3 ms·

I think this is going to look a lot more like 2001-02 than 1980-82. But in any event it might get worse before it gets better.

dragonwriter 4y ago
> I think this is going to look a lot more like 2001-02 You mean Mar-Nov 2001? That’s kind of my fear. Because while it was an extremely mild and short recession in aggregate terms, the recovery afterward had the worst distributional profile of any recovery in recent memory, seeing declines in the bottom three quintiles, the second-from-the-too quintile mostly flat, and almost all the gains concentrated in a very narrow slice at the top of the top quintile, which was a big reason for how bad the Great Recession was. And there is a lot of indication that a 2024-ish recession could see a similar, or even worse, policy environment in the US to the one that produced the bad outcomes of the recovery from the 2001 recession.
- ars 4y ago
  That's exactly what it will be. Unless we dramatically increase energy usage. By not being permitted to increase energy usage, all the money is being made with capital, instead of physical things, which helps those at the top. The only fields "available" if you will, to making money with are those that are intangible, capital, intellectual property, things like that. And those types of things help those at the top.
- encoderer 4y ago
  So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? Sure, but I will still take a mild recession over the multi year double dip 1980 variety. Seems like what you are really saying is that you want an 80s style boom recovery - me too!
  - dragonwriter 4y ago
    > So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? No, I’m worried that the recession, even if not severe in aggregate terms, will be the occasion of a policy response that will set us up for an extended period of bad economic experience for most of the population despite a strong aggregate economy culminating in a catastrophic aggregate collapse both caused by and compounding the bad experience of the bulk of the population. Top line aggregate numbers don't capture the general experience of the economy. > Seems like what you are really saying is that you want an 80s style boom recovery No, I am saying (to the extent a recent historic precedent is the model, though I don't expect the specific causes can or should be replicated) I want a 90s style boom recovery; the 80s “boom“, while not as bad as the 2000s expansion in distributional terms, was far worse than the 90s boom (e.g., real hourly wages fell through 1980s expansion, while rising overall—leveling out in the first few years, and rising strongly after—in the 1990s expansion.)
    - encoderer 4y ago
      Well, I think that is a valid worry, but nevertheless my point was that i believe we are headed to a mild recession and that is a far better outcome than a severe recession. But yes, a robust recovery is also better than a weak one and you seem to be focusing on the kind of recovery we might experience. So it seems we are talking past each other.
      - dragonwriter 4y ago
        > nevertheless my point was that i believe we are headed to a mild recession and that is a far better outcome than a severe recession. Ceteris paribus, I would agree, but I don't think that policy response and the effect on the distributional shape of the post-recession recovery is independent of the dimensions of the recession (though there are other aspects of the economic and political context that play a role.) There was a general feeling that the preceding recession never ended leading into the Great Recession and the reason for that is that if you look at the experience across the economy adverse conditions persisted across most income segments despite aggregate expansion. It is my contention that as well as an alignment of the right political conditions when the recession occurred, the policies which contributed to this were able to be implemented and sustained, in significant part, because the aggregate recession was short and mild.

dragonwriter 4y ago

> I think this is going to look a lot more like 2001-02 You mean Mar-Nov 2001? That’s kind of my fear. Because while it was an extremely mild and short recession in aggregate terms, the recovery afterward had the worst distributional profile of any recovery in recent memory, seeing declines in the bottom three quintiles, the second-from-the-too quintile mostly flat, and almost all the gains concentrated in a very narrow slice at the top of the top quintile, which was a big reason for how bad the Great Recession was. And there is a lot of indication that a 2024-ish recession could see a similar, or even worse, policy environment in the US to the one that produced the bad outcomes of the recovery from the 2001 recession.

ars 4y ago
That's exactly what it will be. Unless we dramatically increase energy usage. By not being permitted to increase energy usage, all the money is being made with capital, instead of physical things, which helps those at the top. The only fields "available" if you will, to making money with are those that are intangible, capital, intellectual property, things like that. And those types of things help those at the top.
encoderer 4y ago
So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? Sure, but I will still take a mild recession over the multi year double dip 1980 variety. Seems like what you are really saying is that you want an 80s style boom recovery - me too!
- dragonwriter 4y ago
  > So you’re worried that this recession will not be severe but the recovery could be terrible and set us up for another recession in 10 years? No, I’m worried that the recession, even if not severe in aggregate terms, will be the occasion of a policy response that will set us up for an extended period of bad economic experience for most of the population despite a strong aggregate economy culminating in a catastrophic aggregate collapse both caused by and compounding the bad experience of the bulk of the population. Top line aggregate numbers don't capture the general experience of the economy. > Seems like what you are really saying is that you want an 80s style boom recovery No, I am saying (to the extent a recent historic precedent is the model, though I don't expect the specific causes can or should be replicated) I want a 90s style boom recovery; the 80s “boom“, while not as bad as the 2000s expansion in distributional terms, was far worse than the 90s boom (e.g., real hourly wages fell through 1980s expansion, while rising overall—leveling out in the first few years, and rising strongly after—in the 1990s expansion.)
  - encoderer 4y ago
    Well, I think that is a valid worry, but nevertheless my point was that i believe we are headed to a mild recession and that is a far better outcome than a severe recession. But yes, a robust recovery is also better than a weak one and you seem to be focusing on the kind of recovery we might experience. So it seems we are talking past each other.
    - dragonwriter 4y ago
      > nevertheless my point was that i believe we are headed to a mild recession and that is a far better outcome than a severe recession. Ceteris paribus, I would agree, but I don't think that policy response and the effect on the distributional shape of the post-recession recovery is independent of the dimensions of the recession (though there are other aspects of the economic and political context that play a role.) There was a general feeling that the preceding recession never ended leading into the Great Recession and the reason for that is that if you look at the experience across the economy adverse conditions persisted across most income segments despite aggregate expansion. It is my contention that as well as an alignment of the right political conditions when the recession occurred, the policies which contributed to this were able to be implemented and sustained, in significant part, because the aggregate recession was short and mild.