If America's So Rich, How'd It Get So Sad?

If America's So Rich, How'd It Get So Sad?

Or: How the 2020s broke our brains

1. The Tragic Twenties

“The United States was a reasonably happy country for a long time,” the University of Chicago economist Sam Peltzman wrote in a 2026 paper. “It is not happy now.”

Crunching data from the General Social Survey, Peltzman documented “a sudden, sharp and historically unprecedented decline in self-reported happiness in the US population” after COVID that “mainly persists” through 2024. He called it a “regime change” in national sentiment. After 50 years of mostly steady levels of self-reported well-being, American happiness plunged. And it’s hardly bounced back at all.

Peltzman’s analysis is not a lonely voice; there is a veritable chorus of gloomy sentiment. This week, the Federal Reserve’s measure of US worker satisfaction fell to its lowest level since the survey began in 2014. One week prior, consumer sentiment had fallen to the lowest level ever recorded in the 70-year history of the University of Michigan economic survey. Once again, the index plunged around 2020 and, like a hiker on the far side of a mountain, continues down step by step. Americans are telling pollsters that they are more depressed about this economy than they were during the depths of the Great Recession or the painful stagflationary years of the 1970s.

Finally, the U.S. has also fallen to its lowest ranking ever in the World Happiness Report, largely due to the astonishingly swift decline in well-being among young people in that international survey.

If you are looking for a sympathetic ear to explain this phenomenon, certainly do not seek counsel from your local economist. The American blues seem awfully curious to those who view the world through the keyhole of employment or income statistics. The unemployment rate has been below 5 percent for practically the entire decade, which is basically as good as you can ask for. For this entire decade, the US economy has significantly outgrown the Eurozone and other rich countries, such as Japan and the UK. Americans are rich and getting richer, by most conventional measures. More Americans are breaking into the upper middle class, and workers at the bottom of the income distribution have seen their wages grow faster than those at the top in the last few years.

So, those who privilege economic statistics over self-reports might be tempted to summarize the situation this way: America’s resilient economy is a fact, while Americans’ sad-sack survey results are mere irrational feelings. There is something to this; the gap between so-called “hard data” (e.g., the unemployment rate) and “soft data” (e.g., a survey) is certainly wide and widening. But a feeling is an important kind of fact. Feelings don’t just shape consumer behavior. They shape political attitudes; and attitudes influence voting; and voting determines policies; and policies shape the economy. To understand the future of the US economy and the United States writ large, one cannot afford a haughty indifference toward sentiment.

And on the sentiment front, what we’ve got are four survey results—four *facts, *you might even say, of American lugubriousness—all of which point to one unmistakable conclusoin. This decade has been the very opposite of “roaring.” We are mired instead in the Tragic Twenties.

2. Who Killed the Vibes?

One of the more remarkable discoveries in Peltzman’s paper is that the decline in self-reported well-being since 2020 has not been concentrated among young people, poor people, or unmarried people—three of the groups typically afflicted by higher levels of anxiety and sadness. Instead, the decline in happiness has been an across-the-board 10- to 15-point decimation experienced by practically every demographic.

Something significant has bludgeoned Americans’ well-being in the last six years without discriminating much by age, ideology, education, or gender. What is it?

The culprit has to fit the crime. Most importantly, it has to fit the timing of the crime. What we’re looking for is something that happened around 2020 (uh, seems obvious) and then didn’t recover (ah, that’s the hard part). This timing rules out several otherwise plausible suspects.

It’s probably not about cultural shifts, such as the decline of religion. Cultural conservatives might try to explain the Tragic Twenties by citing the rise of secular individualism among American liberals and pointing to the fact that religion seems to be a tonic for unhappiness. But the rise of religious non-affiliation in America has been a steady 30-year trend, whereas this falloff in well-being started in 2020, when secularism reached its recent peak. So, that explanation won’t do.

It’s probably not about old-fashioned wage inequality. Someone on the left might be inclined to argue that American misery is the reasonable and automatic societal reaction to severe class inequality. But low-income wage growth has been unusually strong since the pandemic, as the economist Arin Dube has taken pains to point out. Median household incomes are higher now than they were 10 years ago. What’s more, Peltzman’s analysis finds that some of the largest declines in happiness seem concentrated among well-to-do demographics, like older people, white people, and college graduates. So, here’s another suspect that doesn’t fit the crime.

It’s probably not just about phones and social media. When the subject is American anxiety and unhappiness, the most obvious suspect is smartphones, social media, and the surging negativity of the American news cycle. As I explained in a long essay last month, I am quite persuaded by the argument that phones and social media are associated with—and, probably, actively causing—a decline in well-being among young people in the U.S. But the rising misery of young people—often rightly associated with rising phone and social media use—has been going on for about 15 years. The more sudden collapse in general wellness that we see in the GSS and University of Michigan data points to an emotional break that happened around 2020. So, even if phones aren’t blameless here, they don’t make sense as the primary culprit.

If neither cultural decadence, nor material inequality, nor phones and social media seem to fit the shape of this particular phenomenon, we have to keep looking for what broke our brains in the 2020s. The simplest explanation I can offer is this: As a cultural-political force, the 2020 pandemic never ended.

3. The Permademic

The Pandemic Never Ended, Part I: The Sheer Shittiness of Inflation

One cannot even pretend to explain the happiness crash of 2020 without starting with the crisis that arrived in 2020 and never quite departed. The COVID pandemic unleashed more than a coronavirus upon the planet. The biological antagonist of the disease gave way to a cavalcade of economic disasters, from supply chain disruptions, to global inflation, to surging interest rates. We are still are living in the midst of an aftershock.

While the official rate of annual inflation has gone up, then down, and then up, again, the typical family does not experience price changes as a 12-month average with monthly updates. What they feel at the grocery store, or the restaurant, or the online checkout page, is something more like *holy shit, this cost what?! *And that holy shit moment is best understood as the accumulation of years of above-average inflation.

Think of it this way: Consumer prices, which had increased by 25 percent between the summer of 2007 and the summer of 2020, surged by the same amount between the summers of 2020 and 2025. In housing, the 50 percent increase in the Case-Shiller US national home price index between the summers of 2020 and 2025.