Societal hatred and tribalism are lagging indicators of economic distress. By the time political polarization becomes extreme, the underlying system is already in crisis due to factors like excessive debt and money printing. The economy is the root cause to watch.
Excessive debt forces governments to print money, which inflates asset prices. This process mechanically enriches the asset-owning class while devaluing currency for wage earners, hollowing out the middle class into either the wealthy or the poor.
Money printing is a politically expedient way to provide voters with the illusion of "free" services. It allows governments to spend without immediate, visible taxation, playing directly into the human tendency to prioritize short-term ease over long-term consequences.
The history of rent control in New York City shows how price caps disincentivize maintenance and new construction. This leads to a death spiral of deteriorating housing stock, supply shortages, abandonment, and ultimately higher market rents for any new, uncontrolled units.
Catastrophic outcomes often result from incentive structures that force people to optimize for the wrong metric. Boeing's singular focus on beating Airbus to market created a cascade of shortcuts and secrecy that made failure almost inevitable, regardless of individual intentions.
While praised for social safety nets, Nordic countries have higher taxes, slower GDP growth, and far less venture capital funding than the U.S. Their model represents a specific trade-off, not a universally superior system, and struggles with scale and diversity.