Your K Is Little More Than The Identifying Details Of This 2nd L

ADP reports today that, for the fifth consecutive month, the labor market recovery everyone had hoped for has instead been transformed into something else entirely. According to the firm, private payrolls expanded by just 307,000 in November 2020 from October. That’s the slowest pace since July, and, most important of all, leaves the private US economy near 10 million short of its February departure point.

At this rate, it’ll take another two and a half years just to close this original gap – assuming the rebound doesn’t decelerate any more over that timeframe – and in the process opening up another huge deficit related to the nearly 4 million in payroll expansion which won’t happen during that extended period of time.

Needless to write, I’ll write it anyway, this is kind of a big deal.

This has brought up a curious if ultimately trivial twist in the ongoing attempt to make sense of the economy and its related recovery alphabet. At first, when reopening was new and furious, the letter of choice was an unaltered “V”; straight down, then straight back up. If it was so easy to close an economy down, and it sure seemed easy, why wouldn’t it have been just as easy to get it back up to speed?

After all, huge doses of fiscal “stimulus” (or was it subsidies?) as well as the top echelon of Federal Reserve officials bragging to every media reporter how they’d rendered the biblical story of Noah tiny and pitiful when compared to the flood of digital dollars their handiwork had unleashed; the guaranteed inflationary and market-rimming ebullient currency orgy of yesteryear lore.

How could it not be “V?”

Well, it wasn’t; V is dead. And it wasn’t the ADP or any one data point or series which killed the dream. Rather, it’s been everything, everywhere. Summer slowdown is real, except now it’s December and the thing only drags on.

In response, almost something like a compromise. If the “V” is gone, and it is, then how about a “K?”

For this mutation, the recovery might not be so easy and perfect but mostly “V”-like…at least for those on top, the ascender mark on the right-side of the letter, enjoying the uptick thoroughly. And while we might feel bad and sorry for those lost in the depression of the “K’s” lower leg heading forever, it might seem for those stuck in it, downward, the media sells us on the pattern as, darn it, the “best that could be done.”

That is supposedly “K.”

No. What’s going on here is rather simpler than all that. A “K”-shaped recovery is really an “L” rhetorically decorated in order to make these rationalizations seem somewhat plausible and less tragic.

It all starts with what seems to be confusion over what is, and is not, recovery – as if there ever could be various types of it. Words, after all, have meaning. In the economic context, the word recovery has a specific meaning and the reason it has a specific meaning is that this meaning conveys meaningful information beyond mere dictionary purposes.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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