Medium Take: Schrödinger’s Economic Disaster
If 24 Million American Workers Sacrifice Themselves on the Altar of Post-Industrial Capitalism, and Nobody Notices, Do They Make a Sound?
When we talk about polarization, we compare the present to the Civil War. We compare our protest movements to the 1960s, our corruption scandals to Watergate, and our mobilizations to World War II. When we talk about the economy, we talk about the Great Depression. We’ve had a lot of days, weeks, months, and years that have been the worst since the Depression. But talking about that time exclusively in terms of money is like talking about the Black Death exclusively in terms of cell biology. The Depression wasn’t just a bad time for the stock market; it altered the way people thought about the world. It destroyed people’s faith in self-regulating market economies and, to some extent, their faith in liberal democratic government.
Describing the Crash of 1929 and its aftermath, economist John Kenneth Galbraith wrote:
In the autumn of 1929 the New York Stock Exchange, under roughly its present constitution, was 112 years old. During this lifetime it had seen some difficult days…. A common feature of all these earlier troubles was that having happened they were over. The worst was reasonably recognizable as such. The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning.
The Great Depression violated people’s understanding of how the capitalist financial system was meant to work. Everyone knew the stock market could crash. It had crashed before, many times. But those crashes had been, essentially, corrections; the market was supposed to recover. Conservative investors, who moved in to pick up bargains after the crash, were supposed to be able to jump-start the economy and reap the rewards of their caution. A market crash that lasted years — that created sustained misery, never rebounded, but just continued to deepen, consuming both the early investors and multiple successive waves of bargain-hunting saviors — wasn’t supposed to be possible. Since it wasn’t supposed to be possible, nobody had any sense of when, or even if, it might end.
That combination of sustained misery and uncertainty was absolutely lethal to liberal democracy. As the economic crisis spread across the globe, desperate people threw their support behind anyone who promised to help them shore up the foundations of what we now call Maslow’s hierarchy of needs, which places security — of our bodies, employment, resources, morality, family, health, and property — ahead of almost everything else. With jobs and homes being snatched away, food scarce, crime rampant, and predictability and consistency effectively nonexistent, the people of Germany, Spain, Italy, and Portugal all submitted to authoritarian dictators. Stalin consolidated power in the Soviet Union. Strong fascist parties rose up in Austria, Czechoslovakia, Romania, Hungary, and Great Britain. They did all this because their democratic governments had failed them. We dismiss those failures today, and condemn their victims, by saying that Mussolini or Hitler or whoever, “made the trains run on-time.” As if the countries that bowed to dictators did so in exchange for a trifle. But if the train is carrying your food, or your payroll, or medicine for your kid, or the raw materials for the factory where you work, that shit matters quite a bit. A government that can’t make that happen is failing its most basic responsibility to its citizens. So, during the Depression, citizens across the Old World chose dictators who could succeed where democracy had catastrophically, unambiguously failed. They chose dictators who promised to make the trains run on time.
Things took a different turn in the United States — though not because the American people were wiser, or less terrified than the people of other democracies. Franklin D. Roosevelt’s agenda for the nation was, in many ways, effectively dictatorial; when Roosevelt entered office in 1933, he closed his inauguration speech by declaring that, “a temporary departure from [the] normal balance of public procedure,” may be required to overcome the disaster of the Great Depression, and that, if he encountered opposition to his New Deal, he would:
Ask the Congress for the one remaining instrument to meet the crisis — broad executive power to wage a war against the emergency, as great as the power that would be given me if we were in fact invaded by a foreign foe.
In the wake of that speech, Eleanor Roosevelt commented to her close friend Lorena Hickok that:
[The speech was] very solemn and a little terrifying. The crowds were so tremendous, and you felt that they would do anything — if only someone would tell them what to do. . . . One has the feeling of going it blindly, because we’re in a tremendous stream, and none of us knows where we’re going to land.
