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A Long Time Until the Economic New Normal

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Re: A Long Time Until the Economic New Normal

#141

Post by orangecat »

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…

You are and always were free to be a hermit yourself. Rooting for this medical, economic, and psychological catastrophe to continue so that people are forced to adopt your preferred lifestyle is bordering on psychotic.

Re: A Long Time Until the Economic New Normal

#142

Post by PaulDavisThe1st »

garraeth wrote: post #52
rwmj wrote: post #50

Earlier quoted context omitted.

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

I think the op is suggesting people will consider this once they are again financially stable (assuming they get to that point).

Not sure what that even means. Many studies over an extended period of time show that a majority of US households cannot deal with a US$400 emergency without taking on more debt.

Re: A Long Time Until the Economic New Normal

#143

Post by PaulDavisThe1st »

david_w wrote: post #104
AriaMinaei wrote: post #79

Earlier quoted context omitted.

Exactly. This is the furthest thing from a black swan. A global pandemic was always a matter of when, not if (still is). That, by definition, is not a black swan. Plus, we in EU/NA had plenty of notice since January to prepare, and we chose to bury our head in the sand instead. Prominent people call this a black swan just to deflect responsibility, and perhaps to get a bit of bailout money on the side.

But ArialMinaei there's not that much more they could have done. It still would have had 20x the mortality rate of the usual flu strain and it still would have had an RO of 3 or 4. Once something that fits those parameters is loosed on the world, the rest is a fait accompli- we're going into social distancing, lockdown, whatever it's being called. Yes respirators and masks, I know, but the previous administration had…

c.f. South Korea. c.f. Germany c.f. Canada

even ... c.f. California.

These are all jurisdictions that took early, effective, widespread action that have resulted in dramatically lower rates of cases and deaths.

Re: A Long Time Until the Economic New Normal

#144

Post by xyzzyz »

alexilliamson wrote: post #130
throwaway_USD wrote: post #84

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 t…

It's amazing how the unemployment rate gets treated as gospel in the media. I never see the actual jobless rate reported anywhere. Why is that? The incentive for politicians to prop themselves up with the unemployment rate is clear. But why does the media never push back? Does "jobless" data - that is ACTUAL unemployment- not exist?

Of course the data exists. See eg. https://fred.stlouisfed.org/series/LREM25TTUSM156S

The issue people are talking about unemployment rate and not the joblessness rate is that people care about ability to get a job if you want one. The joblessness rate includes people who are looking for job but can’t get any, but also people who are supported by their spouses, retirees, and people living on government benefits who are not looking for job, because they are disabled, too busy with childcare, or care for other people needing it, or ultimately too lazy and having too little self-respect to stop living on charity of others.

This wide aggregation makes it very difficult to understand what actually causes changes in it: are more people jobless because of expansion of disability benefits? Or maybe there was a surge of people retiring early? You need to look at other indicators to understand it. For example, good amount of growth of employment rate in recent years is a result of many people, who previously drew disability benefits to compensate them for their inability to work, actually going to work, once the work became better option than government check.

For this reason, unemployment rate is a better metric to look at, because it tells you something more useful and has better signal to noise ratio.

Re: A Long Time Until the Economic New Normal

#145

Post by Jagat »

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…

Spanish flu was very closely intertwined with the war, because of which people were kept in the dark almost everywhere. Lack of reporting translates to lack of awareness of the pandemic which translates to people working and shopping fearlessly.

The difference now is that people know there's a pandemic, and many would be averse to go out working, or shopping even though the scale is much lower than that of Spanish flu.

Random tidbit:. It's named Spanish flu because that's one of the few places where it was reported, because it wasn't involved in ww1 and had no reason to shut down the press. Everyone thought the flu epidemic was in Spain.

