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We'll be stuck in this recession for years, economists say

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Re: We'll be stuck in this recession for years, economists say

#111

Post by tsimionescu »

Mediterraneo10 wrote: post #96
icedchai wrote: post #46

Earlier quoted context omitted.

They're pointing out the obvious. Do you think tons of people are going to start dining out again? Going to gyms? Going to the movies? Large parts of the economy will be soft for years. Much of it will never come back due to semi-permanent shifts in behavior.

> Do you think tons of people are going to start dining out again? Going to gyms? Going to the movies? When the first lockdowns ended in Europe, people started to do just that. Restaurants in many countries are like normal, gyms that I walk past on the street look about as full as they have ever been. I have spent two months of this summer traveling around, and I found some tourist destinations crowded with people wh…

Anecdotal, but in my area (Eastern Europe) restaurants are still half empty, even after accounting for the reduced number of tables to allow for social distancing and after accounting for the indoor areas being closed. So at best, they are probably doing a quarter (probably less for most) of the business they were doing before. This is in the largest city in my country.

Gyms are also almost empty. Tourism is surprisingly less affected, and I would imagine that restaurants in tourist places are much more full. But outside of those, it is definitely NOT business as usual.

Re: We'll be stuck in this recession for years, economists say

#112

Post by leftyted »

TheCowboy wrote: post #92

The grandstanding against economists is disappointing. Let's say you were driving at night with someone in the country, and because they either knew the road or could see farther ahead they said, "There's a boulder in a road ahead, we're likely going to hit it if you don't slow down and turn to avoid it." And you do slow down and it allows you to turn to avoid a crash. How do you respond? Mock them for always being w…

All economists can do is project current trends into the future.

Economists do not have -- to use your analogy -- a good theory for predicting when there will be a rock in the road. When economists act like they have such a theory is when people start rolling their eyes.

Re: We'll be stuck in this recession for years, economists say

#113

Post by eloff »

save_ferris wrote: post #104
sfblah wrote: post #97

Earlier quoted context omitted.

This is a very reasonable comment. Social sciences are frustratingly imprecise. But, understanding the history of various scenarios is useful. And, it can result in useful policy changes which avoid the worst, as you mentioned.

The problem I have with economics after reading Debt: The 5000 years by David Graeber[0] (solid read, btw) is that the field was founded on some fundamentally flawed assumptions about its own history. The biggest one being that there's no evidence that a barter economy preceded a cash economy. We've all been taught that this was the case when there's no evidence it was true and there are a lot of unexplained problems…

> In our lifetimes, economists largely balked at the idea that the housing market could collapse, and then boom, 2008 happens.

I don't buy that without citations. Everyone knows housing markets are like most other markets and go both up and down in cycles. Like most other markets, the bigger the boom, the bigger the bust that follows.

To say that a majority of economists believed otherwise seems like pure hyperbole to me.

Re: We'll be stuck in this recession for years, economists say

#114

Post by marcosdumay »

TheCowboy wrote: post #92

The grandstanding against economists is disappointing. Let's say you were driving at night with someone in the country, and because they either knew the road or could see farther ahead they said, "There's a boulder in a road ahead, we're likely going to hit it if you don't slow down and turn to avoid it." And you do slow down and it allows you to turn to avoid a crash. How do you respond? Mock them for always being w…

Well, they really don't have much onus of evidence this time, but...

How often do governments follow economists predictions? Govs mostly react to things after they happen, much more so in monetary matters. When they do follow predictions, it's some stupid, politically based one, not an economics consensus.

Besides, we trust that guy on your scenario because he has a verifiable model of how accidents happen. For some reason, the people that make macroeconomics theories really dislike verifiable stuff, with very few exceptions.

Re: We'll be stuck in this recession for years, economists say

#115

Post by danhak »

maerF0x0 wrote: post #102
coliveira wrote: post #91

Earlier quoted context omitted.

Exactly. The Fed has pumped trillions of dollars in an economy that is stuck, nothing new is being done except for tech. No wonder this money has to flow into tech stocks, and I tell you that it won't stop until something changes in the economic scenario, or the Fed for some reason decides to stop its super-easy-money policy.

I'd love to see a multi-currency valuation of the S&P 500 over the next few years. Part of the issue of saying the Market is "up" is that we keep changing the size of the unit. Is the market worth more now in Yen, Indian Rupees etc? Or are people just willing to part with more USD (that asset specifically) for the underlying asset (the stock)?

