The Two Economies of Post Pandemic America: Part 3 - The Reset Nobody WantsWhy a recession would close the gap faster and why policymakers keep choosing the slow burn insteadThe Last WireThe question no one in Washington wants to answerAt some point, every recovery runs into the same uncomfortable question.
How do we reset the baseline?
Not how do we slow inflation.
Not how do we manage expectations.
Not how do we smooth charts so the trend lines calm down.
How do we actually restore purchasing power?For most of modern economic history, baselines reset through demand destruction, not patience. Prices fall when excess demand disappears, bad investments are cleared, and leverage is unwound. That process is usually called a recession.
Sometimes it is worse.
No one in power likes that answer. Least of all the people who would be blamed for it.
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