We Haven’t Turned the Corner…But Maybe We Can At Least See It From Here

A spate of good news in diverse arenas creates opportunities for progress

There has been an unusual amount of good news lately, even for those of us who by nature are optimistic. To be sure, the country hasn’t conquered our economic challenges, healed the political and cultural divisions or gained the courage and wisdom to tackle the big issues of the future.

It certainly is premature to say that as a nation we have turned the corner. But it may not be too soon to say that we now at least can see the corner from here.

Start with politics. Most candidates who peddled lies about 2020 election fraud were rejected by voters across the country in 2022. Whatever one’s political leaning is, it is a cause for celebration when voters endorse the integrity of American elections.

Meanwhile, anti-abortion advocates long have argued that abortion should be decided by the people not courts. They got their way. In every state in which voters were asked to decide whether or not to protect access to reproductive health, they said, “yes.” Those state referenda alone don’t get us to a new day in the debate over abortion, but they do pave the way for different and more productive policy discussions. Already, some anti-abortion advocates are calling for more access to pre- and post-natal health and better support for expectant and new mothers. The outcome of the votes may even encourage some to seek common ground on the fundamental right to abortion. That likely is a corner too far…but social change sometimes can be stunning.

One of those stunning events in the culture wars was passage of federal legislation to recognize same-sex and interracial marriages from state-to-state. The vote in Congress was a remarkable political reversal from not too many years ago. It was just a decade ago that Minnesota defeated a constitutional amendment to ban same-sex marriage. The Minnesota vote brought an end to a streak of initiatives in 30 other states that made same-sex marriage constitutionally prohibited. It paved the way for Minnesota to pass a law in 2013 legalizing same sex marriage and preceded the historic 2015 Supreme Court case requiring states to recognize same-sex marriages.

The vote for marriage protection in Congress gained a substantial (although still a small minority) of Republican votes, including two members of the incoming GOP U.S. House leadership team. Certainly, the vote isn’t an immediate precursor to bipartisan peace treaties on other cultural issues, including transgender rights, but it does show how opinions on even the most divisive and intractable issues evolve with time, education and wisdom.

On the economic front, there also are causes for optimism. The rate of Americans without health insurance hit an all-time low of 8% in 2022. Among children, the rate fell to 3.7%.

Employment remains strong, including an unexpectedly robust November jobs report. The unemployment rate has remained at or near a 50-year low for months. And, the demand for labor is expected to stay strong with federal legislation to rebuild the country’s infrastructure and to invest in bringing semiconductor research and production back to domestic shores.

Meanwhile, supply chains are returning to normal and transportation costs are dropping. According to industry sources, the cost of shipping a 40 foot container from China to the U.S. West Coast has dropped by 84% since the start of April and is expected to continue its decline. The backlog of container ships waiting to unload their cargo at the twin ports of Long Beach and Los Angeles finally hit zero in late November after rising to as high as 109 ships in January.

Inflation - still an enormous problem - shows some signs of slowing. The latest Consumer Price Index report showed an unexpectedly large drop. The CPI was preceded by a steady decline in wholesale price index, an indication of underlying drivers of inflation. The index has declined for five consecutive months. An especially positive trend for family budgets is the drop in gasoline prices. Prices at the pump are now as low as they were in fall 2021.

All of this favorable economic news is leading some economists to be guardedly optimistic about the U.S. economy in 2023. “The U.S. will probably stick a soft landing next year: the world’s largest economy is forecast to narrowly avoid a recession as inflation fades and unemployment nudges up slightly,” according to Goldman Sachs economists. Other financial institutions, including Bank of America and JP Morgan, aren’t quite as optimistic, but are predicting only a “mild recession” for next year.

On the energy front, the transition from fossil fuels to renewable energy is accelerating. The production of renewable energy has increased at an average annual rate of 12.6%. “Renewables were the only category of energy that grew globally at double digits over the year (2021) and the past decade,” according to Forbes, a pace the magazine called “blistering.”

The Energy Information Agency estimates that wind, solar and hydro will generate 22% of US electricity by the end of 2022, surpassing coal as an energy source. And, with the Inflation Reduction Act’s $369 billion in new clean energy investments coming online, there is meaningful progress being made to curb the impact of climate change.

Without doubt, there are plenty of red flags, including the on-going Russian assault on Ukraine, new variants of Covid, an economy that remains fragile and a public still deeply divided. The linchpin for overcoming these challenges and building on the spate of good news: policymakers. Can they move beyond their worst partisan instincts to build on the positive trends?

Democratic and Republican partisan biases, though, run deep. The late pundit P.J. O’Rourke described the goals of the two parties (with not much exaggeration) this way: “The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn't work and then they get elected and prove it.”

Eager to prove O’Rourke’s point, Republicans, who will control of the House of Representatives in January, are threatening to shut down government rather than authorize the funds to pay for debts already incurred. Not incidentally, the debts now coming due were exacerbated by the GOP’s big spending and terrible tax policies when they had complete control of the national checkbook in 2017-18.

Democrats for their part offer a financial lifeboat for every individual crisis, sometimes warranted and necessary. Sometimes, though, they build a lifeboat larger than the crisis warrants. A case in point: forgiving student loans for households earning up to $250,000.

Consider what could be done if Republicans and Democrats agreed to capitalize on favorable trends. Take one issue of critical importance but too little attention - the labor force participation rate. Even with employers desperate for more workers and wages going up, only about 62% of Americans over age 16 are in the labor market or actively seeking a job. Among the most worrisome trends are the labor force participation rate of men 25 to 54 years which has seen a long-term decline and the participation of women which peaked in the late 1990s and has been falling since.

State and federal policymakers could do a lot to boost labor force participation. Making child care more accessible and affordable would help young parents. Reforming immigration laws would bring new, qualified workers to America. Eliminating regulations and sometimes burdensome professional licensing requirements could encourage older workers to start new careers in teaching and other fields where their professional experience would be hugely valuable. Changing tax laws to flip the incentives that now encourage some companies to invest more in dividends and stock buybacks to those promoting investments in research and capital spending that lead to well-paying jobs.

Those and other reforms require a lot of political heavy lifting. The good news is that today’s good news makes innovation more politically viable. Republican and Democratic policymakers face a choice. The good news on so many fronts reduces the need for crisis management and opens the door to future-focused solutions. The results of the 2022 elections at least suggest that voters are willing to reject nonsense and maybe, just maybe, reward substantive solutions.

So here’s the question of the day: Does America still have the capacity to celebrate good news and build on it for the future? Or, will the politics of pessimism prevail? That corner we need to turn is within reach. I think.