Recessions, before the Great Depression, were often viewed as good things. Secretary of the Treasury Andrew Mellon, even after the crash of 1929, expressed the common view of the time: "It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people."
"Liquidate labor," he thundered, "liquidate stocks, liquidate the farmers, liquidate real estate."
Though the current Treasury Department seems a bit more compassionate, the idea that a recession is good lives on. A Conservative leader in Britain was forced to apologize last week for extolling the health virtues of an economic decline. "Recession can be good for us. People tend to smoke less, drink less alcohol, eat less rich food and spend more time at home with their families."
With less money and perhaps no work, people don't generally splurge on cigarettes, booze, and unhealthy food. And, with nothing to do all day, they do hang around the house more.
But, as Daniel Gross at Slate magazine points out, the recession will likely bring (or has already brought) on lower housing costs, a reduction in the trade deficit (the difference between things imported into and exported out of the U.S.), a severe crimp in consumerism (a relief for those of us whose kids want all the same toys as the neighbor's), and the comeuppance of Wall Street fat cats. All good things. And the blessed reduction in oil prices nearly tips the scales in favor of a recession.
While recessions can be occasions for moral renewal, "They're also about fear and diminished expectations," writes David Brooks. "The cultural consequences ...1