IMHO, the revolution is the quick fed and congressional response in terms of stimulus. The mindset allowing it was a very long time coming, going back to lessons learned from the great depression, the dropping of the gold standard, observations of Japan's lost decade, but more recently the observation that all of the quantitative easing from the 2008 crash did not lead to horrible inflation.
The Great Pause Was an Economic Revolution
81–90 of 125 posts
Re: The Great Pause Was an Economic Revolution
#82Earlier quoted context omitted.
> lost ability to rationally think about small additional chances of dying What price would you put on a 5% chance of death plus higher chance of permanent chronic health problems for each of your friends and relatives over age 70? (That may even be an underestimate of the Covid IFR for elderly people.) Even for healthy young people, we are talking about a 1/1000 chance of death and rather higher chance of long-term…
> If this virus ends up infecting 60% of the population, as it will if people carry on their pre-pandemic lives, we’ll end up with something on the order of 2–4 million deaths in the USA, and the aggregate healthcare costs over the next few decades will be an outrageously large burden. On the economics front, USA just printed out $5 trillion of stimulus to fight the slowdown caused by lockdowns. I hear this is just a…
> how do you plan to avoid it?
Look around the world. Many other countries rich and poor are doing a good job containing the virus, while the US is incompetently flailing. The scale of social/industrial changes necessary to stall a pandemic for long enough to get effective treatments and ideally a vaccine pales in comparison to the changes required to e.g. fight WWII.
The US is one of the richest and most industrially capable countries on earth, and yet it is barely acting at all, and many official actions (canceling research projects, defunding the WHO, restricting experts at the CDC, the president advising people to just drink bleach, public officials suggesting that the pandemic is a hoax, manipulation of aggregated statistics, ...) are actively harmful.
Success requires a large-scale coordinated national response including but not limited to: clear and consistent factual messaging to the public, free widely available tests with quick turnaround time, industrial coordination to produce and distribute necessary supplies (e.g. the state should be sending reusable face masks to every resident), quick ramp-up in necessary human labor like contact tracing and regular check-ins with people isolating at home, enforced quarantines and testing for travelers, temporary limits on travel to/from heavily affected areas, direct monetary transfers to people temporarily unable to work (possibly extending for months), state-supported pauses in expenses like rent and mortgage payments, ...
The countries which quickly and effectively control the pandemic are those which will ultimately see the least harmful medium-term economic consequences, while those which dither around will both cause massive suffering to their own citizens, and also crater their economies hardest.
> Are we going to force folks wear masks for a year? Outlaw all in person schools and university classes? All contact sports? Honest question.
I would say yes, yes, and yes. Wearing masks while visiting indoor public spaces like shops and public transit is not a significant burden. Packing audiences into sporting arenas during a pandemic is absurdly irresponsible.
Re: The Great Pause Was an Economic Revolution
#83Earlier quoted context omitted.
I agree with you about rational weight of risks. However there is a possibly implicit meaning that you consider the current efforts of preventing transmission of the virus to be overkill. Possibly in other parts of the world a little more measure and give might have been the best response in hindsight, but knowing what we did know then, rather than now, I believe most places* (in the 'first' world) made the correct a…
Overall... The vast majority of the states have done really well. The us average is thrown off by a few states -- not even the largest states. I'm not sure where people get this idea the us has done poorly. New York and surrounds did terribly mainly due to not following issued guidance. But even with them pulling up the average, the us has done fine. If new York had closed down when told and then followed federal gui…
https://www.washingtonpost.com/graphics/2020/world/mapping-s... you’re gonna have to nav down and play with some toggles but I’ve enjoyed using their data. Also you’re gonna need to tune your radar towards Texas, Florida, Arizona and others, the New York line is only going to have a couple more weeks of legs.
Re: The Great Pause Was an Economic Revolution
#84I feel like this article is simply premature. I think its headline is likely accurate, but all it can really do is cite the events we have been and are living through, not give any concrete suggestion of the consequences. I'm eager to see what kind of interesting theses economists will devise from studying this time period, but I don't think the article offers any in this moment.
Re: The Great Pause Was an Economic Revolution
#85Earlier quoted context omitted.
I think you're misreading the comment - the person you're responding to is claiming that the engineering of the economy started way more than a couple of months ago.
I read it right. It's a conspiracy theory about capitalism deployed as proof that "engineering" of the economy works, despite the obvious fact that the past few months of "engineering" have destroyed businesses and ruined many lives. The "self designed, self regulated free market economy" which the OP insinuated is a myth or a lie is actually the only reason the economy still functions. Businesses didn't shift to rem…
I’m not talking about conspiracy theories, just mundane things like like urban planning, real estate and industry lobbying, choices about policing and who makes them, I mean just check how many members of your local city council were funded by the chamber of commerce. There’s no conspiracy, it’s all done right out in the open. Why do we drive cars instead of taking mass transit everywhere? Because the big auto companies lobbied to make it that way. Why do real estate prices keep on rising? Because the Fannie Mae and Freddie Mac interfere with loan pricing. You don’t think all this stuff just happens, do you? Most of the laws governing the financial sector were directly written by lobbyists working in that sector. Most of the new technology, the basic research that happens, is funded by the federal government. And then handed off to corporations in the private sector who happen to fund political campaigns. It’s not some secretive cabal or some silly thing like that. It’s just how business is done. The whole economy is like that. Somebody made each choice. It was somebody who had a stake in the outcome, somebody with money.
Re: The Great Pause Was an Economic Revolution
#86Earlier quoted context omitted.
I think you're misreading the comment - the person you're responding to is claiming that the engineering of the economy started way more than a couple of months ago.
