Out with the Bad, in with the Good POSITIVE-NEWS BOOM

Article excerpt

If Rip van Winkle were to wake up today after a seven-year snooze and check the papers, he probably wouldn't believe his eyes.

In six-plus years, the US economy has boomed in ways the experts thought impossible: Unemployment has sunk below 5 percent, a 23-year low. Inflation, around 3 percent, is at a 30-year low. The stock market continues to break records. There are even possible signs that the rich-poor income gap may be easing.

In the social arena, the news is just as heartening: Welfare rolls have declined dramatically. Violent crime has plummeted. Teen sexual activity is declining for the first time in two decades. The teen birthrate is also down. The abortion rate has dropped for four straight years. Internationally, more people are living in democracies than ever. The world's population is growing slower than predicted, easing fears of an early crisis over resources and environment. It's all enough to make doomsayers throw up their hands and go home. But explaining the spate of good news is no simple matter - especially if one tries to find an overarching connection between the economy and societal issues. "There may be a linkage, but it's extremely weak," says William Popenoe, a sociologist at Rutgers University in New Jersey. "It's certainly the case that welfare rolls could be affected by the economy. The same with crime," he says. "Any time people are a little bit better off, their outlook is rosier and they're more likely to walk the straight and narrow path." But, he adds, one could also make the case for the opposite. During the Great Depression of the 1930s, hard times brought families together, and the divorce rate dropped. In current times, the divorce rate leveled off in the early 1980s. It has since stayed there, which is in some ways an encouraging sign, but is also a result of the trend toward forgoing marriage altogether. End of a bad wave? David Hackett Fischer, a historian at Brandeis University in Waltham, Mass., has laid out a whole thesis linking waves of inflation throughout history with periods of social upheaval, marked by family disintegration and high rates of birth outside of marriage. We are currently in the late stages of a great global wave that began in the 1890s, Professor Fischer writes in his book "The Great Wave." It is an extended period of economic disequilibrium and societal stress that mirrors similar periods in the 16th and 18th centuries. Under Fischer's thesis, it is tempting to surmise that the current low inflation and slight downturn in illegitimate births mean the latest wave is ending. But in an interview, Fischer demurs. "Well, it's possible" that we have reached the end of the current wave, he says, adding that the future will be determined in no small part by choices that have yet to be made by leaders. Still, he points to a significant global trend that may signal the end of the wave is coming: the decline in the rate of population growth. To be sure, most countries' populations are still growing (though more than 60 nations now have rates of population increase below the replacement level). But the lower rates of growth could mean a lessening of economic demand, and therefore lower inflation. The end of the cold war - and with it a decline in the growth of military spending throughout the world - also eases an inflationary pressure that had been in place for 45 years. Before that, military spending for both world wars was also highly inflationary. Fischer also points to expanding education of women throughout the world, which contributes to lower birth rates, as a key component in reducing inflationary pressure. And he notes that the restructuring of economies around the world is reducing the rate of growth of government spending - again, a trend that dampens inflation. "You put all these things together and disinflationary pressures are building," he concludes. But "it's not clear if this is really a fundamental . …


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