In the climate-change era, everyone who has oil wants to be the last one to sell it. Oil-producing countries still plan to increase production in the near term, and very few economic incentives exist to press them in any other direction. As long as someone else still has oil, they’ll sell it to your customer in your stead. Oil-industry insiders have said this point-blank throughout this year’s United Nations climate talks in Dubai, which are scheduled to end tomorrow.

The economic disincentives to phasing out fossil fuels have been the “elephant in the room,” according to Susana Muhamad, the environment minister of Colombia’s first-ever leftist government, who has emerged as a vocal leader in the meeting’s plenary rooms. Some of the countries most dependent on income from oil and gas are also among the ones most indebted to foreign banks, and so they keep drilling to stay current with payments. Countries such as Ecuador are exploiting their reserves—even in protected rainforest ecosystems—to service their painfully high debt. (Ecuadorians voted this August to block drilling in at least one part of the rainforest, for now.)

As one of South America’s biggest oil producers, Colombia is—or should be—another case like Ecuador. The country has a lot of international debt, so according to traditional economics, it had better keep pumping that oil. Instead of falling into that “economic trap,” Muhamad told me, over an espresso in an Emirati restaurant inside the sprawling COP campus, the country decided to veer radically off course. It announced in Dubai that it would sign on to a novel attempt to fix this seemingly intractable logic, one that has been gaining momentum outside negotiating rooms: a fossil-fuel-nonproliferation agreement.

Modeled in concept after the nuclear-nonproliferation deal signed in 1968, the Fossil Fuel Nonproliferation Treaty is not official COP business, but is at the center of a growing side conversation. Like the Nuclear Nonproliferation Treaty, the fossil-fuel treaty aims first to take stock of each country’s resources; the organization Carbon Tracker Initiative has already begun compiling a registry of fossil-fuel production and reserves. Then agreements could be made to mutually halt expansion. So far, 12 countries have signed on to support the deal; Colombia is the second oil-and-gas-producing country to join. (Timor-Leste, an island nation in Southeast Asia with a struggling oil economy, was the first.) Ultimately, the treaty’s signees intend to have it recognized by international law and be legally binding.

Tzeporah Berman, a longtime Canadian environmental activist and the chair of the group pushing for the fossil-fuel treaty, has had “an out-of-body experience” watching the treaty take on a life of its own, she told me when I caught up with her at the conference. “Last year, we walked into COP with one country,” she said. The tiny island nation of Vanuatu called for the fossil-fuel treaty on the floor of the 2022 UN General Assembly. Now, in addition to those 12 countries, 95 cities and subnational governments have signed a call for nonproliferation, along with 3,000 academics and scientists and 101 Nobel laureates. Mark Ruffalo is a fan. Those other entities can’t be party to the treaty when it ultimately forms (only countries can do that), but Berman sees their collective support as a force to move public opinion—much as the nuclear-nonproliferation movement started by turning the moral tide on nuclear weapons. If everyone who thinks that fossil-fuel expansion is morally unacceptable backs a single treaty, that could have major political ripple effects, she thinks.

Berman spent a number of years as a provincial-government appointee working with the Alberta oil-sands industry on climate policy. Though their goals are at odds, she is still friendly with a number of oil-sands executives, and in Dubai, she happens to be staying in the same hotel, so she greets them in the lobby in the morning. Canada put 28 oil-and-gas-industry employees on its official roster for the climate talks. “The industry has made $2.8 billion in profits every day for 50 years,” she said. “They’re trying to hold on to that.” After working with them, she clearly understood one thing: “Anything that out-and-out constrained the production of their products, they would not support.” They have maintained this position in Dubai, where Exxon Mobil’s CEO and others have expressed their preference for agreements that focus on limiting carbon emissions generally—not on limiting fossil fuel production specifically.

