Growth anatomy: America’s expansive decade

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Hello and welcome to the intelligence on Economist Radio. I'm your host Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. One of the most persistent inequalities in America isn't just about income or education about but life itself. White people live longer than black people, but these days that disparity is as small as it's ever been. We look into why and have you heard about that amazing new movie with a mind blowing twist at the end? Let me tell you about it. Don't worry, I wouldn't do that. We examine why there's so much hype around spoilers. First up though.

Throughout America's history, there have been some.

Years that simply rolled into the next without much notice or fanfare.

2009 was the year Barack Obama became president, that bitcoin was created and Susan Boyle dreamed a dream.

And then there are the years that.

Come along once in a generation.

The kind that mark a clean break.

From a troubled past and set a new course for our nation. This is one of those years.

But 2009 also marked the beginning of a record breaking run for the American economy. One that began in the wake of the 2008 financial crisis. This week makes 121 months of continued growth, the longest such period in the country's history. And despite only being in charge for a portion of it, President Donald Trump has sought to claim his share of the credit.

In just over two years. Since the election, we have launched an unprecedented economic boom, a boom that has rarely been seen before. There's been nothing like it.

But the fact is we are just getting started.

But there are worries about a slowing manufacturing sector and the dragging on of the trade war. A global slowdown is adding to the unease. With the Federal Reserve poised to cut interest rates if it needs to stimulate the economy, how much longer can America's historic run continue?

Well, it's been a sustained period of, on the whole, slow growth.

Henry Kerr is our economics editor.

The recovery from the financial crisis is America, but also globally has been long, but it's not been a continuous boom. We're not sitting here having to explain some economic miracle of how really good times have rolled for a whole decade. Really. We've had a few years now where the unemployment rate has been very low in America. You've got a lot of Americans today saying you're seeing really good times in the labor market. But if you went back five years, say, you'd still be quite a long way from the financial crisis of a decade ago at that point. But I'm not sure many people would have said that America was in a boom. So what you've really had is a sustained expansion. Yes, but a relatively slow one. And the really interesting thing, I think will be to see how long today's economic conditions can be maintained from here. Given that the unemployment rate is so low, given that America doesn't have a very good record of going into periods of economic stress late in the cycle without having a recession. And so we're sort of seeing a bit of that uncertainty this year. But the puzzle of why it's gone on so long is a puzzle. It is an unusual period in history, but it's also not been a decade long boom.

Why is it unusual? What's been behind it that you think is unusual?

I suppose that depends what causes economies to go wrong? A lot of people would say that what causes economies to go wrong is central bank mistakes, or at least that would be quite high on the list. So the Federal Reserve raises interest rates too much and you haven't had that over the last decade. So you could say, well, the Fed hasn't made a calamitous policy error. That doesn't mean it's done everything right. I mean, if you look at what happened in Europe and contrast that to America, Europe made the error of raising interest rates early in the decade, in 2011, because they were worried about inflation that contributed to a second recession in Europe that America didn't have because its policy was more expansionary. So that's one fairly clear example of America not making a policy mistake where they might have done. And that's one of the things that has contributed to America having had a longer expansion certainly than Europe.

With all of that in mind, how much of the current health of the economy can Donald Trump take credit for, as he is often wont to do?

So the long running nature of the expansion is something that predates Donald Trump in the White House. The recovery in labor markets is something that predates Donald Trump under his presidency. You've got to a point where, where the US labour market is very tight. His fiscal stimulus when he cut taxes has contributed to that. There's no doubt it boosted growth last year. On the other hand, the main threat to global growth and American growth at the moment is emanating from the White House, or at least the White House and China, because it's coming from the trade war that America and China are engaged in that is knocking global business uncertainty, that's knocking capital investment, and that's probably behind the slowdown we're seeing in this year. So really you could tell a story where President Trump boosted growth at first and is now starting to constrain it. Neither of that's really about the longevity of the expansion, but he's definitely having an effect on the economic statistics.

I mean, is it possible to sort of decouple those things? Can you make a guess as to how stable, how happy the American economy would be in the absence of the trade war if it were. If the trade war were to de escalate entirely?

