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Effect of economic crisis on America’s small businesses [slides]

• lettergram 7y ago
  One thing that really horrified me was how quickly people threw away the economy. Unfortunately, this virus is highly contagious (to the point that the vast majority of countries won’t contain it) and fairly lethal. We don’t actually know how lethal, but it appears 1%-3%, but without widespread testing we wouldn’t know. At the moment, we just reduced our GDP by 30%-50% in regions under quarantine. Think about that for a second... Now consider the fact that the supply chain is also all kinds of messed up and with the loss of jobs people have less money. Finally, save this, but I don’t think the US quarantine is going to do much to lower the curve. Simply put, the west is not prepared. Our checkouts are run by people without masks or gloves. People still are closer than 2 meters (or 6 feet). To lower the curve we’d need strict quarantine (no leaving the house) for a month or two. Even then we won’t have enough masks, hopefully we’d have enough ventilators and tests by then... Point is, we are tanking our economy and mark my words — it won’t work. People voted, had spring break, celebrated st. Patrick’s day went out shopping in droves. It’s likely too late, one sick per household and they infect the whole house. All this to say: we are losing our economy and probably this isn’t effective.
  • zaidf 7y ago
    “one sick per household and they infect the whole house“ This happened repeatedly in China; in fact, the nature of a lockdown sort of encourages this. But an infected household of 5 ppl is significantly easier to contain than 1 infected person going on to infect 4 people from 4 different walks of life.
    • TwoNineFive 7y ago
      The same-household infection rate in china was 10.5% last I read. I don't know if there's any data yet from other countries.
  • booleandilemma 7y ago
    New Yorker here. From what I see through my window, my fellow New Yorkers still don’t “get it”. I see clusters of people hanging out and families going for leisurely walks. If this keeps up the number of infections - and deaths - will only increase. Last week my brother suggested instead of working from home I work from a Starbucks. I feel like people don’t understand how serious this is and it’s really bothering me.
    • maxerickson 7y ago
      There's nothing wrong with people that are living together going for a walk together, it won't particularly increase their exposure. People should cooperate and keep distance, but it's not a big deal to just be outside a reasonable distance from small numbers of other people.
      • war1025 7y ago
        Something that amused me the other day was was an NPR reporter saying, "I went to the park yesterday and I was surprised at all the people just out in the park" as if they didn't also make the choice to go to the park.
        • senordevnyc 7y ago
          I feel this. Every time I go out (to the park) I’m amazed at how many people are out. I start thinking about how we’re doomed, because people obviously aren’t taking this seriously. I mean, they’re at the park instead of huddled in their apartment! Then I remember I’m at the park too...
      • pdonis 7y ago
        > There's nothing wrong with people that are living together going for a walk together, it won't particularly increase their exposure. And it might help to keep them from going stir crazy from being cooped up inside too long...
    • jmull 7y ago
      Leisurely family walks are fine. Generally, clusters are OK for people that live together anyway.
  • war1025 7y ago
    Well, only one way to find out, right?
  • maxerickson 7y ago
    Reasonable compliance with social distancing from 25% of the population has a huge impact on the slope of the curve. Of course better compliance from larger numbers of people has even more impact, but it's not a binary condition. That said, we probably aren't doing enough to prevent hospitals from being overwhelmed, or to even push that very far into the future.
    • lettergram 7y ago
      Not enough, all the simulations show we’d need to basically reduce our number of interactions a day by 75% and double the number of ventilators by 100% to “stay under the curve” that’s if we didn’t have a huge number of celebrations and people in lines, etc. Projections are 500k dead by June. Maybe with the precautions we can slow the millions dead by the end of the year. It remains to be seen.
      • ivalm 7y ago
        I mean, italy is no longer exponential, China clearly contained their issues. The doom and gloom is somewhat overblown.
        • megous 7y ago
          https://www.worldometers.info/coronavirus/country/italy/ https://www.worldometers.info/coronavirus/country/italy/ Looks fairly exponential to me. (log y axis) And that's just confirmed cases.
          • ivalm 7y ago
            Try to fit it. More easier is to look at daily new cases. For past 4 days they are increasing linearly (meaning total is quadratic)
            • deleted 7y ago
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  • mirimir 7y ago
    Sure, but if what you say is accurate, it wouldn't matter. Once people started dying by the thousand, even if they're all old, governments would be forced to lock stuff down. And even if they didn't, the economy would be hosed.
  • JMTQp8lwXL 7y ago
    So let's cancel any sort of response, as you propose. What do the next two weeks, two months, etc. look like? I think it's the human condition to least try, but I can entertain the reality that some Americans just aren't for social distancing and of that segment, some will become superspreaders.
    • hanniabu 7y ago
      They should be charged and prosecuted for putting others in danger.
  • faitswulff 7y ago
    As a counterpoint, Illinois just ordered residents to shelter-in-place after closing schools and restaurants a week ago and our new cases of COVID-19 aren't accelerating upward as of today. This model also predicts far fewer deaths with shelter-in-place rules: https://covidactnow.org/state/IL https://covidactnow.org/state/IL As governor Pritzker said: "I fully recognize I am choosing between saving people's lives and saving people's livelihoods, but ultimately you can't have a livelihood if you don't have a life."
    • toomuchtodo 7y ago
      The problem will be how long the shelter in place can be maintained; as long as you have folks coming in infected from other states, once the mass quarantine is lifted, outbreaks will flare up. This only ends with a vaccine and enough people recovered after infection we arrive near enough herd immunity. Until then this will have to burn through populations. Regardless, I can appreciate and support Pritzker’s response, and efforts to “flatten the curve”. It’s an unfortunate situation with no clear path to success.
      • sokoloff 7y ago
        I agree with your first paragraph. On the second, I would think a moderately successful therapeutic protocol would go a long way to quickly getting us out of the houses. A vaccine is too long a time away to count on; there won’t be an economy left by then.
      • ericd 7y ago
        We don’t have a vaccine for the common cold, not for lack of trying. AFAIK we’ve never made a vaccine for a coronavirus. This isn’t the time to be relying on silver bullets.
