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Ask HN: How bad will the 2020 economic crisis be?

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Re: Ask HN: How bad will the 2020 economic crisis be?

#121

Post by dawnerd »

yulaow wrote: post #27
jawns wrote: post #15

I've heard economic forecasters predict that the economy will spring back once the crisis is over. Their reasoning is that the crisis is an external issue, not a problem with the economy itself, as with the housing crisis. Once it becomes more contained and controlled, there will be work for people to do, and people available to do that work, and the economy will just start humming along again. I'm more pessimistic.…

I would add that even after the crisis is more under control, people will still avoid any not necessary spending for a very long time and this will keep the economy to restart. Also most of them will have depleated all savings at that point and will want to rebuild them aggressively, further reducing spending

Anecdotal but my eBay sales have been way up this last week. Although honestly I suspect it’s Amazon having problems shipping things.

I’m better a lot of other online sellers are seeing the same as people stay indoors and change how they spend. Of the items I’ve sold they were all hobby items.

Re: Ask HN: How bad will the 2020 economic crisis be?

#122

Post by mooreds »

nathanaldensr wrote: post #99
User23 wrote: post #49

Earlier quoted context omitted.

This is why fiscal stimulus in the form of checks to every citizen is a brilliant idea. It doesn’t matter if they “need the money” it matters if they spend it and productive capacity can meet the demand.

The Fed could drop a bag with a million freshly-printed FRNs in it on my doorstep, and I'd simply take the bag and put it in my bedroom. A significant number of people aren't going to spend the money no matter how much it is.

Hmm. I am not sure one can have it both ways. Either most people will save a government handout, or most people live paycheck to paycheck and will be severely affected by losing their job/an economic slowdown.

Of course there will be some people who will immediately save any check from the government, but that's a disjoint set from the people who are in dire need (laid off or reduced hours).

Re: Ask HN: How bad will the 2020 economic crisis be?

#123

Post by istorical »

alexpetralia wrote: post #68
Mountain_Skies wrote: post #43

Earlier quoted context omitted.

During the Great Recession my employer at the time laid off a large percentage of our staff that they had wanted to layoff for a long time. Due to the nature of their industry, the appearance of stability was very important so they never did layoffs before. Any accumulated excess workforce had to be reduced through attrition or gross misconduct excessive enough for warrant being fired for cause. During the recession…

I also wonder whether this obscured and now accelerated "structural unemployment" - combined with a greater acceptance of remote work - will further shift domestic jobs overseas.

This is my greatest fear as an American engineer.

When corporations finally realize remote work is just as valuable as in office work they'll start to wonder why they are employing US developers for $XX,XXX to $XXX,XXX when they could pay a European developer a low five figure salary in a weaker currency and get the same results.

Re: Ask HN: How bad will the 2020 economic crisis be?

#124

Post by kevindong »

gdubs wrote: post #91

As others have said, this is largely a guessing game right now. How swiftly and how boldly governments act is going to determine a lot. In 2008 you had people like Paulson and Bernanke who studied the Great Depression and desperately wanted to avoid the mistakes of the past. They saw those mistakes largely as a failure to act quickly. I’m not an economist, but in my humble opinion what we need is cash in the hands of…

Just giving out cash isn't going to fix the problem. It is however one required part of the solution to prevent the situation from spiraling as hard as it otherwise would.

The crux of the issue is that economic activity is severely hampered due to the paralyzing fear of the coronavirus. Even if the government pays out benefits as though everyone remained employed as they were a few months ago, that's not truly economically productive activity. It's an economically-neutral but socially-positive action.

Economic value is generated when people exchange goods (in a better example to reflect modern life, money for goods and vice versa) such that every party is better off. Shuttered businesses prevent this value generation. I live in NYC and most non-food/beverage stores are closed.

Re: Ask HN: How bad will the 2020 economic crisis be?

#125

Post by akiselev »

istorical wrote: post #123
alexpetralia wrote: post #68

Earlier quoted context omitted.

I also wonder whether this obscured and now accelerated "structural unemployment" - combined with a greater acceptance of remote work - will further shift domestic jobs overseas.

This is my greatest fear as an American engineer. When corporations finally realize remote work is just as valuable as in office work they'll start to wonder why they are employing US developers for $XX,XXX to $XXX,XXX when they could pay a European developer a low five figure salary in a weaker currency and get the same results.

I'm more worried about tech losing its status as investment of last resort. Who knows how much of the industry is propped up by the flood of easy capital in the last few decades. We just watched all that capital dry up with everyone's liquidity.

Software engineering already went through a wave of offshoring in the 2000s and the whiplash from that was enough to make many a freelancer/agency/startup rich. We learned that many knowledge and service jobs can't economically be offshored because the benefits of locality (whether thats due to the trust from face to face interaction, efficiency of communication, etc, depends on the field) far outweighs the extra cost.

Re: Ask HN: How bad will the 2020 economic crisis be?

#129

Post by _bxg1 »

jacobwilliamroy wrote: post #113

The Big One is coming. This is just gonna be a recession, no one is going to lose their retirement or social security this time. Still, big banks like American Savings and Chase are going to be buying up lots of property ("seizing" is probably a better word for it). When The Big One comes, we will all have to forfeit our property to the Federal Reserve, and they will start the cycle all over again. I think the cycles…

Specifics about how to make the military more efficient are probably out of scope (and out of depth for anyone here), but I agree we should spend less on it (and I think we could, without making any other changes, and still remain the dominant power by a wide margin)

Re: Ask HN: How bad will the 2020 economic crisis be?

#130

Post by biolurker1 »

filleokus wrote: post #69

I have no expertise in any area, but I would like to put down my thoughts for posterity (and feedback). I think we will see governments in the coming week or two start doing broad randomised samples of the population for antibodies and realise that many many more people have been infected than previously thought. Meanwhile fears for the economic consequences will grow larger. Also (hopefully) countries like Germany a…

How can UK see less numbers than Italy when they imposed a cuarantine much later at the exponential curve? It's just impossible mathematically
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