Re: A Long Time Until the Economic New Normal

#146

Post by ska »

_curious_ wrote: post #129

It's a succinct and plausible set of positions held by the author, but I'm not sure this one holds up: "The disruptions in face-to-face work will be a drag on economic efficiency, leading to slower growth in revenues, lower profit margins, and reduced cash flow." Maybe I've been doing business remote/virtual for so long already that I see actual face-to-face as the economic inefficiency more often than not. Earlier,…

I suspect that we here on HN may suffer from selection bias, in that many of us do work that is most amenable to moving to remote.

There is also an issue of transition, where there plausibly is quite an efficiency lag (months, at least) before people become get really set up, even assuming they are able to be as (or more) efficient.

Re: A Long Time Until the Economic New Normal

#147

Post by PaulDavisThe1st »

rietta wrote: post #72
bwb wrote: post #12

Earlier quoted context omitted.

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…

For most small businesses, disaster planning is going the full Dave Ramsey. Be debt free in your personal life. Have a 6 month emergency fund. Don't hire in your business until it hurts and is impossible without the additional help. Build up 3-6 months of cash cushion in the business. For most businesses, this take a decade or more of delaying self gratification but the end result is stability. You're much better off…

You're not describing a company with payroll as a (or the) major expense.

Re: A Long Time Until the Economic New Normal

#148

Post by amanaplanacanal »

alexilliamson wrote: post #130
throwaway_USD wrote: post #84

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 t…

It's amazing how the unemployment rate gets treated as gospel in the media. I never see the actual jobless rate reported anywhere. Why is that? The incentive for politicians to prop themselves up with the unemployment rate is clear. But why does the media never push back? Does "jobless" data - that is ACTUAL unemployment- not exist?

I think the big problem is who do you count? Probably not children under 18, or the elderly (starting at what age?), and what about stay at home parents?

Or do you survey people and ask them if they are not worrying, would they rather be working?

And how do you count people in the gig economy? Or folks who used to have professional jobs but are now making do with a service job because they can't find something like what they had before?

Counting unemployment is not straightforward.

Re: A Long Time Until the Economic New Normal

#149

Post by makomk »

Invictus0 wrote: post #91
briandear wrote: post #75

Earlier quoted context omitted.

> could have taken action as early as January At the exact same time China and the WHO were lying that this wasn't person-to-person transmissible? December 30: Dr. Li Wenliang sent a message to a group of other doctors warning them about a possible outbreak of an illness that resembled severe acute respiratory syndrome (SARS), urging them to take protective measures against infection. December 31: The Wuhan Municipal…

The US government doesn't rely on Chinese state news. US Intelligence independently tracked the virus and briefed the President on it on January 3rd [0]. It's plausible to assume that there was not even a single case of coronavirus in the United States at that time: and yet the administration waited until the 31st of January to suspend travel from China. Compare this to the previous administration's work on Ebola [1]…

That CNN article claims that US intelligence agencies somehow knew about the outbreak before, as far as we know, even the actual doctors on the ground in Wuhan did. All of the known timelines point to doctors there spotting the first cases in December and becoming increasingly alarmed about it at the month wore on; the headline claim in that article is that the US knew about it in November. Small wonder that the intelligence agency in question issued a rare public, on-the-record denial.

Re: A Long Time Until the Economic New Normal

#150

Post by ska »

xyzzyz wrote: post #144
alexilliamson wrote: post #130

Earlier quoted context omitted.

It's amazing how the unemployment rate gets treated as gospel in the media. I never see the actual jobless rate reported anywhere. Why is that? The incentive for politicians to prop themselves up with the unemployment rate is clear. But why does the media never push back? Does "jobless" data - that is ACTUAL unemployment- not exist?

Of course the data exists. See eg. https://fred.stlouisfed.org/series/LREM25TTUSM156S The issue people are talking about unemployment rate and not the joblessness rate is that people care about ability to get a job if you want one. The joblessness rate includes people who are looking for job but can’t get any, but also people who are supported by their spouses, retirees, and people living on government benefits who a…

> "For example, good amount of growth of employment rate in recent years is a result of many people, who previously drew disability benefits to compensate them for their inability to work, actually going to work, once the work became better option than government check."

I've heard this before but have not seen good data on it, do you have cites?

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