In re-reading O'Connor, it struck me that he talks about (economic) crisis as having two possible attributes:
- A dramatic excess of demand over supply.
- A dramatic excess of supply over demand
I think a blend is possible. Take the present crisis. Policy makers seem to be most worried about a shortage in demand - hence a willingness to distribute checks to a sizable portion of the population. Yet, on supermarket shelves, there are some items where those providing supplies are having a difficult time keeping up with demand. In my area, that includes paper towels, toilet paper, and bottled water. There has also been discussion of a shortage of such things as ventilators and certain types of masks. Still, I think the main problem there is that of hoarding. Panic has resulted in buyers stocking up on supplies well in excess of their immediate needs. So the shortage problem is likely to be of relatively short duration (I hope).
That leaves the problem of sustaining demand. There go those printing presses. Normally, a sure prelude to inflation. Yet, in this case, the stimulus is meant to restore demand to previous levels. So, supply is, for the most part, there to meet demand. Moreover, the U.S. has a very strong currency. It is likely to still be seen as a desirable currency to hold. So that will also help.
True supply shortages may occur due to our overall destruction of the environment. Depletion of fishing stocks, draughts, etc. pose a real threat. Counter to that are new technologies to assist in increasing yield, and exploitation of new food sources, such as insects.
Psychologically, crisis may take the form of manic depressive behavior. Spurts of perhaps unmerited optimism followed by deep bouts of pessimistic depression, and so on and so forth.
With that, I am taking a break.