. We somehow console ourselves to be out of the red and staying in the black, even while we fail to notice that civilization is falling apart.
The tremendous tragedy here is that this slowing of wealth creation occurred at the very time of the great technological advances in a century or more. The rise of databasing, the internet, and digital technology should have given us vastly more wealth than electricity, flight, and the telephone. And yet, at this very period, government grew vastly and in ways that crowded out private-sector wealth creation.
This constitutes one of the great missed opportunities in world history. Today, wealth creation in the West is hobbled by crazed litigation (over anything and everything), which is costly in terms of money and time. Compliance with regulations is insane, too, as any businessperson knows. The amount of time and money it takes just to hire people is astonishing. Taxes at all levels are out of control, creeping higher every year and requiring ever more teams of lawyers and accountants, software, and so on. Really, all of this is killing enterprise.
The institutions and people most hurt by this plethora of control are the smaller businesses and poorer folks, which is precisely why the big businesses and big shots like them so much. As a result, industrial structures are ever more cartelized, as the major players have rigged the system of progress in their favor and the gap between the rich and the poor and middle classes keeps growing. Inflation in recent years has been brutal to the purchasing power of money that we managed to make.
Also affecting American prosperity is the rampant ill-health of the population, with obesity, drug addiction, and overall demoralization setting in. Poisonous food doesn’t help, and that’s mostly what Americans eat, thanks to an intensely overregulated agricultural sector.
Education has become a disaster, too, such that it no longer matters what degree a person can claim; it’s highly likely that the person verges on what most previous generations would call illiteracy. As for finance, the distortions that sucked so much American capital from productivity to paper shuffling over the past 15 years have a very long way to go to unravel. We’ve only begun that process.
There are fixes for all these problems, but they’re hardly spoken about at all. Administrative agencies need to be completely abolished, taxes slashed, the government cut back to size, and something needs to be done about the litigation problem, but I don’t know what. In essence, we need full free enterprise back, complete with universal free trade. We’re further from that ideal than at any point in my lifetime.
Even basics such as property rights are in trouble. Why start a business if the government can just lock you down again? The psychological impact of 2020 to 2022 will last generations. It doesn’t help that the ruling class has never admitted error.
Diversity regulations and the attempt to impose “woke” philosophy over profitability on business are bound to fail. There must be a quick turnaround on this bizarre movement. They all claim to be “progressive,” but the practical reality is regressive: back to old-world tribalism with a digital spin.
Soft landing or not, American prosperity is gravely at risk. We don’t have to experience a fast-motion second Great Depression to have a crisis. This slow-motion strangulation is enough to kill our prospects for the future. At that point, we’ll have to deploy all sorts of new metaphors involving sinking, ditches, and collapses.
