Use COVID outrage to reform economy
Politics, the economy and the pandemic have angered everyone, and that takes a toll on more than just our psyche.
No emotion motivates people more than anger or its kissing-cousin fear. One look at any of President Donald Trump’s campaign commercials reveals the effectiveness of riling people up. But anger bleeds over into economic activity.
Two economists, one a hedge fund manager, the other an academic, studied how anger affects the economy. In their new book “Angrynomics,” Eric Lonergan and Mark Blyth conclude that public anger comes in two flavors — one beneficial, the other toxic.
Lonergan and Blyth dive into past economic crises, the popular rage they triggered and how governments addressed both. They found, in most instances, a sense of injustice fueled public anger and most of the time, that energy can be useful.
For example, people get angry when someone steals, takes more than their fair share, or does something that hurts cohesion. This righteous anger dissuades people from doing harmful things and keeps the peace.
Righteous anger also motivates us to address injustice, something all mammals instinctively hate.
One of my favorite primate studies, one not mentioned in “Angrynomics,” chronicles a researcher giving one monkey grapes in front of another monkey who receives only slices of cucumber for performing the same task. After seeing the other monkey repeatedly get sweet treats, the other monkey, as they say, goes ape.
In democracies, voters enraged by an unjust system elect new leaders. Lonergan and Blyth explain how voters angered by the Great Depression elected President Franklin D. Roosevelt. He overhauled a profoundly exploitative economy and established the New Deal, which favored workers and government intervention.
When that system became unbalanced and led to recession and stagflation in the late 1970s, voters chose President Ronald Reagan. He threw out many of the advantages the New Deal guaranteed workers, stripped down the government’s role in the economy and started a 40-year era of economic policies that favored the investor class.
The 2008 Great Recession triggered another round of public rage, but this time opportunist politicians
stoked the other type of anger: tribalism. Rather than demand an end to an unjust system, tribal anger blames another group of people for their problems and seeks to punish them.
Trump, Indian Prime Minister Narendra Modi and Hungarian Prime Minister Viktor Orban are just a few of the populist politicians who harnessed Great Recession anger to gain power. All three rally their supporters by promoting hatred toward a scapegoat rather than introducing real change for the citizenry.
Lonergan and Blyth make the compelling argument that while righteous anger encourages governments to solve economic problems and improve equity, tribal anger encourages confrontation and demonizes others, thereby contracting the economy.
Trump, for example, has levied tariffs on foreign goods that zero-out the economic benefits of his tax cuts. His administration has vilified foreigners, making it more difficult for legal immigrants to enter the country, even though immigration keeps the U.S. population and economy growing.
The onset of the COVID-19 pandemic and the Coronavirus Recession has triggered yet another wave of public rage.
“The anger can be righteous indignation that can be addressed, or a tribal energy that can be weaponized,” the authors write.
Based on their campaign materials and speeches, Trump and other Republicans have chosen tribalism. They’ve declared that anyone who opposes them is a traitor to the country. This is pure demagoguery. For more on that, check out Patricia Roberts-Miller’s excellent “Demagoguery and Democracy.”
Lonergan and Blyth suggest harnessing righteous anger for a once-in-alifetime overhaul of economic policy. Politicians should take the opportunity to address the income inequality, health care inequity, and workplace exploitation that makes average workers hate our economic system and afraid for their family’s future.
While the authors argue for progressive policies, which are worth buying the book to understand, I want conservatives to play a critical role in reforming the economy as well. The United States is at its best when liberals and conservatives work together and find useful compromises.
What we do not need, from either political party, is more anger, vilification and hatred for our fellow Americans. While our country includes some fascists and communists, and some who hate our Constitution, they are an infinitesimal portion of the electorate.
Our nation has some severe problems made more evident by the pandemic. We don’t need cynics grabbing power by stirring the pot of tribal hatred. What we need are leaders who will bring forth good, diverse ideas for a more just economy and society.