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The state of the restaurant industry

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Re: The state of the restaurant industry

#501

Post by wyattpeak »

DoreenMichele wrote: post #474
markdown wrote: post #264

Earlier quoted context omitted.

A better way would be to suspend all debt collection and rent collection for x months. That will keep lots of small businesses alive, and employees on reduced salaries will still be able to feed their families if they don't have to worry about rent. Throw in food stamps for the unemployed and you're most of the way to keeping a nation going.

You might want to read up on The Irish Potato Famine. Some landlords were letting people stay rent free out of compassion because no one had money and it was tough all over and no one else was going to rent it. Then the government decided to bleed the landlords and insist it get paid if the unit was occupied, even if no rent was being paid. Landlords had no choice but to begin evicting people. Things got ugly fast.

That was a fairly unusual scenario though, where the government actively disliked their citizens, many politicians explicitly happy to see the Irish suffer, others viewing it as the will of God, and none of them dependent on Irish votes.

It's an indication of how things can go wrong with the government working against you, but I don't know that it maps well to the current pandemic.

Re: The state of the restaurant industry

#502

Post by DoreenMichele »

wyattpeak wrote: post #501
DoreenMichele wrote: post #474

Earlier quoted context omitted.

You might want to read up on The Irish Potato Famine. Some landlords were letting people stay rent free out of compassion because no one had money and it was tough all over and no one else was going to rent it. Then the government decided to bleed the landlords and insist it get paid if the unit was occupied, even if no rent was being paid. Landlords had no choice but to begin evicting people. Things got ugly fast.

That was a fairly unusual scenario though, where the government actively disliked their citizens, many politicians explicitly happy to see the Irish suffer, others viewing it as the will of God, and none of them dependent on Irish votes. It's an indication of how things can go wrong with the government working against you, but I don't know that it maps well to the current pandemic.

The road to hell is paved with good intentions. The Irish example is a real world example of the government tampering in some way with landlords and it having unintended consequences that were disastrous.

Re: The state of the restaurant industry

#503

Post by repsilat »

cs702 wrote: post #3

Wow, 50-70% drop in online reservations, phone reservations, and walk-in diners, compared to last year, in every country measured by OpenTable. The restaurant sector generates $3 trillion in annual sales worldwide, and provides employment to a vast number of individuals.[a] Absent government intervention, the cascading economic impact from just this one sector will be enormous. [a] https://medium.com/@CravyHQ/the-res…

> The restaurant sector generates $3 trillion in annual sales worldwide, and provides employment to a vast number of individuals

Can someone with an economics background tell me whether this is a sound argument? It looks like it could be reasonable to me, but it also looks a lot like the examples of deadweight losses in Bastiat's "That Which is Seen, and That Which is Not Seen".

I would guess that we should count the $3T transferred as a cost on one side of the book and as a benefit on the other side, and from an accounting standpoint not care much either way. I'd also guess we should somehow try to compare the relative value of the service on each side of the transaction to gauge somw "surplus" value. People get food they value at $3.1T, and they pay $3T, and the workers would have done the job for $2.9T, so society wins by $200B in aggregate. Or something. But maybe that's nonsense?

I don't know if that's reasonable, but I am fairly convinced that we shouldn't dig $3T worth of ditches just to fill them in. That is deadweight loss.

At the very least I think we can assume that restaurants are not a deadweight loss because they're profitable, though. People often choose to pay that premium over cooking for themselves, and we should trust that those choices reflect personal relative value well.

Re: The state of the restaurant industry

#504

Post by wyattpeak »

DoreenMichele wrote: post #502
wyattpeak wrote: post #501

Earlier quoted context omitted.

That was a fairly unusual scenario though, where the government actively disliked their citizens, many politicians explicitly happy to see the Irish suffer, others viewing it as the will of God, and none of them dependent on Irish votes. It's an indication of how things can go wrong with the government working against you, but I don't know that it maps well to the current pandemic.

The road to hell is paved with good intentions. The Irish example is a real world example of the government tampering in some way with landlords and it having unintended consequences that were disastrous.

I don't think that's a reasonable reading of the event. Ascribing good intentions to Westminster with regard to the famine is unjustified. Some wanted to help, others distinctly didn't. It would be beyond charitable to suggest that all their actions were designed to minimise Irish suffering.

Re: The state of the restaurant industry

#505

Post by tomhoward »

jpizagno wrote: post #487
sosodev wrote: post #485

Earlier quoted context omitted.

Corona panic isn’t going to kill more people than the virus. Also, it certainly will kill far less people than if we didn’t react at all.

"Corona panic isn’t going to kill more people than the virus" I wish I could bet you on that. I could get rich fast

You can buy stocks/derivatives.

I'm tempted, though I don't have much cash - I keep putting it into startups (my own and others').

