In case you think things are going badly here, spare a thought for the poor folks of Lebanon:¹
This represents a GDP loss of about 35%, far greater than the US suffered during the Great Depression. Inflation is running at about 100%, the banking system is in about the shape you'd expect, and unemployment is sky high.
This all comes from the World Bank, which refers to this as a deliberate depression because Lebanon's leaders are deliberately not doing anything about it:
In the Fall 2020 LEM, Lebanon’s economic crisis was termed The Deliberate Depression. For over a year, Lebanese authorities encountered an assailment of compounded crises—namely, the country’s largest peace-time economic and financial crisis, COVID-19 and the Port of Beirut explosion—with deliberately inadequate policy responses. The inadequacy is less due to knowledge gaps and quality advice and more the result of a combination of (i) a lack of political consensus over effective policy initiatives; and (ii) political consensus in defense of a bankrupt economic system, which benefited a few for so long.
In other words, no one can agree about what to do, and lots of powerful people want to do nothing because they benefit from the current corrupt system even during a depression.
And now for the clickbait. Carmen Reinhart and Kenneth Rogoff, the reigning experts on episodes of economic collapse, use a formula called CSI to calculate how severe a depression is. It's pretty simple: just take the percentage GDP decline from peak to trough and add it to the number of years it takes to get back to the previous peak. Under this accounting, for example, the CSI for the Great Depression in the United States was 38 (a 28 point decline + 10 years for GDP to recover.
The World Bank's forecast is that Lebanon will suffer a GDP decline of 35% and it will take 12 years to recover. This gives them a CSI of 47, which would be the second biggest CSI since World War II and the sixth worst ever.
But that's the "good" scenario. The bad scenario is a GDP decline of 38% and 19 years to recovery, which produces a CSI of 57. This would be the worst since World War II and the third worst ever.
There's no real point to make here. I just thought you might be interested. Just think: possibly the worst depression since World War II and Lebanon's leaders are twiddling their thumbs and figuring it's better than the alternative, which might end up affecting them. It sure makes our political gridlock look penny ante.
¹Don't assume these numbers are absolutely precise. The World Bank seems incapable of proofreading its own reports and press releases, so I had to decide which of its various figures to use.
When was the last time Lebanon actually functioned well in political governance? As long as I've been alive, it's been muddled by outside interference and civil conflict.
If I recall correctly, Lebanon has been fubar since circa 1975.
Probably the best solution would be partition, Hezbollah, Druze, and the rest.
With the Druze state incorporating the Druze area of southern Syria.
It's wrong to think of the Middle East as comprising modern nation states, it's the pre-modern world and they want to keep it that way so re-drawing the borders, especially if it's in the interest of creating stability, will not be as unpopular as a lot of people think.
We should do the same with the US.
An excellent idea!
Now how to talk all the wingnuts into moving south so they can at last enjoy their slave empire?
I know! They can kill anyone they want to and that makes it the only safe place to be.
Slave empire??? More Like zionism.
There are places that can help you get your face tattoos removed.
What about the Christians? Lebanon was supposedly the Christian partition off of Syria.
They aren't that significant a percentage of the population,
https://upload.wikimedia.org/wikipedia/commons/4/4f/Lebanon_religious_groups_distribution.jpg
But now I'm changing my mind. I'd thought Shiites were localized in the south and it doesn't look like that, so, barring mass relocations, which I can't picture happening in any way that wouldn't be mass catastrophe, it doesn't seem like anything like a straightforward partition could happen.
They're a third of the population- just because they're concentrated in the cities, they still count (unlike some other countries).
You are correct, I don't what brain hiccups I'm suffering today.
Ignore me!
Opines an American with rather zero sense of where people live in Lebanon. Nonsense superficial blithering on.
Any pretension to partition using the simplistic and ethno-geographically ignorant view above would simply rerun the Lebanese civil war combined with Syrian one.
What is Lebanon supposed to do? The World Bank isn't going to issue them loans they can repay.
A total restructure of the banking sector, end the informal capital siezure that has ended up freezing the dollars of the middle classes while allowing the oligarches with their corrupt routes to continue to do business.
Float the theoretical domestic currency - the Lebanese pound rather than keeping up the pretence of the current FX rate and the hard currency capital controls.
Entirely replace the entire management of the Central Bank which was engaged in bizarrely corrupt schemes.
Seize all the domestic banks which are all (1) controlled by the factional oligarchs, (2) all Zombie Banks that are in effect all bankrupt (and were madly levered up in corrupt refinancing schemes no sane Central Bank would ever permit).
As a good (and non-corrupt) Leb banker friend of mine said last year just before this went to hell, Lebanon wasn't a country it was a Hedge Fund Ponzi Scheme with a central bank attached to it.
Us with 34% contraction 1929-33.
I'm guessing any steps needed to fix problems may expose those in charge.
Societies fail when leaders are too afraid to give up power because then they may be held accountable. Many times that starts with refusing to admit that there are problems to fix. And since they can never admit they are wrong, corrective action can never be taken.
So, what you're saying, is that just as Obama 2009 was going to turn America into Zimbabwe, Biden is going to turn America into Lebanon.
Anyway, who is the Mitch Mc Connell of Lebanon that wants to make things worse so that his opposition party does better in the next polling?
Part of the problem is if the Muslims take real power based on population that means Hezbollah will take real power and then you'll get massive ethnic cleansing of Christians and Druze
No, the "Muslims" are in fact not a single bloc but two or three rather, of which the Sunni and the Shia would rather do deals with the Christians - but attention, their favoured version of Xian, the Orthodox and the Catholics get along not particularly better than the Shia and the Sunni.
I wonder what Carlos Ghosn thinks about this.