Berman saw a similar reticence from countries when she started coming to COPs in 2007, she told me. “I was told by governments, including my own, that oil production was not a climate issue.” When a blockbuster climate deal finally emerged from a COP in 2015, she said she “searched the Paris Agreement for oil, gas, and coal,” but the words weren't there. Every country had committed to tackling climate change, yet none of them officially planned to cut fossil-fuel production. And since then, production has gone up.

So Berman began talking with academics, looking for a political strategy that had worked in the past to break this type of standoff. The nuclear-nonproliferation movement stood out. It was a case much like climate change: The threat at hand had the potential for mutual assured destruction, a danger that many agreed was unacceptable, yet no country wanted to go first in eliminating its part of that danger.  

With a fossil-fuel-nonproliferation treaty, countries could share information on their oil and gas reserves and agree to a mutual drawdown schedule that reflects their individual situations. “It’s also an instrument to look for better and more fair conditions for countries like Colombia,” Muhamad, the environment minister, said. The country has roughly seven years’ worth of oil reserves left, and is expected to run out of gas in this decade. Changing course, she said, would save the country from being locked into a downward spiral of aggressive oil drilling and then a financial crisis when it ran out. Plus, to meet the Paris Agreement’s climate goals, Colombia can’t possibly unearth all its oil. With so many cities and subnational governments also signed on to support the nonproliferation agreement, economic dialogues might be possible among more entities. Muhamad pointed to California, which has supported the nonproliferation treaty. “But who buys 50 percent of their oil from Ecuador in the Amazon? The state of California. So what is California going to do about it? This is the discussion that we have to have.”

Ecuador has not yet signed the treaty, but Colombia, Ecuador, and similar countries are, as Muhamad put it, “not Saudi Arabia,” with its seemingly endless reserves. Colombia and Ecuador will run out of oil. Which means they have less to lose, long-term, from agreeing to leave it in the ground. “We don’t have resources for hundreds of years. We are the ones right now who could do this transition,” she said. But their short-term financial needs are too pressing to leave the oil there for nothing in return. Plus, when her country does try to move in this direction, it is punished in the markets, she said. After Colombian President Gustavo Petro announced that the government would cease issuing new permits for oil exploration, the value of its peso dropped immediately. The financial system needs to change, Muhamad said, or countries like hers won’t be able to take meaningful climate action. “And a treaty could be the place where we could negotiate now, not in 15 years, when nobody wants our oil.”

Of course, that logic won’t work for mega-producers such as the U.S. and Saudi Arabia, or even for smaller countries such as Azerbaijan, which gets two-thirds of its wealth from oil and gas, and which was just announced this week as the host of next year’s COP. But, Berman argues, treaties change the culture, even in the absence of the biggest players. The nuclear-nonproliferation deal had limits—the five major nuclear powers, including the U.S. and Russia, still have their arsenals—but it did change the trend of unrestrained weapons production. More recently, a UN treaty banned nuclear weapons outright. No nuclear power signed on, but such treaties can succeed nonetheless: The Guardian notes that the U.S. never signed a UN land-mine treaty, yet aligned its land-mine policy to match. The dangers of using oil are more diffuse than the dangers of nuclear weapons, and the incentives to use it are constant. Decoupling those things will take a monumental effort—something treaties are designed to do.

Ministers at COP28 have spent nearly the past two weeks sitting in large, carpeted rooms negotiating a text that, up until today, contained a call to phase out fossil fuels altogether. John Kerry, the U.S. climate envoy, had said during the conference that he thinks the world needs “largely a phaseout of fossil fuels in our energy system,” a distinct difference from the less forceful “phase down” language the U.S. previously supported. China said it would commit to some language on fossil fuels, which was better than no language.

For a few days, it felt like a radical new approach to oil and gas might be possible. But Saudi Arabia and the head of OPEC had been attempting to block the phaseout proposal, and today COP President Sultan Al Jaber released a new draft of negotiated text that eliminated the possibility, instead leaning on the much softer language of “reducing” fossil fuels. The European Union has said it will not accept this version of the text, leaving open the door to restoring some stronger language. Yet even the discussion of a phaseout at COP represented a change in the rhetoric of some powerful countries: Once, Berman told me, talking about oil production at all was a nonstarter. Diplomacy might have limits, but it can bring ideas once treated as impossible dreams into the mainstream. A treaty to stop expanding the frontier of fossil-fuel production could go the same way, or further. “At the beginning, it seems to be something on the periphery,” Muhamed said. “But maybe from the periphery, it goes to the center.”

