Economic Recessions And Covid Operations
He was always just a few steps ahead of everyone else. He was rude, domineering, and loud. We hated him. We all hated him. But the hatred had that annoying self-doubting quality hinting at an Oedipal insecurity, the sort that relegates the object of your hatred to the background so the real combatants, you vs your past, can do battle. While we did battle with ourselves, we would listen to him, attentively, and with hatred. The truth is, even now he is just a few steps ahead of everyone else. Xamat Bhavik, Grand Master in waiting, had the floor.
It began when Poarna asked what seemed an incredibly naïve question. Fortunately for the question, she was known for highly unusual hypotheses that were most often wrong but disproportionately valuable when correct. We allowed the question to slosh around in our heads until we found an interpretation of the question that wasn’t obviously naïve. ‘What if the economy suffers no impact whatsoever?’, she shrugged more than asked, in that offhand throwaway detached style of hers. An absurd proposition given the setting. Since the virus hit and country after country began to shut their borders, the global markets had gone into freefall. Financial clamps were put in place to stop the terminal descent of economic optimism. This was before the quarantines began.
At first there had been two options. The liberal-minded voices among us favored the strategy of optimistic denial. Panic was worse than pestilence. We would insist that nothing was wrong, that the widespread reaction was widespread over-reaction, and that hindsight would reward the calm wisdom of those who put the bug in context with hazards that actually mattered, like Malaria, heart disease, poverty, malnutrition and war. Facts would be downplayed, and resources would be shunted into the scenario that truly mattered, one where universal infection was a fait accompli, rather than one where it simply hovered over the population like the sputum of Damocles. The Lodge was founded on ideals of liberal paternalism, so there were few dissenters to this view.
Xamat had other plans. As population growth and life expectancy for the species continued to climb skywards, the proportion of the population that was old went up right alongside. Since rights, respect, power and influence only went up with age, all these things became increasingly concentrated in a section of the population that was invested in conservative status quos. The life expectancy, however, had now stalled. It could no longer offset the drop in population growth. The pyramid was becoming a trapezium, and that was a problem for conservatives, power followed an osmotic rule of flow, and the inflection point had been reached beyond which power would start from the young and flow downwards to the old. Unless something changed. Say what you might about conservatives like Xamat, but they readily embraced change if it meant things could stay the same.
Of all penalty kicks that were successfully saved, the highest were those where the ball was kicked right down the middle and the keeper had decided not to move in either direction. This is statistically significant, but behaviorally unrealistic. Intervention bias sets in and we are rewarded with dopamine for acting. The larger the act, the more the reward. But large actions need large causes, and have large consequences. So instead of liberal paternalism, we went with manipulative opportunism, and drummed up a panic. We controlled the formal and informal informational networks. We triggered the run on the markets and then the banks. We swamped the hospitals. Then we swooped in and acted. With largeness and largesse. The streets are now empty, and the army picks up stragglers. We are lauded each time we rid a pest of another liberty, by fellow pests who see us on their side.
We took their serenity, then their freedom, their privacy and their autonomy. Now we have taken their livelihood. That’s why The Lodge was in session today. Livelihood. When it was done consolidating its power, it must capitalize on the opportunity of the economic recession, always a tricky affair. More people will die from the recession than the virus, even in its worst projections. We will return to liberal paternalism when the recession is upon us. More liberties will be surrendered, and it will be a long time before anyone dares to ask for them back.
For three months, the economic activity of the nation has ground to a halt. The reserves will run dry. The penury will be fractal, self-similar at all levels. Day-wage laborers won’t be able to afford their food. Others will have no income to pay taxes on. They will borrow from the state. States will have no revenues to pay for their operations. They will borrow from the Center. The Center will have no revenues to pay for imports. They will borrow from The Lodge. The Lodge will open its robes and let the wretched masses suckle at its teat.
Everything was going very well. The capital infusion plans were clear and ready. Until Poarna came along with her inconvenient question. What if there is no recession? Sure we had taken it for granted. There was no reason not to. Normal people did not question whether the sun would rise tomorrow. Induction might be flawed, but as long as your name isn’t Hume, the odds are you can assume it works well enough for you. However, her name is Poarna, and we took her words less lightly than we did Hume’s.
Maybe expendable consumption drops and no one feels too different. Maybe economic production catches up in no time, re-filling what in essence had been a reserve stock piled up at every node in the market and then gradually depleted. At the end of the year, the drop in GDP is minimal, there was never a constraint on production that required 24x7 operations, merely consistent overproduction because production lines were expensive and needed to be thoroughly used. Maybe once the wastage, planned obsolescence, inefficiencies, buffers, and frivolous consumption are all adjusted for, as they would be in times of austerity, there is in fact no recession to speak of. Aggregate demand falls when we consider consumption frivolous. That’s bad enough. But when we consider employment frivolous, and the aggregate supply falls? That’s the Eco 101 recipe for depression and disaster.
It was all too facile and ludicrous to conceive of. Yet none of us had a literate response to any of her claims, apart from calling it facile and ludicrous. It didn’t help that she wore a mischievous smile the whole time, taunting us with the suggestion that she knew exactly why her idea was facile and ludicrous but enjoyed watching us struggle to arrive at that logic ourselves and tie ourselves into unexamined knots in the process.
Now there is only one person smiling, and unfortunately for us, it is not Poarna. It is Xamat.
‘Imagine you have a controlling husband. You’re a housewife, depending on his handouts to run the home. He’s not likely to make you forget it. Every single handout is accompanied with the demand for a receipt, to be acknowledged by you as another handout received, praise be his gloriful benevolence.’
He laps up the hatred. He knows he has the room. Only a man of his power can afford to make a sneering metaphor of himself. What word have we for self-deprecation that is its very opposite? Once there was a competition to name this special phenomenon of his. There were worthy entries like boast-deprecate, self-depraisate, and self-apprecate. Eventually we decided that in keeping with the sentiment of the word, it would be most apt to just name it Bhavikize, the question of whether that was an insult or a compliment to be left in the void of the beholder. It pleased us greatly that it wasn’t even his name, but his father’s.
‘Times are tight. He never fails to tell you that. He makes a big show of being transparent about the state of finances. He shows you how low the bank balance is. You’re a responsible housewife, and you suffer and scrimp and save. Every cent matters and the reminder of the bank balance drives you to endure hardship. Unknown to you, he has shown you just a small part of the bank balance, there has never been a financial shortage. One day, you get kidnapped. The ransom is set. He can pick you up the second he coughs it up. But every day he waits, they cut off a finger. You despair. You know there is no money for the ransom immediately. Or is there? Does he reveal the deep pockets?’
‘Yes. It’s a minor temporary sacrifice.’
He gives her a sympathetic look, stopping short at commenting ‘so cute.’
‘He makes a big show of slaving all around town, working night and day, begging, borrowing and stealing, all with a heart of gold. He destroys the withdrawal slip from the ATM and shows up with a wad of cash. A week later. “Don’t ask. Nothing matters except that most of you is safe.” He mutters through gritted teeth. You’ve never felt so loved and cared for. You’ve never felt so indebted and grateful. You can’t even imagine what he must have gone through. There is a surgical stitch on his abdomen. He has given a kidney away. For your fingers. Everyone has suffered.’
He looks at Poarna. There will be a recession. He states. She nods. She is pale. She thought she knew the real scientific reason there was zero chance of there being no recession. She didn’t. The capital infusion plan is distributed. The Lodge is adjourned. We put on our masks and leave.
