A CURE THAT'S WORSE THAN THE DISEASE

Okay, quick question:

Which is worse, a check that doesn't stretch as far as it used to because of increasing prices or not having a check at all?

Stated somewhat differently:

Which is worse, inflation or recession?

I think that recession is worse than inflation, and I'll unpack why further below. For the moment, though, here's how Jerome Powell, chair of the FED, answers that question:

"The difference between inflation and unemployment is that inflation affects just everybody. Unemployment affects some people a lot, but most people don't respond to unemployment too much because they're not personally unemployed. Inflation has a social-wide kind of impact."

But does that make sense? Are the consequences of joblessness primarily confined to the job loser and, therefore, largely bereft of 'social-wide" impacts?

Is it not possible, in other words, that recession is truly worse, genuinely more damaging, than inflation?

I think so, and here's why.

RECESSION IS WORSE THAN INFLATION

Actually, Powell's comment is crazily detached from the reality of recession and the deep ways in which the joblessness that it spawns can spread throughout the social fabric. Underlying his comment is an image of the jobless as isolated individuals whose suffering, although real, is so self- contained that it lacks the social oomph that inflation has.

But get Powell and the folk at the FED out of your ear for a second and think about that. Some reflection, I think, readily reveals that stuff is the exact opposite of what Powell is saying Rather than isolated individuals who carry all the weight of joblessness on their own shoulders, the unemployed are as deeply embedded in webs of interdependency as anyone else.

It's because of deep and varied interdependencies that communities with elevated levels of joblessness are also characterized by, among things, limited employment opportunities, low quality housing, fewer recreational activities, underfunded schools, increased mortality rates, declines in the well-being of children, and heightened rates of mental and physical problems.

What's more, and as a number of economists have stressed, joblessness represents an underutilization of resources" and therefore results in a level of output and income that falls below what could be achieved in a fully employed economy.

No matter how you cut it, the reduced output and income that flows from joblessness is a "society-wide" impact and, as mentioned previously, it gets registered as heightened levels of crime, malnutrition, infant mortality, ethnic and racial antagonism, and drug addiction.

This stands in stark contrast to the effects of inflation. Inflation, as economist J..W. Mason reminds us, redistributes aggregate income while recessions, in contrast, actually reduce it.

Taken together, there's a strong case to be made that recession is worse than inflation, and that Folk at the FED--and Powell in particular-- are pushing a cure that's worse than the disease.

It's a cure that could unleash the cruelest of consequences, throwing millions into the deep pit of joblessness and having an impact that extends far beyond that experienced by the unemployed.