The U.S. was as ready as any other country to hand itself over to a dictator who promised to make the trains run on time. But, for whatever reason, the dictator Americans elected seemed to prefer the old definition of the term, from ancient Rome: an extraordinary magistrate, given special authority to resolve a specific problem, who would dispense with those powers once the crisis had passed. Roosevelt’s New Deal wasn’t just intended to re-start the American economy, or pave the way for American dominance in some Hobbesian war of all against all. The New Deal was a program of reforms explicitly (and, arguably, primarily) intended to protect American liberty. FDR described the connection he saw between economic security and the strength of a democracy many times, but one of his most eloquent summations was in a 1938 radio address, which is worth quoting at some length:
Democracy has disappeared in several other great nations — not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion and government weakness through lack of leadership in government. Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat. We in America know that our own democratic institutions can be preserved and made to work. But in order to preserve them we need to act together, to meet the problems of the Nation boldly, and to prove that the practical operation of democratic government is equal to the task of protecting the security of the people.
Not only our future economic soundness but the very soundness of our democratic institutions depends on the determination of our Government to give employment to idle men. The people of America are in agreement in defending their liberties at any cost, and the first line of that defense lies in the protection of economic security. Your Government, seeking to protect democracy, must prove that Government is stronger than the forces of business depression.
History proves that dictatorships do not grow out of strong and successful governments, but out of weak and helpless ones. If by democratic methods people get a government strong enough to protect them from fear and starvation, their democracy succeeds; but if they do not, they grow impatient. Therefore, the only sure bulwark of continuing liberty is a government strong enough to protect the interests of the people, and a people strong enough and well enough informed to maintain its sovereign control over its government.
We are a rich Nation; we can afford to pay for security and prosperity without having to sacrifice our liberties in the bargain. [bold added for emphasis]
And it seems to me that this is where we are now. Frustration with “government confusion and government weakness” is a driving force in the thinking of voters — both Democrat and Republican — who have given us two terms of Donald Trump. Most Americans are struggling under the economic weight of market failures in key sectors, and nearly everyone believes our government is either helpless to improve matters, or that it actively makes things worse. And yet, in spite of the fascism, and the homelessness, and the riots, we’re engaged in a broad cultural debate about whether or not anything’s actually wrong. A quarter of Americans are living paycheck to paycheck, but when someone tells us our problem is that we don’t save enough, or that we spend too much on avocado toast, that criticism gets traction. A big sector of the commentariat has made this debate their daily bread. In 2022, a 25 year old influencer built a whole career out of coining the term “vibecession,” to describe, essentially, when people think the economy is worse than it really is.1 The term immediately made its way into the wider discussion. For example, a recent article in the Atlantic, titled, “The ‘Vibecession’ Is Over. The ‘Permacession’ Is Here,” announced that, “People have stopped believing that the economy can be good, and have lost the willingness to admit that they are doing well. That pessimism might be harder to fix than an actual downturn.” In other words, the problem isn’t that things are fucked up; the problem is that people are unwilling to “admit that they are doing well.”2
Part of the reason the yay-sayers can credibly claim that the perception of economic distress is based on “vibes” is that we inherited our concept of an economic emergency from the Great Depression. In the Keynesian view, the Depression was a self-perpetuating vicious cycle triggered by a ruptured stock market bubble. The economic shock of the Crash caused businesses to downsize to conserve capital and redirect it to operations; the wage loss caused consumers to stop buying things; the loss of demand caused businesses to downsize more, more people lost work, fewer people bought things, and so on, causing the overall size of the economy, and GDP, to drop precipitously. This shaped the long-term cultural narrative about the Depression, and gave us a list of specific metrics that laypeople like voters, career politicians, and members of the news media use to judge the overall health of the economy — insofar as a “healthy” economy is defined as, “not the Great Depression.” For decades, we’ve talked about the economy in terms of consumer demand, stock market performance, GDP growth, inflation, and unemployment (including jobs added/lost). If those numbers are all “up” then the cultural consensus regards the economy as “healthy.”
