If all of these analyses suggest that the gap between fundamentals and mood represents a negative vibe, it is probably worth considering, alongside the economic factors, the way that vibes of widespread social dislocation, illness and death have contributed, as well. But it is remarkable how invisible the pandemic has been in recent debates about American gloom, with only a few economists even considering the role that recent mass death and social disorder may be playing in our moods. America’s worst year for Covid deaths ended just 23 months ago.
There were secondary effects: mass unemployment, G.D.P. contraction and a stock-market collapse, a rapidly expanded social safety net. But each was reversed fairly quickly, leaving behind a discombobulated economy that nevertheless looks, at first glance, pretty healthy. These days, both consumers and businesses are acting as if the economy is booming, spending and investing, and mostly reporting good news about their own finances. But when asked to assess the broader state of the world, they invariably get bleak. “The pandemic shattered a lot of illusions of control,” the University of Michigan’s Betsey Stevenson recently told The Times. “In terms of sentiment,” the former Federal Reserve economist Claudia Sahm wrote earlier this fall, “the pandemic caused a sudden increase in pessimism that hasn’t gone away.”
Covid-19 isn’t a total explanation, of course. People do worry about price levels, not just the rate of change, and for much of the last two years, inflation outpaced wage growth. Much of the gains Americans got from pandemic stimulus policies disappeared in 2022, when they were rolled back, driving child poverty back up and leaving millions more disenrolled from Medicaid. Partisanship skews perceptions, and perhaps the media does, too, including by underplaying the way that a Trump presidency would make inflation worse. (Though none of those phenomena were new in 2020 or 2021.)
But let’s not forget that the backdrop for all of this economic dislocation was the pandemic itself — a tough and disorienting few years for almost everyone, whether you spent them anxious about infection or outraged about mitigation overreach or somewhere in between. According to the General Social Survey, the share of Americans describing themselves as “very happy” fell about 40 percent between 2018 and 2021, and has only halfway recovered since. The share of Americans who described themselves as “not too happy” roughly doubled early in the pandemic, and has barely declined since.
That alone is a big hole to climb out of, emotionally and politically, and as Jerusalem Demsas noted recently in The Atlantic, it takes a little time for perceptions to catch up with reality. Would it have been reasonable, in 2010 or 2012, to ask about public confidence in the economy or the shape of the future without emphasizing the financial crisis in the rearview mirror? In 1992, 15 months after the end of what was in retrospect a mild U.S. recession, and in a much calmer time for partisanship and news polarization, the percentage of Americans who said they were satisfied with the direction of the country hit a new low: 14 percent.