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

Re: A Long Time Until the Economic New Normal

#211

Post by malandrew » Fri, Apr 10, 2020, 8:53 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…

> "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"

Probably because there was no choice but to barrel forward towards herd immunity and deal with the suffering and loss of life.

In 2020, we're delaying and dragging out the tragedy at the cost to the economy.

On top of that, the economy was far more distributed and local. With globalization, things are much more interconnected and interdependent.

Restarting local commerce is much much easier.

Re: A Long Time Until the Economic New Normal

#212

Post by kazen44 » Fri, Apr 10, 2020, 8:53 PM UTC

twelve40 wrote: post #68

frosted-flakes wrote: post #55

Earlier quoted context omitted.

It also occurred during World War I. That changes the situation somewhat.

Changes how? I'd say being in WWI was much much worse, no? And yet you still don't hear about a great 1919 depression.

depression of what?

The end of world war 1 had an enourmous impact on continental europe, with many nations simply ceasing to exist at the end of the war.

Germany for instance, had a state of near constant poltical and economic anarchy during the weimar republic. And the austrian-hungarian empire ceased to exist.

Many people seem to forget that world war 1 was suchs a massive shift in terms of the geopolitical landscape that many nations simply had no functioning economy or proper goverment to speak off.

Re: A Long Time Until the Economic New Normal

#213

Post by WanderPanda » Fri, Apr 10, 2020, 8:54 PM UTC

malandrew wrote: post #203

ttul wrote: post #176

Earlier quoted context omitted.

Thank you for pointing this out. Secondly, just what the hell is the central bank supposed to do? Had they not intervened hard in debt markets, we would have seen bank runs and mass chaos in financial markets, making things we take for granted (such as paying for stuff at the grocery store) totally fail over night. I am wayyyy less worried about the magnitude of the Fed’s intervention than I am about what might have…

Lately, I've been amazed at the number of people that have been arguing in favor of allowing "otherwise" to happen.

Everyone is afraid of „otherwise“ without anyone having witnessed it before. My guess is, we are trading short / mid-term stability for decreased long-term efficiency / productivity

Re: A Long Time Until the Economic New Normal

#214

Post by numakerg » Fri, Apr 10, 2020, 8:57 PM UTC

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.

I disagree. It's more of a drought where the smaller trees with low reserves die out, and in the recovery the large trees grow even larger and take up the remaining canopy space.

The economic consequences of the pandemic will make things fundamentally worse for the average person. The wealthiest entities will accumulate even more wealth, because they have the resources to survive, to petition the government for assistance over smaller players, and to buy out the leftover pieces of those who couldn't survive. In the end, the majority of the bailout will go to the rich, because they are the ones with the bargaining power. The result is lower competition, which is worse for almost everybody.

The only upside could be a shifting technological landscape. Work-from-home and physical distancing could create demand for new solutions which would be capitalized by smaller, agile companies, creating new competition. That's what I'm hoping for anyway.

EDIT: I don't know if that's how a drought actually works. The demand for new tech is already here, it's a question of whether it will stay long-term.

Re: A Long Time Until the Economic New Normal

#215

Post by ckcheng » Fri, Apr 10, 2020, 8:57 PM UTC

alexilliamson wrote: post #170

xyzzyz wrote: post #144

Earlier quoted context omitted.

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…

Sure I agree that the typically reported unemployment measure is best for measuring how easily people who want jobs can obtain them. However, so often this is touted not only as an indicator of the overall economy, but even the well-being of society. The categories of people you mention that shouldn't be counted... all of those people live in and have an effect on society. If we're worried about the economy, it seems…

> If we're worried about the economy, it seems like we would want to know how much of our population (not just job seekers) are working, and how many people depend on the system without employment.

Is joblessness specific enough to answer how many people depend on the system without employment? I thought it includes, among other people, people who aren't job seeking because they are happily supported by their spouse, or people who are happily living off of savings, and not any other system, for example.

Re: A Long Time Until the Economic New Normal

#216

Post by dang » Fri, Apr 10, 2020, 9:03 PM UTC

david_w wrote: post #125

david_w wrote: post #108

Earlier quoted context omitted.

Right but the culpability is 99.9999% with the virus. I don't blame Obama I don't blame Trump. I don't blame Congress. I don't blame Italy. I blame a virus. Our response to it, so far as it deviated from a hypothetical perfect 10, is not relevant. It's a virus.

Just for the record, every single time I make a post even mildly criticizing China in any thread, it gets downvoted almost immediately.

Most people who do that are posting nationalistic flamebait whether they mean to or not, and the majority of readers here do not want flamewars on the site.

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

I'm afraid that your post upthread (https://news.ycombinator.com/item?id=22834681) is an example. We don't need that sort of low-information, high-indignation arguing on inflammatory topics.

Re: A Long Time Until the Economic New Normal

#217

Post by dang » Fri, Apr 10, 2020, 9:07 PM UTC

Invictus0 wrote: post #61

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 hope the pandemic lasts long enough to make some of these things permanent. PEOPLE ARE DYING. This is A DISASTER. Have some fucking compassion, good grief.

Please don't.

https://news.ycombinator.com/newsguidelines.html

Re: A Long Time Until the Economic New Normal

#218

Post by dang » Fri, Apr 10, 2020, 9:07 PM UTC

arbitrary_name wrote: post #128

Invictus0 wrote: post #61

Earlier quoted context omitted.

> I hope the pandemic lasts long enough to make some of these things permanent. PEOPLE ARE DYING. This is A DISASTER. Have some fucking compassion, good grief.

People die every day. Malnutrition has killed more people this year than covid. Where's your perpetual handwringing for those in impoverished far off countries? Or are you just emotional because it's YOUR people dying right now? Keep your myopic melodrama to yourself.

Please don't.

https://news.ycombinator.com/newsguidelines.html

Re: A Long Time Until the Economic New Normal

#219

Post by dang » Fri, Apr 10, 2020, 9:07 PM UTC

24gttghh wrote: post #184

arbitrary_name wrote: post #128

Earlier quoted context omitted.

People die every day. Malnutrition has killed more people this year than covid. Where's your perpetual handwringing for those in impoverished far off countries? Or are you just emotional because it's YOUR people dying right now? Keep your myopic melodrama to yourself.

This is the most out of touch, bizzare, sad, and disgusting comment I have read yet regarding this pandemic. You should be ashamed of yourself.

Please don't.

https://news.ycombinator.com/newsguidelines.html

Re: A Long Time Until the Economic New Normal

#220

Post by dcolkitt » Fri, Apr 10, 2020, 9:11 PM UTC

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'd caution away from comparing the current recession to 2008. There the problem was truly unsustainable economic activity in the runup expansionary phase.

Consumer spending was powered by sub-prime mortgages that let people use hyperbolic housing prices as an ATM. Investment was juiced by an unsustainable expansion in residential construction. The financial markets created a flood of illusory wealth based off credit models that were never tested in production. Even after the initial financial crisis subsided, there was no way to turn the clock back to 2007. You couldn't just go back to AAA-rated CDOs built on NINJA loans to let people speculate on McMansions.

This crisis is very different. Quarantine may last a long time, but eventually it will be over. There's no ostensible reason we can't go back to status quo ante bellum. There was nothing grossly unsustainable about the way the economy was operating in 2019. And once the virus threat is gone, we can just go back to the same economic patterns we were engaged in before the crisis.