Wednesday, April 29, 2020

On The Other Side

I "joke" about economists talking about 'V-shaped recoveries' (we lose 4 million jobs overnight but then we just get them back again in 3 months!) because the experience with the last recession, at least, should show them how absurd that is. There was no "good" reason for the recession to have lasted as long as it did. Imperfect policy response is part of the story - stimulus too small, Obama insisting on people getting foreclosed on - but it isn't the only part of the story. An economy of people living one minor disaster away from ruin is a lot of the story. There is no bouncing back from this quickly, even if "the good guys" were running things, because the good guys wouldn't be doing much better. Best case scenario is that people are going to be strangled by debt forever, on top of people already being strangled by debt forever. There is just something fundamentally wrong with "the economy," and you can't just turn the lights back up.