171–180 of 240 posts
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Calling it "hundreds of thousands of dollars of capital" somehow makes it sound like massive wealth, as opposed to the single accumulated asset of a lifetime of lower middle-class labor.
It's not pennies, and it's supposed to be evidence of fiscal sophistication. That's what Capitalism is marketed as: the people who are most responsible and talented gain the most wealth. Are you telling me it's not true?
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> First, the situation is not that dire to start with, most people and businesses can meet their obligations. 76% of americans live paycheck-to-paycheck. Regardless of if you like it or not, a time will come when massive amounts of rents aren't paid. It can either fully immiserate the economy (most likely course of action), or it can be paused. > the markets simply won't function at all even on a purely basic level C…
That day is coming April 1st. The unemployment numbers will come out soon. April 1st will be bad, but May 1st will be terrible. There will be millions of Americans unable to pay for basic necessities. The money from the stimulus will go to rent-seeking and basic necessities. I am very thankful to still be working.
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Ok. Im a (small) landlord. None of my tennants claim to be able to pay rent. How am I buying groceries this month?
I don't mean to be rude but relying on collecting month-by-month rent from your tenantS to buy your groceries seems like poor financial management. You've bought an asset which is not returning as expected for the time being, but has for the past n years. What do you expect now, a bailout?
The economy is effectively frozen. But you have to distinguish the production process from the monetary, contractual and ownership relations that normally control the production process. We can continue to produce necessary , essential good during this crisis and let the rest of the economy stay frozen 'till the end of this mess. The situation should be the equivalent of a war or a different natural disaster. Essenti…
You can't turn off and on the economy like a switch. People need to pay rent and mortgages, or loans will not be repaid. If loans don't get repaid, banks fail. If banks fail, we have another financial crisis. The last one took a decade to recover from and there weren't even that many bad mortgages (as a percent of all mortgages). Businesses right now are eating a bunch of costs. That can't last for very long before t…
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You can't turn off and on the economy like a switch. People need to pay rent and mortgages, or loans will not be repaid. If loans don't get repaid, banks fail. If banks fail, we have another financial crisis. The last one took a decade to recover from and there weren't even that many bad mortgages (as a percent of all mortgages). Businesses right now are eating a bunch of costs. That can't last for very long before t…
Why do banks fail if loan payments are paused?
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You ask them. If they say no, then they can't pay rent. "OMG everyone is going to totally take advantage of this!" Not everyone, but yes, plenty of people and business will. "OMG that's unfair." Yes, I acknowledged that from the start. The whole point of my argument is that this might still be preferable to the alternative, it might still be better than sticking to what's 100% fair, because collectively we might emer…
Ok. Im a (small) landlord. None of my tennants claim to be able to pay rent. How am I buying groceries this month?
I bet if you and your tenants got together, you could acquire enough food for all of you.
Is it the government's job to hold the proverbial hot potato in events like this?
Yes. That is the whole concept of lender of last resort. The goal is to avoid a panic fueled fire sale where prices become decoupled from anything resembling fundamentals and instead collapse as everyone acts in concert to irrationally unload otherwise valuable assets. By acting in this capacity the government can allow the market price seeking mechanisms of capitalism to operate on an appropriately longer time horiz…
This makes it sound like the Market is primary to the State, where observation/history very much paints things as being the other way around. I don't know as one should even be talking about the Market doing anything in this case seeing as the preconditions for it's stable existence are coming into question.
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What are you smoking? This isn't Captain Planet where the gangs all come from wide ranging and diverse backgrounds, most people who might engage in black market activities are not the same people who are at risk of dying from the virus. There's no scythe of correction in play here. Similarly, the people who are most willing to go outside to engage with a black market as consumers aren't in that group either. This fan…
> most people who might engage in black market activities are not the same people who are at risk of dying from the virus. That is a very bold claim. Do you have data on the age distribution and comorbidities of criminals vs the general population? I find the claim that on average criminals will be both younger and healthier than the general population to be quite dubious. At the very least, I'd expect you to be able…
So maybe criminals in general wouldn't be younger and healthier, but there's a really strong chance that gang members are - and it would likely be gangs running black markets anyways.
0: https://www.nationalgangcenter.gov/survey-analysis/demograph...
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Why do banks fail if loan payments are paused?
Depending on the degree to which they are leveraged, they are counting on loan payments to be able to meet the withdrawal demands of their deposit accounts.
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Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligation in America. In 90 days, it expires, and everything starts back up again. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...
And how do people who make incomes on collecting on obligations (landlords, pensioners, etc.) buy new things, like food and medicine?