        • zeroonetwothree 7y ago
          Common cold is caused by hundreds of different viruses so a single vaccine is not useful
  • pbourke 7y ago
    > We don’t actually know how lethal, but it appears 1%-3%, but without widespread testing we wouldn’t know. That’s the fatality rate within a functioning medical system. It’s safe to assume that if the virus is uncontrolled the rate will be substantially higher.
    • logicchains 7y ago
      Why? There wasn't enough testing/medical capacity for at least the first month in Wuhan, and the rate wasn't any higher.
      • OGWhales 7y ago
        Well we can look at Italy for example. Also America has a lot of obese people, which are supposedly at a high risk, so it’s possible we see a higher fatality rate. I personally don’t think so just trying to answer your question
        • logicchains 7y ago
          We don't know the total number of infections in Italy so we can't get a meaningful estimate from there.
          • mjul 7y ago
            Meneghini and Gram Pedersen of University of Padova just extended the standard “SIR” epidemiology model with quarantine and it has the nice property of being able to estimate the infections from the observables. Preprint on Researchgate: “ Quantifying undetected COVID-19 cases and effects of containment measures in Italy”
  • tuna-piano 7y ago
    Even if you take an extremely high estimate of the currently infected in the US, you're probably in the low 100s of thousands of people, approx <0.1% of the country. So to say it's "likely too late" is just crazy - 99.9% of the country is not yet infected.
  • tinyhouse 7y ago
    I wouldn't say it's lethal, at least not for everyone. The last report from Italy has stats on 2000 deaths. No deaths under age of 30 and only a few under 50, all with pre-existing health conditions. Women's median age close to 84. Men's 80. And vast majority of deaths are people with multiple pre-existing health conditions.
    • m_ke 7y ago
      42% of Americans are obese, this will hit us a lot harder than Europe.
      • Exmoor 7y ago
        Do you have any data to indicate that obese young people are significantly more at risk of dying than healthier individuals?
        • m_ke 7y ago
          We already have a bunch of 50 year old diabetics who passed away in the states. https://img.buzzfeed.com/buzzfeed-static/static/2020-03/13/23/asset/477a38122bb4/sub-buzz-470-1584141544-1.png?crop=1280:599;0,0&downsize=900:*&output-format=auto&output-quality=auto https://img.buzzfeed.com/buzzfeed-static/static/2020-03/13/2... https://www.nytimes.com/2020/03/12/health/coronavirus-midlife-conditions.html https://www.nytimes.com/2020/03/12/health/coronavirus-midlif...
      • rootusrootus 7y ago
        It's not like obesity isn't a problem in Europe, too. 25% is lower than 42%, sure, but it's still a lot.
        • m_ke 7y ago
          We have way more morbidly obese people though http://ncdrisc.org/morbid-obesity-population-bubble.html http://ncdrisc.org/morbid-obesity-population-bubble.html
    • 7y ago
  • toast0 7y ago
    I don't think the options are have a lockdown vs have a functioning economy and a bunch of sick people. Once hospitals start overflowing with this, you're not going to have a functioning economy anyway. If hospitals can get the supplies they need, and testing and health department capacity is there to do contact tracing, the lockdowns can loosen, and our economy can start back up. Bonus points if the warmer weather in the coming months helps fight the virus.
    • daenz 7y ago
      >Once hospitals start overflowing with this, you're not going to have a functioning economy anyway. Is this true though? I'm not trying to be insensitive, but according to reports, ~15% of the infected need hospitalization, and the distribution of those people are mostly over 60[0]. Is having these people hospitalized on a large scale more detrimental to the economy than shutting everything down? Serious question. 0. https://www.cdc.gov/mmwr/volumes/69/wr/mm6912e2.htm https://www.cdc.gov/mmwr/volumes/69/wr/mm6912e2.htm
      • zaroth 7y ago
        The vast majority of people with COVID do not end up at the hospital. So it is absolute fact that we are sacrificing the economy in order to save, relatively speaking, a select few. If this continues for more than a few weeks - 50% of American business dies. 50% of America is unemployed. Contagion from massive defaults and write-offs spreads throughout the entire economy. Money printing at a rate heretofore unimaginable and probably hyperinflation to follow. It is no less than committing hari-kari in a moral panic. Hopefully we will wake up from the fever dream before it’s too late. “Flatten the curve” is a terrible lie. The extent and duration of the measures required would bankrupt 95% of the country. ICUs being overrun is actually an argument for getting the COVID cases out of the way quickly, not dragging it out over, say, 24 months. If you can get your head around the scale involved, if 80% of people are going to be infected and 14% of those are going to need serious treatment (doubtful, but the same assumption the “flatten” exercise is based on), there is actually no way to keep COVID cases “at or below” ICU capacity. They will absolutely take 100% of capacity and beyond for more than a year, if you drag it out. The longer you have COVID cases overwhelming your system, the longer you have non-COVID routine emergencies getting untreated. Either you can contain it in a few weeks or you have to let it burn through. There is no “slow smolder” scenario I can see that leaves society intact.
  • qqn 7y ago
    > People voted, had spring break, celebrated st. Patrick’s day Sounds a lot like Philly' Spanish flu parade,[1] as compared to St. Louis' lockdown during the same.[2] [1] https://finance.yahoo.com/news/chart-1918-spanish-flu-shows-173312236.html https://finance.yahoo.com/news/chart-1918-spanish-flu-shows-... [2] https://media.zenfs.com/en-US/quartz.com/df26ee36f79f85f57ad0137d3bf12c52 https://media.zenfs.com/en-US/quartz.com/df26ee36f79f85f57ad...
