The Great Unpause
Concepts like "recession" and "recovery" might be a poor fit for predicting our near-term economy. It's more accurate to say that we intentionally hit the big pause button, and in a few months, will try to unpause it again. We've never tried that button before. Hopefully, it works smoothly.
There were no big structural problems with the economy that triggered the pause. It was an intentional and appropriate response to a temporary external shock. Unlike prior crises like the Great Depression, 9/11, or 2008, there's no reason to think that conditions have changed permanently.
Sadly, many workers in the US do not have much of a safety net, so a months-long pause of economic life will cause real suffering, even if the eventual unpause goes perfectly. Government assistance is thankfully coming. Building a resilient safety net should be a priority later.
I'm optimistic that once the public health environment is right for the Great Unpause, the economy will start playing again without too much of a stutter. This is not guaranteed, however, and there are three things we can do to make it more likely to succeed:
- Don't push the unpause button too soon. The fastest way to a good economy is to defeat COVID-19 first. A false start may inflict enough harm to turn the pause into a prolonged depression.
- Government aid must be sufficient to prevent short-term damage to workers and small businesses from being so crippling that they are in no condition to unpause.
- Companies that can afford it should avoid reflexively slashing staff under the mistaken assumption that the pause will last years, not months. You'll need them soon.
The fastest way to a good economy is to defeat COVID-19, minimize death and suffering, compensate for the short-term costs of lockdown, avoid thrashing around.
Then hold our breath and push the Great Unpause button. It'll probably work.
Next time, let's test it first.
Phil, thanks for sharing!
Founder | Product Builder | Team Builder & Coach - Working enthusiastically in service to teams and users to build cool things the world needs!
4 年??
Project Manager Metro Corporate Interiors
4 年This is nothing like 2008 A recession normally starts in the production end of the economy and slows the service sector Here you basically wipe the service economy off the map in our country Businesses even with the stimulus package may not open back up
Editor in Chief, VP at Lean In
4 年We keep getting asked to compare this to the 2008 recession, but there is no comparison really. Thanks Phil Libin for these insights!
Director, Founder at CESANTA
4 年Great one Phil! Stay safe and healthy!