The Bright Side of 2022: More Went Right Than Most of Us Recognize

From a Wall Street Journal essay by Zachary Karabell headlined “The Bright Side of 2022”:

If the final decades of the 20th century were marked by a burst of techno-capitalist optimism, the first decades of the 21st century have often felt like a step-by-step descent into despair. Beginning with the false Armageddon of Y2K and followed in quick succession by the bursting of the tech bubble, “the hanging chad” disputed U.S. presidential election and then, of course, the attacks of 9/11, the last two decades have seen a relentless cascade of rising pessimism and dystopian gloom. For a time, that sense of impending doom was most pronounced in the western world, but with spreading anxiety over climate change and the effects of Covid-19, we have reached the end of 2022 with a disagreeable form of globalization: Everyone, it seems, feels grim about the present and worse about the future.

And yet, far more went right in 2022 than most of us recognize. Rather than being the sum of all of our fears, the year was in many ways a possible harbinger of a pessimism thaw. Of course, focusing on what has gone right requires an asterisk acknowledging that much did not. But we know that already, and the negative skew is a distortion. News, politics and social media thrive on bad news and hot emotions: People respond more powerfully and immediately to anger, outrage and fear than they do to hope and calm. That makes it difficult for good news to stand out, but we do ourselves a disservice if we fail to give progress its due.

After a tumultuous period in which some began to question the viability of American democracy, the U.S. midterm elections in November proved to be remarkably normal. Those who had come to prominence after 2020 by questioning the integrity of the electoral process failed to gain traction at the ballot box. Turnout was robust, especially for young voters who until 2018 had become increasingly detached and apathetic, and voters surged to the polls despite fears that laws passed after 2020 in states such as Georgia and Texas would lead to voter suppression. Losers almost everywhere acknowledged they had lost, as should be the case in a functional democracy. Neither party was particularly happy about the results, but democracy clearly emerged a victor.

That was echoed elsewhere in the world, with elections in Brazil and France that were hotly and at times angrily contested, but in both cases the more aggressively nationalist candidates lost and accepted their defeat. In Italy and Israel, voters ushered in right-wing coalition governments, but not ones that challenged the legitimacy of elections and democracy.

The global scene was dominated by the Russian invasion of Ukraine and rising concern in East Asia and the West that Xi Jinping’s China is gearing up to invade Taiwan—hardly happy developments. But at the same time, European nations embraced millions of Ukrainian refugees, with Poland alone taking in two million, spending more than $5 billion dollars and extending a range of benefits including healthcare. And in contrast to the mantra that we live in an era of deglobalization, global trade is headed for a new high of $32 trillion for this year, with notable progress in East Asia as countries sought to become less dependent on China and strengthened bonds with each other.

Inflation was clearly the dominant story of economic life both in the U.S. and throughout the world. By year’s end, however, the surge in energy and commodity prices—triggered in part by the global reopening after Covid restrictions and even more by the Ukraine crisis—had abated. Oil prices are ending the year almost precisely where they were last January, after a 50% surge in the spring. And while inflation remains disturbingly high in parts of the world, in the U.S. the trend has been distinctly downward in the face of both easing supply chains and the aggressive, albeit controversial, moves of the Federal Reserve to raise short-term interest rates.

The flip side of inflation of goods and services has been the most robust wage gains for tens of millions of workers in the past 50 years. While those wage gains of about 6% did not for most of the year keep pace with inflation, as inflation moderates, those gains will stay, which means lasting improvement for the workers who have least benefited from the economic growth of the past decades.

The wage gains were complemented by a Social Security cost-of-living increase of 8.7%, which means that if, as expected, inflation comes down to 3%-4% from its current rate of about 7%, even retirees will see significant gains in income.

Along with increased wages, families in 2022 benefited from a multi-year trend of declining poverty, and especially childhood poverty, trends evident throughout much of the world. In the U.S., some of that was due to government stimulus in 2021 that was not renewed, bumping poverty rates up again for now, but still only about 1 in 10 U.S. children are in poverty by one accepted measure, down from 1 in 4 in 1993. And the overall increase in minimum wages alone has meant better lives for millions.

In technology and science, the best news came toward year’s end, with California’s Livermore Laboratory capping years of efforts by achieving the first viable fusion reaction that resulted in more energy released than used to create it. Though it’s uncertain how soon (if ever) the breakthrough might translate into viable commercial use, nuclear fusion is the ultimate clean energy and could transform efforts to deal with climate change. The achievement has as much potential to reshape the world as nuclear fission did in the early 20th century—and without the inconvenient danger of nuclear weapons.

Fusion was the most dramatic technological development of 2022 but hardly the only one: OpenAI, a consortium of artificial intelligence research companies, released ChatGPT, which is by far the most sophisticated artificial intelligence language program that can simulate human prose. The rise of AI has understandably caused fears, just as the invention of the printing press, the telegraph, the radio, television and the internet did. Given human nature, it is a certainty that AI will be a mixed bag of wondrous and terrible, but the potential of AI to enhance living standards, help humans unlock new sources of energy and mitigate the effects of disease and poverty is extraordinary.

Climate technology also was supercharged this year. The ill-named Inflation Reduction Act in the U.S. will channel nearly $400 billion into clean energy and related programs, and European nations, spurred by a desire to end their dependency on Russian oil and gas, will spend hundreds of billions more. Wherever one falls on the spectrum of urgency about climate change, such public investment is crucial. The most meaningful technological developments of the 20th century—the internet, cellphones, jet engines—were all products of government spending to boost innovation. This influx of risk-free capital into cutting-edge energy technologies may lead to some dead ends, but if the past is any guide, it will also spark some important breakthroughs.

Finally, after several extremely challenging years of Covid—with a dramatic drop in human movement around the world and enormous government spending to maintain some sense of stability—it is remarkable how little changed in 2022. You would never know it from how we talk about the world these days, but other than the Russian invasion of Ukraine, the planet was marked by stability: No revolutions, other than perhaps a welcome one brewing in Iran. No economic collapse. A seeming decline in angry nationalism everywhere.

Progress is always provisional, of course, but so is doom-saying. If you’re going to forecast the end of the world, it’s best not to give a date. Will things turn suddenly worse in 2023? Will markets collapse in the face of recession? Will turmoil prevail? Perhaps. But if this past year is any gauge, far more likely is a muddling through, with billions of people striving for a better life and, for the most part, achieving it. Much will continue to go tragically and spectacularly wrong, but that shouldn’t keep us recognizing and celebrating all that goes right.

Zachary Karabell is the founder of The Progress Network, president of River Twice Capital and the author of 13 books.

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