A Long Time Until the Economic New Normal • Hacker News Board

Re: A Long Time Until the Economic New Normal

#21

Post by sremani » Fri, Apr 10, 2020, 2:50 PM UTC

bwb wrote: post #12

coldcode wrote: post #3

While I agree that it will take longer (and wind up different looking) to full recovery, having governments and business plan for the next pandemic will not happen. Short sighted people do not waste time on long term thinking.

I'd also point out that planning for "high risk" events like this is not something small to medium size businesses should be doing. Government yes, but I don't expect my mexican restaurant to have a plan in case of a global pandemic :). Just like I don't expect them to hedge pork futures so my pork tamales don't go up 8 cents. Gov is insurance and I want them to be building resilience into the system. That is done wi…

A Global Pandemic is NOT A BLACK SWAN. As matter of FACT, it was predicted by Taleb and according to him it is a WHITE SWAN.

The true problem here is the so called Risk "experts" do not understand Risk, and that is the core problem.

Re: A Long Time Until the Economic New Normal

#22

Post by dustingetz » Fri, Apr 10, 2020, 2:50 PM UTC

We could be about to see a massive re-pricing in goods & services, salaries, rent, commodities with disrupted supply chains, food, wipe out of businesses no longer viable, new business models suddenly viable

Or not, but if not, why not?

Re: A Long Time Until the Economic New Normal

#23

Post by onion2k » Fri, Apr 10, 2020, 2:51 PM UTC

rwmj wrote: post #8

coldcode wrote: post #4

Earlier quoted context omitted.

How many people on a single $1200 check and unemployment will go out and buy a car, a house, a washing machine or visit a Disney park?

For many people outside the highly paid HN reading bubble that's a huge windfall.

Not enough to buy a car though, especially if you've also lost your job.

Re: A Long Time Until the Economic New Normal

#24

Post by vorpalhex » Fri, Apr 10, 2020, 2:51 PM UTC

bwb wrote: post #12

coldcode wrote: post #3

While I agree that it will take longer (and wind up different looking) to full recovery, having governments and business plan for the next pandemic will not happen. Short sighted people do not waste time on long term thinking.

I'd also point out that planning for "high risk" events like this is not something small to medium size businesses should be doing. Government yes, but I don't expect my mexican restaurant to have a plan in case of a global pandemic :). Just like I don't expect them to hedge pork futures so my pork tamales don't go up 8 cents. Gov is insurance and I want them to be building resilience into the system. That is done wi…

I wouldn't expect your local mexican restaurant to have an emergency stockpile of ventilators (as handy as that may be right now..) but I would expect most clever small businesses to have resiliency by keeping cash on hand, operational flexibility (can they switch to a to-go model?) and not over-expanding.

You can't prepare for specific black swans, but you can generally structure things to be more or less resilient. It's not even impossible for small businesses to gain during this time - my local wing spot is doing crazy good business because they've converted to to-go orders amazingly intelligently (curbside delivery, easy to get orders, high order accuracy, and delivery area is well managed by multiple employees).

Re: A Long Time Until the Economic New Normal

#25

Post by jointpdf » Fri, Apr 10, 2020, 2:51 PM UTC

rwmj wrote: post #8

coldcode wrote: post #4

Earlier quoted context omitted.

How many people on a single $1200 check and unemployment will go out and buy a car, a house, a washing machine or visit a Disney park?

For many people outside the highly paid HN reading bubble that's a huge windfall.

It’s really not. Even in a low cost of living area, $1.2K is about one month of basic living expenses.

Re: A Long Time Until the Economic New Normal

#26

Post by tarr11 » Fri, Apr 10, 2020, 2:52 PM UTC

david_w wrote: post #19

From the article: "The first is that it overlooks the negative impacts on consumer sentiment and spending, which are likely to persist for many months, if not years. " Yeah, right. Citation needed. My to-buy list of pent-up demands grows longer by the hour.

They are not talking about electronics or haircuts.

For example, many people have vowed never to step on a cruise ship after this and attending large scale events in person will probably give a lot of people anxiety for some time.

Re: A Long Time Until the Economic New Normal

#27

Post by Donald » Fri, Apr 10, 2020, 2:52 PM UTC

david_w wrote: post #19

From the article: "The first is that it overlooks the negative impacts on consumer sentiment and spending, which are likely to persist for many months, if not years. " Yeah, right. Citation needed. My to-buy list of pent-up demands grows longer by the hour.

I assume you're not one of the 17+ million Americans who became unemployed in March?

In addition, there will be structural changes to consumption habits. Many meetings will persist online when this is over, creating a drag on demand for airline services. Cruise ships, large sporting events, and concerts will take years to bounce back.

Re: A Long Time Until the Economic New Normal

#28

Post by taneq » Fri, Apr 10, 2020, 2:52 PM UTC

david_w wrote: post #19

From the article: "The first is that it overlooks the negative impacts on consumer sentiment and spending, which are likely to persist for many months, if not years. " Yeah, right. Citation needed. My to-buy list of pent-up demands grows longer by the hour.

Just wait til you're hungry for a few weeks. I guarantee you're going to be more interested in buying canned beans than in a new iPad.

Re: A Long Time Until the Economic New Normal

#29

Post by dlp211 » Fri, Apr 10, 2020, 2:52 PM UTC

david_w wrote: post #19

From the article: "The first is that it overlooks the negative impacts on consumer sentiment and spending, which are likely to persist for many months, if not years. " Yeah, right. Citation needed. My to-buy list of pent-up demands grows longer by the hour.

You are likely not the average American consumer.

Re: A Long Time Until the Economic New Normal

#30

Post by vikramkr » Fri, Apr 10, 2020, 2:53 PM UTC

londons_explore wrote: post #18

vikramkr wrote: post #10

Earlier quoted context omitted.

I also think a lesson people might have learned on the business side is that theres almost no point planning for something like this - how is a small business supposed to have enough cash on hand to make it through something like this? This is just so bad for so many restaurants/small businesses etc that it's not really something you can overcome with some planning if you own a small margin small business

The same is true of a fire in your small restaurant. Yet people buy insurance for that. Pandemic insurance could exist, and a massive fund could be built up over many decades to pay out when a pandemic does occur. It would be expensive though. If a pandemic occurs every 100 years, and cuts revenue to zero for 6 months, that means the average cost is 0.5% of revenue...

By your own calculation there that's a really tall order for restaurants to afford, and the damages are also hard to tabulate. For flood or fire you can mitigate your risk and clearly value the damages - how exactly do you tabulate for shutting down a restaurant? Who decides what revenues would have been for a new restaurant?