Re: The state of the restaurant industry

#506

Post by foota »

repsilat wrote: post #503
cs702 wrote: post #3

Wow, 50-70% drop in online reservations, phone reservations, and walk-in diners, compared to last year, in every country measured by OpenTable. The restaurant sector generates $3 trillion in annual sales worldwide, and provides employment to a vast number of individuals.[a] Absent government intervention, the cascading economic impact from just this one sector will be enormous. [a] https://medium.com/@CravyHQ/the-res…

> The restaurant sector generates $3 trillion in annual sales worldwide, and provides employment to a vast number of individuals Can someone with an economics background tell me whether this is a sound argument? It looks like it could be reasonable to me, but it also looks a lot like the examples of deadweight losses in Bastiat's "That Which is Seen, and That Which is Not Seen". I would guess that we should count the…

I think the most important thing is that they're both a net wealth transfer to local food service workers (who by and large are relatively low income) and fuel demand down the road.

Most people will be able to cook for themselves just fine, but by doing so they'll be saving money, which would otherwise have been spent locally. This means that that money won't go on to restaurant workers to be spent, and the remainder won't show up as profit for the restaurant. (Instead it'll go into savings, which will likely have a negligible effect at best since money is ~free to borrow these days)

Locally this will lead to a depressed demand for everything and globally lead to a decrease in paper GDP and profit for the companies (read: stonks go down).

So honestly, I would argue that paying people to dig ditches (vs do literally nothing else, though at that point you might as well just give them cash) is in and of itself beneficial, though of course less so than doing something that generates a benefit outside of that from the activity itself.

Re: The state of the restaurant industry

#507

Post by ericd »

nikanj wrote: post #471
yibg wrote: post #467

Earlier quoted context omitted.

Anyone knowledge about the probabilities of getting infected from takeout / delivered food? Either via handling at the restaurant itself or en route. All indications are that the virus can survive quite a while on smooth surfaces like plastic bags.

The only thing I know, is the people making the food probably don’t get paid sick leave. With the huge demand in place for delivery food, the pressure is on from their bosses to keep coming in no matter how sick.

You can nuke the food in the microwave, supposedly that's been a common measure in China for delivery. You have to get it up to germ-killing temp throughout for it to be effective, though. Not great for sushi/salad takeout, obviously...

Re: The state of the restaurant industry

#508

Post by sershe »

sosodev wrote: post #485
jpizagno wrote: post #483

Related to the restaurant industry, Yelp is laying people off due to the corona virus. My contract with the Yelp has been withdrawn. This "corona panic" will kill more people than the virus itself.

Corona panic isn’t going to kill more people than the virus. Also, it certainly will kill far less people than if we didn’t react at all.

If the current metrics, economic measures taken, and politicians' statements are any indications, the "corona panic" may as well waste far more life than the worst case unchecked virus epidemic could versus the slowed-down epidemic that will happen anyway.

Re: The state of the restaurant industry

#509

Post by DoreenMichele »

wyattpeak wrote: post #504
DoreenMichele wrote: post #502

Earlier quoted context omitted.

The road to hell is paved with good intentions. The Irish example is a real world example of the government tampering in some way with landlords and it having unintended consequences that were disastrous.

I don't think that's a reasonable reading of the event. Ascribing good intentions to Westminster with regard to the famine is unjustified. Some wanted to help, others distinctly didn't. It would be beyond charitable to suggest that all their actions were designed to minimise Irish suffering.

I don't think that's a reasonable reading of my comment. (Trying to be light-hearted here, not mocking.)

I wasn't ascribing good intentions to Westminster. I was saying that their intentions, good or bad, and the intentions of the current American government are irrelevant. What's relevant here is they did a thing and it got x result. So we should use that example to wonder what will really happen should we do a similar thing now.

Re: The state of the restaurant industry

#510

Post by anovikov »

repsilat wrote: post #503
cs702 wrote: post #3

Wow, 50-70% drop in online reservations, phone reservations, and walk-in diners, compared to last year, in every country measured by OpenTable. The restaurant sector generates $3 trillion in annual sales worldwide, and provides employment to a vast number of individuals.[a] Absent government intervention, the cascading economic impact from just this one sector will be enormous. [a] https://medium.com/@CravyHQ/the-res…

> The restaurant sector generates $3 trillion in annual sales worldwide, and provides employment to a vast number of individuals Can someone with an economics background tell me whether this is a sound argument? It looks like it could be reasonable to me, but it also looks a lot like the examples of deadweight losses in Bastiat's "That Which is Seen, and That Which is Not Seen". I would guess that we should count the…

I don't even know how to comment on this. The restaurant industry isn't just about food. It's about life. It may make just 3.5% of world's GDP but for many people it's most of what they do outside of home. I feel it more acutely than ever now when all restaurants are closed due to the quarantine, in our place.
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