“What is happening,” writes Annie Lowrey, “is a shock to the American economy more sudden and severe than anyone alive has ever experienced.”
It’s also different from what anyone alive has ever experienced. For many of us, the Great Recession is the closest analogue — but it’s not analogous at all. There, the economy’s potential was unchanged, but financial markets were in crisis. Here, we are purposefully freezing economic activity in order to slow a public health crisis. Early data suggests the economic crisis is going to far exceed any single week or quarter of the financial crisis. Multiple economists have told me that the nearest analogy to what we’re going through is the economy during World War II.
I have a secret advantage when trying to understand moments of economic upheaval. I’m married to Annie Lowrey. I can give you the bio — staff writer at the Atlantic, author of Give People Money (which is proving particularly prophetic and influential right now) — but suffice to say she’s one of the clearest and most brilliant economic thinkers I know. Her viral piece on the affordability crisis is crucial for understanding what the economy really looked like before Covid-19, and she’s been doing some of the best work on the way Covid-19 will worsen the economic problems we had and create a slew of new ones.
But this isn’t just a conversation about crisis. It’s also a conversation about how to respond. I wouldn’t call it hopeful — we’re not there yet. But constructive.
References:
"The Great Affordability Crisis Breaking America" by Annie Lowrey
If you enjoyed this episode, check out:
"Fix recessions by giving people money," The Weeds
Book recommendations:
Severance by Ling Ma
Midnight in Chernobyl by Adam Higginbotham
Crashed by Adam Tooze
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