This commentary is by Tom Evslin of Stowe, an entrepreneur, author and former Douglas administration official. It is republished from the Fractals of Change blog.
In Lionel Shriver’s dystopian novel The Mandibles: a Family, 2029-2047, the U.S. falls into chaos when it learns that it can’t just print money forever and that ignoring China’s (so far fictional) invasion of Taiwan led to international helplessness for the U.S.
Fortunately, perhaps, we learned in 2022 that there is a consequence to infinite federal largesse financed by the Federal Reserve creating money. The ridiculous theory that money can be printed in infinite amounts without adverse consequences (Modern Monetary Theory) has been discredited. The Fed has learned the lesson and is reversing its free money, zero interest rate policy. However, there is no sign that political Washington has learned the same lesson. The only bipartisan acts Congress is capable of are huge spending bills full of special interest handouts like the recently passed $1.6 trillion Omnibus Bill passed last month and the ironically named $738 billion Inflation Reduction Act from earlier in 2022. The collision between Fed policy and congressional vote-buying may well lead to a recession — which will, of course, be an excuse for more spending. A lesson half-learned.
If left unanswered, Russia’s invasion of Ukraine would have had disastrous consequences for freedom and world order. Most credit goes to Ukraine for its incredibly brave defense. However, President Biden has so far done a very good job of rallying America and most of the free world to arm the fighting Ukrainians and reduce Russia’s economic ability to fight this war. Current NATO members have recognized the threat; Sweden and Finland are prepared to join and strengthen the alliance. IMO we should be giving Ukraine more advanced weapons; but we have come a long way from the socks (or was it gloves?) that President Obama sent after Russia’s invasion of Crimea. There are still many Americans calling for a compromise (give part of Ukraine to Russia); others inexplicably side with Putin. Europe is paying a hard price as it weans itself from Russian oil and gas and not all Europeans want to pay that price. Can’t call this a lesson learned until Putin is defeated and seen to be defeated.
There are many more lessons to be learned from 2022 (blogs to come); but we will be a long way towards avoiding Lionel Shriver’s path to dystopia if the two lessons above guide us in 2023.