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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

#151

Post by seanmcdirmid »

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?

There are 6 official measures of unemployment in the USA (see https://www.bls.gov/news.release/empsit.t15.htm), and most people get confused when presented the distinctions all of them. In general, the number that is reported on the most is U3, but U6 includes a lot of people stuck in part time employment when they really want full time.

Re: A Long Time Until the Economic New Normal

#152

Post by TrainedMonkey »

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…

I've been bombarded by a popular "stimulus for the rich" from everywhere. Please describe what would happen if stimulus did not pass and there was no assistance from the government.

Re: A Long Time Until the Economic New Normal

#153

Post by seanmcdirmid »

blast wrote: post #115
nabnob wrote: post #92

I think it's incorrect to blame the current depression entirely on Covid-19. Economists have been predicting a depression by the end of 2020 or 2021 for a while - on HN I remember lots of discussions around the inverted yield curve. There's been a tech bubble for the past couple of years, and covid was just a catalyst for this bubble popping.

Even if there was a tech bubble, what's the evidence of that bubble having affected the entire economy to that degree? This sounds exaggerated.

There are lots of bubbles going on all at once. The tech bubble is one thing, but the bubbles in China being popped right now are much more significant, on the scale of the great Japan bust that set the world into recession in the late 1980s. It isn't weird that many bubbles would pop during the same incident of stress.

Re: A Long Time Until the Economic New Normal

#155

Post by _curious_ »

taneq wrote: post #32
dlp211 wrote: post #29

Earlier quoted context omitted.

You are likely not the average American consumer.

From everything I've read, I'm amazed the average American has enough spare money to consume non-essentials.

Average is a very loose concept, but many Americans who appear to have steady discretionary income for 'non-essentials' are constantly walking the thin line of living within their means/being broke at best, but worse, in debt.

Re: A Long Time Until the Economic New Normal

#156

Post by empiricus »

Regarding the economy, we are basically in the woods. It can go either way, the economy might recover or it may not, we have limited understanding and control. Same regarding the pandemic: we might find a vaccine or another solution, or the virus might mutate into something more deadlier. Again, limited control. We should be more scared about this. Despite our degree of civilization development, we are still clowns pretending we understand and control what happens around us.

Re: A Long Time Until the Economic New Normal

#157

Post by hilbertseries »

Jagat wrote: post #145
twelve40 wrote: post #43

Earlier quoted context omitted.

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 fl…

During the Spanish flu pandemic, entire cities and towns would get sick and everything would stop. There were also shelter in place orders given during this time. 1918 wasn’t the dark ages, we had telephones and radios. People knew what was happening.

Re: A Long Time Until the Economic New Normal

#158

Post by _curious_ »

briandear wrote: post #83
rwmj wrote: post #50

Earlier quoted context omitted.

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.

Exactly. It's like foreign concept to some people to consider the possibility of living within their means and making associated sacrifices.

Re: A Long Time Until the Economic New Normal

#159

Post by rietta »

PaulDavisThe1st wrote: post #147
rietta wrote: post #72

Earlier quoted context omitted.

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.

Payroll is a lot easier when the owner/executive can skip income for one or more months. It's easier if the business has the cash that in good times allows them to pay payroll even when collections are weak. In my own agency/consultancy business, payroll is constantly on my mind and the source of most of my anxiety as I double down and do the technical work that is in front of me along with my team. It takes YEARS to build cash savings when the margins on top of labor are so thin.

Re: A Long Time Until the Economic New Normal

#160

Post by jimmaswell »

joncrane wrote: post #111
dustingetz wrote: post #22

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?

I am tempted to think of crises like these to be the economic equivalent of a forest fire. It makes way for new vegetation to grow and is part of the normal cycle of many forests.

Like the Black Plague increasing wages and distributing land rights.
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