There is much that is strange and weird about the times we live in now. Right from the post-pandemic “blues” where corporate professionals are “rebelling” against back-to-office mandates to the very bewildering The Great Resignation, or the trend of Millions of Americans (especially the Millennials) quitting their jobs without a clue on what they would do next, to the sharp falls in productivity (despite automation and tech easing work methods), there is much that is “weird”. Maybe this is why the reputed American magazine, The Atlantic, called the US (United States) economy an “everything is weird” economy where nothing makes sense, and everything is not what it seems.
Sample this, gas prices are falling, yet inflation is high. Or, wages are growing, yet GDP (Gross Domestic Product) is declining. Employment is at an all-time high, and still, stagnation conditions persist. Moreover, everybody is on vacation, yet consumer confidence and the sense of well-being are at record lows, where all of us feel fine yet miserable about the future and the state of the economy. So, how does one explain all these “unexpected” anomalies? Perhaps, it is time we invoke Oracles and Diviners to help us understand what the heck is happening to the world. And, more importantly, the Americans. History would undoubtedly judge these times as “insane” and “zany” when the abnormal is The New Normal.
While one can dismiss The Atlantic’s bewilderment as “another form of paranoia” that Americans are notorious for, there are signs that even much of the Global Economy, or for that matter, the Indian Economy too, seems befuddling. For instance, the Indian Economy has been touted as the “fastest-growing major economy” by almost all media. However, why are Crores of Indians stopped “looking for jobs” if the GDP growth is so impressive? Is it the case that economic growth is not translating into gains for everyone and just accruing to the Top 10%? Indeed, recent surveys have revealed that all it takes to be in the Top 10% income segment is a monthly earning of Rs. 25,000. I wonder what the rest of the 90% are making and how they survive (subsisting?) when the inflation is touching double digits.
Let us turn to the global economy! Just about “every economist and their dog” is predicting a recession at a time when the post-pandemic recovery is yet to dissipate with strong sales figures and record tourism revenues contrasting with the “doom and gloom” prognostications (which too are backed by data). Maybe, we should start digging deeper to unravel the “many paradoxes and puzzles” of our economies. Or, it is that the economists and their “dismal science” needs newer approaches and tools to diagnose the economies. The other day, I read an article in The Hindu newspaper which pointed out that the “link” between GDP figures and the broader employment uptake is at best “tenuous”, with data going back to a decade or two revealing that higher GDP does not mean more jobs.
So, what is behind all this head-scratching where “nothing makes sense” anymore? Is it because the pandemic played “havoc” not only with our lives and livelihoods but also with our “brains” and the broader “social contract”, which is the “glue” that binds societies together? If so, it is worrying that we are leaping into the “unknown”, where the “virality” of the times and the virus are in direct competition. Otherwise, how would one explain the trend of a single Tweet from Elon Musk making or breaking the fortunes of Crypto Millionaires, which are crashing anyway? Is technology making otherwise sane and sensible people “lose their heads”? After all, economic theory premises on rationality among economic actors as the basis for all predictions. Perhaps, we need a new approach to economics.