Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A Long Time Until the Economic New Normal

sloanreview.mit.edu

Post reply on HN
Print view View original

131–140 of 322 posts

Re: A Long Time Until the Economic New Normal

#131

Post by david_w »

amiga_500 wrote: post #113
david_w wrote: post #112

Earlier quoted context omitted.

Sure. Communists gone from China by 2035. Latest. 15 years across multiple administrations across multiple nations. It's just like before WWII. Some people see the mortal danger and realize by hook or by crook something HAS to be done. Some people are suing for "peace in our time". Only one of these camps is right. Guess which one. Say what you want, this is something we DID learn from WWII. Know the signs and don't…

The USA won't even have most of its supply chain under domestic control by 2035. The response to the virus was typically disorganized and indicative of wider issues. The last 40 years have seen a huge slide in power and credibility, what is going to stop that?

Recapturing the supply chain is not hard to do. Even the cheerleaders from the 90s for neoliberalism, which lead to "that great sucking sound" Ross Perot warned about, now admit they made a mistake.

Formerly, before COVID-19 and China building up outcroppings of rock into military bases, and declaring the whole of the South China Sea to be their personal property, and the genocide of the Uyghurs the details of which are far far more horrifying than the average Westerner is aware of (proof on demand), before the bellicose anouncements about the upcoming "China Century" before all that... the conventional wisdom was the growing propserity of China would lead to a burgeoning middle class, which in turn would demand their human rights causing a reform of the Communist regime. That and giving China MFN status would make them behave like other nations with respect to IP laws and pirating and currency manipulation etc. etc.

It didn't happen. Instead what we got was a blustering, expanionistic kleptocracy provably willing to murder their own people, other people's people and anything else that stands in the way of the mighty Century of China, where China takes its "rightful place" as the undisputed world leader.

So now, Plan B.

Re: A Long Time Until the Economic New Normal

#132

Post by [deleted] »

cryoshon wrote: post #58
frockington1 wrote: post #2

The articles states as fact there will be negative impacts on long term consumer sentiment and spending without really providing any evidence. Most Americans are about to receive a $1200 check and unemployment benefits that pay more than their job did for the next 6 months. I don't think consumer spending is going anywhere soon.

$1200 is barely enough for one month for most people. for a lot of urbanites, that check will get eaten by rent more or less immediately. if not this month's rent, next' month's rent, and so on. if not rent, then food. or healthcare. or essential utilities, or car payments. when things get tough and there is scarcity, people save more and spend less. as far as the unemployment benefits go, i think most people will st…

[deleted]

Re: A Long Time Until the Economic New Normal

#133

Post by fergie »

Strapline: "A full economic recovery from the COVID-19 pandemic is unlikely, and the new version of normal for work and organizations is further off than we think"

2nd paragraph: "...it is likely that full recovery of economic activity, including GDP growth, jobs, and unemployment, will take at least a year, and likely much longer."

At this point we are used to shoddy economic analysis and predictions that are so woolly as to be meaningless, but this article is in direct contradiction with itself. Surely MIT of all places could place a bit more rigor on its output.

Re: A Long Time Until the Economic New Normal

#134

Post by quickthrowman »

rietta wrote: post #72
bwb wrote: post #12

Earlier quoted context omitted.

I'd also point out that planning for "high risk" events like this is not something small to medium size businesses should be doing. Government yes, but I don't expect my mexican restaurant to have a plan in case of a global pandemic :). Just like I don't expect them to hedge pork futures so my pork tamales don't go up 8 cents. Gov is insurance and I want them to be building resilience into the system. That is done wi…

For most small businesses, disaster planning is going the full Dave Ramsey. Be debt free in your personal life. Have a 6 month emergency fund. Don't hire in your business until it hurts and is impossible without the additional help. Build up 3-6 months of cash cushion in the business. For most businesses, this take a decade or more of delaying self gratification but the end result is stability. You're much better off…

Just as government finance isn’t like personal or business finance, business finance is not like personal finance. For one, the cost to borrow money is far cheaper for a business. Please don’t apply personal finance rules to businesses, they do not apply.

A business is not a household.

Re: A Long Time Until the Economic New Normal

#135

Post by britch »

xwdv wrote: post #54

IMO things aren’t that bad. Yes restaurants and some small businesses are suffering, but look, people are cooking at home more, spending time with family, being healthier. People don’t need cosmetics or new clothes or cars or gasoline, and some luxury flashy items take a hit because there’s no way to really flaunt your wealth inside your own home. People aren’t traveling as much, tourist hotspots that were getting tr…

Many people, who work in those industries you list as things "you don't need" are without work and health insurance (if they had in the first place). 16 million more people are out of work in the US [0].

