I get the impression that a lot of people in the west fundamentally fail to understand what the purpose of an economy actually is.

An economy is a model for allocating labour and resources in a way that meets the needs of the people in the country.

The original argument for capitalism was that market economy with private ownership is the most effective way to allocate labour and resources in a way that benefits everyone.

Measures such as the stock market and GDP were meant to act as proxies for measuring how well the economy was accomplishing its stated purpose, which is to improve the standard of living for everyone.

Understanding that these metrics are simply proxies has been lost today, and they've been turned into goals of themselves. People have started treating the stock market and GDP as the economy.

This is why we're seeing an increasing disconnect between the economy that people are experiencing in their daily lives and news reporting on how the economy is doing.

And that's why we see absurd articles like this one arguing that the recession people are experiencing isn't real.

https://www.wsj.com/economy/it-wont-be-a-recession-it-will-just-feel-like-one-1919267a

  • zifnab25 [he/him, any]
    ·
    10 months ago

    Then do you want to explain the 1:1 correlation between interest rates and inflation?

    Again, that's got nothing to do with the USSR.

    And a market crash would be something like the Great Depression

    Or The Great Recession. Or the Enron / Worldcomm crash. Or the '97 East Asia Financial Crisis.

    The closest that we’ve gotten was Covid. But even then, it was understood that there would be a recovery after vaccine deployment.

    Because of the Keynesian economic model that we still kinda-sorta adhere to when shit hits the fan.