Six reasons 2021 was a better year than people think
Happy New Year, Noahpinion readers!!
2021 began with a contested election, a coup attempt against Congress, and an unprecedented surge of pandemic death. It proceeded to give us supply chain snarls, persistent inflation, the bitter policy negotiations between Biden and centrist Dems in the Senate, a huge wave of violent crime go from bad to worse, a politicized antivax movement that led to hundreds of thousands of preventable deaths, the Taliban reconquest of Afghanistan, a deadlier new Covid variant, and a more transmissible breakthrough variant. But somehow, this year doesn’t seem quite as catastrophic as the previous years did. Everyone seems exhausted, but exhaustion isn’t as bad as perpetual bubbling anguish.
In fact, I think 2021 was in some ways a very good year. Here are six developments — technological, economic, and political — that put me in a positive mood.
1. The triumph of vaccines
Technically, the mRNA vaccines that are conquering the Covid pandemic were developed and approved in 2020, but it was in 2021 that they started saving life en masse. Here’s a graph showing death rates by vaccination status in the U.S.:
There are various estimates of how many total lives the vaccines have saved, both in the U.S. and throughout the globe. The Commonwealth Fund estimates 1.1 million lives saved in America alone, while the NIH has a smaller estimate of 140,000. But by any measure, the benefit has been staggering. And on top of all those lives saved, vaccines have allowed the economy to get back to something closely resembling normality, with workers no longer hospitalized or afraid to come in to work, and customers once again filling restaurants and shops. Omicron will disrupt that to some extent, but it’s clear that the vaccines are still doing a great job of protecting people against severe illness:
Now let’s pause for a second and think about just how amazing this was. In the space of a year, American and German scientists took an unproven technology and turned it into a safe, highly effective vaccine against a deadly pandemic before that pandemic was even halfway over. And in 2021, world governments have distributed the vaccine to almost 5 billion people.
That is a feat of scientific and logistical prowess arguably unmatched since the days of World War 2. People who claim that modern governments and nation-states have become ineffectual are mentally comparing it to some unrealistic imagined ideal. The vaccines are proof that when it counts, our system can still get big things done.
And as an important coda, mRNA vaccines, having proved their worth against Covid, are now slated to be deployed against many of the most devastating diseases in the world — malaria, cancer, and more.
2. The U.S. economic resurgence
Economically, much of the attention has focused on inflation, and consumer sentiment is fairly low. But let’s not let that obscure the strength and speed of the U.S. economic recovery. Employment continues to roar back, despite successive Covid waves. My favorite statistic here is the prime-age employment-population ratio, which measures the percent of people between ages 25 and 54 who have jobs. And this number is at 78.8%, equivalent to where it was in late 2017 or early 2004:
In terms of wages, the picture is a little muddier — due to rapidly rising inflation, real wages are flat or even a bit negativve, but for the bottom portions of the distribution they’re rising strongly, representing a real gain for the people who need it most. Here are some charts via labor economist Arin Dube:
After a decades-long rise in income inequality, a year or two of wage compression is a welcome thing, even if inflation is a pain.
And remember, we have competent leadership to thank for this. The vaccines have suppressed Covid deaths, of course. But another driver of the rapid recovery has been the three very large relief bills passed by Congress in March 2020, December 2020, and March 2021. Together those bills — the first two of which were passed by a Republican-dominated Congress! — totaled about $4.5 trillion in total spending. Our leaders correctly threw deficit concerns to the wind, recognizing that even mild inflation would be an acceptable price to pay for bailing out America.
And what about that inflation? Due to supply chain snarls we shouldn’t expect it to vanish anytime soon, but prompt Fed action — rapid tapering of QE and the promise of rate hikes in 2022 — have kept a lid on inflation expectations, preventing a devastating upward spiral:
Once again, resilient institutions have done their job and saved our nation from catastrophe.