It seems intuitive that good times will breed feelings that match, but often a comfortable, steady temperature makes people overheat. It’s like we crave imbalance for some evolutionary reason. Remember before 9/11 and the 2008 economic collapse and ISIS, when Bill Clinton’s intern shenanigans were a national outrage? George W. Bush, who led the single most failed administration in generations, was elected in good part to restore “honor” to the White House. That really seemed important to an awful lot of people. Today, an utter lack of honor–and competency and sanity–makes no difference to Trump supporters, despite the financial recovery (an uneven one, admittedly) we’ve experienced in the past eight years. They’re mad and want to break something.
National moods aren’t always rational, not always driven by the bottom line, but perhaps there’s something other than the spoiling effect of complacency driving the current ill feelings. Maybe our new tools have made it easier for a toxic airborne event to occur at any spot in the Global Village?
In a smart Bloomberg View column, Tyler Cowen theorizes that bad moods are traveling in a viral manner today, even settling over a relatively fortunate nation like Australia. An excerpt:
Australia does have problems and identity crises of its own, but still it seems the country has caught a dissatisfaction bug from abroad, most plausibly from the pro-Brexit forces in the U.K., the Trump and Sanders movements in the U.S. and the common global feeling that much of the world is slanting askew.
For some time now, equity returns in Australia have had one of the highest correlations with equity returns in the U.S., and some of this probably has to do with the transmission of moods and not just shared economic shocks. What’s changing is that the risk of negative mood transmission may be going up, even though the Australian economy still appears to be fine.
It is a common theme in political science that low levels of trust in government tend to translate to inferior political performance.Trusting citizenries give their governments the resources to produce valuable public goods, as is often the case in the Nordic economies, but falling trust leads to higher social conflict and corruption. And so, because of its recent pessimism, Australia may be on the verge of losing some of the good governance it has enjoyed for the last few decades.
The broader and more disturbing implication is that the entire global economy may be more vulnerable to mood swings.•