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U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

bloomberg.com

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Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#821

Post by simonh »

Theodores wrote: post #722
kilroy123 wrote: post #602

Earlier quoted context omitted.

I completely agree with you, but... How about don't vote in leaders that only care about helping out their rich buddies then? The Scandinavian countries have moved to pay all payrolls to keep people paid during all this madness, instead of just bailing out large debt holders.

In the UK there is a lot of payroll being paid by central government, plus there are interest free loans for small businesses. This is very good on the surface, however, there is a large chunk of wealth going to the rentier class. The rentseekers were encouraged under successive Tory and New Labour governments with schemes such as 'buy to let'. Now they are the only truly protected sector of society. The rich get ric…

Buy to let has been heavily discourages by changes to the tax system and stamp duties in the last few years, so this is an unreasonable characterisation. The previous long-running Labour government did far less to discourage buy to let and other rent seeking activities than recent Conservative governments in the UK.

Yes rent seeking activities are a serious problem and I think there's a consensus forming on this, at least in the UK.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#822

Post by simonh »

mcphilip wrote: post #138
nimbius wrote: post #98

This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating. My job just cut benefits and hours but we're "essential." Remembe…

> This is anecdotal and it might come across as bitter and tonedeaf as someone who is not in a STEM job and cant see the bigger picture very well. Im a diesel engine tech who repairs those big trucks carrying food and shit tickets to grocery stores. the fact that ANY market is completely detached from whats actually happening to Americans is frustrating. Thanks for posting this comment. I know it sounds trite, but I’…

Very few rich people will actually get any richer. Most of them are heavily invested in stocks, which have plummeted, or owned or work for businesses which are being crushed. There are very, very few places to hide from what's going on.

One possible exception, and it's quite a small group really, may have had a lot of money in cash and bonds. They may be able to do quite well by buying or investing in businesses at relatively low prices and earn gains during the recovery. This is _not_ a bad thing. The economy desperately needs fresh investment to re-grow businesses, re-hire employees, pay salaries, rebuild supply chains. That takes a lot of capital investment.

I suppose another way would be to confiscate all their wealth and give it to the government to invest, but who do you trust to do that most efficiently and to the best economic effect. Government bureaucrats, or businesspeople with track records of investing in and growing businesses?

So on the business side now is not at all the time to bet on Socialism. We can't afford it at the best of times, let alone the worst. On the other hand, this crisis has starkly exposed the weaknesses of naked market capitalism. It's pretty obvious already that the European model of social democracy with single payer health systems and a robust social safety net has proved far better able to cope with this crisis. It's a system specifically designed to help people suffering hardships, and now it's doing exactly that on a massive scale. I think this comes out of the European experience in the two world wars. Existential crises in which all of society pulled together because we flat out had no other choice. We were all in it together. Now we're all in this together.

I suspect this will lead to similar realisations in the US. If big companies hit by disaster deserve bailing out for the common good to save jobs and economic resources, why are individuals hit by adverse circumstances any less deserving at a personal scale? If it's reasonable to help a business hit by a health crisis, why is it unreasonable to help a family? I'm no socialist, check another post on this discussion where I defend Conservatism here in the UK, but recognising that as a society we have obligations to each other isn't socialism, for me it's just pragmatism.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#823

Post by atlantique »

gbjw wrote: post #816
atlantique wrote: post #815

Earlier quoted context omitted.

Poor diets are not highly contagious.

Maybe not in a traditional sense, but certainly there are strong social pressures to eat similar things to those around you. Advertising can strongly affect your food choices. Smoking is also not contagious in the sense that it doesn’t immediately give you cancer: it takes years, often decades. Yet we’ve decided to outlaw it in many public places.

Ultimately decisions about diet are made by yourself and affect nobody else (unless maybe you're feeding dependents). Smoking is prohibited in public areas for the same reason that businesses are shuttered now; it subjects others who do not have a choice to a situation that is quite frankly dangerous.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#824

Post by oblio »

stcredzero wrote: post #654
dlkf wrote: post #639

Earlier quoted context omitted.

It's tough when your country isn't much of a democracy. A major difference between Scandinavia and the US/Canada/many others is that proportional representation plays a much greater role in the electoral system here.

It's a good thing, when a republic is constructed so that a minority still has a voice. One might perceive them as the "wrong" minority today, in the current context. In the future, they might well be the "correct" minority. (That said, I think Sweden of all places in the west, have had the best, most sane reaction to the pandemic.)