When you order a pair of sweatpants online and don’t want to keep them, a colossal, mostly opaque system of labor and machinery creaks into motion to find them a new place in the world. From the outside, you see fairly little of it—the software interface that lets you tick some boxes and print out your prepaid shipping label; maybe the UPS clerk who scans it when you drop the package off. Beyond that, whole systems of infrastructure—transporters, warehousers, liquidators, recyclers, resellers—work to shuffle and reshuffle the hundreds of millions of products a year that consumers have tried and found wanting. And deep within that system, in a processing facility in the Lehigh Valley, a guy named Michael has to sniff the sweatpants.

Michael is one of dozens of material handlers—the official job title—at the Inmar Intelligence returns-processing center in Breinigsville, Pennsylvania. Inmar is a returns liquidator, which means that popular clothing brands and all kinds of other retailers contract with the company to figure out what to do with the stuff that customers end up not wanting. Much of that process involves complex machinery and data analysis, but the more than 40 million returned products that the facility sifts through annually still must pass in front of human eyes. Material handlers are charged with determining a return’s ultimate fate—whether it goes back to the retailer to be sold anew, gets destroyed, or something in between.

I wandered by Michael’s workstation on a trip out to Breinigsville last month to see one of the great mysteries of American consumer life in action: what actually happens to your unwanted purchases when you send them back. Michael, who was on the clock and would only share his first name, had just begun evaluating a pink button-down, plucked from a box of identical shirts. In the space of barely more than a minute, he confirmed the item number on the fabric label, unbuttoned the shirt, gave it the same kind of smell test you’d perform on your dirty jeans to see if they have one more grocery-store run in them, turned the shirt fully inside out and back again, eyed it for stains or other imperfections, ripped the price off the paper tag, rebuttoned it, lint-rolled it, folded it to the precise dimensions of a new clear plastic bag, and deposited the shirt inside. A brand’s contract with Inmar can stipulate details down to exactly how many pieces of tape are used to seal a perfect (or very close to it) item into new packaging. The pink shirt, an overstocked design destined for a discount store, got two.

Reverse logistics—basically, the business of moving unwanted products back up the supply chains from whence they came, or into different supply chains entirely—is a ballooning global industry that was valued at nearly $1 trillion in 2022. Before the advent of online shopping, return rates for even finicky products like clothing were in the single digits; now 20 to 30 percent of all purchases come back. Beyond the behemoths—Amazon, Walmart—very few retailers undertake the messy, fiddly work of evaluating the deluge of products themselves. Instead, the prepaid shipping labels you print out guide most of your returns to third-party facilities like Inmar, where they’re stacked six feet tall in palletized bins known as gaylords, along with thousands of other retaped cardboard boxes and poly mailers, all waiting to be ripped open, eyeballed, and searched by hand.

When I arrived at Inmar’s facility, on a sunny morning shortly before Thanksgiving, I did so alongside a fleet of trucks pulling in to pick up or drop off loads of UPS packages or ShopRite groceries or Coca-Cola products at a sea of other surrounding warehouses. Breinigsville is the kind of place where logistics facilities tend to crop up. Just outside Allentown, it’s in an area with plenty of open, inexpensive land, which has allowed for the construction of wide, low-slung warehouses near highways for moving tractor trailers full of consumer goods between there and Philadelphia or New York City in a couple of hours. ProLogis, the industrial real-estate company that operates this sprawling campus, boasts to potential tenants that it is situated within a day’s drive of nearly a third of American consumers. The scene was industry for postindustrial America. No smokestacks rose into the sky; the grounds were neatly manicured; the buildings were uniform shades of white and pale gray. The Bridgestone facility on campus doesn’t make tires. It moves them around.

