An Odd Dilemma

The definition of dilemma, literally “two propositions,” takes its negative meaning from the fact that both propositions (or situations) must be unfavorable to deserve the name dilemma—yet we must choose one. Fine. But my use of the word is a little different here. Of the two propositions I have in mind, I view the first rather with approval; not the second; yet the second is the cause of the first.

The first is that since the end of the Great Recession (let’s assume that it lasted for two years, all of 2008 and 2009) has had a dreary aftermath that, so far, has lasted nearly six years. By dreary I mean that the economy, while it has grown, has grown from 2010 to 2015 at an annual rate of 1.4 percent whereas it grew from 2002 to 2007 at a rate of 2.9 percent. The measured item here is Gross Domestic Product expressed in constant dollars. The low GDP growth rate since the recession actually pleases me: 1.4 percent is much closer to the population growth rate, which is under 1 percent annually—yet it is higher than the population growth rate; we are growing, a little, but are avoiding what Alan Greenspan once labeled “irrational exuberance.”

The second proposition is that the reason for our supposedly sluggish growth is not only domestic but also international conflict. Conflict has caused the erosion of public confidence and manifests in countless ways—and this despite low gasoline prices and gradually increasing employment—if only in the lower-paid segments of the economy. The adaptive growth pattern is pleasing; its cause, vast demoralization, is not. Therefore the dilemma.

In a way this situation illustrates the nature of real change—which is almost never by design but always by default. Just as drought produces those ugly cracks in dried out ground so social conflict produces adaptive attempts to form new, smaller, and more viable social entities. Unfortunately, to make the smaller, one has to tear the greater apart. Hence we have these nearly annual cliff hangers about public debt and government closings, cracks within and between parties, insane shootings at public events that are beginning to be almost casual—and, to be sure, hesitance by people to spend money on anything but the necessary stuff. Meanwhile, looking beyond our borders, much, much the same everywhere. If this goes on, yet more changes will appear in society. Some of them I will actually appreciate and value (as I do low-growth-GDP), even if their causes are rather sordid.

At the Root of the New Normal

To speak of “the new normal” is, you might say, the new normal. The phrase signals something negative. The speaker is comparing current conditions with a much happier one—a time of growth in every category, even such negative categories as debt. People piled on debt because they were confident that growth, progress, advancement, promotions, and good fortune would magically create the necessary funds to pay it back. And debt for some meant sales for others. More and more sales. Higher and higher profits.

The new normal signals disappointment. It’s as if, watching a pot, waiting for it to boil, we looked under it to see if the blue flame was on; and it was. So why, for Heaven’s sake, doesn’t it start to boil? Something is wrong. Is it the water, the pot, or the fire? The Laws of Progress no longer seem to hold. A fundamental change has set it. It’s the new normal.

If the gas flame is the cause of water boiling, what is the analogous driver of the economy. For the longest time—essentially since the end of World War II—economic dynamism was a given. It was the way things were: dynamic. Yes, the occasional “correction” explained why sometimes we had brief recessions, but the phenomenon, the old normal, was really Progress. The way things ought to be. So what was the source of that dynamism.

Confidence. And the root of the New Normal is—the lack of it.

Confidence is two parts faith and one part observation. It is a feeling. It also feeds on itself. It was first shaken on 9/11/2001. On that day a fundamental feeling of American invulnerability was put in question. The excessive reaction to it—proportional in size to the unrealistic faith in our superiority—has spawned a series of mismanaged wars. Meanwhile the Money Culture ignored it and produced growing inequality, the fraudulent Mortgage Bubble, and then the Great Recession. And since then, no matter what happens, it is interpreted as yet more proof that something’s wrong—so that we are now behaving irrationally about the ebola plague in part of Africa.

When for far too long a period a vast, rich society like ours has come to forget that real life is dangerous and ever demanding of vigilance, especially in good times—and that our faith should be in Something beyond our own genius—the “corrective” of our delusion will also take a while to manifest. The New Normal is an early sign of that correction. But confidence will only return when we forget about the Old Abnormal—infinite growth and progress—and turn our eyes to the Heavens. That will steady us again. And the waves of hysteria, which now characterize social life, will then gradually diminish.