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This is the way economic recoveries happen

Summary:
Covid lockdowns have caused more than a few businesses to crumble - airlines among them. So, what will happen after covid with airlines? This:MESA, AZ — Avelo Airlines, which launched Thursday at Hollywood Burbank Airport, offers flights to and from Mesa Gateway Airport. Avelo’s only flight option from Mesa Gateway as of now is Burbank, but the price tag of only after taxes and fees is pretty enticing.Not that we’re backing, in any manner, this particular adventure into the soaring skies. Rather, that it’s an excellent example of how economic recovery happens.People who desire to fly still exist. ‘Planes and airports still exist. People capable of flying ‘planes still exist. What might have failed in the recent hard times are particular organisations which employ the people to fly

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Covid lockdowns have caused more than a few businesses to crumble - airlines among them. So, what will happen after covid with airlines? This:

MESA, AZ — Avelo Airlines, which launched Thursday at Hollywood Burbank Airport, offers $19 flights to and from Mesa Gateway Airport.

Avelo’s only flight option from Mesa Gateway as of now is Burbank, but the price tag of only $19 after taxes and fees is pretty enticing.

Not that we’re backing, in any manner, this particular adventure into the soaring skies. Rather, that it’s an excellent example of how economic recovery happens.

People who desire to fly still exist. ‘Planes and airports still exist. People capable of flying ‘planes still exist. What might have failed in the recent hard times are particular organisations which employ the people to fly the planes which people desire to travel upon. So, the solution is that new organisations arise to employ the extant people to fly the existing ‘planes to services that revived desire.

That is, the Austrian view of recessions and the recovery from them is at least partially true. Assets don’t disappear, it’s the form of their ownership that might change. Once the hard times are past then entrepreneurs will and do pick up the assets and use them, again, to satiate consumer demand.

And, of course, if no one can work out how to usefully utilise such assets then clearly they’re not in fact assets anyway.

The point being of rather wider application than just short haul jollies of course. Take, just as an example, a business built of the scrag ends of the steel and aluminium industry worldwide which now finds itself desperately short of working capital. No names, no pack drill you understand.

That the organisation itself goes bust will be painful to those who currently own it. Other than that, well, not much. The assets that are worth reemploying will be reemployed. Those that aren’t then we shouldn’t be trying to save them anyway.

Liquidationism as a reaction to recession has a bad name, mostly because people don’t seem to understand that what is liquidated is the current structure of ownership, not the underlying valuable assets.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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