And do you think that in Sweden of all places, minorities don't have a voice?

They have more of a voice, because they don't have a two party system. If you are American, please check out some European political systems. You'll find that politics in Europe are a lot more nuanced and minorities in general are much, much better represented.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#825

Post by Tade0 »

tekknik wrote: post #813
Tade0 wrote: post #659

Earlier quoted context omitted.

It's possible if you're like my friend whose job was to drive all around Europe hauling specialised parts for construction equipment, sometimes doing 2k km in a single day. I think he did 60k km (37.5k miles) during the first year, but you couldn't tell that from the shape the car was in, since he cared for both the exterior and interior. The only thing that showed any visible signs of aging were the windshield wiper…

tbf 37.5k miles really isn’t a lot. in my area in the US it’s common for people to push 25k - 30k a year just on their commute

And that's my point - you can do 100k miles in less than four years.

Is the car "heavily used" after that? I would say that aside from the driver's seat there's probably no clear indication of that.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#826

Post by dnate »

guiomie wrote: post #346
baron_harkonnen wrote: post #257

Earlier quoted context omitted.

Tech people will be hit much harder by this than they think. The STEM world is largely in denial because ultimately SV grew because of the last major recession. That won't be happening this time. Startups are having massive layoffs right now, and each week bring companies further and further down the chain lay people off. I strongly suspect we'll see more major layoffs next week. Most big tech companies are driven by…

100% agree. The housing market in the bay area will go down even more. The last year changes in tax rules such as lower deduction for mortgage interest and municipal taxes had already weakened the market. With RSUs going down, even less people will be able to buy housing, driving the price down. I think my house lost 8% in the last year, pre-COVID19. Sucks for me as a home owner, but I really believed the housing mar…

wow, those poor bay area house owners.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#827

Post by mdszy »

jb775 wrote: post #803
mdszy wrote: post #801

Earlier quoted context omitted.

Sorry but if all you can think of when there's an incredibly contagious virus for which there are few treatments and no cure is "BUT WHAT ABOUT MEEEEEEE?????" then I know all I need to know.

You missed valachio's point entirely. Quit being so smug and try to consider things from a different perspective.

>I want to be able to run my business when there is a somewhat dangerous virus running around.

This is literally "but what about ME?!???"

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#828

Post by mdszy »

augustt wrote: post #481
mdszy wrote: post #350

Earlier quoted context omitted.

Literally killing people for the sake of "the economy" is a disgusting notion to even attempt to defend. The system is entirely broken.

We "let" people die all the time due to unhealthy choices, many of them being economically convenient. Do you have similar outrage over having a lower life expectancy than any other comparable western nation?

Do you have similar outrage when it comes to not being able to smoke in public buildings?

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#829

Post by grey-area »

watwut wrote: post #753
grey-area wrote: post #234

Earlier quoted context omitted.

Revolutions happen when the gap between public pretension and private reality becomes too large. The same could be said of stock market crashes.

Not really. They happen when whoever holds power gets weak and there is discontent simultaneously. As long as you are strong, the gap can be arbitrary large.

Many dictators have been deposed not because they were weak, but because their subjects grew tired of lies and life under their rule.

Gadaffi, Sisi, Ceaușescu, Romanovs were not weak by any objective measure, they were happy to suppress dissent and kill their subjects and still had a functioning security apparatus when deposed, ordinary citizens just refused to cooperate. If almost the entire civilian population refuses to cooperate, regimes cannot function.

Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession

#830

Post by CydeWeys »

xyzzyz wrote: post #578
SketchySeaBeast wrote: post #452

Earlier quoted context omitted.

The larger penalty would still probably be the taxes, which I assume aren't waved, and again assume there's enough in there to make it worthwhile. I know for myself, even though I've been diligently saving for my relatively short career, I don't think there is.

You are going to pay those taxes anyway when you retire. 401k is only beneficial if you expect to pay lower tax rate when you finally retire. Unless you expect the federal tax rates to go significantly down across the board, withdrawing from 401k when you have no other income is actually a great idea, or it would be without the 10% penalty. However, you typically can borrow money from your 401k, and pay no penalty, w…

And considering how early this pandemic hit in the year, if you were laid off in March you didn't even make 25% of your salary yet. That means your taxes are likely to be quite low for the year, so this is actually a good time to withdraw money from a 401k and take the tax hit.

If I ever have a full year gap between jobs (like some kind of a long sabbatical), I'm going to be doing a lot of Traditional to Roth converting, for exactly this reason.

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