Is the Country... Continuing to Get Better And Better?

I'm going to keep hammering this point home until the data suggests otherwise.

Photo by Jordan Wozniak on Unsplash

The hard-working staff here at Drezner’s World has been stressed out as of late. There are papers to be read, exams to be graded, spring syllabi to assemble, grant proposals to draft, rants to write, book drafts to revisit, and committee work to shepherd. There are a lot of balls in the air is what I am saying here.

All the stress has perhaps caused me to sound a touch more pessimistic than I normally do. And let’s be honest: there is a scenario where, a year from now, Donald Trump is president-elect and American democracy deconsolidates even further.¹ I still do not think that is going to happen, but I could very well be wrong and the high variance of possible outcomes is a source of stress in its own right.

As the digital pile of grading has shrunk, however, so have my cortisol levels. Regaining my equilibrium, the hard-working staff has been reinvigorated. It reminds me that on a semi-annually basis I like to point out the myriad ways the United States is in better socioeconomic shape than is commonly perceived. See, for example, this from a year ago and this from six months ago.

Now seems like a particularly ripe moment to do so given how downbeat the polling and the vibes have been about the state of the country. As WSJ reporter Christopher Mims noted on Threads recently, filter bubbles can cause such dour perceptions to calcify even if they are wrong — in no small part because mainstream media finds it hard to buck a trend: “If, as a responsible reporter, in the course of doing one's job, you uncover something that doesn't fit any of the current popular narratives on a topic, good luck getting people to share and read that story. Social media has created a powerful incentive to produce stories that will bolster the preconceived notions of any particular group of people.”

So if all y’all don’t mind, let me share some stories that might disrupt some of your preconceived pessimism.

Take, for instance, the general perceptions of lawlessness that have persisted since the pandemic.² Remember the claims of “organized shoplifting” that were so prevalent in 2021? It turns out that was mostly horseshit.

In January of this year the CEO of Walgreens acknowledged that, “maybe we cried too much last year” about claims of theft and that, “the company had ‘probably’ spent too much on security measures and that it might have mischaracterized how much theft took place in its stores.”

The New York Times’ Eduardo Medina recently reported that it’s not just Walgreens who was exaggerating the problem of retail theft:

A national lobbying group has retracted its startling estimate that “organized retail crime” was responsible for nearly half the $94.5 billion in store merchandise that disappeared in 2021, a figure that helped amplify claims that the United States was experiencing a nationwide wave of shoplifting.

The group, the National Retail Federation, edited that claim last week from a widely cited report issued in April, after the trade publication Retail Dive revealed that faulty data had been used to arrive at the inaccurate figure….

In fact, retail theft has been lower this year in most of the country than it was a few years ago, according to police data. Some exceptions, including New York City, exist. But in most major cities, shoplifting incidents have fallen 7 percent since 2019.

Organized retail crime, in which multiple individuals steal products from several stores to later sell on the black market, is a real phenomenon, said Trevor Wagener, the chief economist at the Computer & Communications Industry Association, who has conducted research on retail data. But he said organized groups were likely responsible for just about 5 percent of the store merchandise that disappeared from 2016 to 2020 (emphasis added).

You’ll have to read the whole NYT story — and while you’re at it check out the Los Angeles Times’ Michael Hiltzik to see where that 50% figure originated.³ The important things to understand are that: a) The allegations of rampant, organized theft in 2021 are bogus; b) way too many media outlets seized on this bogus data as a really important; and c) shoplifting is trending downward.

That’s not the only crime statistic that is trending downward. In fact, with the exception of automobile theft, every national crime statistic is trending in the right direction. Earlier this month Jeff Asher went through the FBI’s crime statistics and was gobsmacked by what the (admittedly preliminary and incomplete) data reveals:

Murder is down 13.4 percent in cities under 100,000 with data in the sample and it’s down 12.6 percent in cities with 250,000 or more.

Murder was almost certainly still higher in 2023 than in 2019 even with a record double-digit decline nationally this year, but not by much. Most of the surge in murder that occurred in 2020 and 2021 has abated across the country….

The decline in crime shown in the quarterly data — if realized — would be historically large. To put some of this in perspective, a 4 percent decline in the nation’s violent crime rate relative to 2022’s reported rate would lead to the lowest violent crime rate nationally since 1969.

The quarterly data through Q3 points to a 6 percent decline in property crime which — if realized — would lead to the lowest property crime rate since 1961….

These trends hopefully will be recognized as the positive developments that they are. In a sane world this new information would change how we talk about crime nationally, releasing people from the myth of a national and unending crime wave.

In other words, tell your friends and family because they probably think crime is surging nationally.⁴ And in this case, they’re almost certainly wrong.

So a lot of the most hyperbolic reporting about crime in recent years has been retracted, and the actual data points to a dramatic reduction in both violent crime and property crime.

