Here's the fantasy: if we stop the shutdowns, the economy will naturally bounce back to its oh-so wunnerful perfection of Q3 2019. This is a double-dose of magical thinking and denial. The U.S. economy was unraveling in 2019 from 11 long years of Fed-induced over-capacity in almost everything (except integrity, competition, transparency and social cohesion) and the bone-crushing burden of corrupt, greedy cartels that have the nation by the throat.
The reality nobody dares mention is that thanks to 20 years of the Federal Reserve's easy money, there's rampant over-capacity everywhere you look: there's too many cafes, bistros, restaurants, fast-food outlets, hotels, resorts, AirBnBs, unprofitable Tech Unicorns, airline flights, Tech startups, office towers, retail space, malls, absurdly overpriced apartments for rent, storage facilities, delivery services, office sublets, colleges, attorneys, unemployed workers with multiple credentials--the list of too much, too many is endless.
Thanks to the Fed, the most profitable venture was borrowing to increase capacity, then borrow some more to extract the phantom value created by the greater capacity. Nobody cared if the office tower remained mostly empty; the money was made in building it and extracting its "value" via debt, not operating a legitimate enterprise.
This Fed-created house of cards was never sustainable, or healthy, as all the incentives to add capacity were perverse. The illusion that every mall, office tower, retail space, college, apartment building, etc. would be filled was only plausible as long as consumers and zombie corporations were borrowing and spending more than they earned.
That was never sustainable, but rather than look at the systemic set-up of an insanely predatory, fragile debt bubble resting precariously on over-capacity, the status quo is blaming Covid and lockdowns. The problem isn't the pin, it's the bubble that was begging to be popped by something, anything.
Recall that bubbles pop on their own, even without a pin. Japan's debt / stock / real estate bubble popped in 1989 without a pin; prices just stopped going up and then started falling, all by themselves.
The other reality no one dares mention is the stranglehold of corrupt cartels that have long outlived their purpose, and now exist solely to enrich insiders and lenders and the wealthy few who own the student loan debt, mortgages, etc.
The entire higher-education cartel was an unaffordable, unsustainable racket eight years ago when I wrote my book The Nearly Free University. Now the racket is finally unraveling, and the insane over-capacity, insanely high costs and lack of value in the credentials are coming home to roost.
The healthcare system is another example of a sprawling system of cartels that's long overdue for a reckoning / unraveling. The fortunes being minted bought more than enough political power to keep the corrupt, predatory machine well-greased with federal money, but that doesn't mean the system is actually providing healthcare effectively or efficiently or in a sustainable fashion.
Now we have multiple Big Tech monopolies bleeding the nation dry, and Big Tech is rushing to flood Washington D.C. with lobbyists and campaign contributions so nobody messes with its parasitic, destructive layers of monopoly.
The entire American economy was a gigantic bubble of corrupt Fed-funded skims, scams, rackets, monopolies and cartels, and it was finally bursting in 2019. The Fed, oh-so protective of its ever-greater and more destructive bubbles, rushed to mask the rot by inflating the greatest bubble of all time: Forget GOAT, Look at GBOAT: The Greatest Bubble Of All Time (November 6, 2020).
Now that the bubble has burst, the hope is that removing the pin will magically restore the burst bubble. Sorry, it doesn't work that way. The bubble has already burst and cannot be magically made whole and re-inflated.
It was never sustainable or healthy, and its collapse was inevitable. The way forward is obvious: stop the Fed from blowing ever-larger bubbles and eliminate cartels and monopolies. But that will require ending the absurd farce of pay-to-play "democracy" that enables the debt / asset bubbles and cartels / monopolies.
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