Inmar stakes its claim as the largest returns liquidator in North America. The company says that it processes half a billion returned goods a year across 17 facilities. At the Breinigsville facility alone, Inmar’s material handlers process more than 100,000 consumer goods each day on behalf of all kinds of retailers—e-commerce giants, big-box discounters, drugstore chains, clothing brands, purveyors of home decor. Inside, the first thing to greet me on the processing floor was an enormous cardboard bailer, fed by a conveyor belt running high above the ground. Cardboard, just as much as returned products themselves, is an inescapable material reality of Inmar’s business; at times, it looked as if almost everything was cosseted by layers of repurposed cardboard or industrial-grade cling wrap. Beyond the conveyor belt, I found towers of pallets stacked to the ceiling as far as I could see, each box stuffed with throw pillows or defective toasters or skinny jeans that are no longer cool. Some were new arrivals awaiting final judgment; others had already been sorted and were waiting for their truck to come in.

I spent a little more than three hours in the facility. Some of that time was in a room with Inmar executives, dutifully scribbling notes as they answered my questions and expounded on the industry. For most of my visit, though, I simply meandered around the warehouse with them in tow, peeking around every corner, prodding at piles of returns, and watching staffers work. The facility was in the middle of a sleepy second shift. Occasionally a forklift would dart in or out of the aisles of pallet towers, depositing another load ready for transport or fetching a fresh set of home decor or sporting goods for inspection. Product examinations happened in a series of distinct work areas, each nestled in a clearing that I would encounter occasionally in the shelving forest. The zones dealt with different types of returns. Rugs had their own area. So did clothing and shoes. Near the bailer, I watched employees sort through the fleece blankets and sets of fake eyelashes that had been sent in from a large chain pharmacy. All the way in the back, special care was taken to separate out the different brands of small appliances sold by a major discount department store.

I’m not identifying the pharmacy or department store, or any of the dozens of other brand names that I saw floating through the facility, because I had to agree to that up front to be allowed inside. All of Inmar’s clients have confidentiality agreements in their contracts that prevent Inmar from publicly naming the companies it serves. Retailers have a fraught relationship with reverse logistics. They rarely acknowledge the system in public. Consumerism has always required a certain amount of abstraction. Originally, this was accomplished through the invention of the department store and the advertising industry, which goaded shoppers into associating new dresses with the limitless possibilities of the self, not with the exploitation and grime of garment factories. As consumer industries have changed, that abstraction has gained new layers: overseas production, online shopping, free shipping and returns. When you order something on Amazon, it’s not so much an act of buying a specific thing, or even of buying an idea of yourself. Instead, you’re buying an idea of a product, and one in every three or four of those ideas doesn’t pan out.

Reverse logistics is, in some sense, the process of unwinding those abstractions—of turning ideas and possibilities back into physical goods that must be dealt with. Figuring out what to do with the stuff that people rejected is unglamorous work, but retailers know how necessary it is. They also tend to be terrible at handling all of it themselves. It’s difficult to process returns profitably without the benefit of enormous scale and the data-analysis capabilities that create it, not to mention a lot of regular people in exurban America making sure you didn’t accidentally include your underpants when you sent back that pair of jeans—the most common stowaways that Inmar’s material handlers find in returned clothing. (They also come across errant vape pens and the occasional wedding ring in garments’ pockets.) Returns “are not what the companies want to do, or what they built themselves to do,” Thomas Borders, Inmar’s vice president of product-life-cycle solutions, told me. “They were built to sell.”

Inside the facility, stripped of context and pretense and marketing, the goods I encountered seemed a lot more similar than they do when gleaming and new on a store shelf. Luxury area rugs probably won’t meet the same fate as the stuffed animals sold at chain pharmacies, but their futures are governed by the same unsentimental practicality. What actually happens to them hinges on a bunch of different factors: whether they were returned by a buyer or by the retailer itself, whether they’re still in their original packaging, whether they show signs of use, whether they’ve been reported by the buyer as damaged or defective, whether they’re high- or low-margin products, whether their original manufacturer is willing to take them back from the retailer, whether they bear a desirable brand name.

