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The coronavirus lockdown appears to be coming to an end. Slowly perhaps, but there is a glimmer of hope at the end of this long tunnel. But, as Andy Kessler reminds WSJ readers, there’s a new parlor game sweeping the nation: predicting the shape and span of the economic recovery.
After Falling off a Cliff, How We Will Recover
There have been 26 million new unemployment claims in the past five weeks. The jobs chart looks like someone dropped a fishing line in the water with a dead whale attached. Same for oil prices. This means the drop in second-quarter gross domestic product will be . . . well, nobody knows exactly. Estimates are still in flux. Sixty economists surveyed by The Wall Street Journal predicted an annualized decline of 25% on average, which works out to about 7% for the quarter alone.
End Unemployment Benefits that Exceed Pay
Policy matters. The yo-yo stock market just performed the double feat of an insta-bear 37% drop followed by an up-26% insta-bull. It’s confused. Provide some clarity by ending the work disincentive of unemployment benefits that exceed pay. Don’t shovel stimulus money like manure on a garden, but instead encourage businesses to hire and expand with targeted tax breaks that last a few years. We don’t have a bottomless well of stimulus funds. Deregulate by default.
No Shirt, No Mask = No Service
It’s time to ease the economic suicide of lockdowns. Open stores, even if it means no shirt, no mask, no service. Fear and loathing are already the norm, so social distancing is here to stay. The faster we get back to an uptrend, the faster we make up for lost time. Wealth and well-being compound, and any time we’re not growing—no matter what shape—hurts society from bottom to top.
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