This framing runs afoul of something called Goodhart’s law. In his original 1975 formulation, Charles Goodhart wrote that, “Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.” That idea has since been boiled down to a more succinct (if less precise) epigram: “When a measure becomes a target, it ceases to be a good measure.” Some of our top-line economic indicators are simply distorted by the pressure Goodhart talked about. For example, the rate of inflation is based on (among other things) the consumer price index (CPI), which is essentially the price of a “basket” of goods and services. The basket is supposed to contain all the basic stuff an average person needs. Conceptually, it’s related to the poverty threshold, insofar as most definitions of the poverty threshold are set at the cost of a “basket” of basic needs for a given year — though the CPI basket and the basic needs basket are generally defined independently of each other. All those numbers — the CPI basket, the poverty basket, the cost and the value of the things in the basket — are set by government agencies. The career bureaucrats who actually do the calculating generally want the numbers to be correct and useful, but they’re under tremendous pressure from career politicians who want the numbers to reflect their political narrative: our party good, their party bad.
That pressure isn’t just rhetorical. Politicians control budgets; they get to hire and fire the heads of agencies, and have significant power to force structural and staffing changes in agencies that will allow them to drive the numbers toward their narrative. As election cycles roll by, and parties swap power back and forth, the battle for control of the narrative leaves a path of destruction through the bureaucracies that calculate the numbers. Over time, just the sheer amount of technical debt injected into the calculation process by the constant political wrangling makes a trustworthy (let alone accurate) count almost impossible.
This is how you end up with a 25 year inflation rate of 92% — when the cost of hospital services has increased 275%, college tuition has gone up 196%, childcare has gone up 185%, and housing has gone up 111%. The average is dragged down by lower costs for TVs, software, computers, furniture, cars, and clothing. But a person can get by on used furniture, old computers, ratty clothes, and public transportation. The stuff that has gone up the most are the goods and services that provide mechanisms for class mobility. You want to save money by owning an apartment, the market makes that available to you for the low-low price of a $50k downpayment, and a $200k mortgage ($1,300 monthly payment but, of course, all you can afford is an apartment so you’ll be into the HOA for another $3-400 a month). That’s a better deal than rent if you can come up with the $50k, but in what universe can the 49% of American renters who are cost-burdened by rent (who spend more than 30% of their gross income on rent) save $50k for a downpayment? Or suppose you have a two-parent household and you want to get ahead by having both parents work? Here comes childcare: 185% inflation. You want a degree to open up new job prospects? Tuition’s up 196%. And when working yourself into the ground and eating the cheapest food you can buy so you can get ahead sends you to the doctor with type 2 diabetes, or stress-related heart disease? Now you’re into the bonus round, where the scores can really change. Healthcare, up 129%, hospital services up 275%. But hey, TVs and furniture are cheap, so inflation’s only 92%. Making America great again, bitches.
A similar problem hits when we look at the unemployment rate. Officially, there were about 7.3 million unemployed people in the United States as of May 2026, for an unemployment rate of 4.3%. But that’s not necessarily the number that matters, socioeconomically — especially when we’re thinking about the influence of economic conditions on political behavior. Economic insecurity is economic insecurity, whether the person experiencing it is technically employed or not. And yet, when we measure total employment and unemployment, we tacitly assume that an employed person is economically stable. Which is obviously untrue. Most of us know this, because most of us know, or know of, someone who works full-time, and who still can’t pay their bills. But for some reason we lose track of it when we talk about aggregate numbers. The reality is that lots of people work full time, and still can’t make ends meet. A federal GAO analysis found roughly 9 million wage-earning adults living in households that receive SNAP benefits (aka “food stamps”), about 70% of whom worked full-time hours in a typical week.3 Besides the full-time employees who can’t pay their bills, about 4.8 million Americans are working part-time while wanting and seeking full-time work. The Bureau of Labor Statistics calls these people “part-time for economic reasons.” These workers show up in a broader measure of unemployment called the U-6 rate, which adds them, along with marginally attached workers (people who want a job, are available to work, and have looked for work sometime in the past 12 months — but didn’t search in the past 4 weeks), to the officially unemployed. In May 2026 the U-6 rate stood at 8.1%; nearly double the top-line rate. When you add the U-6 group to the full-time workers who rely on government help to afford food, you get something like 18 million Americans, or roughly 11% of the labor force who are willing to work full time, but either, (1) can’t get work, (2) can’t get enough of it, or (3) work full time and still can’t cover the basics. Add to that number a fourth group, (4) the roughly 6 million people who want a job but haven’t actively searched in the past year, you’d get about 24.5 million, or roughly 14% of the labor force. About one in seven American workers wants a full-time job, and can’t find one that allows them to pay their bills. That’s a level of economic distress comparable to the Great Depression, hidden underneath a top-line number of 4.3%.
