Take Heart, Doomscrollers, America's on the Way Back
(Bloomberg Opinion) -- Last year made it feel as if the U.S. was a nation in steep decline. And in some worrying ways it is. But looking back on 2020, and looking ahead to 2021, there are signs that the country has robust reservoirs of strength and effectiveness that will cause it to outperform the gloomiest expectations. It may not be morning in America yet, but it’s past midnight.
The clearest example is the vaccination race. Despite problems with the initial rollout, the U.S. public health system has now found its feet and is putting about 1.2 million shots into arms per day — not far short of President Joe Biden’s target of 1.5 million. Around the world, only a few countries have administered shots to more of their population than the U.S. has — and of those, all except the U.K. are very small.
Notably, China is lagging far behind the U.S. in the vaccination drive despite getting a considerable head start on development. The country’s vaccines, which used an older technology than the U.S. shots and may have been subject to less reliable trials, have unclear efficacy. Whether or not China’s vaccines actually work well, the country has slow-walked its rollout, and now has been reduced to spreading unfounded rumors about Western vaccines. If the U.S.’ great rival continues to lag, the fight against Covid-19 could end up looking less like America’s Chernobyl and more like a repeat of the space race — the U.S. off to a slow start but finishing strong.
In economic terms, the U.S. has taken a big hit from Covid-19, including a recent downturn from the big winter wave. But whereas the American economy was lagging other rich nations as of summer 2020, it's now recovered to an average performance:
And 2018 was near the end of the longest unbroken streak of economic growth since World War II — an expansion that particularly benefitted those at the bottom of the distribution. That suggests that the U.S. system has underlying strength that will return after Covid-19 goes away.
The reason poverty hasn’t fallen more is that the U.S. has been very generous with government financial aid — partially reversing a typical pattern of stinginess and partisanship. Though the most effective relief measures were cut off too early in the summer of 2020, the Cares Act spent so much that American incomes rose in the second quarter of 2020, performing better than any other OECD country except Canada. The more recent relief bill will help preserve this record, as will any bill that Biden passes.
All in all, despite the summer slump, the Covid relief spending effort has showcased a surprising amount of bipartisan cooperation and congressional effectiveness — two things the U.S. has not exactly been known for in recent decades.
In addition to all this, the U.S. looks like it’s finally getting serious about addressing its biggest long-term challenge — climate change. The bipartisan Covid relief bill passed in December also included significant measures to fight greenhouse emissions. It included $35 billion of new government investment in solar, energy storage and other green energy technologies, tax credits for solar and wind, and a phasing out of hydrofluorocarbons (a greenhouse gas used in coolants). And that was done under the Trump administration, with Republican support; Biden’s plans are even bolder.
Moreover, the global fight against climate change has been advanced immeasurably thanks to American science, technology and industry. It was U.S. government-funded research that drove drops in solar cost between 1980 and 2000, and U.S. installation of solar at large scales helped continue the decrease afterward. Meanwhile, American science and the industrial leadership of Tesla Motors have driven down the cost of batteries as well. The result has been a true technological revolution. And that revolution is making it possible for other countries to step up the fight as well. India, only recently on track to build huge amounts of coal plants, is now canceling them rapidly in favor of solar, simply because the latter is so cheap now.
All this isn't to paper over the still-huge weaknesses and dysfunctions plaguing the U.S. Costs for health care, infrastructure, housing construction and higher education are far higher than in the rest of the developed world. The country’s bureaucracy has suffered from years of neglect, disinvestment and political meddling. Polarization remains dangerously high, as evidenced by the unprecedented Jan. 6 attack on the Capitol.
But those who worry that the U.S. is in terminal decline should take heart. The nation's fundamental strengths remain, and many of its biggest challenges are being addressed by science, industry and government.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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