Last year, the crime and inflation crises largely evaporated. So did the leading theories about what had caused them.
America entered 2023 with two big problems and two leading theories about what was causing them. Over the preceding three years, the murder rate had reached levels not seen since the mid-1990s, which was widely attributed to reductions in policing following the protests over the murder of George Floyd. The inflation rate was even worse, by historical standards, peaking in 2022 at 9 percent, the highest number since 1981. This, in turn, was believed to be the result of Congress and the Biden administration pumping too much money into the economy. Each theory implied a solution to its respective crisis. To bring crime back down, America’s cities would have to empower their depleted and demoralized police forces. To tame inflation, the Federal Reserve would have to crush consumer spending by triggering a recession.
Both theories now appear to have been wrong. Over the course of 2023, police forces kept shrinking, yet overall violent-crime rates plummeted to their lowest levels since the 1960s. And the economy boomed even as inflation came just about all the way down to the Fed’s 2 percent target. In surveys, most Americans say that crime and inflation are still rising, but they’re wrong. Call it the Great Normalization: The twin crises largely evaporated, and no one is totally sure why.
The year 2020 was a bloody one. Murder spiked by 30 percent that year and continued to rise in 2021, abruptly reversing decades of progress on violence in America. One of the most common explanations was that the protests against police brutality in the summer of 2020 had created a hostile environment for police officers, many of whom responded by pulling back from their duties or leaving the force altogether. Officer resignations jumped 35 percent in 2020 and 9 percent in 2021.
Then the unexpected happened. Even as police forces across the country continued to shrink, violence began falling fast. According to the crime researcher Jeff Asher, murders fell by 13 percent and violent crime overall by 8 percent in 2023, some of the largest single-year decreases on record—a shift that my colleague David Graham recently called “America’s peace wave.” The improvement, though not universal, was particularly striking in some of the cities that needed it most. Baltimore and Philadelphia each experienced a roughly 25 percent decrease in homicides despite being down about 700 and 1,000 officers, respectively. Detroit experienced its fewest murders since 1966, even though it lost an average of nearly an officer a day for much of 2022. New York City lost more than 2,500 officers in 2023 alone. The murder rate fell there too.
Jeff Asher: The murder rate is suddenly falling
Policing matters for public safety, and the complicated reaction to the 2020 protests almost certainly made that year’s homicide spike even worse. But the roots of America’s violence wave now appear to have had much more to do with the pandemic itself than pandemic-era policing. Murder peaked in the summer of 2020, but homicide rates had already begun rising sharply in March, shortly after lockdowns began. For those who study violence most closely, that wasn’t surprising. A large body of research has shown that community institutions play an essential role in preventing crime. Schools and workplaces keep people off the streets. Local government connects them with social services. Nonprofits provide mental-health and after-school programs.
“Think about it from the perspective of a young person living in one of these neighborhoods with a history of violence,” John Roman, the director of the Center on Public Safety and Justice at the University of Chicago, told me. “Suddenly you’re stuck at home all day without access to social supports or a sense of purpose or something to occupy you. And the guy you have a beef with is just down the road. It’s a recipe for violence.” Roman pointed out that the beginning of the decline in violence coincided almost perfectly with the beginning of the 2022–23 school year. “That’s really the first time when everything finally went back to normal,” he said. According to the most recent data, murder rates are just a notch above where they were in 2019, and violent crime overall is even lower.
A strikingly similar story can be told about the post-pandemic economy. After several decades of stable prices, inflation went wild in late 2021, peaking at 9 percent in the summer of 2022. By then, the prevailing explanation was that the Biden administration’s $1.9 trillion American Rescue Plan had given people too much money to spend. Former Treasury Secretary Larry Summers called the bill the “least responsible macroeconomic policy we’ve had in the last 40 years.” All that stimulus, he and other experts argued, had led to too much money chasing after not enough stuff. The only way to tame inflation, according to this view, would be to crush the excess demand by engineering a painful economic slowdown. Heading into 2023, nearly every economist, forecaster, and CEO predicted that a recession was right around the corner. A Bloomberg Economics model put the odds of a recession by October 2023 at 100 percent.
Instead, inflation fell steadily while the stock market boomed, unemployment remained below 4 percent, and wages rose faster than prices. Meanwhile, Europe—which did not have nearly the same level of fiscal stimulus—experienced even higher inflation than the U.S. in 2022 while experiencing far less growth and more unemployment.
Many economists now believe that the pandemic played a more central role in the inflation story than they previously realized. An analysis by the Brookings Institution concluded that inflation was mostly a story of pandemic-shutdown ripple effects. (Other studies have come to the same conclusion.) Consumers, stuck at home, shifted their spending from entertainment and services toward physical goods at precisely the moment that the supply chains that were supposed to provide those goods were being catastrophically disrupted. The sudden firing and rehiring of tens of millions of workers produced a chaotic labor market that forced employers to quickly raise wages. Together, those forces created the perfect recipe for rising prices. Russia’s invasion of Ukraine, which sent fuel prices soaring, only made things worse.
As with crime, the shock took a long time to work its way through the economy. But when it finally did, the change was dramatic. By the end of 2023, America’s unemployment rate, inflation rate, and economic-growth trajectory looked almost identical to what they had been just before the pandemic. (One measure of inflation did tick up slightly in December, but many experts believe that was caused by a temporary lag in the data.) Prices remain higher, of course, even though the inflation rate has returned to normal. But inflation-adjusted wages are rising rapidly and recently surpassed their pre-pandemic levels. Some indicators, such as household wealth, income equality, and women’s labor-force participation, look much better than they did in 2019.
Not everything is back to normal. Pandemic learning loss has erased two decades of student progress in math and reading. The abrupt rise of remote work continues to wreak havoc on both commercial real estate and the housing market. Even so, when it comes to crime and inflation, the Great Normalization was remarkable. Huge problems rarely improve so much, so fast, in such defiance of conventional wisdom.
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More remarkable still is the fact that hardly anyone seems to have noticed. According to Gallup, 77 percent of Americans believe there is more crime in the U.S. than there was a year ago. Economic sentiment has begun to tick up, but it is still near the lowest levels on record. This may help explain Donald Trump’s strength in electoral polls. A recent Wall Street Journal survey found that U.S. voters overwhelmingly believe that Trump will do a better job than Joe Biden when it comes to the economy (52 percent to 35 percent), inflation (51 percent to 30 percent), and crime (47 percent to 30 percent). Voters seem to be yearning for a return to the normalcy of the pre-pandemic, and Trump is promising to give it to them.
The absurdity of Trump as the normalcy candidate is almost too much to bear—especially because the normalcy that voters are desperately craving is, in many ways, already here, and Biden helped deliver it. Many economists now believe that the pandemic stimulus was key to the U.S. economy performing so much better than those of other advanced countries. The stimulus also might have played an underappreciated role in reducing crime by keeping local governments and the community organizations they support afloat. “The only reason cities did not completely fall apart during the pandemic was because of a huge boost in federal funding,” Patrick Sharkey, a sociologist at Princeton University who studies urban crime, told me. “I’m very convinced that is a central part of the explanation for why violence fell in ’22 and ’23.”
Even as the pandemic has released its grip on our economy and civil society, it has yet to fully work its way through our politics. Before voters will credit Biden for making things better, they’ll have to be convinced that things are, in fact, better. In the meantime, the sitting president will almost inevitably take the blame for whatever America is unhappy about. That’s about as normal as it gets.
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