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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& #39;s 40%. When those firms start operating again many of them won& #39;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& #39;s not how it divides I& #39;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& #39;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& #39;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& #39;s by no means obvious to me that the normal arguments for price stability apply in this scenario.+
