By Morf Morford
Tacoma Daily Index
Welkome to the K reKovery
I’m sure you’ve heard that we are in a “K” shaped recovery.
We have had “V” shaped recoveries, even “W” shaped recoveries. The premise is that the recovery follows the shape of the letter. A “V” shaped recovery is a dip and then a plateau.
A “W” recovery is a double version of that.
A “K” shaped recovery is a recovery that goes two directions at the same time. Up for some of us, down for some of us.
It can indicate that some industries quickly return to strong growth in output while others see declining activity, or that some types of asset values rise while others continue to fall, or that some segments of society see increasing wealth and income while others lose wealth and income. It can also mean a multiplier-effect combination of all three of these.
In other words, different parts of the economy recover at different rates, times, or magnitudes. This is in contrast to an even, relatively uniform recovery across sectors, industries, or groups of people
How any particular segment of the economy, the stock market, tourism or global trade for example, will fare is anybody’s guess.
It might be the best year ever – or it might be literally the end of an industry, as in travel or movie theaters.
There are many factors at work in driving a “K” shaped recovery. First, a “K” shaped recovery can reflect creative destruction in an economy which is when new technologies and industries replace older technologies and industries over the course of a recession.
It could reflect public policy responses to a recession in terms of funding and “stimulus packages” which can benefit some segments of the economy more than others.
Or it could simply reflect the differential impact and underlying weaknesses that the initial recession had on different parts of the economy in the first place
Besides being a metaphor, “K” is very different from any other letter.
Besides pointing in two different directions at the same time, the letter “K” has a peculiar history. It is usually associated with comic or absurdist words like “klown” or “klassy”.
We have a breakfast cereal called “Special K”. Why not “Special R” or “Special F” or even “Special N”?
There’s something about “K” that is inherently not serious.
Some foods, drinks in particular, have a tiny circled “k” on their packaging. Urban rumor was that the company was owed by, or at least a supporter of, the KKK. It actually stands for Kosher.
The letter “K” is one of the least used letters of our alphabet, and when it is used it is almost always used either for comic effect or to mark a contrast.
Klutz, Klink and Klean are words that take on a whole new meaning than if they were spelled with a “c”.
A “K” shaped recovery is klumsy and is making us all krazy. Any recovery that goes two directions at once, with some people prospering while others are suffering financially to the point of unemployment, eviction if not business or personal bankruptcy is not an economy that any of us can tolerate for long.
Some industries are flourishing while some are disappearing forever. And there doesn’t seem to be a pattern to it. Baking products, toilet paper, Netflix, Instacart, Amazon and several more are (or have been) in high demand, but will they be six months from now?
The pace and arbitrary nature of our economy is accelerating, but where is it going?
Those with wealth are cleaning up at a rate rarely seen in any economy –https://www.aljazeera.com/economy/2020/10/7/what-crisis-billionaires-rack-up-record-fortunes-survey-shows.
In fact I would argue that a “K” shaped economic recovery is not a recovery at all.
Any economy that is premised on a near permanent underclass is inherently unstable, and the more it continues to go in two very separate directions, the more unfair it will appear to be.
And we, for better or worse, become even more accustomed to a bifurcated economy with education, health care, career opportunity and quality of life for some, and not for others begin to lose what is the real American Dream; equal opportunity and equal treatment under the law.
America as the land of opportunity confronts one of the most ancient and ingrained principles; the rich get richer and the poor get poorer.
And as we have seen from economic patterns for the past several years, the middle class get smaller.
As with our economy, the letter “K’ is narrowest at the middle.
Economic inequality, a headline garnering issue a year or two ago, is only more entrenched and accelerating in 2020.
About half of Pierce County is at or below the poverty level.
The “K” shaped recovery passes the economic benefits up and a different set of economic benefits, as in “stimulus” or “paycheck protection” plans down.
The economic momentum separating us is gathering steam thanks to demands on business and our market economy.
A massive wave of evictions and foreclosures is on the sidelines held back only by government restrictions on them.
The largest increase in employment this year, by far, has been low-skill, low-wage jobs.
The real question is what follows a “K” economy.
A “V” shaped economy, as mentioned above, is a dip and then a return to a plateau.
A “K” shaped economy doesn’t even point to stability or return, it points to two opposite directions. It is a separation, not a unified direction.
A “V” shaped recovery is a metaphor of an economy, an economy comprised of all of us, that gains strength and stability and offers opportunity to all.
The “K” economy presumes a ratification, if not endorsement of inequality.
Every metaphor has its limits, but a “K” shaped economy has no equilibrium, no stability and, as I implied previously, no return to a stable state.
There is no movement in a “K” shaped economy.
A “V” dip and recovery might look closer to this; ~~~~~V~~~~~ with the economy establishing a stable state while a “K” economy “establishes” instability.
The letter “K” gives us words like kerfuffle, kook and “Kleenex” and even a term or two like “drink the Kool-aid”.
Consider some of these other “K” words; kibosh, kaput, Karma, K-9, K-Pop, kleptocracy, kakistocracy, kangaroo, kaleidoscope, kerplop, kimchi and Kamikaze.
And of course, the late 2020 emergence of the Seattle Kraken (https://www.nhl.com/kraken).
2020, the year of the “K” recovery might be a katastrophe, or a reconfiguring of Kapitalism or even an entirely new economy in Amerika.
You might have thought that we could not get any more divided. Politics, ethnicity, and now economics, divide us as never before.
The letter “K” is just about the middle of the alphabet. Maybe, whatever we want to call it, we are about halfway through.
Whatever name we come up with, we are in it together. That has always been our strength, even our superpower.
The “K” recovery metaphor emerged in September of 2020. Perhaps like the toilet paper frenzy earlier in the year, this too shall pass like just another bad dream of 2020.
Onward to “Z”…..