  • whb07 7y ago
    Nowhere have you seen numbers that remotely approach 1-3%. You’ve seen the critical, largely elderly population get tested and from that you get that number that’s freaking people out. Stop spreading panic. With those kinds of numbers China alone would have 10M+ dead. In Japan, Singapore, surrounding nations more millions dead. Use a bit more common sense. We know we haven’t tested enough in the US, yet we don’t have bodies piling up on the street. You don’t have families of 4 where 2 suddenly die. This has been going on for greater than 3 months now. Stop spreading fear. The only thing to fear is the terrible consequences of those stuck inside the fear bubble
    • empath75 7y ago
      China would have had those numbers if they didn’t quarantine a whole region for 3 months. They may still have those numbers after they lift the quarantine.
      • whb07 7y ago
        Quick now do the same for the 50 other countries nearby. What was their reason?
    • m_ke 7y ago
      4 dead and 3 more in critical condition from a single family: https://www.nbcnews.com/news/us-news/coronavirus-shatters-new-jersey-family-kills-3-4-more-hospitals-n1163696 https://www.nbcnews.com/news/us-news/coronavirus-shatters-ne... 26 dead at the washington nursing home, 50 tested positive: https://www.businessinsider.com/coronavirus-deaths-washington-nursing-home-outbreak-2020-3 https://www.businessinsider.com/coronavirus-deaths-washingto... Death rates by preexisting condition: https://img.buzzfeed.com/buzzfeed-static/static/2020-03/13/23/asset/477a38122bb4/sub-buzz-470-1584141544-1.png?crop=1280:599;0,0&downsize=900:*&output-format=auto&output-quality=auto https://img.buzzfeed.com/buzzfeed-static/static/2020-03/13/2... America has 42% obesity rate and a huge population with diabetes and heart issues, the numbers for 30-60 year olds might end up looking a lot worse than in Asia and Europe.
      • smallgovt 7y ago
  • opportune 7y ago
    Well, in California: I got my groceries from people wearing masks. Everybody in the store kept 6 feet distance. I've been working from home for 2 weeks and will continue to do so for at least 3 more. Company wide mandate. Almost every business other than groceries/other essentials (where some are surprisingly "essential", granted) are closed so people have no reason to break quarantine except to perform essential tasks. So overall, I'd say we are doing exactly what we need to be doing. Hopefully the rest of the country follows suit
  • justanotherc 7y ago
    Masks and gloves are ineffective for people who don't know how to use them -- wearing a mask? Great. Now you just felt hot and pulled the mask down onto your chin. Congratulations, the outside of the mask is no longer sterile. You're wearing gloves? Fabulous. Now you're out shopping pushing a cart and you just scratched your nose with your gloves. Cart handle is now contaminated or visa versa and gloves didn't change anything. PPE is only effective under very controlled environments, and the general population doesn't understand this. The economy will recover, especially since EVERY country is taking a hit, I don't think it will take very long for the capitalist engine to roar back to life. That's the beauty about capitalism -- you're turning the ingenuity of humans loose to be productive. As humans we're great at figuring out how to be productive.
    • oggy 7y ago
      The effectiveness doesn't need to be perfect. If I'm now only 50% less contagious to others with my no-longer-sterile mask, that's a huge win.
      • justanotherc 7y ago
        There is a shortage of masks and other PPE because people think that way. There is a cost because if everyone were to wear masks, there is not enough supply for healthcare professionals who could actually benefit from them. The percentage of effectiveness isn't really measurable if the standard isn't followed. You're assuming its 50%, but it very well could be 0% because your equipment is just as contaminated as your hands. So you have not helped yourself, AND you have decreased supply of essential equipment from someone who ACTUALLY needs it. That's a big fail.
        • oggy 7y ago
          I agree that we shouldn't be taking the supply away from the professionals while there's a shortage, but your statement was that they were ineffective in the hands of laymen, and I don't think that's true. I'm not assuming that they are 50% effective either, I pulled the 50% number out of my ass, but so is your 0%, and I find it hard to imagine a physical reality where me keeping a 6 feet distance to an infected person decreases my infection probability significantly more than that person wearing a mask. Anecdotally, South Korea, Japan, Hong Kong, and Taiwan, where wearing masks is quite commonplace all seem to be doing better in transmission rate than the Western world, and all that without killing their economies. And considering that we're producing around 2 billion disposable plastic bottles a day, I'd currently bet money that we should be able to ramp up the supply of cheap masks for a sum that's a lot less than that of halting 50% of the Western economy for several months. Obviously, it can't happen in a day, but I'm not really seeing anyone try, except for perhaps Trump after his recent epiphany that Corona is not a Democrats' hoax. I'm willing to be dissuaded by someone who's actually thought it through, but sadly I haven't seen any such analyses.
  • asdff 7y ago
    More can definitely be done with enforcing quarantine. In LA, meat is still prepared and served openly on the side of the road, so long as you have a relatively trivial permit. Even though the state is 'locked down,' you are still free to venture out at your leisure. Technically bars are supposed to be closed, but there is a pervasive speakeasy culture that hasn't slowed down. The most vulnerable groups, the working class that pack like sardines in public transit every day, either continue work or are laid off. Tenement conditions still exist in Los Angeles, with multiple families cramming into a 1br apartment. Quarantine is really only affecting the knowledge workers who make up a minority of the population, and who interact with a sliver of the population to begin with. Effective quarantine would include protections for the working class, but there isn't any political will. I'm legitimately fearful of hitting the breaking point. Maybe some would call it overblown, or hysteria, but this is a city that endured three days of looting after a verdict, requiring the national guard to stabilize the situation. Men with rifles used to take positions on the roof of my grocery store. This isn't ancient history, unfortunately, it's who we are when pushed past our limits with nothing left to lose.
  • abootstrapper 7y ago
    You have a point. We should have been aggressively testing at the start. Imagine if we had thrown the same amount of effort and money into initial testing as we are economic relief now. We'd still be open for business! But our leadership failed. So, now we have to lock down, but we should be doing it 100%. Hard core. Lock down. This weak half measure of "recommended guidelines" and leaving it up to local governments to adopt them is undermining the entire effort. It's tanking the economy AND not going to work. Let's swallow the damn pill and get it over with! Why is our leadership intent on dragging this out as long as possible? We should have been in hardcore, national lock down mode last Monday. We'll come around, once it's too late. "Americans will always do the right thing — after exhausting all the alternatives."
