[w4women]

I think their fatal flaw is that they don’t realize some people have given up. And other people like the way the world is changing, as it allows them to blame someone else for their own failures. And then there are the lazy people, who will be there no matter what. It is easier to be a slacker than an innovator, especially when you have permission.....morally, that is.

[Publius]

That's a good answer. There is also the issue of acclimation.

Dagny and Hank think that the dementia is self-defeating. They don't perceive that the nationl insanity is creating a new construct with its own rules, and a stable one at that. This construct will go on until it reaches a point of genuine self destruction -- but that might well take years to unfold.

Hank and Dagny have more faith in the people than they deserve. Rand didn't live long enough to encounter the word sheeple, but I think she would have understood.