If a recession happens in an economy where most people don't work, does anyone notice?
Discussion
I was just thinking this because Germany has been in a recession for almost a year and...
If gender reassignment surgery happens in a society where no one knows what a gender is, did anything really change?
is this a zen koan, or geniune question ? because yes, people will feel and notice. life is/will be heavier than normal
Real question.
Life seems sort of subdued, now, but otherwise... nothing.
"If a t̶r̶e̶e̶ GDP falls in a f̶o̶r̶e̶s̶t̶ country and no one is around to hear it, does it make a sound?"
Yeah, basically.
Slow, calm slide into irrelevance.
Where most people don't work?
Probably not - but where is it that most people don't work
Germany currently has almost 84 million residents.
Thereof,
46 million people work at least 1 hour per week
- 1,8 million are on parental leave.
- 5,2 million work for the state
- 4 million have universal income smoothing their wages
Only 35 million people are dependent upon a strong private economy for their income. Less than 42%.
And 30% of them work part-time (less than 30 hours/week).
A particular favorite lyric of mine comes to mind:
"Funny thing about the weekend when you're unemployed - doesn't mean quite so much"
Sort of like being a sharecropping black person during the Great Depression. No change.
If a recession happens in a country and people don't even notice, is it a good metric?
Isn't a recession mostly just shown by a fall in GDP? And you can fudge GDP and it doesn't necessarily have anything to do with people's standard of living so therefore why should anyone really care?
Yes, there's no longer a direct connection between overall national economic expansion/contraction and personal living standards.
That's why legislation that damages the economy is popular.
That just clicked in my head, this morning.
Nobody cares because it doesn't actually matter. 🤷♀️
ill steelman the opposite -
it does matter.
there are strong correlations between health outcomes, life expectancy, and crime rates vs country's GDP (don't know just assuming something like that) so
if I'm responsible for my country I should do what I can to avoid recession or limit its impact
This is too abstract, for most people.
If their nominal income doesn't get cut off or dramatically reduced, quickly, it didn't happen.
If you can't afford a housing, food etc while working during the 'good times' while would you care about it during the bad times? 🤷 Living standard here have been effectively stagnate since 2008. Most of the good times just inflated assets which most people don't own...when you think about it that way it's not hugely surprising people don't really care..
Here atleast during this recession adjusted for inflation the petrol is cheaper!
Petrol is usually cheaper in a recession.
We can expect widespread disinflation and eventual mean deflation, soon, at least in Germany.
The producers that were using the energy are closing or moving away, so energy will get cheaper.
That's what you would hope for but the money printer will just negate it surely? They are going to need the money printer to stop the riots by giving people some kind of 'social welfare'.
Exactly!
And it seems like most are too distracted to notice their living standard going down too.
Imagine being a carpenter and taking out your ruler, then taking a rubber band and stretching it out beside the ruler and marking inches on the rubber band with a Sharpie marker. Then imagine trying to build a house using the rubber band as a ruler. You'd end up with a pile of garbage, because it would be impossible to know whether the piece you're measuring is actually a certain length, or if the rubber band is just stretched more or less.
That's all economics with fiat money. Economic "measurements" are all full of massive undetectable errors, because the unit of measurement itself constantly changes in unpredictable ways. And science is impossible without measurement, so it's more voodoo than science.
We're so far away from understanding money in a way that's actually relevant to people, that a "recession" becomes a lot less meaningful.
When the schuldenbremse is taken away, we'll really see how little a recession matters. For a while. Maybe a long while. Maybe spending 1.5 trillion euros per year on the energy transition will keep the wheels on Europe for a little while. As long as we don't talk about the debt.
Debt is irrelevant, so long as monetary velocity is low. Which it will be, in an aging population.
We are entering the Japan stage, I suppose.
Meh, that sounds like peter Schiff or some doom sayer. I've spent too long and am too old to wait for whatever is supposed to happen. Whatever is happening is happening and I'll stack sats in all scenarios.
Bitcoin can rise in purchasing power, over a longer time-span, even if fiat disinflates or deflates over the same time span because it has it's own independent mechanism for creating scarcity.
That is sort of the point of it.