  • pdr2020 7y ago
    "All this to say: I think we are losing our economy and I think probably this isn’t effective." Fixed this for you. (Additional comment: I will counter with I'm really amazed how quickly people threw away the economy in an effort to reduce lost lives. Normally, I expect people to be much more mercurial)
• dijit 7y ago
  The slides by themselves do not speak a compelling narrative to me, so I think I’m missing something fundamental or not understanding. Small businesses (all, businesses) will suffer quite badly, but if your company cannot continue operating because its shut/slowed down for 2 weeks then it’s likely that your business was running on a knifes edge and /any/ shock would have killed it. Arguing that many people have done this is not just cause to bail them out (speaking from a purely logical non-empathetic position) EDIT: ok. Our entire economy is built with no buffers in place and people here seem to have no issue with that. From a personal finance perspective I ensure that I live beneath my means and have capacity for a couple of months lost revenue. (Shit happens) and I’m not “well paid”.
  • alexpetralia 7y ago
    This is like saying, if you are in credit card debt and not prepared for a disaster, you are on your own. While this is true, this logic simply doesn't work in aggregate because the status quo is millions of people are in debt. Similarly, most small businesses operate with very little operating cash flow, and that is simply how our economy operates.
  • buboard 7y ago
    i dont think that s fair. in an efficient market, profit margins are slim for the benefit of the consumer, which means businesses are not super profitable and need to invest continuously.
  • deleted 7y ago
    [deleted]
  • marta_morena_23 7y ago
    " then it’s likely that your business was running on a knifes edge and /any/ shock would have killed it." Welcome to... life? This is how America or even the world works. Most people live on knife's edge. One missed paycheck? Homelessness just got its greasy hands on you. Two missed paychecks? Go pack what you have left... Most business are not any different, especially those run by regular people. In my family we have a quite successful business in the sense that the person running it, has quite a fancy lifestyle and can afford it. But you have to realize that most business have terrible margins. Our family business has maybe a margin of 10%. That means, for every 10.000$ you take home before taxes every month, your business has running expenses of about 100.000$ per month. Now restaurants are all closed... Nobody will buy your stuff anymore, but your employess still need to get paid. So now you have those 100.000$ monthly costs and not a single dime coming in... There is no reasonable expectation to save this much buffer. In short, even business that run extremely well, will die within A MONTH, if all expenses continue and no income is generated. This is why I think what they are doing for this petty virus is quite insane. They are destroying the middle class for some "theoretical" projection that might not even play out the way they think. What is guaranteed though is that businesses will die in troves and the economy and middle class with it.
• JMTQp8lwXL 7y ago
  Instead of hundreds of billions in loans to businesses, which have to be underwritten -- and as discussed on Slides 17/18, the SBA did an abysmal job administrating during Hurricane Sandy, helicopter money might be the better answer. Give everyone money, no criteria. If we do impose income limits, and since viable proposals do -- we ought to discuss it. Give them a check now anyways. We cannot be worried people will be "annoyed" if they owe their check back come next tax season. Future annoyance is a small price to pay if these businesses can't stay afloat. We will be feeling the effects for far longer than a quarter. The helicopter money needs to be distributed as soon as possible.
  • lotsofpulp 7y ago
    Why income limits? Would it not be easier and faster to just adjust marginal tax rates and simply give everyone money right now?
    • dillondoyle 7y ago
      Yes. Way easier and way faster. call your representative and senator.
    • JoshuaDavid 7y ago
      That is the question -- it might legitimately be harder to adjust marginal tax rates than to add an income limit, even if the outcomes would be identical either way.
      • lotsofpulp 7y ago
        I meant logistically easier.
  • Anon1096 7y ago
    Helicopter money won't help businesses in the service industry where people literally can't spend their newfound helicopter dollars. With the incompetence of the SBA I'm not sure what a total solution would look like, but helicopter money can only be part of a larger plan if we want to save America's small businesses.
• codingslave 7y ago
  The stock market is largely collapsing because: 1.) Hedge funds levered up their capital 5 - 15x to make more money, then got caught with their pants down. So they all panic sold at once, crashing the market. 2.) CEOs of large corporations used cash to buy back their stock, inflating the stock price, and depleting their cash reserves. So now those same companies are on the brink of collapse, causing the credit markets to collapse, the stock market to collapse, and the rest with it. They can buy 50B worth of their own stock, but cant pay employees for a month without revenue. This whole mess is in part due to financial engineering taken down by a black swan event. CEOs should be in jail and so should finance professionals. Laws need to be passed so that finance individuals cannot ruin the market for their own financial gain.
  • alexpetralia 7y ago
    Did you miss the part about small businesses?
    • codingslave 7y ago
      Everything is related. Imagine if the market only dropped a bit, large companies could support their employees, the credit markets wouldnt require massive trillion dollar spending. Supporting small businesses would be a walk in the park.
      • SpicyLemonZest 7y ago
        It's not really possible for the market to drop only a little bit in response to half the economy shutting down. Stock prices are an expectation of future cash flows, so they have to drop on news that a huge chunk of those future cash flows are cancelled.
        • codingslave 7y ago
          Look at Boeing stock. Companies dropping 50% because they miss 3 months of revenue?
• danieltillett 7y ago
  It is time to declare war. We need to move to a war economy and get on with what needs to be done.
  • maxerickson 7y ago
    What does that even mean?
    • danieltillett 7y ago
      Congress declares war. Think WWII. Edit. Thanks to the wonders of HC I can’t reply to you so I have edited this post. The declaration of war is symbolic in one way, but it captures what needs to be done. The entire economy needs to be swung around to getting this pandemic under control as quickly as possible. Once war is declared we can start conscripting people to do the things that need to be done like enforce curfews, do door to door testing, build hospitals, keep people fed, etc, etc. We are going to end up at this point anyway, so we might as well do it now and save lives and the economy.
      • quartzite 7y ago
        Hard to have a war economy when winning the war means shutting your economy down.
