Imagine a great little restaurant that goes out of business. You think, Well, that’s a shame. Yeah. It’s a shame for the current 50-year-old owners. But it also means that the real estate and the supplies — dishes, the stove — go down in cost, and it gives a 28-year-old, a recent graduate of a Brooklyn culinary academy, her shot at owning a restaurant. Closures mean layoffs, of course. But new ventures quickly take up the slack. And in an empathetic — or even sane — system, direct payments to anyone affected could carry them through the transition.
In the 2008 financial crisis, we did stimulus, but stocks were allowed to fall. We basically said, “All right, we’re going into a massive recession, but what we need to do is make sure it’s not a depression.” Now, with COVID, that’s not enough. We decided that not only is a depression not tolerable but recessions aren’t tolerable. We threw trillions at the problem — so much stimulus that the markets went up.
Assets have never been higher because we keep printing money and doing more stimulus. Yet as a percentage of GDP, wages have tanked. How do young people make money? Wages. And then who owns assets? Old rich people. So all we said is, “Okay, people who get the majority of their income through wages, i.e., young people, get screwed. And people who have the majority of their earnings or wealth in assets like real estate and stocks do really well.”