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The Pandemic Boom Goes Bust

therossreport.substack.com

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Re: The Pandemic Boom Goes Bust

#71

Post by eru »

thisisnotatest1 wrote: post #57
pjc50 wrote: post #20

This is missing a very important graph, unemployment. Here's an example: https://www.bbc.co.uk/news/business-52938993 And its not-quite-mirror, labor force participation: https://www.bls.gov/charts/employment-situation/civilian-lab... The purpose of stimulus was to prevent those from looking even worse and causing more permanent damage to the economy. In that regard it's been a huge success; somewhere above, Keynes i…

That's a very simplistic (and ideological) view. World's leading country in inflation, Venezuela, has terrible wages. Inflation makes people overworked, by forcing them so sell under fair price. Wages are sticky, prices are not. That salaries are picking up doesn't mean real salaries have improved. They have not.

Be careful. There's a big difference in impact of modest inflation like in the US at the moment vs hyperinflation.

The Fed handled the monetary side of the pandemic reasonably well. Inflation overshot a bit, yes. But it's far cry compared to when they caused a slowdown in the housing market to become the Great Recession in 2008-ish.

Re: The Pandemic Boom Goes Bust

#72

Post by mattzito »

onlyrealcuzzo wrote: post #67
lvl100 wrote: post #47

Earlier quoted context omitted.

I agree they had to spend the money to prevent a depression. I don’t think anyone is here contesting the amount of money unleashed. However, I am really disappointed with where that money went. It went into “non-productive” assets and activities.

My problem is - there are sooooo many things that need done in this country. I am not sure why everyone thinks it is cruel and unusual punishment to ask people to do some of those things that need done (burying power lines in cities, as one example) in exchange for money. Why is it so barbaric to give people a job? Theoretically, there are plenty of low-skilled workers that could've been trained to do needed skilled…

Conceptually, I agree with you - but the reality is that many of the skilled jobs you describe take a long time to get trained. Power line technician is a 4 year apprenticeship.

Re: The Pandemic Boom Goes Bust

#73

Post by eru »

yarky wrote: post #46
pjc50 wrote: post #20

This is missing a very important graph, unemployment. Here's an example: https://www.bbc.co.uk/news/business-52938993 And its not-quite-mirror, labor force participation: https://www.bls.gov/charts/employment-situation/civilian-lab... The purpose of stimulus was to prevent those from looking even worse and causing more permanent damage to the economy. In that regard it's been a huge success; somewhere above, Keynes i…

> to prevent those from looking even worse and causing more permanent damage to the economy. What makes you think that temporary measures will avoid a permanent impact on the economy ? These measures only delayed the impact.

Keeping people out of unemployment is good. Longer spells of unemployment make skills 'rust'.

Re: The Pandemic Boom Goes Bust

#74

Post by thisisnotatest1 »

eru wrote: post #71
thisisnotatest1 wrote: post #57

Earlier quoted context omitted.

That's a very simplistic (and ideological) view. World's leading country in inflation, Venezuela, has terrible wages. Inflation makes people overworked, by forcing them so sell under fair price. Wages are sticky, prices are not. That salaries are picking up doesn't mean real salaries have improved. They have not.

Be careful. There's a big difference in impact of modest inflation like in the US at the moment vs hyperinflation. The Fed handled the monetary side of the pandemic reasonably well. Inflation overshot a bit, yes. But it's far cry compared to when they caused a slowdown in the housing market to become the Great Recession in 2008-ish.

Yes, it's exactly the same but different speeds.

People with savings and salaries got a nice 7% wealth tax this year

The government, with it's massive 20 trillion dollar debt, got a nice 7% write down on the debt, so they can quickly spend this voucher again in a matter of weeks.

Re: The Pandemic Boom Goes Bust

#75

Post by eru »

pjc50 wrote: post #20

This is missing a very important graph, unemployment. Here's an example: https://www.bbc.co.uk/news/business-52938993 And its not-quite-mirror, labor force participation: https://www.bls.gov/charts/employment-situation/civilian-lab... The purpose of stimulus was to prevent those from looking even worse and causing more permanent damage to the economy. In that regard it's been a huge success; somewhere above, Keynes i…

Monetary stimulus went pretty well, and it's essentially free and reversible. Fiscal stimulus was a waste of real resources.