      • maxerickson 7y ago
        So the sarcastic response to that is: What does that even mean? What I tried and failed to get at in my other comment is that massive resources are already being marshaled to produce more tests and find treatments and find a vaccine and so on. Federal leadership appears to be…poor, but that isn't stopping people from stepping forward. So when you step past the slogan, what does Congress write in their declaration?
      • ccktlmazeltov 7y ago
        BTW France declared war officially.
• fl4bfl4b 7y ago
  Better solution: https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3SjhsZ0ztpG5bMzA3WNbVNhU/edit# https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs... We can shelter-in-place as long as needed. And no businesses go under, and no one loses their home.
  • ccktlmazeltov 7y ago
    > First, we pause all fixed financial obligations, which are what’s crushing our economy right now. Right now, we’re in a crunch: people can’t work, and so they can’t make payments on mortgages and rents. Totally agree, it is insane that some families are under the threat of eviction because they live paycheck to paycheck and cannot afford to pay rent now. Same for small businesses who cannot afford to pay rent. I'm sure some landlords will do the right thing, but we can't trust all landlords to do the right thing. Something has to be done at the federal level, and it's now or never. UBI would be another way to get around this BTW.
    • ip26 7y ago
      It isn't about landlords doing the "right thing". Landlords have debt to pay, generally aren't sitting on mountains of free cash, and foreclosure of the property you are renting is functionally similar to eviction.
      • noahtallen 7y ago
        This is why the article discusses "pausing" these types of payments for everyone from the average person to fortune 500s. If the Landlords are in a similar position (i.e. their "rent" and other debt payments are paused as well), then they have the power to pause rent payments for their residents.
      • ccktlmazeltov 7y ago
        to re-iterate the other comment: landlords have landlords.
        • 7y ago
• glass_of_water 7y ago
  This appears to be an appeal by Womply to direct a ton of stimulus money toward them, so that they can make loans to small businesses (instead of the Small Business Administration), and then they can take a cut of that.
  • danieltillett 7y ago
    This appears to be a very ungenerous reading of the slide deck. This is a time everyone needs to pitch in and do what needs to be done.
    • jellicle 7y ago
      Yeah, this is no time to criticize grifting. Previous commenter has nailed it directly: opportunists see a mountain of money heading out from government to the public and they want to insert themselves in the middle and grab a big chunk of it. I mean, these businesses file tax returns and the government has an address and even a bank account on file for them. Government could... write them a check. I've just provided all the value Womply provides in getting money to small businesses, pay me.
  • Womply 7y ago
    No, that's not the goal. We aren't trying to monetize this. We are trying to be good corporate citizens and to help our customers, the country, and our market. We have unique data, expertise, and resources so we feel obligated to help out.
    • dredmorbius 7y ago
      Is there a PDF of this deck?
• forkexec 7y ago
  I was just talking to my mechanic by text at middlefield & n shoreline at the Arco on the southwest corner, just across 101 from the Googleplex. He may have to permanently close his business and get a regular job because his landlord will demand rent when there are no customers. A similar situation is happening to Louis Rossmann who doesn't have business interruption insurance because they require flood insurance and weasel out of covering disasters. Another situation is Michael Moore's nonprofit movie theaters won't be reimbursed to pay or govt pay their employees' salaries, and building lease/rent. Also, tip-based workers are screwed too. Only 20% of workers are getting some money, with a little promise of temporary UBI to some people. And then the government has the gall to offer interest-bearing loans instead of no interest loans and grants? WTF! The situation is there will be people working to put food on the table sick or not, and riots if people aren't made whole. The US economy will crash and burn for decades if this isn't handled correctly by clawing back some of the tens of trillions the MIC, corporations, and the rich stole from the little guys and regular folks.
  • anigbrowl 7y ago
    Residential landlords are looking at a rent freeze until June: https://caanet.org/caa-unveils-safe-at-home-guidelines-in-response-to-covid-19/ https://caanet.org/caa-unveils-safe-at-home-guidelines-in-re... Commercial landlords are likely thinking about it. the solution is to figure out who else rents from the same landlord/other small businesses in proximity, team up in solidarity and demand a rent freeze. The alternative is owning capital in either a ghost town or Bartertown (https://en.wikipedia.org/wiki/Mad_Max_Beyond_Thunderdome https://en.wikipedia.org/wiki/Mad_Max_Beyond_Thunderdome). For the skeptical, think back to the Occupy movement of around 2011, which mostly took over public space. With so much private space sitting empty, the outcome would be very very different this time.
    • zaroth 7y ago
      “Freeze rent” as in not increasing the monthly payment? Waive late fees as in, expect to be paid for all months back rent in the first place? Gosh, that’s cute. Small businesses forced to shut down aren’t going to be gritting their teeth and paying back rent when the government decides they’re allowed to re-open. I would guess most businesses forced to close at least 6 weeks will be write-offs. Walk away from the debt and start again if you can / dare. Unless someone else (govt) is picking up the tab.
• s3cur3 7y ago
  I have to think that as a society, we’re going to be introducing a lot of slack that never existed before. Consider commercial real estate: there are going to be loads of small businesses that can’t make rent in the next 3 months... but from a landlord’s perspective, it probably doesn’t make sense to terminate the lease (or hound the business into bankruptcy or something), because who the hell else are they going to get to rent the place?
  • Rapzid 7y ago
    If more banks follow suite with deferring mortgage/loan payments... All the stops are being pulled. If the governments can get their shit together over the next 2-3 months we could actually hit play after this pause and have a real shot at rebounding. Other countries, and developing countries, may.. Will not be so lucky.