Consumer demand hasn’t so much been warped by target pressure as its meaning has been altered by changes in how demand is created. Widespread access to revolving consumer credit, which is a comparatively recent innovation, has made it possible for people to keep buying things, even when they don’t have an income. In practice this tends to mean that the economy can keep on chugging along even when consumers — meaning workers — are financially eating shit. Indeed, banks and credit card companies have turned consumer poverty into a profit center, with overdraft fees, higher interest on ballooning credit card balances, and transaction service fees. Banks and payday lenders charge short-term loan activation fees, and gouge consumers on emergency loans. And, of course, the degree to which credit/debit cards and e-commerce have been normalized in our society means that service fees take enormous bites out of every dollar we spend, on pretty much everything. So if Berkshire Hathaway, JPMorgan Chase, Eli Lilly, Visa, Walmart, ExxonMobil, Mastercard, UnitedHealth Group, Johnson & Johnson, and Procter & Gamble are all doing well on the New York Stock Exchange, does that mean the economy is in good shape? Are we economically healthy, if JPMorgan Chase collected $1.028 billion in overdraft fees in 2024 (or over $2 billion in 2019)? Is the economy doing well if Americans paid $187 billion in credit and debit card “swipe fees” in 2024? And does consumer demand mean anything, when the finance industry has created so many ways to decouple employment, and individual financial health from economic performance?
The upshot of all this is that we don’t have millions of people in bread lines, or going without basic necessities. Instead of immediate, shocking, and tangible financial ruin (the kind of thing that makes for dramatic photographs, relatable narratives, and shared experiences that lead to unified resistance) economic downturns now manifest as quantifiable but narratively ambiguous shifts in aggregated metrics; things like student loan defaults, or car repossessions. What we see at the individual level is a more gradual process of growing debt, individual attempts at debt optimization, default, resort to more predatory forms of debt, further default, and so on. By the time someone’s life falls apart completely, they’ve often had to look for cheaper housing (which can be extremely disruptive to children’s education, commute times, etc), lost their medical insurance, been shunted into much less stable and lower-paid jobs, and found themselves broadly reclassified in ways that amount to a kind of socioeconomic banishment that’s difficult or impossible to recover from.
The mechanisms that lock people into that position are often opaque, even for the people whose lives are destroyed by them: credit reports, tenant screening services, and poorly regulated background checks. The individual on the receiving end of these systems has to know where to look, and what questions to ask, just to find out why they didn’t get the job, or the apartment, or the loan. It’s a slow-moving, piecemeal process, and one feature of this incremental financial death is that, in our culture, each step is treated like a mistake on the part of the individual consumer/worker, rather than a desperate person having to repeatedly pick the best bad option from a list of untenable choices.
Herein lies the other problem with vibecession framing: if the economy is really as good as some people are saying it is, why are large numbers of American voters making such desperate political choices? To repeat Roosevelt’s formulation, history proves that dictatorships do not grow out of strong and successful governments, but out of weak and helpless ones. For ten years, vast numbers of Americans have been voting for a dictatorship — or refusing to vote against one, which amounts to the same thing. Why the fuck have they been doing that, if things are going so well?