Fiscal tightening doesn't do anything about inflation. See eg the fiscal cliff of 2013 for an example.

Re: The Pandemic Boom Goes Bust

#76

Post by thisisnotatest1 »

eru wrote: post #75
pjc50 wrote: post #20

This is missing a very important graph, unemployment. Here's an example: https://www.bbc.co.uk/news/business-52938993 And its not-quite-mirror, labor force participation: https://www.bls.gov/charts/employment-situation/civilian-lab... The purpose of stimulus was to prevent those from looking even worse and causing more permanent damage to the economy. In that regard it's been a huge success; somewhere above, Keynes i…

Monetary stimulus went pretty well, and it's essentially free and reversible. Fiscal stimulus was a waste of real resources. Fiscal tightening doesn't do anything about inflation. See eg the fiscal cliff of 2013 for an example.

Monetary and fiscal are largely equivalent

specially when the central bank has the tendency to print money to buy government debt, so public solvency is never an issue

Re: The Pandemic Boom Goes Bust

#77

Post by throw0101a »

giantg2 wrote: post #36
thrown_22 wrote: post #19

Earlier quoted context omitted.

>This statement makes no sense: even (most? all?) construction was shut down during (pre-vaccine) 2020 for periods of time to reduce the spread of COVID. At least it was where I was. Yes, and? All it would have taken was to call them vital workers, or whatever the local equivalent was, and they could have kept working. That was a political decision and covid still spread among vital workers. Adding construction would…

"Unless people start getting physically in the way of each other more people on a site means the project gets done faster." Have you worked construction? If they're clueless, then they will slow you down with mistakes and questions/training. Not to mention many parts of construction require skilled trades (electric, plumbing, carpentry, masonry, etc), some of which require licenses.

> Not to mention many parts of construction require skilled trades (electric, plumbing, carpentry, masonry, etc), some of which require licenses.

There's smaller and smaller areas of construction that is unskilled nowadays AFAICT. Unless you're just there to lift stuff and/or literally dig ditches (which is often done with machines), there's not much that can be done by some rando off the street. Even the day labourers that are found around Home Depot (probably?) have areas of knowledge, even if it's just framing.

Certainly some areas could be picked up fairly quickly (spreading/trowling and/or screeding concrete?), in most other areas there's some specialized knowledge. Especially if it has to meet code, which is getting more stringent over time. A YouTube channel of someone who does building inspections:

* https://www.youtube.com/watch?v=326J5b_1ydI

* https://www.youtube.com/watch?v=xD3Vo6WTsXA

Quite a few subtle places that one can mess up, even if you're a licensed professional (e.g., electrician) and are supposed to know better.

Re: The Pandemic Boom Goes Bust

#78

Post by eru »

thrown_22 wrote: post #7

I am as far from an inflation hawk as you can get. I basically think that any government can both print money and avoid inflation bar external shocks with a modicum of common sense, e.g. don't pay people not working to piss off the French and Belgians: https://www.theholocaustexplained.org/the-nazi-rise-to-power... Yet we did just that. People not working being paid for existing at a time when the real economy went i…

> I basically think that any government can both print money and avoid inflation bar external shocks with a modicum of common sense, [...]

It's all a question of how much money you are printing, and what your inflation targets are.

The Fed is supposed to 'print' just enough money to hit 2% inflation.

If the fiscal side is doing weird stuff (or not doing weird stuff), the Fed is supposed to accomodate that by printing more or less money, so they still hit their 2% target.

Re: The Pandemic Boom Goes Bust

#79

Post by fortran77 »

> At some point, voters will start asking: what’s the point of all this stimulus, if it only ends up making us poorer?

Well, not all of us. Just people who work for a living and pay significant taxes, and people who were responsible and saved.

There may be enough votes in people who aren't in those categories to elect another tax-and-spender.

Re: The Pandemic Boom Goes Bust

#80

Post by hcayless »

Serious question: I keep seeing opinions about the inflation and supply chain problems being purely the result of the stimulus, and they feel, well, ideological. To what extent is this simply the effect of the pandemic? In my own family, we’ve spent way less on travel and more on things over the last couple of years.

Put another way, isn’t this the product of a combination of factors and not just because of the stimulus? I’m not convinced supporting people out of work through no fault of their own is a bad idea.

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