THERE ARE WORDS used so often in conversation and public discourse that their meanings are no longer provided nor challenged. Take “corruption.” (Go ahead.) This word is often paired with “graft,” referring to the illicit use of one’s position to derive personal benefits and advantages. Graft too is a botanical term for joining plant stems. “Graft and corruption” are automatically linked, like two plants…well, grafted together and attached to political types.
Pairs of words can blur together in their usage to form a single phrase, such as “rock and roll,” “bread and butter,” “death and taxes,” “carrot and stick,” or…“recession and recovery.” For this last pair, the connection is sequential. A recession is expected to be followed by a recovery, though not always right away.
The daily status report on pandemic cases flags “recoveries” too. These are defined as previously positive cases that have healed and then tested again as negative. Medical recovery is easier to understand than its economic counterpart.
How exactly is “economic recovery” defined?
One definition cites recovery as a period in a business cycle when the lines for economic numbers are moving up, after a dip when GDP growth is negative, say after 21 years or 84 quarters of continuous positive growth. The V-shaped recovery is devoutly to be wished. It signifies a steep climb from the bottom.
All the stimulus packages, and our form of quantitative easing when government agencies buy up local stocks to create rallies, are intended to hasten recovery. Money supply is pumped up with lowered interest rates and lower bank reserves. Fiscal moves from government spending on face masks, test kits, and roads add to the GDP rise.
Does a restaurant with losses for two quarters declare it is “recovered” when its next quarter’s net income is above break-even? Maybe it’s bankers will only be too happy to declare a recovery at this point too. It should prudently wait for one more quarter to start breathing again. What about those deferred loan payments?
As for the individual, when does he lose the panicky feeling of tight money? What is personal recovery? If one has lost his job, suffered a decline in value of his assets, with maybe his home amortization in arrears with three years still to go, can he feel he has recovered if he gets a new job as consultant for online education? How much does he still need? Or will he only feel he has recovered when he gets back to his financial position “status quo ante,” or BQ (Before Quarantine)?
Managing expectations, both our own and others’, is a way to avoid grief. (Self-delusion is after all, the key to happiness.) To define recovery as climbing back up to one’s personal net worth at the top of the market is likely to end in disappointment. While such a possibility exists that the PSE Index will once more reach its all time high of over 9,000, such a definition of recovery may be wishful thinking. Lowering expectations is an optimist’s way of coping.
It may be better to use physical well-being, a sense of satisfaction and relief, as a metaphor for recovery.
When a patient is diagnosed with a dreaded disease (not necessarily the current pandemic) in whatever stage, the hope for recovery should be modest. The best case entails remission but seldom the full recouping of the vim, vigor, and vitality in one’s prime when one could run up the stairs, without holding on to the banisters. A goal of achieving the “peak of health” is analogous to wishing for asset valuations to return to “peak of market” numbers.
A modest desire to be well, and able to walk unaccompanied to the toilet is enough…. Unless the accompaniment itself is the desired goal.
Recovery always needs to be defined on an individual basis. The bust after a continuous boom can feel like a free-fall, much like the stomach-churning plunge in the roller coaster after it is hauled up slowly and noisily to the peak. And the experience of a plunge is not always thrilling.
Maybe a modest recovery should start with achieving a survival mode of three meals a day, followed afterwards with an increasing level of discretionary income. Things are looking up when dinner out is capped…. by a glass of the house wine.
Tony Samson is Chairman and CEO, TOUCH xda
