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IMV almost everyone discussing the post-crisis economy is missing two key issues. 1) Commercial rent arrears. 2) Inflation.
Let me explain...
Let me explain...
Normally abt 10% of commercial rents are in arrears. Currently it's 40%. When those firms start operating again many of them won't be able to pay. Many may try to dispute their liability during lockdown in court. That alone cld block up courts for years.+
+In the meantime, commercial landlords may have mortgages. If their commercial tenants default that could create big problems for banks as they themselves default in turn.+
+The govt cld pass a law imposing general burden-sharing during lockdown. Why shld commercial tenants have to pay the full rent on properties the govt has asked them not to use or forbidden them from using? A law sharing the burden 50-50 might seem fair.+
+But what shld pro-market people think of such a law? My guess is it might vary according to your attitude to the private ownership of land (a dividing point amongst pro-market types). But even if that's not how it divides I'm not clear what the split *would* be.+
+What abt the Left? What would it think of such a burden-sharing law? Might this be an issue where Left & Right wld line up against the Centre? Or are they against each other? How about North v South - cld there be any difference of opinion there?+
+I don't see how a debate about such a burden-sharing law is to be avoided, but as yet I have no real feel for where anyone is likely to stand.+
+Next, inflation. If we have a new, significantly reconfigured "new normal" economy, the things we buy (& from what countries we buy them) may be so different that it's not clear that "inflation" will be an applicable concept in the usual way.+
+Furthermore, one thing sudden changes in the price level does is to change the relative value of past work (eg accumulated in savings) & future work. Maybe in this scenario we want that to change?+
+So it's by no means obvious to me that the normal arguments for price stability apply in this scenario.+
