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

Re: A Long Time Until the Economic New Normal

#81

Post by jcranmer » Fri, Apr 10, 2020, 3:28 PM UTC

twelve40 wrote: post #43

JackFr wrote: post #9

The points made are fine insofar as they go. At the same time, the current economic situation is, very literally, unprecedented. It has aspects of a war, a natural disaster and a secular recession. Economists should try to estimate its effects, but in this case their predictions need to be taken with an extra large grain of salt.

How is it very literally unprecedented? Spanish flu had much deadlier properties, "work from home" wasn't even possible, there were no antibiotics and almost none of the modern med tech, yet there is no mention of a "1919 economic collapse". Death toll in the US was So I'd say it looks very much "precedented", and during the last precedent the situation was much much worse, and the world moved on just fine for anothe…

> Death toll in the US was The US population was also only ~103 million in 1918, compared to ~327 million today. Proportionally, we should expect about 2 million deaths from coronavirus to be merely "as bad" as the Spanish flu.

Re: A Long Time Until the Economic New Normal

#82

Post by meow1032 » Fri, Apr 10, 2020, 3:30 PM UTC

briandear wrote: post #56

toomuchtodo wrote: post #41

Earlier quoted context omitted.

The CDC had a pandemic team, they were let go. California had a reserve of ventilators, which were liquidated due to “budget reasons”. The problem isn’t risk experts; the problem is that government representatives elected have no domain expertise nor leadership fortitude to put domain experts into the driver’s seat when the situation dictates. China, for all its failings, gets this right. Their leadership is more STE…

> The CDC has a pandemic team, they were let go. Can we please stop parroting that distortion of the facts? https://www.factcheck.org/2020/03/dems-misconstrue-trump-bud... > China, for all its failings, gets this right. Their leadership is more STEM and less lawyers and politicians. You don't know anything about China's leadership. They're all politicians. Not a decision gets made without it being vetted ideologicall…

Your link suggests that the statement is true, but you probably already know that and are posting in a bad faith effort to mislead people.

Re: A Long Time Until the Economic New Normal

#83

Post by briandear » Fri, Apr 10, 2020, 3:31 PM UTC

rwmj wrote: post #50

drocer88 wrote: post #37

Earlier quoted context omitted.

A lot of folks are going to take the traditional advice of having 6 months of living expenses in emergency savings seriously this time.

How? Many people are paid week to week and have just enough to get by.

Perhaps they'll start reducing non-essential purchases. While many people are paycheck-to-paycheck, there are many of those same people that buy things they don't need and incur debts they shouldn't have incurred.

Re: A Long Time Until the Economic New Normal

#84

Post by throwaway_USD » Fri, Apr 10, 2020, 3:31 PM UTC

It seems people don't realize how much $6T is and the effects of that kind of money being injected into the economy. Consider the 2008 housing bubble and financial crisis which was ultimately corrected with two stimulus packages totaling less than $2T...that money turned the economy around, put the economy into the longest bull market in history, resulting in a record stock market and corporate profits.

Now its not to make this sound good, the 2008 crisis had real victims, millions lost jobs, never returned to the workforce and became homeless...but with the stimulus money in play those people were systematically swept under a rug and hidden from public. This was done through cooking the unemployment books (basically if you exhausted your unemployment benefits, the government no longer counts you as unemployed but removes you from the job market on the basis that you will likely not become employed again).

$6T is over 3x the 2008 stimulus packages and it will be spread to an even smaller group of people and a much more significant number of people will become unemployed (already over 20M) and they to will be swept under a rug in time and disappear from economic data when they exhaust their unemployment benefits...the rich will become richer and the government will go on to brag about the drastically falling unemployment numbers.

Re: A Long Time Until the Economic New Normal

#85

Post by londons_explore » Fri, Apr 10, 2020, 3:33 PM UTC

vikramkr wrote: post #30

londons_explore wrote: post #18

Earlier quoted context omitted.

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?

damages could be written into the insurance contract. For example, "During any pandemic period, as defined by WHO, the policyholder may define a single continuous wholly contained subperiod for a claim. A business valuation shall be made of all assets at both the start and end of this subperiod by designated auditor X. The insurance policy shall pay out the difference in valuations."

Re: A Long Time Until the Economic New Normal

#86

Post by meow1032 » Fri, Apr 10, 2020, 3:34 PM UTC

kens wrote: post #71

briandear wrote: post #56

Earlier quoted context omitted.

