The Freakonomics blog in the New York Times has a brief article (and a spirited discussion section) considering how people’s spending patterns might adapt to changes in income. While the conjecture about which products and services might be more or less income-elastic is certainly interesting, the first two paragraphs contain two very curious words which add up to a pretty big unchallenged assumption: “presumably,” as in “a (presumably) temporary decline in income during the recession; and “the short run.”

In the short run, Daniel Hamermesh is probably right: lots of things get short shrift when income shrinks, including his list of “postponable luxuries” like plastic surgery, participation in the Austin Marathon, and pediatric visits (not my idea of a postponable luxury, but to each his own). But I am not convinced that we’re in a short run situation at all, and that we are witnessing the presumptive temporary decline in personal income.

This may not be a recession. We may be in Act I of The Great Reset. If we are in a recession, the standard economist playbook holds. If we are in uncharted waters, all bets are off.

So, what do you think? Is this a permanent or temporary setback? What are you you postponing, or planning to forego entirely?