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
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
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
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
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
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
"You put all these things together and disinflationary pressures
are building," he concludes. But "it's not clear if this is really
a fundamental . …