> The CDC has a pandemic team, they were let go. Can we please stop parroting that distortion of the facts? https://www.factcheck.org/2020/03/dems-misconstrue-trump-bud... > China, for all its failings, gets this right. Their leadership is more STEM and less lawyers and politicians. You don't know anything about China's leadership. They're all politicians. Not a decision gets made without it being vetted ideologicall…

>> The CDC has a pandemic team, they were let go. >Can we please stop parroting that distortion of the facts? I'm not a fan of fact-checker battles but Snopes says "Claim: The Trump administration fired the U.S. pandemic response team in 2018 to cut costs. True." https://www.snopes.com/fact-check/trump-fire-pandemic-team/

There's no battle, both links say pretty much the same thing.

Re: A Long Time Until the Economic New Normal

#87

Post by frosted-flakes » Fri, Apr 10, 2020, 3:34 PM UTC

beamatronic wrote: post #40

jointpdf wrote: post #25

Earlier quoted context omitted.

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

...which is a huge windfall. Has anyone on here ever actually been poor before? Genuinely curious.

I grew up in a poor family. Not poor enough that we ever went hungry, but that was partly because of the generosity of friends/family who would sometimes buy us groceries. Us kids certainly never got new clothes (there was a steady stream of hand-me-downs from the older kids and other families we knew).

Being self-employed, my dad's income was irregular and often came in $5000 chunks. You might call that a windfall, but my parents were disciplined enough with their money that it automatically went into a savings account for the next mortgage payments, or to pay off credit card debt[1]. We weren't suddenly going out to eat when a cheque came in (in fact, when I was 10 or so, I remember helping my mom enter receipts into her big accounting book, and the total restaurant expenses for the entire year was something like $30).

I don't think we were ever officially under the poverty line, but with a family of 11 in a high cost of living area, the money had to go a lot farther than normal.

[1]: Unfortunately, they weren't disciplined enough to build up and maintain an emergency fund to carry them through rough times, so they relied on a low-interest credit card for essentials way too often.

Re: A Long Time Until the Economic New Normal

#88

Post by xwdv » Fri, Apr 10, 2020, 3:39 PM UTC

tmountain wrote: post #69

xwdv wrote: post #54

IMO things aren’t that bad. Yes restaurants and some small businesses are suffering, but look, people are cooking at home more, spending time with family, being healthier. People don’t need cosmetics or new clothes or cars or gasoline, and some luxury flashy items take a hit because there’s no way to really flaunt your wealth inside your own home. People aren’t traveling as much, tourist hotspots that were getting tr…

I appreciate your perspective, but regarding things not being that bad, it depends on your vantage point. I have a few friends with established restaurants in town. As you can imagine, this is pretty dire for them. They're looking at losing everything they've built up slowly over a matter of years being completely destroyed in the matter of a few months--with ripple effects to dozens of employees that are essentially…

It sucks for your friends yes, but to be honest most restaurants fail and the only thing notable about the present situation is many of them are failing all at once.

It’s not like a restaurant failing and putting entire families out of business is some surprising event. I’m sure it happens everyday.

You have to look at the other side, when your friends restaurants fail and move out, new ones will move in with the same optimism as your friend originally had, except this time it may be better equipped to survive social distancing by adopting a “take-out first” approach.

Re: A Long Time Until the Economic New Normal

#89

Post by frockington1 » Fri, Apr 10, 2020, 3:43 PM UTC

rwmj wrote: post #17

csomar wrote: post #14

Earlier quoted context omitted.

Or the $ doesn't buy as it used to in 2016/2017.

Speaking as someone who is paid in £, I can tell you I'd much rather be paid in $, especially since the Brexit vote. You guys don't know how lucky you are.

At least the Brexit vote was relatively clean in terms of currency with them using the pound. If/when an euro-country things may be even more volatile

Re: A Long Time Until the Economic New Normal

#90

Post by samsonradu » Fri, Apr 10, 2020, 3:47 PM UTC

rietta wrote: post #77

vorpalhex wrote: post #24

Earlier quoted context omitted.

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.…

I agree. For most small businesses, going the Dave Ramsey way is best. Be debt free, build a cash cushion, and as you say grow slow and methodically with cash not cash you think you might have next month.

While it sounds doable in theory, it’s hardly doable in today‘s (well, yesterday’s) market conditions.

Low interest rates and an abundance of cheap money looking for yield distort the environment. Your debt-free, slow growth company will be wiped out by some bilion $ valued cash-burning startup.