Supply must be reduced, and you either do that by reducing the workforce by 20 % or you reduce the working hours of the workforce by 20 %. Those are the alternatives here.
And I hardly think you want your management to work 20 % less during the crisis of the century. That they are often grossly overpaid is another issue.
And the quity holders not taking a haircut? Have you by any chance noticed how share prices have developed since the crisis began? Peak oil is not an energy crisis. It is a liquid fuel crisis.
The justification, in the capitalist system, for downturns is precisely that it forces overpaid and underproductive parts of the political economy - and these days, the most obviously underproductive and overpaid part of the political economy is the management class - to take a haircut. If this haircut fails to materialise, then capitalism isn't working as advertised.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