I think that's pretty difficult to do. I don't think anyone is really able to say that. What you can say is that the trade war is a threat to growth. It's possible that we could be seeing the start of a downturn this year. It's unclear as yet whether it will be avoided, but it's definitely beginning to show up certainly in the manufacturing statistics. And it's a common view that that's attributable to the trade war. So you can say that without the trade war things would be better in America. You could be more confident about growth going forward for the next few years. I don't think anyone can really say how much better. It's a very uncertain world out there.

Do you have the sense that when the downturn comes, as it inevitably will that policymakers have the tools and the wherewithal to use them to head it off.

So there are two parts to that question. One is the tools. The other is the willingness, if you will. I think this year we've seen that they definitely have the willingness to change course and take action. The Fed's poised to cut rates at the end of this month. It's widely expected that they will. Having started the year thinking about how much they were going to raise rates this year, they're now going to cut them, and that will provide stimulus. Of course, the question hanging over central banks at the moment is what if a really bad downturn comes? How can you fight that? A downturn which takes interest rates all the way down to zero again in America, Then you're going to have to look to unconventional tools again. You're going to have to look to quantitative easing, or you'd have to look to fiscal policy then to boost the economy. And it's a lot more uncertain whether the U.S. congress and fiscal policymakers will be willing to provide stimulus the way central banks definitely are. So I say, on balance, the Fed certainly looks ready to act, but its tools may be tested and may eventually, in a bad downturn, prove to be inadequate. And then fiscal policymakers will have to decide what's due at that point.

So 10 years of growth in America is a good news story, is a record breaking story as it goes. But it's still nothing like the record that Australia holds with something like 27 years of continuous annual growth. What are the odds, you think that could happen here, that we could get another 10 years of growth? Say, is it completely out of the question?

It's not utterly out of the question. I think economic expansions don't die of old age is what people say. There's no reason to expect them to finish. Australia demonstrates that. On the other hand, the historical record is that sooner or later some policymaker screws up, something bad comes along and we, we have a downturn. I'd be very surprised if you've got another 10 years of economic growth. It's definitely not impossible.

Henry, thank you very much for your time.

Thank you, Jason.

For much of the 20th century, the average life expectancy has increased as public health has steadily improved. The average American born in 2000 can expect to live more than 50% longer than if they'd been born a century earlier. But these longer lives haven't been experienced equally by everyone. While white people have steadily made gains, a racial gap has persisted. And black men have been dying earlier.

Back in 1980, when Harlem was still all black and highly impoverished, life expectancy there was dismal for black men. It is a crack epidemic which police say is causing an increase in murder and other violent crime. An epidemic with no end in sight. Black men there had a worse chance of living to the age of 65 than men in Bangladesh did.

Idris Kahloon is the Economist's US policy correspondent.

They were 10 times as likely to die of alcoholism and 14 times as likely to die of murder than white residents in America at the time.

But recently, this gap has narrowed as a result of various and at times unexpected factors.

Today in Harlem, life expectancy is up to 76.2 years. That's still five years behind the rest of the city. But the gap is no longer nearly as egregious as it was back then. And in the country as a whole, the life expectancy gap between blacks and whites is at its lowest point that it's ever been. It's about four years for black men and about three years for black women.

So why was there such a big discrepancy in the first place? And what factors would explain the narrowing of the gap?

There are a couple of things going on. Elderly African Americans died from cardiovascular disease and cancer at higher rates than whites. Those two are still the biggest killers in America. Overall improvement in treatments thus led to a narrowing of the racial life expectancy gap because blacks were disproportionately affected by those two to begin with. For young black men, the story is about the decline of premature death from three different violence, drug overdoses and hiv.

So let's tease those apart a bit on the matter of violence. How has that changed? Why has that helped with the gap?

So the violent crime rate has basically fallen in half since its peak in the early 1990s. And if you conduct a thought experiment, as two sociologists have done, and you look at what the effect of those high crime rates would have had on black life expectancy versus today, they find that the crime decline basically improved life expectancy for all Black men by 0.8 years, which is a massive effect in these sorts of studies. It's on par with eliminating obesity entirely.

