Friday, May 22, 2020

The Other New Normal

I keep "joking" (not actually joking) that once the stonks are stabilized, any sense of urgency from the powers that be that anything needs to be fixed, that they need to *do something*, will fast fade.

If you take the views of right economists semi-seriously, the Great Depression was really just the Great Shirk. People weren't unemployed, they just chose not to work at the prevailing wage. This was the view of the Great Recession too. Remember funemployment? The idea that it was just a little vacation for people was pushed in the summer of 2009. A serious take later was that the innovations in video game development (the games were super good now) meant that youngish males just didn't want to work and preferred to game all day.

The other one was "skills mismatch." Stupid Kids listened to us and borrowed all that money to go to college but they didn't get STEM degrees. Time for some jaayuuuuubs retraining!

Every time unemployment goes up, the view of what "the natural rate of unemployment" is goes up with it, and the agreed upon level of what full employment is goes down. The good guys (team Obama) thought we hit it by 2016. It wasn't true, but even if it had been, it took too damn long to get there, and that wasn't because a new Call of Duty, or whatever The Kids Today play, came out.

You'd like to think this can't happen with 20% unemployment, or whatever we're headed to, but it will. It won't take long before we move from no longer panicking (almost there!) to blaming the people for the failures of government. All those lucky duckies and their funemployment!

Oh I see basically already wrote this. 10 years ago.
If I went back in time and informed the Obama administration's economics people that the stimulus they were planning to enact resulted in the May 2010 unemployment rate being 9.7%, they would freak out and realize that more needed to be done. Now that we're here, there's not a lot of freaking.

And I'm not surprised that economists will continue to come up with increasingly clever explanations as to why this is the new normal, as they always do. The Great Recession will just been seen as the Great Shirk, with all those lucky duckies on extended periods of funemployment.