Where a product was purchased can play a major role too. Of the brands that Inmar processes, those that sell their own products directly to the general public put more than 90 percent of their returns back into their inventory on average, according to Inmar. Meanwhile, retailers that sell a bunch of different brands do so with less than half of their returns, according to Inmar’s data, largely because the logistics of multibrand retail are more complex and the brands carried by these stores tend to be less desirable. In the best-case scenario, what can’t be sold again by its original retailer will be liquidated to wholesale buyers, eventually stocking discount stores or resale platforms domestically or small retailers in poorer countries. The stuff that doesn’t find a buyer will be donated, recycled, or destroyed. (Destroyed is the preferred industry euphemism for products that end up landfilled, incinerated, or otherwise trashed.)

Inmar says that its donations go to a whole range of charities—food banks, shelters, animal-rescue organizations. But just like donations and recycling that come from individual households, there’s no guarantee that any particular product will find a willing recipient, or that it can be effectively remade into a safe, useful new material. Lots of things that aren’t immediately deposited in landfills still end up in them, even if they pass through the hands of multiple middlemen first.

In the Breinigsville facility’s garment-inspection sector, where Michael was sorting pink shirts, the work of determining any particular product’s destination is more complicated because the potential outcomes for clothing are more numerous. Many different types of wholesalers and discounters are willing to buy up liquidated clothing, and brands can be very picky about where goods bearing their name are allowed to show up. Inspections take place at a bank of about two dozen identical, brightly lit workstations where employees attempt to discern how honest you were when you filled out your return slip—or, in the highly likely event that you declined to fill it out at all, what that return slip should have said. The centerpiece of each station is a white tabletop, above which is mounted a computer monitor that will explain the precise level and type of scrutiny that different items from different retailers require. Employees are armed with an arsenal of very analog tools—lint rollers, box cutters, sanitizing wipes, an array of plastic bags. Behind each station, five colorful, waist-high bins represent the possible futures of each garment: liquidation, donation, recycling, destruction, or, if everything is perfect, a speedy trip back to the retailer’s main inventory.

Inmar collects huge tranches of data on what gets returned and why, which can be incredibly valuable to retailers desperate to cut down on their return rates or catch faulty products before they irritate even more customers. But really, information about customer returns can only do so much for retailers’ bottom line. Most of the returns that Inmar handles actually aren’t things that anyone bought and rejected, or that anyone bought at all. Instead, they are excess inventory—a surplus of goods that comes directly from retailers themselves. Their hope is to squeeze at least some value out of everything their customers didn’t want by selling it off or returning it to the wholesaler or manufacturer from which they bought it.

Consumer behavior isn’t cleanly predictable. Sometimes trend projections fall flat or the weather behaves in strange ways or sizing doesn’t work out as planned, and the velvet skirts or patio furniture or redesigned hiking boots just don’t move. Or, worse, they do move, but then they all come back. The system as currently constituted requires the circulation of much more stuff than will ultimately find useful purpose in people’s homes; the shelves must always be full, the sizes and colors must all be available, and there has to be surplus to satisfy consumerism’s promise of convenience and abundance. If your retailer doesn’t provide this—the excess that the industry itself taught people to expect—then your competitors will.

All of this—the high return rates, the extra stock, the endless shipping, and the enormous numbers of workers sniffing and buttoning their way through careful decisions—doesn’t come cheap. That expense drives up the prices of consumer goods for everyone, no matter what your personal shopping and returns habits are. Lately, retailers have started to take more pointed measures to try to close Pandora’s cardboard shipping box. Most notably, many have started to charge for return shipping, rolling back the free, open-ended policies that persuaded so many people to adopt online shopping in the first place. But these changes aren’t designed to dissuade people from shopping online; they’re simply asking shoppers to start subsidizing the process. So far, the tactic seems to be working. At the end of my visit, I sat down with Borders, the Inmar VP, in the Inmar facility’s lone conference room, readjusting to the scale of a space meant for humans after a couple of hours in those meant for industry. He told me that retailers’ new policies have so far not affected the volume of returns that Inmar processes at all.