But what were the causes of the reduction in crime in the first place?

The short answer is that criminologists don't have a really good theory for it. There have been a bunch that have been proposed. Some people have said that it was a natural result of the crack epidemic fizzling out, that it was the result of mass incarceration working as intended which is a controversial theory. Another say that reductions in lead poisoning in the previous decade or maybe expanded access to abortion may have helped. But a short answer is that we don't know. But what we do know is that there was a big decline and that had a huge effect in terms of increasing the lifespans of black men and especially young black men.

And as for drug use, how has that story changed?

So the crack epidemic fizzled out and that disproportionately affected blacks, especially those living in cities. And at the same time, we've had an increase in opioids. And opioids, unlike previous drug epidemics, disproportionately affect whites. So there's a strange effect where life expectancy is converging not only because life expectancy for black men is increasing, but, but because of this pressure from increase in drug overdoses that is pushing down the life expectancies of white men, particularly middle aged white men.

And what about the matter of hiv?

HIV is also a disease that disproportionately affected blacks in this country. So as part of the population, about 13% of the American population is black. About 42% of Americans living with HIV today are black. Back in the 80s and 90s, when we were just getting acquainted with the disease, the disease was really a death sentence. And today, with the advent of better treatments, life expectancy is much better for those people. So for black men today, living with HIV has, you know, is no longer killing them in the same proportion as it was back then.

So all of these factors that sort of disproportionately affected black people, black men in particular, seem to have reduced. This sounds like a good news story.

Yeah, it is on those dimensions. The other downside of that is that you've seen an increase in premature deaths for white men. And that's predominantly due to increases in drug mortality and alcohol related diseases and suicide, which disproportionately affects whites. So since 2000, drug related deaths for whites have quadrupled. And basically all of that is due to the opioid epidemic. First prescription painkillers, followed by heroin, and now fentanyl.

So it's not just a matter of death rates then going down for blacks. It's also a rise for whites on the basis largely of the opioid stuff. But where's the racial dimension of that?

It's quite interesting. Historically, drug overdose deaths were much higher for blacks than they were for whites. And now that's reversed almost entirely because of the opioid epidemic. A lot of it has to do with the way that the opioid crisis itself started. About 3/4 of people who use heroin today started with a prescription painkiller. And the hotspots of the opioid epidemic were in places like Ohio, Kentucky, West Virginia, or rural New England, Places with very few black people to begin with. At the same time, most people got their prescriptions from doctors. And we know from academic studies that doctors are less likely to prescribe opioids to black patients, even if they present with the same amount of pain. And they're more likely to cut them off if they detect illicit use. In a way, medical racism, which we know exists, may have had this inadvertent protective effect on black men, at least in the beginning of the drug epidemic.

So this reduction in the racial based mortality gap is that represented more broadly? Is all of America converging on a single life expectancy?

The interesting thing is no. Even though the racial gap is declining, we have good evidence that the socioeconomic life expectancy gap between the rich and the poor is actually increasing. And as we try to understand why it would be shrinking in one dimension and increasing in another, what we realize is that historically, richer people lived longer lives. And this wasn't true of black people beforehand. Poorer black men and richer black men tended to live almost similar lifespans. What we're seeing now is that richer black men, richer black women are actually able to live longer. And so you see a widening of the gap on the income level and a shrinking on the racial level, which is good news in one dimension, but not so good in the other.

But I suppose we should take good news where we can find it.

Yes. This is one of the few stories in which it seems like there is some progress being made and pretty significant progress being made on race in America.

Adris, thank you very much for your time.

Thanks.

It must be hard to be a famous actor. There's the paparazzi, the critics, the filming schedule, and the pressure not to accidentally reveal the end of your latest blockbuster.

Yeah, it's agonizing.

It's not fun.

It's plaguing Star wars stars Mark Hamill and Felicity Jones.

Are you glad you don't have to keep secrets anymore?

I'm so glad.

And Avengers hero Scarlett Johansson.

This whole secretive thing, it's just not my style. It gives me a lot of anxiety. I will be celebrating not only the premiere of the Avengers, but the fact that I can actually not have to keep these crazy secrets anymore. I can't take it.

