No One Alive Has Experienced An Economic Plunge This Sudden


This Is Not a Recession…

It’s an Ice Age.

america recession, america economic collapse, worldwide recession coronavirus, This Is Not a Recession It’s an Ice Age
No one alive has experienced an economic plunge this sudden. Picture: DREW ANGERER / GETTY

We can’t say we’re in a recession yet, at least not formally. A committee decides these things — no, really.

The government generally adopts the view that a contraction is not a recession unless economic activity has declined over two quarters. But we’re in a recession and everyone knows it.

And what we’re experiencing is so much more than that: a black swan, a financial war, a plague.

Maybe things feel normal where you are. Maybe things do not feel normal. Things are not normal.

For weeks or months, we won’t know how much GDP has slowed down and how many people have been forced out of work.

Government statistics take a while to generate. They look backwards, the latest numbers still depicting a hot economy near full employment.

To quantify the present reality, we have to rely on anecdotes from businesses, surveys of workers, shreds of private data, and a few state numbers.

They show an economy not in a downturn or a contraction or a soft patch, not experiencing losses or selling off or correcting. They show evaporation, disappearance on what feels like a religious scale.

A shock to the economy





Absent a strong governmental response, the unemployment rate seems certain to reach heights not seen since the Great Depression or even the miserable late 1800s. A 20 percent rate is not impossible.

Unemployment rate explodes



These numbers are subject to sharp changes; things like large plant closures lead them to jump and fall and jump and fall. But for them to rise so precipitously, across all of the states? To stay high? That is new.

The economy is not tipping into a jobs crisis. It is exploding into one. Given the trajectory of state reports, it is certain that the country will set a record for new jobless claims next week, not only in raw numbers but also in the share of workers laid off.

The total is expected to be in the range of 1.5 million to 2.5 million, and to climb from there.

None of that is surprising

The economy needs to halt to protect lives and sustain the medical system. Planes have been grounded, conferences canceled, millions of Americans told not to leave their homes except to get groceries and other necessities.

Because of the emergency measures now in place, businesses have had no choice but to let workers go. The list of employers laying off workers en masse includes cruise lines, airlines, hotels, restaurants, bars, cabinetmakers, linen companies, newspapers, bookstores, caterers, and festivals.

I started adding up numbers in news reports, and quit when I hit 100,000.

The economy had been plodding along in its late expansion, growing at a 2 or 3 percent annual pace. Now, private forecasters expect it will contract at something like a 15 percent pace, though nobody really knows.

A consumer-economy apocalypse

A viral quarantine is impossible to model, because modeling would mean knowing how long the necessary emergency measures will last and how well the government will respond with some degree of accuracy.

Still, real-time measures show a consumer-economy apocalypse.

One credit-card processor said that payments to businesses were down 30 percent in Seattle, 26 percent in Portland, and 12 percent in San Francisco. Nearly every state is seeing dramatic declines, with hotels and restaurants hit particularly hard.

The markets are not normal, either. The stock market lost 20 percent of its value in just 21 days—the fastest and sharpest bear market on record, faster than 1929, faster than 1987, 10 times faster than 2007.

The financial system has required no less than seven emergency interventions by the Federal Reserve in the past week.

The country’s central bank has wrenched interest rates to zero, started buying more than half a trillion dollars of financial assets, and opened up special facilities to inject liquidity into the financial system.

Yet in the real economy, everything has halted, frozen in place. This is not a recession. It is an ice age.

The article first appeared in The Atlantic.



  1. In other words, for unity to be achieved, we must first realize justice. In the context of today’s pandemic, this tells me that if the person handling your food, change, hotel cleaning, or childcare is underpaid and under cared for, we all are affected – even if you enjoy all the privileges. No amount of hand sanitizer will address the root problem. If the person cleaning your hotel room or setting the restaurant table is feeling ill, they might have no choice but to come to work to earn the wages that will help feed their family or make loan payments. For the hourly laborer, no work = no pay. What if as a society we realized that their welfare IS our welfare, that their health is our health? Corona-virus is sort of deciding that for us. Indeed, in cities where sick pay is mandated for all workers, flu rates fell 40 percent. This small step toward justice benefited everyone.


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