When inflation started to spike in 2022, the Federal Reserve made the only move it could: raising interest rates. Over the course of 18 months, rates shot from near zero to above 5 percent and have remained there since. Now inflation appears under control, having fallen steadily since July 2022. But while the Fed may be done raising rates, it’s not cutting them back to zero anytime soon.

According to the central bank’s most recent projections, rates will stay where they are for most of 2024 and will fall only slightly in 2025, ending the year at about 4 percent—more than twice as high as in late 2019. Activity in the bond markets suggests that rates could stay near that level for the better part of a decade. Wall Street has begun summing up the situation with a simple phrase: “higher for longer.”

As jarring as 5 percent interest may seem, by historical standards it is pretty modest and, believe it or not, represents a healthy adjustment. America since the Great Recession has been living through an anomalous period of super-low rates that contributed to widening inequality and speculative-asset bubbles. Higher-for-longer should herald a fairer, more sustainable economy. Americans just have to survive the transition. Because before we get to the good place, higher-for-longer is going to feel bad—or at least very weird. Rates haven’t been this high since George W. Bush was president and Taylor Swift was in elementary school. At this point, nearly every facet of the American economy has reshaped itself around near-zero interest rates. As with any dependency, withdrawal will be painful.

The core irony of raising rates to tame inflation is that higher rates can make major purchases—like a car or, especially, a house—more expensive, because most people take out loans to make them. In other words, the cure for inflation may itself be experienced as inflation. In January 2021, the interest rate on a 30-year fixed home mortgage reached a record low of 2.65 percent. Today, it is just over 7 percent. In theory, higher borrowing costs are supposed to cool prices. Instead, they’ve hardly budged. With rates spiking, many homeowners have decided to stay put to preserve the cheap mortgages they secured when rates were low. The resulting restriction of supply has led to the slowest pace of existing home sales since the height of the Great Recession, keeping sticker prices high even as the cost of a mortgage has ballooned. This double whammy has produced the most punishing housing market in at least a generation: Buyers can’t afford to buy, and owners feel stuck in place. As my colleague Annie Lowrey points out, the market could be bleak until the 2030s.

[Annie Lowrey: It will never be a good time to buy a house]

Higher borrowing costs can hurt in less obvious ways, too. Jesse Jenkins, who leads the Princeton ZERO Lab, estimates that higher-for-longer will increase the cost of renewable-energy projects by 20 to 30 percent. In just the past few months, two large offshore wind projects in New Jersey and three in New England—which together would have accounted for nearly one-fifth of President Joe Biden’s 2023 offshore wind-power target—have been canceled because of soaring costs. The world’s largest borrower is also feeling the squeeze. Thanks to rising rates, the U.S. government will pay $659 billion in interest on the national debt this year, nearly as much as it spends on Medicare or national defense.

But the most alarming potential consequence of higher-for-longer lies in the pressure it puts on the financial system. The collapse of Silicon Valley Bank, First Republic, and Signature Bank earlier this year was largely a story about interest rates: When rates went up in 2022, existing government bonds, which had lower rates, lost value. That inflicted huge paper losses on Silicon Valley Bank, triggering a bank run. A wider crisis was averted, but banks remain vulnerable to future shocks. Regulators worry that additional pressure on balance sheets—from, say, a collapse in commercial real estate—could trigger a larger round of bank runs, with damage spilling over into the broader economy. “Eventually,” says Mark Zandi, the chief economist at Moody’s Analytics, “something could break.”

