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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

#221

Post by wait_a_minute »

WanderPanda wrote: post #213
malandrew wrote: post #203

Earlier quoted context omitted.

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

Which in my opinion is acceptable, because it's the short-term chaos that is the most likely to bubble out of control and turn into a long-term chaos. Imagine the chaos that would besiege the world if there was a risk of bank runs and people not even being able to pay for food anymore. We're only three to six missed meals away from absolute anarchy and violence in the streets.

Re: A Long Time Until the Economic New Normal

#222

Post by icedchai »

dcolkitt wrote: post #220
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…

Even after quarantine is over, it will be a slow ramp for many sectors. Small (hopefully very small) outbreaks will continue to occur, so people will be afraid. Restaurants will be less than a third full. Nobody will want to go to the movies. Crowds will be avoided.

Re: A Long Time Until the Economic New Normal

#223

Post by nitwit005 »

ska wrote: post #146
_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.

When it comes to actually building a product there is definitely face to face benefits.

However, I'd point out that many software companies have far more sales people than engineers. There has been this expectation that salespeople should fly out, and have meetings, meals, and expensive drinks with the companies they sell to. Now magically that's all vanished, but sales are still happening. The cost of some sales efforts has presumably plummeted.

Re: A Long Time Until the Economic New Normal

#224

Post by Mikeb85 »

_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,…

Businesses that require face to face contact (ie. the service sector) employ the most people of any sector in the economy. And then there's manufacturing, resource extraction, construction, etc..., which all can't be done remotely. The amount of jobs which don't require physical presence or face to face contact are a minority of the workforce.

Re: A Long Time Until the Economic New Normal

#225

Post by jshevek »

Damorian wrote: post #107
TMWNN wrote: post #100

Earlier quoted context omitted.

briandear is right and toomuchtodo is wrong. (He's even wrong in the way he was wrong.) One would think reading only the Snopes article, or the Twitter thread (!) the piece is based on, that to save money (or because the Trump administration hates science, or something) the entire "US Pandemic Response Team" agency was eliminated and everyone in a large DC office building was fired. Actually reading the contemporary…

I'm glad I'm not the only one who bothered reading these links. I can only assume earlier posters are blinded by partisanship. Anything even tangentially related to politics requires a good degree of skepticism in the face of bias that's evident throughout this entire thread.

Yes. Thank you so much for saying this. It seems like there is only a handful of people who are trying to keep the focus on the truth in the midst of this partisan battle of competing narratives.

Re: A Long Time Until the Economic New Normal

#226

Post by UncleOxidant »

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…

There was a depression in 1920/21. Of course, there were multiple factors that led to that not the least of which were lots of soldiers returning from WWI.

Also, lots of people worked from home in 1918. 40% of people lived on farms in 1900 so probably not much change from that by 1918.

Re: A Long Time Until the Economic New Normal

#227

Post by dcolkitt »

icedchai wrote: post #222
dcolkitt wrote: post #220

Earlier quoted context omitted.

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…

Even after quarantine is over, it will be a slow ramp for many sectors. Small (hopefully very small) outbreaks will continue to occur, so people will be afraid. Restaurants will be less than a third full. Nobody will want to go to the movies. Crowds will be avoided.

I doubt people alter their behavior for long. Certainly not more than 6 months after the crest is over.

The 1957 flu pandemic killed 100,000 Americans, which adjusted for population is where current models estimate Covid will land. And it had virtually zero lasting impact on culture of behavior.

Re: A Long Time Until the Economic New Normal

#228

Post by 3minus1 »

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.

Nice theory, but do you have a shred of evidence. Economists predict things all the time that don't happen; it doesn't really mean anything.

Re: A Long Time Until the Economic New Normal

#229

Post by tathougies »

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…

Yes, the Spanish flu led to one of the biggest economic booms in history: the roaring 20s

Re: A Long Time Until the Economic New Normal

#230

Post by oblio »

nitwit005 wrote: post #223
ska wrote: post #146

Earlier quoted context omitted.

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.

When it comes to actually building a product there is definitely face to face benefits. However, I'd point out that many software companies have far more sales people than engineers. There has been this expectation that salespeople should fly out, and have meetings, meals, and expensive drinks with the companies they sell to. Now magically that's all vanished, but sales are still happening. The cost of some sales eff…

The problem with your comment is that you're forgetting all sales are remote now.

Once the lockdown is over, I wouldn't bet on the company that keeps doing remote sales versus the company doing normal face to face sales.

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