• testfoobar 7y ago
  The virus is terrible. But our solution could turn into an economic catastrophe. It simply isn't possible to shut down the economy and then pay people, businesses to sit idle for an undetermined amount of time. The solution is aggressive, continuous testing so that people can feel safe going back out. 1. Make hundreds and millions of the rapid tests available. 2. Deploy them to every business, every institution. 3. Test everybody coming into work every morning. 4. Isolate and quarantine the positive ones. 5. Elderly and immunocompromised self-quarantine. Lets find the actual contours of this infection within the population. And then squeeze it down. - Want to get into a theme park? You need a negative test result on your phone from this morning. - You got tested at one of the thousands of mobile test stations. You received a code with your test. - 15 minutes later, you get a test result on your phone - also sent to a national database in real time. - The theme park worker scans your phone and validates the result. This is not a fool-proof system. But it or something like it will instantly reduce anxiety of people trying to work. If you knew that everyone at your coffee house, at your gym, in your lecture hall, etc. tested negative in the morning. You'd feel safer and we'd all be able to move forward.
  • SpicyLemonZest 7y ago
    I agree with the spirit, but theme parks specifically should probably stay cancelled until the virus is completely and universally suppressed. Temperature checks in smaller public accommodations, absolutely.
  • kingbirdy 7y ago
    It would likely take longer to develop and roll out a system like that than for social distancing to run its course
  • throwaway9980 7y ago
    Unfortunately the tests can’t be replicated and distributed at anywhere near the rate that the virus can be.
  • 609venezia 7y ago
    Can we make millions of the tests rapidly available? I am still reading about test shortages on both coasts, even under the restricted testing regime we have been in so far. Maybe the no-contact thermometers could be a scalable approach. Go to the bank? Forehead scan to get in. Go to the grocery store? Same. At least until--and maybe even after--we can scale the RNA testing.
• iamleppert 7y ago
  I’m honestly looking forward to a new economy served by large corporations. Large companies are more consistent in their user experience across multiple locations, and are better buyers of tech. They are always looking for new ways to automate their operations and frequently turn to tech companies to solve their problems at scale. So in a way, it’s good for the valley if more of the economy becomes more corporate.
  • chance_state 7y ago
    /s ?
    • mywittyname 7y ago
      Doubtful. People often romanticize the "mom & pop" places, but there's a reason that most consumer-facing companies are very large, and those reasons were enumerated by the OP. Also, there's a good deal of selection bias going on. If you had a successful business, why wouldn't you look to expand it to multiple locations? Running a single store makes your business vulnerable and usually requires a lot of time.
      • TheSpiceIsLife 7y ago
        Not everyone is driven to become the CEO of a mega-corporation. Some people are content with what they have, or find running one location stressful enough, or whatever reason.
      • miketery 7y ago
        While there are advantages to having large / homogeneous / monolithic / centralized entities. There are also weaknesses in the face of some threat because there is no diversity to survive it.
        • iamleppert 7y ago
          I’m not sure I agree with the diversity argument. That argument is based on the biological principle of natural selection. However, an economy isn’t a biological system: its a man-made system that is designed and run by an intelligence, actually many intelligent agents working together. Biology is not designed or run by any intelligent agent that we know of. When people apply the diversity argument to non-biological systems, it makes me think they are actually and really arguing for intelligent design of biology.
• haecceity 7y ago
  How long do we expect shelter in place to last?
  • jborichevskiy 7y ago
    At least weeks, at most years?
    • yibg 7y ago
      Most countries can't survive months let alone years on lockdown. Most people can't work remotely, so in extended lockdown people lose their jobs and small businesses fold.
  • ccktlmazeltov 7y ago
    if we can trust the imperial college of london, the next 12-18 months will have 2/3rd of their time in lockdown.
    • Gibbon1 7y ago
      I think that model assumes everyone goes right back to 'normal' as soon as lockdown is lifted. China and South Korea are both using regulations and surveillance to try to keep r0 below 1 while out of lockdown.
• tinyhouse 7y ago
  Regarding restaurants. I live in Massachusetts where sit in is not allowed as of last week. I'm sure many restaurants are hit hard. But I also see many cafes and restaurants that adjusted quickly to take out and delivery and seem pretty busy. Some adjusted their menus and selling soup in bulk etc. Bars got hit harder. Many sport studios quickly moved to online classes. Not everyone can of course. The climbing gym near my house is closed and who knows if they ever reopen. I'm not saying that we're not in a middle of a small businesses catastrophe, just that many small businesses find ways to survive. But obv they won't be able to for too long.
• unexaminedlife 7y ago
  It's articles like this that really make me facepalm, shake my head and say "this isn't about whether America could survive this". America is the last of our concern. Almost ALL of the other countries on planet Earth have orders of magnitude LESS resources (in every sense of the word) than we do. Think about how likely those countries aren't going to fall into chaos. Their governments aren't equipped to deal with this sort of thing.
  • captain_crabs 7y ago
    Part of the benefit of living in America is the fact America will put it's citizens first, no? I fail to see how putting the rest of the world before our own countrymen could at all work. To many, that would be viewed as betraying countrymen if we didn't handle it here first. I'd even posit that an America that's contained and controlled COVID-19 is better for the world than one that's not. I'm _not_ saying we shouldn't help the rest of the world. That's the very next thing. I'm saying, let's make sure we're not drowning before trying to help others not drown. This is a really weird line of reasoning because I don't think it even holds in the case of a broader unity.
    • captain_crabs 7y ago
      I'll drop into this more, because we might not be connecting on what layers we're talking about. I'm talking about immediate medical survival. If by "resources" you're talking about financial/economic support, then I could very much agree with an "everyone right away" approach. I see the immediate health layer as subject to physical limitation, the economic layer subject to informational limitation. If by resources you mean money, then yes, I very much agree.
    • unexaminedlife 7y ago
      I guess, subtly, my point was less about making suggestions about how to proceed, and more about just imagining how the small businesses (mentioned in the article) will do if/when the rest of the world is in disarray. Sure, I have no gripe with the author(s) of the article, but reading it makes me feel like they just don't get the big picture.
• ccktlmazeltov 7y ago
  Here are the issues from my paper napkin analysis: * large businesses not being able to pay for maintenance of tools. * small businesses not being able to pay employees, rent, services, etc. * people not being able to pay for rent and food. What are possible solutions for a long-term lockdown? * for large businesses: bail out. * for small businesses: rent should be free. * for people: rent should be free, food should be distributed like in times of war.
