[Mick]

Back to the original topic, here's a contrary take: https://www.bloomberg.com/opinion/articl...c-recovery

I think Krugman was by and large accurate about the problems with recovery in the last recession, so I'm inclined to think he's more likely than average to be right this time around. Here's the part about the recovery:

My take is that the Covid slump is more like 1979-82 than 2007-09: it wasn’t caused by imbalances that will take years to correct. So that would suggest fast recovery once the virus is contained. But some big caveats.

One is that we don’t know how long the pandemic will last. Right now, we’re probably opening too soon, which will actually extend the period of economic weakness.

Another is that even if we didn’t have big imbalances before, the slump may be creating them now. Think of business closures, which will require time to reverse.

And I also wonder how much long-term change we’ll experience as a result of the virus. If we have a permanent shift to more telecommuting and less in-person retail, then we’ll have to shift workers to new sectors, which will take time. That was an argument lots of people made, wrongly, in 2009, but it could be true now.

All that said, right now I don’t see the case for a multiyear depression. People expecting this slump to look like the last one seem to me to be fighting the last war.

All due respect to Krugman, our self-inflicted economic woes are much deeper and broader than people originally thought.  The Fed's Beige Book indicates an economy worsening to an unexpected degree:
https://thehill.com/policy/finance/49980...t-covid-19

The good news is that the cratered economy will sink Trump's re-election hopes.  Tech billionaires are conspiring against Trump to boost Joe. They're even stronger in COVID-19 times.
https://www.vox.com/recode/2020/5/27/212...ic-schmidt

Trump allies are nervous:
https://www.politico.com/news/2020/05/27...ign-283602

Trump's former political advisors know he's down in key swing states:
https://www.politico.com/news/2020/05/26...sie-283089

And the polls show Trump slipping. As I'd predicted months ago. When Trump took office, he had a 4% positive approval rating. A month ago, it was 5% negative. Yesterday, the disparity between positive and negative views of Trump was -11.2%:
https://projects.fivethirtyeight.com/tru...l-ratings/

[Mick]

Back to the original topic, here's a contrary take: https://www.bloomberg.com/opinion/articl...c-recovery

I think Krugman was by and large accurate about the problems with recovery in the last recession, so I'm inclined to think he's more likely than average to be right this time around. Here's the part about the recovery:

My take is that the Covid slump is more like 1979-82 than 2007-09: it wasn’t caused by imbalances that will take years to correct. So that would suggest fast recovery once the virus is contained. But some big caveats.

One is that we don’t know how long the pandemic will last. Right now, we’re probably opening too soon, which will actually extend the period of economic weakness.

Another is that even if we didn’t have big imbalances before, the slump may be creating them now. Think of business closures, which will require time to reverse.

And I also wonder how much long-term change we’ll experience as a result of the virus. If we have a permanent shift to more telecommuting and less in-person retail, then we’ll have to shift workers to new sectors, which will take time. That was an argument lots of people made, wrongly, in 2009, but it could be true now.

All that said, right now I don’t see the case for a multiyear depression. People expecting this slump to look like the last one seem to me to be fighting the last war.

All due respect to Krugman, our self-inflicted economic woes are much deeper and broader than people originally thought.  The Fed's Beige Book indicates an economy worsening to an unexpected degree:
https://thehill.com/policy/finance/49980...t-covid-19

The good news is that the cratered economy will sink Trump's re-election hopes.  Tech billionaires are conspiring against Trump to boost Joe. They're even stronger in COVID-19 times.
https://www.vox.com/recode/2020/5/27/212...ic-schmidt

Trump allies are nervous:
https://www.politico.com/news/2020/05/27...ign-283602

Trump's former political advisors know he's down in key swing states:
https://www.politico.com/news/2020/05/26...sie-283089

And the polls show Trump slipping. As I'd predicted months ago. When Trump took office, he had a 4% positive approval rating. A month ago, it was 5% negative. Yesterday, the disparity between positive and negative views of Trump was -11.2%:
https://projects.fivethirtyeight.com/tru...l-ratings/