There are three key letters everyone needs to focus on. They are V, U, and L. These are the common shapes economic recoveries take.
A V shaped recovery is ideal. It means bounce right back. This is where we should aim, but if we don’t get the economy functioning fast, the opportunity will be lost.
A U shaped recovery means a reasonable period of loss, followed by growth. This is more common, but second best. If we let this scenario slip from our grasp… heaven help us.
An L shaped recovery is the wolf now stalking us. It means drop down and stay down, with suffering over a prolonged period. We’re talking stagnation — Japan’s lost decade — if we’re lucky. It means long-term bread lines, brother can you spare a dime, shanty town, 1930s great depression, if we’re not.
We’ve worked together to flatten the virus transmission curve and enable our medical system to cope.
We hope these efforts stem the loss of life and the burden on our nurses, hospitals, and doctors. To all those who have lost someone, or are concerned about their health, or the well-being of a loved one, our prayers are with you.
We must work together now to narrow the economic recovery curve.
With huge portions of our economy shut down, markets are crashing.
How could they not?
If we don’t get the economy functioning we will all learn a terrible lesson in what “unsustainable” actually means.
Trillions of dollars in bailouts and stimulants will quickly be consumed, vanish and be wasted, unless markets are permitted to function and the economic motor to run.
The good news is that if we’re smart, we are better equipped to harness the productive power of our free market, and safely phase economic activity back on, than we’ve ever been before.
- The CODVID-19 crisis is not an opportunity for partisan advantage. STOP IT!
- One-size-fits-all edicts are what we issue at the first moment of emergency. We must do better moving forward.
- We’re in the digital age. Information is power. Use it.
- Not all activities operate at the same level of risk. Assess them individually and phase them back on as quickly as reasonable.
- State-wide orders are inefficient. Rural and desert counties in California with little exposure, for instance, shouldn’t receive the same mandates as dense urban areas. Fine tune.
- Slash bureaucratic red tape and remove unnecessary obstacles to working in novel ways.
- Remove disincentives and create no new disincentives to hiring Americans and producing goods here.
- Make remote working incredibly productive.
- Tailor safety procedures to allow businesses to resume functioning.
- Set aside unneeded regulations.
- Keep emergency programs temporary. Make long-term policy changes through normal due process.
- Phase activity back on as the virus threat diminishes.
- Phase activity back on if, sadly, the virus becomes widespread and social distancing is no longer effective.
- Government is vital, but inefficient. Enable the private sector to provide solutions.
- Harness today’s data-driven economy to replace blanket shutdowns with a mosaic of safe activity.
- Be kind, caring, compassionate, appreciative, polite and helpful to others.
- Plan a COVID-19 endgame.
If we don’t enable economic recovery to get moving, the resulting harm will exceed the harm from the virus.
Time to be smart. Fast.
EDITORS NOTE: This CFAT column is republished with permission. © All rights reserved.