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


But when confronted by a real-world set of outright contradictory evidence, drawn from allegedly different, far-flung economies all over the world, Economists refuse to rethink their post-war master. In the face of constant, uniform “L’s”, they reclassified Y to Z as “recovery” anyway. Changed its meaning entirely.

In order to pull off such a dastardly feat, all that was required was to further rewrite economic “potential” and to obscure when this modification needed to be introduced. In the real-world data, that has literally meant downward revisions in economic potential the world over, especially the United States, beginning, interestingly, right at 2008.

Who in the public would ever notice? Quite predictably, hardly anyone has.

Here’s the thing; while the average worker/consumer/employer/portfolio manager hasn’t noticed, they sure have understood at least on a personal level the increasingly grave level of dissatisfaction with how things apparently don’t work anymore. The economy has “recovered”, so sayeth the sage advice from the Ivory Towers, but it really hasn’t no matter how many times the pedigree-d few declare reality differently.

Instead, it only raises the temperature even more – just like the 1870s, the 1830s, and, if you prefer, the 1930s. An economic condition that’s both “L” in overview and “K” in detail leaving too many on the outside looking in, and no one with answers for either side.

That was all post-2008. Here in 2020, we’ve now been set up do this all over again. Yep, another “L” being lined right up right in front of our eyes to add on (further subtract from?) to the prior “L” still causing inordinate suffering. Saying this is a “K” is only more lying window dressing.

In this case, unlike the 2008 case, Economists and their like are being more open about it – because they believe they can be. While they had no good answers for the first permanent shock of 2008 (come on, subprime mortgages!), this time, oh yes, it’s not our fault blame COVID!!!!

Whereas around 2010 and 2011 you never would’ve heard such honesty and openness as what I quoted yesterday from an outlet like the OECD, instead there was only ever “recovery is still happening” garbage, nowadays they aren’t quite hiding it in the same way. If you have any doubts about this “L” versus “K”, I’ll reproduce it again here (I couldn’t have written it any better):

Despite the huge policy band-aid, and even in an upside scenario, the pandemic will have damaged the socio-economic fabric of countries worldwide. Output is projected to remain around 5% below pre-crisis expectations in many countries in 2022, raising the spectre of substantial permanent costs from the pandemic. The most vulnerable will continue to suffer disproportionately. Smaller firms and entrepreneurs are more likely to go out of business. Many low wage earners have lost their jobs and are only covered by unemployment insurance, at best, with poor prospects of finding new jobs soon.

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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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