The economy is already broken. Devastated. The economic crisis is still to come. Realise this: in 2008-09 the government spent tens of billions of dollars keeping the economy going. In 2020 the government has already spent hundreds of billions of dollars to stall the economy. We haven’t begun restarting the economy.
It gets worse. Both state and federal government are in denial. They seem to think that this is a “business-as-usual” crisis. That somehow when they give the all-clear that we’ll emerge – as if from hibernation – from our homes, squeeze into our work clothes, give up our day-drinking, and go back to work. This is the snap-back view. Similarly many economic commentators seem to think that a good dose of government spending and tax increases will restore our prosperity.
Economies are not about businesses, and unions, and shops, and goods and services. The economy is about people; their plans, their expectations, their relationships. For all the talk about competition, the economy is about co-operation. The economy is not a machine that can be switched off and on at will. The interrelated web of co-operative relationships that was the February 2020 economy is gone forever. The economy that now exists is a lot smaller than what it was just six months ago. The problem now being that we can’t be sure which part of it will revive and which part of it won’t.
The Age basically published it as submitted (minor adjustments to reduce word number) but did edit part of my affiliation – alas.
He is co-author (with Darcy Allen, Chris Berg, Aaron Lane and Jason Potts) of Unfreeze: How to Create a High Growth Economy After the Pandemic published by the American Institute for Economic Research.
Anyway – now available at all good book stores (okay – Amazon).