The recession technically ended five years ago. But the cut was so deep we’re still crawling our way back. Unemployment is looking a lot better, and the stock market sure looks good, but there’s still a lot of pain out there. So while we may not have to worry about a recession right now, should our economic eyes be diverted? No. So let’s take a look at some of the economic challenges we’re facing now and gearing up for.
- Inflation: During the financial crisis and recovery the government injected trillions of dollars into the economy. Everyone expected runaway inflation, but that hasn’t been the case so far. However inflation becoming a bigger problem. While you and I have noticed prices at the grocery store and gas station climbing, the Federal Reserve just considers this normal volatility. In other words, food and energy prices move around too much for the central bank to actually make policy decisions based on them. Meanwhile, you and I see this as real inflation. And the people suffering on the low end of the income spectrum are feeling it even more.
- Income/wealth inequality: Speaking of income, inequality is still a major issue. The major open question around inequality, whether wealth or income, is whether we should do anything about it. There’s no political appetite to simply redistribute the wealth, and that’s probably not the best policy. So then what do we do about it? Like it or not, this has very real impacts on the economy and is an issue a lot of people care about. This conversation isn’t going anywhere.
- Healthcare: This was an issue getting worse even before the economy tanked. Economic concerns may have distracted us for a few years, which may have been why Obamacare passed in the first place. But now we’re all over it. Obamacare may help with some of these issues, but it’s far from being a solution to all these problems. Much like the financial crisis, we’re all a part of the problem and a part of the solution. The real challenge is getting us all on the same page about how to fix this thing.
- Climate: The president has done a fair job of pushing forward laws and rules that aim to get better control of pollution, but critics make very valid points. No, not deniers, critics. It’s not going to do a whole lot of good for the US and Europe to embrace new laws if Asia and Africa don’t get on board. But on the flip side we don’t help things by doing nothing. I believe that if climate starts to affect the bottom line of businesses, you’ll see the turnaround in behavior many have been waiting for. The thing we should be concerned about is whether or not we’ll be able to correct ourselves in time. Humans are an innovative bunch, but we’re also quite fragile.
There’s probably more out there. But with the worse of the economy behind us, we’re all about shift gears and get back to worrying about the longer term issues. It’s like when you have a brush with death and there’s a panic. And for a moment you forgot about all the stresses of life. Well, the panic is over, and the stress is returning.