Jeff @JTradle

I have been an economists for a very long time. I have always been a little surprised by how some people will talk about recession as a necessary reset or a “cleans.” There is this “let them eat cake” kind of mentality that emerges that somehow a recession is like a fast for a day and healthy. Recessions are painful, especially when accompanied by inflation. I became an economist as a fluke - it was the only class open when I registered & it sounded interesting. I loved the math and the intuitive study of collective human behavior. It gave me an understanding for the train wreck of an economy I experienced growing up in the modest suburbs of Detroit as a kid. My best friend’s dad died of cancer when I we were in high school. She stopped bringing lunch to school - there was no money for food. Her family dug up their backyard to plant a garden & put food on the table. Her yard was bigger than the postage stamp of my own, but the ground was toxic. Many of her siblings died of cancer very young. I still remember the smell of baked bread - it was the only bread they could afford. My mom, who was on her own tight budget, gave me money to buy her lunch each day. Stagflation and recession were brutal. The scarring effects of all those years ago linger. Families broke down & vicious cycles of poverty emerged in towns that became known as the Rust Belt for their rusting factories. Recessions are ugly, unpredictable and leave a scar. Those accompanied by inflation are worse. The economy is not a single body that can be fit from a “cleans,” as I have so often heard in my career. It is a complex system that has increasingly seen inequality worsen in the wake of recessions. Income inequality hit a low as measured by the Gini coefficient in 1979 in the US. We have been seeing a rise in inequality ever since, with more sidelined for long periods after recessions, with perhaps the brief surge in hiring we saw in the wake of the pandemic. That is over. We are already flirting with a payroll recession, which is showing up as losses in payroll employment. I would like to believe that rate cuts could cure what ails us, but I fear what we are enduring is systemic. Lower interest rates cannot spur hiring with firms dealing with so much uncertainty. That means the Fed should focus more on inflation. I hate to think of what a recession to derail the inflation we are enduring would look like, although I think about it a lot. It is not pretty. The economy is about people’s lives and livelihoods. It is what you deal with when you walk in your front door if you have one to walk through. It is worrying about feeding and sheltering your kids. It is about all the choices we make every day. It is a living organism that does not do better when pain is broader. I will never say a recession is good. Recessions are hard. We may have to suffer one to derail inflation - I hope not but worry that may end up being the case. That is a horrible place to be. Food for thought. I have seen talking heads talk about a recession with a cavalier attitude. I find that hard to witness. The tails risks of recessions are large. They hurt people. Break bread not ties. Empathy is a gift to few share. Time to fill our cups with it.