I read it right. It's a conspiracy theory about capitalism deployed as proof that "engineering" of the economy works, despite the obvious fact that the past few months of "engineering" have destroyed businesses and ruined many lives. The "self designed, self regulated free market economy" which the OP insinuated is a myth or a lie is actually the only reason the economy still functions. Businesses didn't shift to rem…
The comment would make as much sense if it were made in December 2019 - it has nothing to do with the last few months.
The comment was also about engineering, not micromanaging. When a civil engineer designs a bridge to resist vibrations and avoid resonance, the civil engineer is not personally damping the bridge every time a car drives over. They've simply designed the bridge so it does what's wanted. There's no government central planner telling business what to do, but there are absolutely a number of government planners setting up the conditions under which businesses operate.
Re: The Great Pause Was an Economic Revolution
#87Earlier quoted context omitted.
> If this virus ends up infecting 60% of the population, as it will if people carry on their pre-pandemic lives, we’ll end up with something on the order of 2–4 million deaths in the USA, and the aggregate healthcare costs over the next few decades will be an outrageously large burden. On the economics front, USA just printed out $5 trillion of stimulus to fight the slowdown caused by lockdowns. I hear this is just a…
> how do you plan to avoid it? Look around the world. Many other countries rich and poor are doing a good job containing the virus, while the US is incompetently flailing. The scale of social/industrial changes necessary to stall a pandemic for long enough to get effective treatments and ideally a vaccine pales in comparison to the changes required to e.g. fight WWII. The US is one of the richest and most industriall…
Can you give examples? I see absolutely no indications that many countries are doing a good job containing the virus. Many are delaying its spread, but they are nowhere near containment; in fact when those countries that supposedly got the COVID under control lift restrictions the disease comes back. I do not see how containment is possible unless you institute a total lockdown and build perimeter around carriers, including those with no symptoms.
>> Are we going to force folks wear masks for a year? Outlaw all in person schools and university classes? All contact sports? Honest question.
> I would say yes, yes, and yes.
I respect your opinion, but I would say "no, hell no, and hell no". Sooner rather than later your opinion and my opinion will have to be reconciled, perhaps not to a solution that makes everyone happy, but at least to a policy that is grudgingly acceptable to both camps.
You can make policy by force, which is what we have now, but such enforcement does not work long-term. You need wide buy-in, without which people quickly start breaking rules, en masse. Which is what we are already seeing in the US; just look at cars at open beaches with license plates from states that supposedly keep citizenry in quarantines.
Re: The Great Pause Was an Economic Revolution
#88The article cites the rapid changes to supply chains, particularly Walmart's, as a reason the economy kept going. What else is that, other than the mechanisms of a free market at work? The government didn't tell them how to run their supply chains. Nor did the government tell companies how to shift their workforces to remote work, they just did it, and they did it pretty well, even though some of them had never tried…
I don't think this article is primarily about free markets vs. government planning. It's about the ability of humans - any humans - to make conscious collective decisions about how the economy works in ways motivated by things other than finding profit, versus treating the economy as a mostly-uncontrollable force optimizing for what it optimizes for (the "invisible hand").
I think that's what the author means by "the spontaneous interplay of individual economic units" - that if a potential profit advantage exists, some rational actor will spring up to take advantage of it. The idea that this sort of thing happens reliably and consistently is behind theories like the efficient market hypothesis, for instance. There's little profit advantage in being the first company to shift to remote work or in proactively closing your coffee shop while there may still be a trickle of customers, but people did it. (For that matter, there's little profit advantage in being a videoconferencing service that has its average customer use the service occasionally suddenly use the service full-time for all its employees, and yet multiple such products of the market not only embraced it but built up their free offerings, too.)
If your claim is that the free market isn't constrained to being motivated by profit and can decide, even (or especially) if not ordered by government, to accomplish some other goal - I think you have no real disagreement with the author. What the author is claiming is novel is that people know that this is true, now.
Re: The Great Pause Was an Economic Revolution
#89Earlier quoted context omitted.
I read it right. It's a conspiracy theory about capitalism deployed as proof that "engineering" of the economy works, despite the obvious fact that the past few months of "engineering" have destroyed businesses and ruined many lives. The "self designed, self regulated free market economy" which the OP insinuated is a myth or a lie is actually the only reason the economy still functions. Businesses didn't shift to rem…
I’m not talking about conspiracy theories, just mundane things like like urban planning, real estate and industry lobbying, choices about policing and who makes them, I mean just check how many members of your local city council were funded by the chamber of commerce. There’s no conspiracy, it’s all done right out in the open. Why do we drive cars instead of taking mass transit everywhere? Because the big auto compan…
By the way, I really liked this article that was posted here couple weeks ago about how the USDA has been leading a battle against an entire species of worms - and has quite successfully driven them to a defensive line they maintain in Panama - for the sake of the cattle industry: https://www.theatlantic.com/science/archive/2020/05/flesh-ea...
Nothing hidden, but unquestionably central planning on the part of multiple governments.
Re: The Great Pause Was an Economic Revolution
#90Earlier quoted context omitted.
This data seems to stop in 2003, before Great Recession and the massive increase in housing costs in urban centers. Also doesn’t seem to take into account the dramatic increases in healthcare costs in the intervening years. I’m not sure how useful it is as a measure?
Do you honestly believe that modern households, even after the Great Recession, spend more on food than housing? Come up with better data if you don't like mine.
I don't think anyone's claiming anything about the relative spending on food and housing, nor that it has any bearing on the matter under discussion - I think the claim is that total spending on "essential needs" has remained fairly high and has not become "much better." According to the article you linked, while food, housing, and clothing are now only about 50% of your budget instead of 80%, there's also about 20% on transportation costs, which didn't show up in the 1900 figure. I think those also count as "essential needs." Things are better than in the early 1900s, but not by very much.