And yet, higher-for-longer appears to be worth the risk. To understand why, it helps to go back to the origins of the previous regime. In 2008, during the depths of the financial crisis, the Fed cut interest rates to zero as part of a desperate bid to avert a second Great Depression. (It also began buying securities itself in an effort to push effective interest rates below zero, a program called “quantitative easing.”) This “zero interest-rate policy”—which became known as ZIRP—was meant to be a stopgap. But as it became clear that the economy needed more help, and a Tea Party–controlled Congress wasn’t going to pass any more stimulus spending, the Fed decided to keep ZIRP in place indefinitely.

The idea behind ZIRP was to encourage spending and, in turn, create new jobs. At the most basic level, the policy made borrowing money extremely cheap. But the flip side was that investors could no longer earn nice returns by simply stashing their money in safe assets such as U.S. Treasury bills. With rates at or near zero, they had to find riskier investments—things like publicly traded stocks or leveraged buyouts or luxury-condo developments. The Fed believed that this would trigger a flood of new investment that would send asset prices soaring and generate what economists call “wealth effects.” People who owned property or stocks would see the value of their portfolios rise, encouraging them to go out and spend more money, ultimately helping to speed along the recovery.

The Fed got the first part right. Almost every single asset class, whether real estate or private equity or cryptocurrency, soared in value in what became known as “the everything bubble.” The stock market more than tripled from 2009 to 2019, and the value of Netflix, Tesla, and Amazon each grew by more than 2,000 percent. But the robust recovery did not materialize. For much of the decade, GDP and wage growth were anemic. The share of working-age Americans with a job didn’t recover from its pre-crisis levels until the fall of 2019.

Instead, because assets like stocks and real estate are disproportionately held by the rich, ZIRP helped produce the largest spike in wealth inequality in postwar American history. From 2007 to 2019, according to calculations by the economist Austin Clemens based on Federal Reserve data, the wealthiest 1 percent of Americans saw their net worth increase by 46 percent, while the bottom half saw only an 8 percent increase. A report from the McKinsey Global Institute, not exactly known as a bastion of economic populism, calculated that from 2007 to 2012, the Fed’s policies created a benefit for corporate borrowers worth about $310 billion, whereas households that tried to save money were penalized by about $360 billion. The journalist Christopher Leonard wrote in his 2022 book, The Lords of Easy Money, that “no single policy did more to widen the divide between the rich and poor” than ZIRP.

ZIRP transformed the American business environment in jarring ways. With borrowing cheap and the market booming, established corporations realized they could exploit financial tactics such as stock buybacks to boost earnings per share without improving their underlying business. Meanwhile, riding a wave of cheap money, Uber, WeWork, and other start-ups burned through billions of dollars of venture capital, pushing entire industries toward hard-to-sustain business models in the process. The private-equity industry, infamous for its debt-heavy leveraged buyouts, began eating up more and more of the economy. Desperation for higher returns also allowed speculative assets including cryptocurrencies and NFTs to attract trillions of dollars, only to collapse spectacularly.

[Rogé Karma: The secretive industry devouring the U.S. economy]

The return of higher rates should help the economy course-correct. More money will flow to long-term investments and sustainable companies instead of speculative assets and impractical start-ups. Companies looking to boost their stock price will have to win new customers or develop better products instead of relying on financial engineering. The gains of economic growth will be more widely spread because less money will be funneled into assets owned mostly by the rich.

Today’s higher rates also signal an underlying economic health that the ZIRP era lacked. The Fed is only comfortable keeping rates higher for longer because America’s post-pandemic recovery has been so strong, thanks to a generous helping of fiscal stimulus. Unemployment has remained at historic lows. Manufacturing is off the charts. Wage gains for lower-paid workers have rolled back about 40 percent of the rise in income inequality that has occurred since the 1980s. In terms of growth, inflation, and employment, the U.S. is doing much better than other rich countries.

Americans used to cheap mortgages and a bonkers stock market understandably might not see all of this as good news. And the risk remains that higher rates trigger the kind of financial crisis that necessitated low rates in the first place. But we shouldn’t pine for the ZIRP era. That was the product of a crisis that our leaders failed to solve. As strange as it is to say, higher-for-longer is what it looks like when things are going right.