An additional 2.4 million U.S. workers filed for unemployment last week, the government reported Thursday, bringing the total to 38.6 million in nine weeks and providing more evidence — in case there was any doubt — that the economy is plunging ever deeper into crisis. Of the path to recovery, Nicholas Bloom, an economist at Stanford University, told The Times, “I think we’re in for a very long haul.”
But not everyone is despairing of the country’s economic future. Last week, my colleague Paul Krugman, a Times columnist and Nobel Prize-winning economist, expressed some guarded optimism in his newsletter: “If we were patient and self-disciplined,” he wrote, “we probably could eventually see rapid recovery.”
I got in touch with Mr. Krugman to talk about why he’s relatively hopeful, how long a recovery could take and whether he might be wrong.S.B.L.: You’ve written that after the Great Recession, we had an extended “jobless recovery,” in which G.D.P. rebounded but jobs took a long time to come back. Could you explain why you think this downturn might be different?
P.K.: The Great Recession was brought on by fundamental overreach. There were underlying problems in the economy. There was too much debt, there was overbuilding of housing. We just were overextended, and that was hard to cure. It took a long time to work off those things.
What’s just happened now — not to say that everything was fine, but there was nothing like the housing bubble or the extraordinarily high levels of household debt we had in 2008 — this was just an act of God, almost, that forced us to shut down a large part of the economy. So you don’t have the kind of underlying drag from past excesses that we had last time.
I think there could be at best a plateau, at worst a second wave, and we’re going to stay depressed — not because of the fundamental economics but because of failure to contain the coronavirus. And we will have a year or more of a depressed economy.
But if we’re taking the 1918 flu as our baseline, the economy did in fact come roaring back. It was nothing like the sustained depressed economy after 2008.
S.B.L.: So you don’t see this downturn rivaling the Great Depression, as some economists have predicted?