The Weekly Quill — The Quill Intelligence Interview Series — Peter Atwater on the Limits of ‘K’

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If ‘1’ is the loneliest number, ‘Q’ is the least loved. The letter, in fact, carried vast appeal to yours truly when the word “Quill” first crossed my mind. It would be mighty difficult to forget the name of a research firm that that starts with the letter ‘Q.’ Right? And then there’s the ubiquitous letter ‘E,’ which is more than 56 times more common than ‘Q’ in forming individual English words. But ‘Q’ was not the letter that dominated the news in 2020, at least as it pertained to economics and finance.

That prize goes to the letter ‘K,’ the sixth least common letter in forming words. To be sure, there are a handful of keepers – ketchup, keyboard, key, khaki, kick, kid, kill, king, kiss, kitchen, kitten, knee, knife, know and kosher (OK, that last one I just threw in there).

The big one I missed is the word “kind,” which brings us to the reason ‘K’ was the poster child for the year 2020. It wasn’t the usage of the letter as much as the shape of the economy that took on the image of an ever-growing letter ‘K’ which was anything but kind to those slipping down its south-facing slope.

There’s a reason the ‘K’-shaped economy became so resonant and it has a name – Peter Atwater. The adjunct lecturer in William & Mary’s economics professor did not dream up the concept, as he explains, “Coinage of the term belongs to IvanTheK. I took it (with his blessing) and ran with it. His ‘K’ shape perfectly described what I was writing about in terms of confidence. My Financial Times op-ed in June took the concept mainstream.”

Back when Atwater was published, on June 30th, the deliberations were limited to three letters to describe what the recession would look like given the coronavirus shock had prompted a forced shutdown of the economy. Most talking heads piled into the ‘V’ trade – forced closure, reopen, end of story. The ‘U’ proponents were unconvinced on the reopening being as economically dramatic as the shutdowns. The remainder populated the ‘W’ camp, and were fairly certain that the reopening would be premature forcing a re-closure.

As Atwater wrote then, “As economists debate the letter-form trajectory of the recovery ahead, it is not too soon to identify the letter shape of what has occurred so far. At best, it might be called a K-shaped recovery. While we panicked together in March, since then there have been two vastly divergent experiences.”

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