Now let’s pivot to the “economic” in “socioeconomic.” Recall that a year ago outfits like Bloomberg were predicting with 100% certainty that there would be a recession in 2023. As the year draws to a close, the Biden administration is crowing about how that did not come to pass. This includes the startling development that the real GDP of the United States now surpasses pre-pandemic trendlines for U.S. economic growth. This includes projections from the Congressional Budget Office and the International Monetary Fund.”

So where does the U.S. economy sit as of December 2023? The Washington Post’s Rachel Siegel and Jeff Stein have a pretty pithy summary in their story about the soft landing:

The economy is ending the year in a remarkably better position than almost anyone on Wall Street or in mainstream economics had predicted, having bested just about all expectations time and again. Inflation has dropped to 3.1 percent, from a peak of 9.1. The unemployment rate is at a hot 3.7 percent, and the economy grew at a healthy clip in the most recent quarter. The Fed is probably finished hiking interest rates and is eyeing cuts next year. Financial markets are at or near all-time highs, and the S&P 500 could hit a new record this week, too. Fresh data from the Conference Board also showed consumer confidence reaching a five-month high in December, thanks to growing optimism for incomes, the job market and overall business conditions.

Yeah, let’s talk about that consumer confidence. For most of 2023 there has been a yawning gap between the performance of the real economy and public perceptions of that economy. As Bloomberg’s Katia Dmitrieva reports, however, the “vibecession” might be coming to an end:

US consumer confidence rose in December by the most since early 2021 as Americans grew more upbeat about the labor market and the inflation outlook.

The Conference Board’s index increased to 110.7 in December from a revised 101 reading in November, data published Wednesday showed. The median estimate in a Bloomberg survey of forecasters called for a 104.5 reading….

The report showed optimism across the board, from job prospects and inflation to future incomes and business conditions. More Americans said they are planning to go on vacation, buy a car or purchase big appliances. The results point to an economy holding up well going into 2024.

“December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months,” Dana Peterson, chief economist at the Conference Board, said in a statement.

Maybe 2024 will be a rougher year for the economy — soft landings are hard to pull off. I have had financial folks tell me that the spike in interest rates will trigger a sharp downturn this year.

Now is usually the point in these columns when members of Generation Z respond with something like, “LOL who cares, climate change is gonna ruin everything.” And I am not going to pretend like COP28 solved everything when it solved almost nothing. What I am heartened about, however, is that the technological keys to alternative energy — solar, wind, and batteries — are following the same pattern of cost and efficiency improvement as semiconductors. In the Wall Street Journal’s year in review, RMI CEO Jon Creyts highlights the good news:

Solar and wind are already the cheapest form of new energy for 85% of the world and we expect their costs to continue falling, if trends continue, by another 25% to 50% by 2030.

Market investments are surging on account of these cost reductions, with renewables setting a record of $358 billion in the first half of 2023. Two-thirds of this total was in solar development, with projections suggesting that investment in solar may even overtake that in oil production this year.  Solar is being developed in gigawatt-scale projects capable of powering whole cities. China, Egypt, India, Mexico, Spain and the United Arab Emirates are among the countries developing resources at this scale, with the U.S. closing ground. Similar scale wind farms have been developed in China, India, the United Kingdom and the U.S.

When we look at passenger vehicles, the shift is also remarkable: Just two years ago, one in 25 cars sold globally was an electric vehicle. This year, based on our projections, it will be one in five cars. In 2025, it will be one in two cars, and in 2030, three in four cars. And around 2040 there will be sharply reduced demand for oil from internal combustion engine vehicles worldwide….

The cumulative savings across all these business opportunities are significant. This fall, the International Energy Agency noted that the transition to clean energy will cost $12 trillion less than a “business as usual” scenario, which projects the economics of future energy demand and supply taking account of established and planned policies and regulations, but not more ambitious plans needed to achieve net-zero emissions. 

When the energy agency models those more ambitious pathways, capital costs to fund a shift to clean energy are sometimes higher in the near term. But continuing savings from avoided fuel costs fully support the investment, even in today’s higher interest-rate environment. In short, saving the planet is cheaper than destroying it.

I like that last sentence a lot, and I like any public policies that create that particular incentive.

Could 2024 turn out horribly? Sure, anyone who has been a semi-attentive adult for the past 15 years knows how things can go sideways in a lot of horrible ways.

Still, what is striking to me is that when it comes to crime reduction and economic prosperity, 2023 was a banner year. I just wish that was common knowledge.

1. Click here if you worry about this and want to worry even more.

2. Here’s a recent example. This is the opening paragraph from a Federal District Court ruling on California’s recent gun control law.

We live in dangerous times. Nearly every day, we are barraged with stories about school shootings, attacks on places of worship, and other unthinkable acts of violence and cruelty. Nor are our society’s problems limited to those acute acts of terror—daily our country faces prejudice and division of all types, economic uncertainty and poverty, a nationwide mental health crisis, and an epidemic of addiction and crime.

3. Let’s just say it’s another cautionary tale that sometimes a stylized fact is not always, you know, an actual fact.

4. The polling backs up Asher’s assertion here.