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

I run a ~40ppl business in Europe (Fr & UK). While young and in a trendy sector, we aren't a startup, in that we invested a lot in being profitable and using our profits to fund our growth. I'm trying to get a sense of what's to come.

Our revenue this week is down 20x compared to the average of the past 4 weeks. In France, many local businesses are basically down to 0 turnover.

We can read here and there that the economic downfall will be worst than the 1929 crash. What will be the chain of events? How bad unemployment can get? Should we expect the real estate market to crash too? In 1929, what kind of businesses were affected the most, should we expect something similar here?

It doesn't have to be bad, on the contrary. Black Death in XIV century have invigorated European economy.

Think of it as much needed reset on multiple levels. New supply chains will be created, new business opportunities. Capital re-allocated. It is going to be wonderfull times.

Also historically plagues allow for great upward social mobility which is kick-start for the economy.

What about putting everyone in chômage technique ?

Oh yes, that’s a great example: “so many people died that the two-thirds that survived enjoyed benefits for generations”.

Yes, it’s accurate... but I think it also somewhat misses the point. The unexpected consequences of a mass culling several years down the line probably is of the “extremely bad” persuasion.

> Also historically plagues allow for great upward social mobility which is kick-start for the economy.

This certainly happened with Europe in the Black Death. I would argue, however, that the present is not a good analogy.

My knowledge of history is a bit sketchy, but from what I understand -- prior to the Black Death, times were rough for ordinary working people. Subsistence farming, in particular, was stretched to its limit; for many peasants, not all that much separated them from starvation.

The Black Death caused a truly massive number of fatalities. Afterwards, when the same total amount of natural resources were available, people had breathing room and the economy was able to expand.

Covid-19, while terrible, is not forecasted to be nearly as bad as the Black Death. The fatality rate is expected to possibly reach 1%, most of that concentrated among the elderly. Although this would be a catastrophe, it doesn't seem likely to have the same direct economic impact. The main economic impact is probably going to come from what is happening now -- bars, restaurants, concert halls, hotels, and such all being shuttered. Especially if this needs to be maintained for a long time.

Moreover, economics are different. So much capital now is concentrated among very big businesses. They'll be fine, especially since there is talk of bailing them out (e.g. airlines in the US). I doubt they'll change all that much, unless coerced by a radical change in public policy. But meanwhile, a lot of small businesses will go under. New ones will start, but I'm afraid (for example) that independent coffee shops will go out of business and that Starbucks will take their place.

I very much hope I'm wrong.