The answer that should be obvious, and somehow isn’t, is that since 1929 the policy world has built lots of really effective mechanisms for cushioning the impacts of financial shocks, to preserve the machinery of American commerce. Monetarist theories about economic control and recovery have prevented several potentially catastrophic financial disruptions from spinning out into full-blown depressions. But those mechanisms have failed to protect the human lives that money travels through. Regular Americans have been slowly crushed, for decades, under the weight of the wealth that’s been transferred to the wealthiest 10%. They’re ready, again, “to sacrifice liberty in the hope of getting something to eat.” And, again, one of the ways you can tell that’s true is because vast numbers of Americans are doing the electoral equivalent of jumping out of a tenth story window. That alone should be enough to make us question our baseline assumption that the building isn’t on fire.
This point can be argued with numbers, like I did with the unemployment figures above. But humans need narrative. It’s one of the reasons that we constantly compare the present to the past; polarization to the Civil War, scandals to Watergate and so on. If we saw people goosestepping down the street in formation, wearing swastikas, we’d know what we were looking at (or at least we used to think we would). But that also leads to a dangerous complacency. If a thing we’re looking at isn’t obviously similar to a thing we’ve seen before, we struggle to form a consensus about what it is. So we don’t really believe we’re in the middle of an economic crisis unless or until we see a version of economic distress that looks like what we’ve all been taught about the Great Depression: Hoovervilles, and soup kitchens, and guys in dirty fedoras asking us if we can spare a dime. And because none of that’s happening, there’s no crisis; so the insane shit that American voters are doing can’t be a desperate response to a crisis — because there’s no crisis. Except there obviously is. Russian-American journalist M. Gessen described this phenomenon well in their 2020 book, Surviving Autocracy:
We learn to think of history as something that has already happened, to other people. Our own moment, filled as it is with minutiae destined to be forgotten, always looks smaller in comparison. As for history, the bigger the event, the more mythologized it becomes. The myth becomes a caricature of sorts. Hitler, or Stalin, comes to look like a two-dimensional villain — someone whom contemporaries, as we imagine them, could not have seen as a human being. The Holocaust, or the Gulag, are such monstrous events that the very idea of rendering them in any sort of gray scale seems monstrous, too. This has the effect of making them, essentially, unimaginable. In crafting the story of something that should never have been allowed to happen, we forge the story of something that could not possibly have happened. Or, to use a phrase only slightly out of context, something that can’t happen here. A logical fallacy becomes inevitable. If this can’t happen, then the thing that is happening is not it. What we see in real life, or at least on television, can’t possibly be the same monstrous phenomenon that we have collectively decided is unimaginable.
We can’t keep waiting to move, listening for the starting pistol of a race that was run almost a century ago. We live in a different world than the world of the 1930s and 1940s. Our wars and our economic disasters are different; they’ll look different, sound different, smell different. There probably won’t be another brightly burning Reichstag to tell us when the Nazis have really taken over; another thunderous Crash of ‘29 to tell us when the economy has really imploded, another choking Dust Bowl to tell us when the environment’s really fucked. None of that shit has happened, but we’re still seeing the problems that come with societal collapse, regardless of whether we all have iPhones, or credit cards, or the mistaken impression that we can afford to treat ourselves to Starbucks. We’re doing what terrified masses do during a sustained and deepening economic collapse: losing hope, electing fascist strongmen, deporting ethnic minorities, surveilling and murdering our own citizens, and possibly starting World War III for, really, no good reason that anyone has been able to articulate. The reactionary instability that Roosevelt was worried about is here, in almost exactly the form he described, whether our market crisis looks like the Great Depression or not.
Even when we manage to agree that something big and bad is happening, we still look backwards for our solutions. The left wants a Green New Deal. The right wants, I guess, coal mining and a battleship? But the thing we need to “bring back” isn’t so much the solutions of the 1930s as it is an acknowledgement of which problems we’re really trying to solve.
