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As we discussed in Swamp Notes last week, there is obviously some overlap between the storming of the Capitol by Trump supporters a few weeks ago, and the storming of capital markets by Reddit flash boys a few days ago. But are both incidents connected to a larger trend, which is a rise in social unrest following pandemics?

The IMF thinks so, and has written a fascinating blog on the topic here. As anyone who has seen Les Misérables knows, the great cholera pandemic of 1832 was one of the precipitating events of the 1848 revolutions. While the two would seem to be too far apart to be interlinked, IMF research across 130 countries seems to show that not only do epidemics and the social and economic tension that they create tend to result in political unrest, but that the worst effects often happen several months or years after the plague itself.

In the short term, societies tend to come together around a crisis. This has generally been the case amid Covid, with the US and Lebanon being the rare examples of countries that have actually seen more social unrest events (in both cases there are obviously other hot-button political issues at stake). The calm amid pandemics can also be about the fact that it’s too difficult to organise protests during a crisis, in part because autocrats often use these moments to tighten social controls and grab more power. But ultimately, the threat of a big government crisis seems to increase two years after a pandemic.

That makes me a bit worried for the Biden administration, which as you know I’m generally quite bullish on. Two years is about the time that any large fiscal stimulus effects would have worn off, and you might have also seen a big stock market correction, at least if you believe as I do that we are in a major bubble (for more on that, and the deep meaning of the GameStop fiasco, check out my Monday column).

There is an opportunity in this challenge. Such post-pandemic public sector crises tend to happen in countries where trust in institutions is low, and there are high levels of poverty and inequality. In many ways, that describes the US today. But these are also the issues that the Biden administration is laser-focused on, with their work over wealth strategy.

I’m particularly interested in whether the pandemic could help the administration to finally push through a more sensible healthcare system in this country. As I’ve written many times, the US healthcare system makes no sense for anyone, particularly anyone who has lived abroad.

Indeed, given that the employer-led healthcare system in this country is a huge competitive disadvantage to business relative to foreign peers, I’m amazed that there isn’t a wholesale call for single payer from business itself.

I know it would be a stretch to expect large reforms given the power of the healthcare lobby and the complexity of the system. And yet, healthcare is one of the fastest-growing industries in the country in terms of jobs, and it is also one of the easiest labour categories to keep at home, which would be a boon for the “Build Back Better” strategy of shifting the economy to income rather than asset bubble-led growth.

Peter, in your debut note, you made it clear that you thought that the Biden administration was taking on too many transformational issues at once. Healthcare does have the reputation of being a Waterloo for American politicians. Do you think the president should forget about trying to fix it? Or is healthcare reform — particularly post-pandemic — crucial to the stability of the economy, and our democracy?

Rana, put me down as unenthusiastic at the prospects of another effort to overhaul the American healthcare system. Not that it doesn’t need it. As the father of a daughter born in a Belgian hospital, and a veteran of various familial breaks and bruises mended by Britain’s National Health Service, I am well aware of how much the US can fall short.

But a failed attempt at healthcare reform crippled Bill Clinton’s early presidency, and the effort to get Obamacare through Congress sapped almost all of Barack Obama’s political capital in the years before Republicans took back the House and stymied the rest of his legislative agenda. In other words, recent history tells us it is nigh impossible to do a major overhaul of the American health system unless a president is willing to sacrifice almost everything else — something which Biden clearly doesn’t want to do.

The slipshod handling of the pandemic would seem to argue for a full-court press to harness popular anger for something new. But let’s remember that Obamacare is only a decade old, and Donald Trump spent nearly half of that time dismantling it. Shouldn’t we first shore up the last round of reforms to see if they work before ditching it for something else?

I’m more interested in your theory that national crises like pandemics are the kindling for national upheaval months or years down the road. I’ve often felt that Trumpism and associated nationalist movements worldwide were the delayed reaction to the 2008 financial crisis. As you noted, Americans pulled together during the first initial shock of the market collapse. But what triggered the nationalist anger, I think, was the sense that while coastal elites were returning to pre-crisis prosperity, a good chunk of middle America never recovered. If the US continues with its K-shaped recovery, the IMF’s prediction of post-pandemic upheaval may prove prescient.

Edward Luce is on book leave and will return in mid-March.

And now a word from our Swampians . . .

In response to ‘Biden’s bipartisanship at the crossroads’:

“Income inequality has hollowed out America’s soul. Congressional acquiescence to corporate profit regardless of its social cost, wealth worship (aka fealty to the 1 per cent), and ‘money in politics’ corruption have all been severe hammer blows to a majority of Americans. America’s soul is bleeding. Governance that serves the 1 per cent only is incompetent governance and is a relatively new undemocratic and soulless form of governance. Restoring the soul, equates to restoring a value system and governance structure that places improved standard of living for all families above unabated wealth accumulation by the fortunate few. Let’s debate the best way to realise these egalitarian values, but proposing that acquiescence to petty partisan interests should be a higher goal strikes me as fiddling while Rome burns.” — Michael Hurd, Chicago, Illinois

In response to ‘Flash mobs, financialisation, and the future of liberal democracy’:“One of the main takeaways from this has to be how much oxygen there is for anyone who wants to attack ‘Wall Street’. The method of the attack and the messenger seem largely irrelevant; we’re seeing day traders running a short squeeze (or less charitably a pump and dump) valorised as populist heroes and Chamath Palihapitiya seamlessly transitioning from his advocacy of elimination capital gains taxes to becoming a near tribune of the people. Enterprising politicians on both the left and right will note how many sins can be washed away and how many disaffected voters can be won over with an ‘anti Wall Street’ image. The downsides to a full out assault on Wall Street are obvious, but ultimately politicians are in the business of winning votes and beating up on the bankers looks like the biggest winner there is.” — Nick Shulevitz, Washington, DC