• Home
  • Independent Voter News
  • Quizzes
  • Election Dissection
  • Sections
  • Events
  • Directory
  • About Us
  • Glossary
  • Opinion
  • Campaign Finance
  • Redistricting
  • Civic Ed
  • Voting
  • Fact Check
  • News
  • Analysis
  • Subscriptions
  • Log in
Leveraging Our Differences
  • news & opinion
    • Big Picture
      • Civic Ed
      • Ethics
      • Leadership
      • Leveraging big ideas
      • Media
    • Business & Democracy
      • Corporate Responsibility
      • Impact Investment
      • Innovation & Incubation
      • Small Businesses
      • Stakeholder Capitalism
    • Elections
      • Campaign Finance
      • Independent Voter News
      • Redistricting
      • Voting
    • Government
      • Balance of Power
      • Budgeting
      • Congress
      • Judicial
      • Local
      • State
      • White House
    • Justice
      • Accountability
      • Anti-corruption
      • Budget equity
    • Columns
      • Beyond Right and Left
      • Civic Soul
      • Congress at a Crossroads
      • Cross-Partisan Visions
      • Democracy Pie
      • Our Freedom
  • Pop Culture
      • American Heroes
      • Ask Joe
      • Celebrity News
      • Comedy
      • Dance, Theatre & Film
      • Diversity, Inclusion & Belonging
      • Faithful & Mindful Living
      • Music, Poetry & Arts
      • Sports
      • Technology
      • Your Take
      • American Heroes
      • Ask Joe
      • Celebrity News
      • Comedy
      • Dance, Theatre & Film
      • Diversity, Inclusion & Belonging
      • Faithful & Mindful Living
      • Music, Poetry & Arts
      • Sports
      • Technology
      • Your Take
  • events
  • About
      • Mission
      • Advisory Board
      • Staff
      • Contact Us
Sign Up
  1. Home>
  2. Opinion>
  3. economy>

This rotation of the economic cycle feels different

David L. Nevins
https://twitter.com/davidlnevins?lang=en
June 02, 2022
Gas prices

Gas prices exceeded $7 a gallon in the San Francisco Bay area prior to Memorial Day.

Justin Sullivan/Getty Images

Nevins is co-publisher of The Fulcrum and co-founder and board chairman of the Bridge Alliance Education Fund.

Most Americans do not pay attention to the intricacies of economic cycles until change impacts them directly. That is exactly what is happening today, causing angst among voters and a feeding frenzy of “who to blame?”

Just go to fill up your car with gas and you feel the impact. In two weeks in March, prices shot up an average of 22 percent, and today the average price of gas per gallon is $4.67 with some states exceeding $5 a gallon. Americans are not only feeling it at the gas pump; they see inflation for groceries, utilities and travel as overall inflation is near a 40-year high.

There are many causes for the current situation but undoubtedly the Russian invasion of Ukraine is impacting the world economy in profound ways. The International Monetary Fund has slashed its expectations for global economic growth for the next two years as a direct result of the invasion. The effects are spreading through the economy on multiple fronts as supply chain problems are becoming more and more obvious in our everyday lives – witness the recent baby formula shortage.

Sign up for The Fulcrum newsletter

One can’t help but wonder where this all ends. We have economic cycles (growth and contraction) all the time, but is there something different occurring that will fundamentally change how the world economy functions? Governments and multinational corporations are re-assessing the risk-reward dynamic of global economic interdependence.


Most would agree that Russia and China are the two biggest threats to the West in geopolitical terms, yet they are also two of the world’s major commodities producers. This results in substantial risks. The disruption in oil and natural gas prices is directly related to policies Western nations have taken in response to Russia’s invasion of Ukraine. The inflation we are feeling extends to food prices as Russia and Ukraine combined account for 20 percent of the world’s wheat production.

How we react as individual citizens and as a nation to the humanitarian crisis will impact our daily lives even though we are far removed from the horrors suffered by Ukrainian citizens. Will we allow ourselves to be economically blackmailed by totalitarian regimes at the expense of our principles? Will we tolerate higher prices at the pump and in the grocery store because we are standing up for the principles of democracy? Or would we succumb to authoritarianism that promises to cost less to us, personally?

As we live through the impact of our response to Russia’s invasion of Ukraine we should be mindful about the ramifications if China were to take military action in Taiwan and the United States were to take similar economic actions against China – or military action, as President Biden has suggested and later retracted.

The globalization of the world economy has been expanding at an ever-increasing rate for the last four decades. The advancement of technology has broken down barriers allowing for a free exchange of goods and services. Yet this inter-connectivity comes with dependency upon nations that do not share our principles of freedom and human rights; they are not our friends. This dependency is what must be analyzed.

The benefits have been many, including lower prices for goods and commodities, but our love of a bargain has blinded us to the risks, or even deluded us into thinking that the economic interconnectivity will naturally result in greater cooperation on issues not related to economics, like expanded citizen rights.

The challenges of the last three years starting with Covid, and the war in Ukraine has called into question the efficacy of the continued globalization of the world economy. As supply chain problems continue and geopolitical events spin beyond our control, more and more Americans are concerned about the vulnerability our national economy faces. Yet the question remains: What price we are willing to pay to protect and defend democracy around the world.

It is our willingness to protect the democratic values we cherish that comes into play alongside our willingness to protect the planet. Statistics show that an increasing number of Americans fear the impact of global warming; at the same time we are impacted by $5-a-gallon gas. These points of tension may result in adjusting priorities as to the pace at which our nation weans itself from fossil fuel.