Americans need jobs, dignity, and hope, so we don’t hand power over to dictators. We need those things quickly, because the dictatorship is already here and it’s doing things that have the potential to kill millions — maybe billions. We’re standing at the doorstep of a half dozen world-ending disasters. What we need to borrow from the 1930s isn’t the Little Red Song Book; it’s some small measure of belief in our own historical importance. Congratulations, America: we’re no longer the middle children of history. Now, and probably for the rest of our lives, we have to be our own Greatest Generation — or we can be good Germans. But there’s really nothing in between. This is when we save America from fascism and save the world from ecological, military, and technological destruction — or when we don’t, and the survivors spend the next 500 years asking how we could have been so fucking stupid.
One idea we can take from the past: in order to solve the big scary end-of-the-world problems, we have to choose to solve the problem of economic hope first — because economic hope is the only solution to fascism, and ending fascism is the only solution to the rest of it. We have to choose to create economic hope, and then we have to go after policies that will make it happen, like our lives depend on it. If we don’t solve this problem, the jobs problem, the dignity, security, and hope problem, then the United States will do what so many democracies did in the absence of a Franklin D. Roosevelt, and a New Deal.
If that happens, the best case scenario to come out of American fascism would be that our country just falls apart. I think the more likely outcome is that, (our current flirtation with kakocracy notwithstanding) we’ll turn out to be a lot better at ending human civilization than the Nazis were.
In fairness to the 25 year old, her original essay included a lot of nuance that, predictably, failed to translate into popular usage.
It seems, to me, not entirely irrelevant that the author of this piece, Annie Lowrey, is married to Ezra Klein. While I normally hesitate to judge anyone based on who they’re married to, Lowrey displayed a very characteristically Klein-esque failure to engage with her own facts when she wrote that, “Seventy years ago, voters were overwhelmingly concerned with life-and-death issues: war, hunger, disease, violence. Today voters are more worried about social concerns: the environment, minority rights, immigration, health policy, casitas, I guess.”
The implication that these are two separate lists seems almost too stupid to critique, but Annie Lowrey gets to write for the Atlantic and I’ve got a substack, so maybe it’s not a complete waste of time to point out that “disease,” is just one of the more obvious top-line manifestations of “health policy,” and that war has everything to do with minority rights, immigration, and the environment. World War I started when a radical from the Serbian separatist terrorist group the Black Hand — essentially a minority rights group — assassinated Franz Ferdinand for reasons that were, by any objective reading, pretty stupid. Nonetheless, that one action ultimately killed something like 17 million people in World War I, and absolutely set the stage for World War II — and, consequently, Lebensraum (immigration, minority rights), Aktion T4 (can we file that one under health policy?), and the Holocaust — another minority rights question, with a body count in the millions. The genocide of Native Americans, the Texas Revolution (“Remember the Alamo!”) and every unspeakably horrific thing that’s happened in Israel/Palestine for the last 100 years have all been direct results of immigration, minority rights, access to arable land and drinkable water, and “casitas, I guess,” insofar as the Israeli tendency to bulldoze and maliciously blow up Arab housing is stoking a humanitarian crisis that has fueled decades of relentless violence. And while I guess “the environment” might feel like a “social concern” to a relatively wealthy urban liberal, I imagine it’s pretty goddamn life-and-death to someone whose house gets hit by an extreme weather event, or a wildfire, or whose food supply gets annihilated by a flood, or a drought, or some bug that migrated 200 miles north because the climate bands are on the move. But I’m sure everything would be fine if people would just stop worrying about the environment, minority rights, immigration, health policy, casitas, I guess, and, “admit that they are doing well.”
The economic profile of Walmart is a good example of how this arrangement can pay off twice for low-wage employers. A 2014 report by Americans for Tax Fairness estimated that public assistance to Walmart employees cost taxpayers $6.2 billion a year across SNAP, Medicaid, and housing subsidies — all while Walmart captures about a quarter of all SNAP dollars spent in the United States. The same Republican politicians who can barely restrain themselves from declaring that poor women have babies in order to collect more welfare are strangely silent about this state of affairs. I suppose the Republicans might have more to say on the matter if the Waltons were Democrats, Somalis, or Jewish.