> Is the market worth more now in Yen, Indian Rupees etc? Or are people just willing to part with more USD (that asset specifically) for the underlying asset (the stock)?

Those are...pretty easy questions to answer. The dollar is down about 10% since its March high compared to a basket of other major currencies: https://www.marketwatch.com/investing/index/dxy

Re: We'll be stuck in this recession for years, economists say

#116

Post by Mediterraneo10 »

icedchai wrote: post #105
Mediterraneo10 wrote: post #96

Earlier quoted context omitted.

> Do you think tons of people are going to start dining out again? Going to gyms? Going to the movies? When the first lockdowns ended in Europe, people started to do just that. Restaurants in many countries are like normal, gyms that I walk past on the street look about as full as they have ever been. I have spent two months of this summer traveling around, and I found some tourist destinations crowded with people wh…

Maybe in Europe that is reasonable, where leaders were responsible and actually did their jobs. Around here (US), some people still even refuse to wear masks. I saw a guy in line in a store just the other day, totally ignoring the signs. There is an executive order in this state requiring it. Things will return to normal, absolutely. I just think it won't happen in 2021.

> Around here (US), some people still even refuse to wear masks.

A number of European countries do not mandate masks at all, or the mandate is de facto only enforced in the largest cities and not in smaller towns. In many places where masks are a mere recommendation, only some people wear them and other people don’t. Observance of the "safety distance" in queues can be very lax indeed, and among the supermarket aisles people move around each other as closely as they ever have.

I am always amazed at people from the USA speaking of Europe as if everyone on this continent is deeply committed to what these Americans consider the proper public-health etiquette, but that just isn’t the case.

Re: We'll be stuck in this recession for years, economists say

#117

Post by rch »

dwheeler wrote: post #78
nordsieck wrote: post #32

Earlier quoted context omitted.

> When it's a survey of many economists I tend to put stock in what comes out. In this case if 80% say there is a 25% chance of a second dip, thats a much more informed opinion than I could ever have on the subject. Who do you think has a higher chance of being right: * macroeconomists when predicting the future of the economy * fund managers when predicting the future of stocks Just because people are smart or know…

> Economists are as effective as astrologists at predicting the future. That's unfair to astrologists, economists are not going to be that good. :-) To be fair, the better economists work by creating models based on reality. But we don't have a rich dataset about modern economies responding to pandemics. It's not that they are stupid, it's that economies are difficult to predict in general, and we don't have the data…

I don't think the term "economists" refers to an easily generalizable group. In my experience there is more world-view variation among economists than one might expect looking at the differences between bayesians vs. frequentists, etc. Some economists don't embrace modeling as a means of arriving at policy recommendations at all, for instance. Others do of course, but influence doesn't seem as tied to quantitative assessments as other fields.

Re: We'll be stuck in this recession for years, economists say

#118

Post by tsimionescu »

joshuaheard wrote: post #70

We aren't "stuck" in a recession. It is entirely man-made. In the past, a recession was significant because it was a market indicator. Now, however, this recession is artificial, so it does not indicate any market defects. I believe we will have a V-shaped recovery and we will get back to normal soon. In a market-based recession, the fear is how to get back to normal. In this artificial recession, there is no fear, w…

If we get rid of all of the lockdowns, and force people to act as if everything is normal (they won't) how will we handle the millions of people dying?

Re: We'll be stuck in this recession for years, economists say

#119

Post by 127 »

TheCowboy wrote: post #92

The grandstanding against economists is disappointing. Let's say you were driving at night with someone in the country, and because they either knew the road or could see farther ahead they said, "There's a boulder in a road ahead, we're likely going to hit it if you don't slow down and turn to avoid it." And you do slow down and it allows you to turn to avoid a crash. How do you respond? Mock them for always being w…

Economists are a priest class that enables the ruling class to make stupid and short sighted decisions.

Re: We'll be stuck in this recession for years, economists say

#120

Post by pantsforbirds »

TheCowboy wrote: post #92

The grandstanding against economists is disappointing. Let's say you were driving at night with someone in the country, and because they either knew the road or could see farther ahead they said, "There's a boulder in a road ahead, we're likely going to hit it if you don't slow down and turn to avoid it." And you do slow down and it allows you to turn to avoid a crash. How do you respond? Mock them for always being w…

As a counter argument it seems to me that if you are an expert in a field you can generally predict disasters and be wrong and people tend to not care so much, but if you predict a more positive outcome and you are wrong people will never forget. I think this kind of societal reaction pushes experts to being more willing to give severely negative predictions.
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