Those out of work cannot get care for usual issues that would normally be provided by their employer, and are now unable to get care for issues related to COVID.

They are going to struggle to pay rent next month (like 40% of New Yorkers by some estimates) much less food, utilities, and other necessities.

People who are able to work from home are in a tremendously better places than blue collar or service workers who make up a great deal of the economy. I suppose in office politics a remote worker might have felt like a "second class citizen." In comparison with many workers who risk being laid off if they are even a few minutes late to their shift, remote workers had things very good.

I think you need to expand your view a little. It sounds like many in your life are not affected by this situation. Many of us, or those close to us, are struggling immensely right now and there is not a clear path out.

For what it's worth, I agree with what you're saying about how this could refocus the economy on things other than luxury goods. I just think we need more support for the people losing jobs than a ¯\_(ツ)_/¯

---

[0] - https://www.theguardian.com/us-news/live/2020/apr/09/coronav...

[1] - https://www.nytimes.com/2020/03/31/nyregion/coronavirus-land...

(Apologies for being overly USA-centered, that is where I live and am most familiar with)

Re: A Long Time Until the Economic New Normal

#136

Post by tdfx »

taneq wrote: post #32
dlp211 wrote: post #29

Earlier quoted context omitted.

You are likely not the average American consumer.

From everything I've read, I'm amazed the average American has enough spare money to consume non-essentials.

The loudest complaints are always from the groups in the minority. Lots of people have small businesses who are suffering, or jobs that are basically incompatible with social distancing. But also think: just Bank of America employs 200k+ people. Most of them are still at work, doing their stuff from home, receiving their normal paychecks. Hundreds of thousands of small Amazon sellers and still shipping packages. There's a wide swath of America that's not feeling the pinch and is more eager to consume out of boredom than ever before.

Re: A Long Time Until the Economic New Normal

#137

Post by PaulDavisThe1st »

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…

Another feature of the 1918 economy in most of the world was it was a lot less global, a lot more localized. There was a lot more regional self-reliance, which meant that the nature of the impact on the economy looked very different.

One of the biggest differences is the enormous growth of what is not very usefully termed "the service economy" since 1918 (really, since maybe 1960 or so). A huge percentage of the population now gets paid to do things that had no real equivalent in 1918, things that you can simply stop doing (at least for some period of time). Restaurants, hotels, therapists of many different kinds, artists, musicians, retail .... these have all exploded, emply lots and lots of people and are all inessentiall to basic living (though essential to meaning for most of us).

Re: A Long Time Until the Economic New Normal

#138

Post by _curious_ »

School-Cotton wrote: post #118
epistasis wrote: post #20

Earlier quoted context omitted.

It's not completely without precedent, in that the 1918 flu pandemic was only a century ago. We don't have a ton of good data, but some researchers are looking at its effects in the US: https://www.bloomberg.com/news/articles/2020-03-27/pandemic-... But I do agree 100% with taken current economic estimates with a huge brain of salt, as our economic machine is far different from the past.

Were virtually all businesses shut down for weeks or months during the 1918 flu pandemic? All I can find is reports of localized shutdowns in certain cities. If not, I don't think you can say it's comparable.

As a percentage of population (and volume of dollars) then vs now: how many are negative net worth? Break even/neutral net worth?

Re: A Long Time Until the Economic New Normal

#139

Post by ikiris »

rietta wrote: post #77
vorpalhex wrote: post #24

Earlier quoted context omitted.

I wouldn't expect your local mexican restaurant to have an emergency stockpile of ventilators (as handy as that may be right now..) but I would expect most clever small businesses to have resiliency by keeping cash on hand, operational flexibility (can they switch to a to-go model?) and not over-expanding. You can't prepare for specific black swans, but you can generally structure things to be more or less resilient.…

I agree. For most small businesses, going the Dave Ramsey way is best. Be debt free, build a cash cushion, and as you say grow slow and methodically with cash not cash you think you might have next month.

Dave Ramsey is a good way to be poor for your entire life, while thinking you're making slight slow progress.

Re: A Long Time Until the Economic New Normal

#140

Post by mperham »

alexilliamson wrote: post #130
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…

It's amazing how the unemployment rate gets treated as gospel in the media. I never see the actual jobless rate reported anywhere. Why is that? The incentive for politicians to prop themselves up with the unemployment rate is clear. But why does the media never push back? Does "jobless" data - that is ACTUAL unemployment- not exist?

There are actually six different "unemployment" metrics, each with different criteria about who counts.

https://www.bls.gov/lau/stalt.htm

Post reply on HN