It's all because twists are getting more and More central to the plotting and the marketing of movies.

Spoilers have reached a point of near hysteria where people are extremely protective of their viewing experience.

John Bleasdale reflects on films for Prospero, the Economist's culture blog.

People are dodging trailers. They're not talking to friends. They're blocking or muting certain words on social media, or they're getting off social media entirely. It even goes as far as violence. In a cinema queue in Hong Kong, a crowd were waiting to go in to see the latest Avengers movie. And when a spectator from a previous showing was coming out, they were talking very loudly about what happens at the end of the film, and this person was attacked.

But, I mean, it's the makers also of this entertainment that are. That are crying out for protection of spoilers, right?

Yeah, absolutely. Filmmakers as diverse as people like Quentin Tarantino, the Russo brothers with the new Avengers movies, an author like J.K. rowling, have all directly addressed their fans and said, please don't spoil our stories. In my opinion, it's getting a little bit ridiculous, mainly because enjoying a surprise is one part of enjoying a film or a book or TV show, but it's by no means the only or even the most important part.

So what lengths are our artists going to now to protect what would be spoilers?

There are several. Obviously, there's a lot of secrecy surrounding production, so some actors don't receive the whole script of the show they're in and just the pages with their characters on. But directors have gone to even more radical measures, so. Such as releasing false spoilers, creating a series of red herrings, and protecting the actual story. Game of Thrones has been incredibly protective of its scripts and its storylines to the extent that when they go to certain locations to film scenes, they will take actors who are not in the scenes as a way of throwing off anybody who's just checking out the hotels and who's around. So, I mean, extraordinary lengths to put the public off.

But why this change? I mean, films in particular have always had, you know, grand twists. This is, in a sense, part of the fun.

Well, you can trace the change to two things, really. In the 90s, you had a series of films that really did depend on twists. I'm thinking of the Crying Game in the early 90s, the usual suspects, and then all the films of M. Night Shyamalan. Practically all of his films sort of sell themselves. On the point of, you won't believe what happens in the last five minutes. And then that happened at the same time that you had the arrival of The Internet. So you suddenly had this space for conversation which was much bigger than it used it used to be.

So I guess as filmmakers have increasingly relied on spoilers and plot twists, they've become more protective over them.

I think there is a legitimate concern. I'm an artist. I spent years working on this. I want people to be surprised. I want people to sit up in their seats when this happens and jump. But there's also an extent to which this is creating a buzz. Once people start talking about the fact that there might be a big spoiler at the end of something, then it becomes more urgent for you to go and see that film because you know you want to see it before it's spoiled for you.

So if people like those surprises and sitting up in their seats and being shocked at the end of the film and it brings more people in, so it's all good for business, then where's the harm in this obsession with. With spoilers?

There's two basic things that I think are negative about spoilers. One is in terms of the discussion, in the fact that it starts to become almost impossible to talk about anything. It's gone from don't ruin the ending to don't say anything at all about the film. But that's relatively minor. More important effect of this obsession with spoilers is that it actually means that if people want surprises, the then you pre write a film or a TV series to include a lot of those surprises. And that's messing with the algebra of narrative. That's messing with how stories should actually naturally, organically work. There are plenty of stories that exist which don't have any surprises, are totally predictable. Shakespeare puts prologues in his tragedies. He tells you what's going to happen right at the very beginning, and they're no less tragic for that. Far from it. Whereas if you look at a popular TV program like Game of Thrones, especially towards the latter three seasons, there were so many instances and twists that it began to become something of a soap opera. One of the biggest twists in the 1980s was who shot J.R. in the soap opera Dallas. But with Game of Thrones, they needed two or three of those twists every season. Some character to die unexpectedly or gruesomely. And by doing that, it just meant that the story was servicing those moments rather than those moments growing out of the story.

John, thank you very much for joining us.

Thanks for having me, Jason.

That's all for this episode of the Intelligence. If you like us, give us a rating on Apple podcast and you can subscribe to the economist@exterator.com radio offer 12 issues for $12 or 12 pounds. See you back here tomorrow.