  • ip26 7y ago
    I am not sure you're going to successfully nationalize all commercial property, but temporarily freezing interest on debt & suspending payments is interesting to ponder. For example, most mortgages are held by the Fed, so they have the ability to do that. Similarly for t-bills. I'm sure a real economist can tell me why it wouldn't work, of course. But in general, rent must be collected because debt must be paid, so if debt were frozen then rents actually could be deferred.
    • asdff 7y ago
      I wonder if the hit from freezing debt is less than the gain from having the vast majority of the working economy get a de facto 2x raise. Lots of people are rent burdened which only hurts an economy driven by consumer spending.
  • donatj 7y ago
    > rent should be free What about property maintenance?
• georgeburdell 7y ago
  If you are rich enough, you should be thinking about which small businesses you rely on and pull-in your purchases. My car mechanic just sent me an e-mail out of the blue advertising that they were still open. I will definitely be getting my car serviced early next week, even though it's a few months early. At work, I'm pulling in some of my "nice to have" projects to keep my favorite vendors (who haven't been shut down) busy.
• DoreenMichele 7y ago
  I can't access the article at the moment. I tried. I'm on my phone. It didn't open for me. I'm not sure I care. The world is suddenly embracing a lot of practices I've pursued for years because of my medical condition. I've spent a lot of years trying to develop alternate mental models and an alternate lifestyle to avoid germs so I can stay off all the drugs doctors think I should take. I run r/GigWorks and r/ClothingStartups. Neither has much traction. I have long wanted to actively foster the development of small independent business. The founding fathers of the US believed small business and entrepreneurship was critical to a healthy democracy. You can't speak your mind or vote your heart if you have to live in terror of being fired for it and unable to get a new job. I can run my big fat mouth as much as I do in part because I work for an online writing service. If everyone absolutely hated me on every forum and in the small town where I live, I can keep earning an income anonymously online through the writing service. I am only one person. I've long been a loser and social outcast. As such, I've been failing to get traction. But you are all invited to check out GigWorks and ClothingStartups and try to be part of the solution. The old guard never goes quietly. They go kicking and screaming. Things usually don't really change until a bunch of people die. We've been here before. We survived as a species. I think the most important question right now is "What kind of future would you like to see rise from the ashes?" Answer that question and then actually do it. Don't just leave it as a mental exercise. For me, that means continuing to try to find ways to foster small and micro business success via the Internet to give stability to a top heavy economy that is sucking the air out of the room politically for reasons foreseen by our founding fathers.
  • barbs 7y ago
    > I've long been a loser and social outcast. Gee, I wonder why...
    • deleted 7y ago
      [deleted]
    • dang 7y ago
      This comment breaks the site guidelines and you've done that elsewhere recently too. Would you please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here? Personal attacks are particularly not ok.
• carapace 7y ago
  Distinguish between wealth and paperwork. As Bucky Fuller pointed out, if all the paperwork disappeared overnight we would have a hellofa fight over who owns what, but no one would (necessarily) starve. If the wealth itself disappeared: the factories, the distribution networks, and so on, we would be screwed. In the situation today the physical basis of wealth is not under attack, the "human capital" is. As long as the food and water keep coming we'll eventually be all right, keep your head, and keep your eye on the fundamentals: In approximate rank order from most important to lesser-but-still-very important, the base of Maslow's Hierarchy of Human Needs: +Water (also soap!) +Food Production & Distribution & Waste Management. +Communications (under which I include governance) +Electric Power Pervading and fundamental to all these are keeping a level head and a civil society. "It may seem a ridiculous idea, but the only way to fight the plague is with decency." ~Camus
• m_ke 7y ago
  This wouldn't be such an economic disaster if the government had their shit together and acted fast. All they had to do: 1. Freeze mortgages, rents and interest for 90 days. 2. Send everyone checks for around $2,000 a month, let people choose to cash them if they need to, correct for it on 2021 tax returns based on your income. Avoid having small businesses shut down and lay everyone off, call it a vacation and give people homework for the next 2-3 months while we focus on fighting this pandemic.
  • wegs 7y ago
    This would cause hyperinflation and a massive redistribution of wealth. Coastal people can't live on $2000. Airlines still go under. Plan B: https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3SjhsZ0ztpG5bMzA3WNbVNhU/edit https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...
• devit 7y ago
  The problem is that businesses have been setup in such a way that they can't just stop spending money when they aren't earning any money. But this can mostly be fixed by law, with a law that retroactively changes all rent, leasing, mortgage, employment contracts and in general any contract that involves periodic or future payments to be stopped at will, subject to no longer enjoying the service or product. Then they can just stop paying rent and paying employees and cancel all supply deliveries, since they no longer need those, and they will not lose any money. Then add a temporary UBI and a ban on actually evicting from rented spaces (since the economy is shut down, and thus there would be no other tenants) so that people can still have a home and food.
• threatofrain 7y ago
  Sad to see museums are among the hardest hit institutions, next to gym club.