There is no doubt that the events of the last three years are resulting in a rethinking about the dangers of the long-term trend of ever-increasing globalization and integration of world economies. While it is too early to say where this will all end, a strong case can be made that the result will be a fundamental rewiring of the global economy by multinational corporations and by governments. It is critical that those empowered to make these important economic decisions have a moral and ethical framework based on economic justice and opportunity to ensure that changes benefit society as a whole and not just those in power. As citizens we should make sure our voices are heard.

Already the redeployment of assets by American companies has occurred as corporations like McDonalds, Starbucks, Netflix, Disney, Shell and Exxon have suspended operations in or completely cut ties with Russian markets. As the war continues, the list grows. Businesses and the markets respond poorly to uncertainty. The extent of the changes – the rewiring of the global economy – cannot yet be ascertained, there is no doubt that both businesses and government are questioning the old rules.

Weighing the risk of globalization versus benefits of a more nationalistic approach in terms of the ability to control one’s own destiny and our ability to adhere to democratic principles that we hold dear must be reevaluated so we can make critical decisions with rational thinking and less reactivity.

The complexity of the shift extends beyond the boardroom to politics as anti-establishment populism sweeps the world. Questions of national sovereignty, control of our own destiny and immigration all play into a reevaluation of the balance between nationalism and globalization. This will unfortunately play to racist and xenophobic tendencies, exacerbated by conflict profiteers and result in increased fear and hatred.

A reevaluation of globalization must assess the economic risk and rewards and also must question the role globalization plays in perpetuating inequalities if our nation does not adapt socially and economically to the rapid changes resulting from world interconnectivity.

Or perhaps, my desire for reevaluation is overstated and this is simply a normal economic cycle during extraordinary times. When we look back on this moment in history, we’ll be better informed to know if we made the right decisions at the right time. Or we’ll look wistfully on the challenges we face today, wishing we’d made better choices.

Only time will answer this.

From Your Site Articles
  • Vladimir Putin and the false promise of autocracy - The Fulcrum ›
  • Good news from outer space, Ukraine and D.C. - The Fulcrum ›
  • U.S. 53rd most "free" country in the world - The Fulcrum ›
  • The corruption behind the crash of 2008 - The Fulcrum ›
  • Ukraine war inspired some unity, but not on energy policies - The Fulcrum ›
Related Articles Around the Web
  • The World Economic Forum ›
  • Global Economy ›
  • World Economic Outlook, April 2022: War Sets Back The Global ... ›
economy

Join an Upcoming Event

What does a fair election look like?

Citizen Assembly
Jul 24, 2022 at 11:00 am CDT
Read More

Citizen Office Hours

Citizen Assembly
Aug 28, 2022 at 6:00 pm
Read More

Citizen Office Hours

Citizen Assembly
Sep 04, 2022 at 6:00 pm
Read More

Citizen Office Hours

Citizen Assembly
Sep 11, 2022 at 6:00 pm
Read More

Citizen Office Hours

Citizen Assembly
Sep 18, 2022 at 6:00 pm
Read More

Citizen Office Hours

Citizen Assembly
Sep 25, 2022 at 6:00 pm
Read More
View All Events

Want to write
for The Fulcrum?

If you have something to say about ways to protect or repair our American democracy, we want to hear from you.

Submit
Get some Leverage Sign up for The Fulcrum Newsletter
Follow
Contributors

How a college freshman led the effort to honor titans of democracy reform

Jeremy Garson

Our poisonous age of absolutism

Jay Paterno

Re-imagining Title IX: An opportunity to flex our civic muscles

Lisa Kay Solomon

'Independent state legislature theory' is unconstitutional

Daniel O. Jamison

How afraid are we?

Debilyn Molineaux

Politicians certifying election results is risky and unnecessary

Kevin Johnson
latest News

How the anti-abortion movement shaped campaign finance law and paved the way for Trump

Amanda Becker, The 19th
24 June

Podcast: Journalist and political junkie Ken Rudin

Our Staff
24 June

A study in contrasts: Low-turnout runoffs vs. Alaska’s top-four, all-mail primary

David Meyers
23 June

Video: Team Democracy Urges Citizens to Sign SAFE Pledge

Our Staff
23 June

Podcast: Past, present, future

Our Staff
23 June

Video: America's vulnerable elections

Our Staff
22 June
Videos

Video: Memorial Day 2022

Our Staff

Video: Helping loved ones divided by politics

Our Staff

Video: What happened in Virginia?

Our Staff

Video: Infrastructure past, present, and future

Our Staff

Video: Beyond the headlines SCOTUS 2021 - 2022

Our Staff

Video: Should we even have a debt limit

Our Staff
Podcasts

Podcast: Did economists move the Democrats to the right?

Our Staff
02 May

Podcast: The future of depolarization

Our Staff
11 February

Podcast: Sore losers are bad for democracy

Our Staff
20 January

Deconstructed Podcast from IVN

Our Staff
08 November 2021
Recommended
Bridge Alliance intern Sachi Bajaj speaks at the June 12 Civvy Awards.

How a college freshman led the effort to honor titans of democracy reform

Leadership
abortion law historian Mary Ziegler

How the anti-abortion movement shaped campaign finance law and paved the way for Trump

Campaign Finance
Podcast: Journalist and political junkie Ken Rudin

Podcast: Journalist and political junkie Ken Rudin

Media
Abortion rights and anti-abortion protestors at the Supreme Court

Our poisonous age of absolutism

Big Picture
Virginia primary voter

A study in contrasts: Low-turnout runoffs vs. Alaska’s top-four, all-mail primary

Video: Team Democracy Urges Citizens to Sign SAFE Pledge

Video: Team Democracy Urges Citizens to Sign SAFE Pledge

Voting