• namelosw 7y ago
  It's worth to take a look at Karl Marx again. I'm not referring to any existed entities, but the model of pure capitalism is so problematic as he pointed out. The usual reason against shutdown is because people have mouths to feed, mortgages to pay. But seriously, most of the products and services people are selling not really important or even any useful - that's why people have to advertise them so hard - it's not as straightforward as advertising cars, houses, and Coke. But those jobs are very important to those individual employees because it's their only source of income if their business were shut down, they wouldn't have roofs over their heads. So the capital is the way to let people claim their part of the economy. It's so vulnerable that it's not even doomsday yet and people start to lose their source of income, and even without shutting down things. If we're going to shut down non-mandatory industries, people from those industries would get broke immediately - it's so deeply coupled so effective measures could not be taken. In a perfect world, less than 10% of people working, or everyone working one day per week could feed everyone effectively. As automation goes on, the percent could keep shrinking. As a comparison, at the end of the day of a capitalist world, most of the "meaningful" jobs would done by very few persons because of the automation, and the rest of the world can only earn money at their mercy by doing "barely meaningful" jobs. Other than that, those who can't even get "barely meaningful" jobs have to working hard on futuristic versions of TikTok trying to become superstars - it's their only way of claiming their part of the economy. Furthermore, the well-connected people get tested first as Trump suggested (or naturally happens in the US) is also a capitalist way of doing things. If we take Asian countries as an example, the testing kit is soon promoted as strategic resource mostly instructed by the government, which should eventually come from health care institutions, they have ideas to allocate those test kits in order to make maximum use of it, instead of blindly testing people back and forth. If Karl Marx is not for you, it's always worth taking a look at Singapore where they did most things correctly most of the time. It's perfectly balanced in economics, politics and many, many other aspects (Though usually bashed by Western media as an authoritarian country). People can afford to buy houses, education is excellent and at a reasonable price, eating outside is cheap and easy, health care is affordable, and people are relatively free. Everything is carefully planned and designed by the government. As a comparison, at a first glance, Hong Kong seems to be similar to Singapore to those people who haven't been there, but Hong Kong is a more western-style democratic society compared to its neighbors (at before 97 if you protest). But the rent is out of control, things are messier, there's no specific plan for things. Again, I'm not evangelizing communism but those problems Karl pointed out have been overlooked largely nowadays.
• anovikov 7y ago
  Soviet approach to solving the problem would be: don't tell anyone. There was a major flu epidemic that killed 100K+ in the Soviet Union in 1977-78 (long after gulags and all the scary Soviet stuff, when living standards were among the world's top, comparable to poorer Western European countries like Italy and Spain). None of my older relatives ever heard of it. just some old people died, that's it. Absolute zero of economic or social consequences. I think kids didn't go to school for some weeks and maybe streets were cleaned bit better than usual, nothing worse.
• marvin 7y ago
  There is a risk that the response to this epidemic will tear some parts of American society apart. Some of the rhetoric in this thread is both representative and frightening in that regard. People of low means do not like getting told that they must go back to work and accept the risk of losing their parents and getting permanent lung injury. They will also not like getting told to stay at home and default on their rent and mortgage. People in a situation like that can take desperate measures, especially when there’s many millions of them. You guys really need to step up the political measures to take care of these folks. Emergency bailout style. The time has never been more ripe to test out basic income.
• jriley 7y ago
  The SBA statistics are sobering. 46 days for application, 24% approval per slides. In my experience, asking for $50k was harder than $350k and a large distraction. Vendor financing and credit cards filled the gaps. IME if you needed capital, you weren’t approved for capital. If you were cash flow positive with solid income and 2 years of operating history and tax returns, you could put up collateral and refinance at a lower rate. Over ~5 years I was denied ~5 times, discouraged from applying ~3 times. I was approved once after several years of track record with a co-signer pledging a property with 100% collateral. That small business (exited 2019) would have really struggled to survive right now. It would also be a difficult time to ask friends, family or spouse to help. I wish I had a better policy suggestion to offer; it's a hard problem. Good luck to all small businesses out there, I’m pulling for you.
  • LeoTinnitus 7y ago
    I worked with commercial loans and SBA stuff is difficult to get simply because it's hedged on risk. If you need an SBA loan to expand being a landlord and you have a year experience, yeah you might get it. If you just bought a new business and you have no experience with it, you may get denied. They look for essentially a business plan that has been thoroughly thought out. It sucked for us because we had to report EVERY DAY someone missed their payment until it was paid. The SBA gives a decent rate for what it risks, but they are an unmovable force. You cannot explain to the the situation or what. Follow the terms to a t or get yanked.
• antaviana 7y ago
  I wonder if the strict lockdown measures that are needed to try to contain the covid-19 virus perhaps will not be enough to contain the covid-19 virus, but as a side effect will extinguish all other virures with lower Rs transmitted among humans, such as the flu, etc. That is, that after 3 months of strict lockdown and 9 months of pervasive social distancing, the only virus you will be able to catch is the covid-19 virus, until new viruses coming from animals appear.
• gdubs 7y ago
  Like a plane crash, there's a moment where the error is realized. Someone says 'oh sh!t' on the flight recorder when they realize the error, and that there's no time left to correct. Yet enough time remains to wait. That's what this month has felt like. The grave error, in my opinion, was refusing to take dramatic action early on. We couldn't tolerate any economic slowdown, so dice were rolled, and here we are. Add in the (criminal) failure of testing in the United States... It's been a week and you see plenty of calls to 'think of the economy', and put an end to the shelter-in-place. One week. But like I keep saying, this isn't a binary choice. It's not clear that we could just 'chose the economy' at this point, because of the path that was chosen weeks ago – which is a narrower, far more dangerous path, to both the global health, and the economy. Short-term thinking at its worst. But this is not a literal plane crash. The majority of us will live. It's about the kind of world we want on the other side of this. What we need now is global cooperation to share knowledge and resources. We need people to come to their senses so we can make smart decisions and make sure we don't throw out our constitutional rights in the process. We need as much urgency in bailing out the millions of people who are already losing their jobs, as there is for the airlines that spent the vast majority of profits on buying back their stock. There's cognitive dissonance at play. "This can't really be the situation we're in?" Well, it is. This path was chosen. Now we need to buckle-up and learn rapidly from the mistakes we've made.
• Fjolsvith 7y ago
  In 6 days, Chloroquine combined with Z-Paks will have nipped this pandemic in the bud.
  • joe_the_user 7y ago
    Yeah, this sort of bogus claim can do real damage.
• segmondy 7y ago
  Just a money grab by a special interest group - folks in the payment industry. Everyone is trying to figure out how to get their fingers on the $1 trillion that the Fed is handing out. This is saying, the SBA can't give out the money fast! Trust us acquirers/processors to do so! Give us the money and responsibility instead!
• MidnightRaver 7y ago
  Some people feel for dying Italians, some fear going outside so much their hands are shaking. But this really wrenches my gut : O