5 ms·

I'm am really trying to determine whether or not this will be the next great depression.

pbourke 7y ago
Yes, but perhaps not in the way that you might think. There were a number of structural factors that led to the great depression: gold standard currency and restrictive monetary policy at the Fed, overly restrictive tariff laws, simultaneous drought that destroyed a lot of farmland, rampant financial fraud, lack of deposit insurance at banks causing numerous bank runs and failures. Basically all of the above is different now. The modern Fed is organized around preventing the monetary mistakes made during the depression. We are on purely fiat currency now, not the volatile gold standard. Food security is hugely increased, and restrictive tariffs have not impacted the ag industry of Canada and Mexico, which are key supports of the US's food supply chain. We have the FDIC for deposit insurance and increased post-Great Recession capital controls on systemically important financial institutions (SIFIs). We have also learned from the Roosevelt interventions of the 1930's that it requires both a strong monetary and fiscal policy to address a systemic shock to the economy. So it might take some time for stimulus to arrive, but it should be incoming. Finally, we have the internet. Not to oversell it, but it's a significant asset that can ensure a degree of continuity of supplies, services and employment in an event such as this. Yes - it's not perfect and many necessary jobs can not be done over the internet. But it's better than the alternative. So, my feeling is that we are heading into the most significant non-wartime economic event since the great depression, but if cards are played properly we should be able to mitigate the terrible effects to a much better degree than was possible in the 1930's.
- wayne_skylar 7y ago
  Without knowing as much about the topic I really feel the same way too. This pandemic might take a "long" time but it will end and we will find ourselves with the same knowhow and infrastructure that we had going in. Surely things will get shaken up but there is a strong desire to go back to life as it was before. It's mostly a question of how that happens.
  - ethbro 7y ago
    The biggest consequence will be creating two tracks of people: those who immediately lost their job, and those who could work remotely. 3+ months of earning is non-trivial, and they'll never get them back. Hopefully any stimulus will be aimed at recently un- or under-employed folks. If I, as a working software developer, end up getting a check... the system is seriously unfair.
    - cmurf 7y ago
      Even three weeks of earnings is non-trivial. e.g. hair salons are shut down by government order as non-essential. Barbers and stylists typically rent their chair, are considered self-employed, and do not qualify for unemployment income. They are screwed right now. They are being told by their landlords they have to keep renting their chairs, perhaps at a discount, because it's a lease. They are being encouraged to get SBA loans by the government, and their landlord. This is vile and immoral. The mere suggestion is unethical feudal nonsense. Make some people go into debt in order to help secure the income of their lord? It's uncivil to say it out loud. Turning it into official policy is an abomination. It indicts the whole culture of a society to do this. I think as a class, they should declare bankruptcy. Force the next higher class to find redress, by mortgagees taking haircuts on loans, all the way up to pensioners and 401ks. The entire point of the free market is that it's supposed to account for these risks, and absorb them equitably. If the market or government demands some low rung people experience worse misery than others, it is a recipe for widespread loss of trust in a system, that quite frankly right now does not deserve trust.
    - mgkimsal 7y ago
      > If I, as a working software developer, end up getting a check... the system is seriously unfair. What if you end up losing your employment a month or so down the road? The 'everyone getting a stimulus check' isn't great, but the effort to means test and make those somewhat arbitrary decisions is non-trivial, and there will always be someone who really did need it, but didn't seem to need it based on some algorithm.
- psfollow 7y ago
  This reads like someone unleashed GPT2 on a bunch of CNBC interviews with a bunch of hedge fund managers making the case for why their portfolio deserves a "fair share" of the bailout pie.
  - pbourke 7y ago
    > This reads like someone unleashed GPT2 on a bunch of CNBC interviews with a bunch of hedge fund managers making the case for why their portfolio deserves a "fair share" of the bailout pie. I am struggling to see why you think that, since I don't watch CNBC and was not thinking of hedge funds or the stock market at all when I wrote the above post. I didn't get into what I think should happen, which is this: - immediate expansion of unemployment insurance to 75-100% of income for at least 12 months, with no shenanigans allowed at the state level - for tip and gig workers and self-employed, 1040 income should be used to qualify for unemployment benefits up to a capped amount ($100k or whatever) - immediate expansion of Medicare to anyone who qualifies for the ACA - immediate open enrollment so people can switch to Medicare via the exchanges - immediate expansion of SNAP and WIC - 6 month moratorium on evictions nationwide - any bailouts should be patterned on the Obama administration's auto bailout, which is to say the capital structure should be rewritten so that workers are given a piece of the company, and the public should benefit once the economy improves
    - madhadron 7y ago
      This seems like the sensible minimum reaction to keep things functioning well to me. I also expect to see a change in perception in the US to thinking that any civilized society that wishes to keep running needs to have a comprehensive health care system, a social safety net for basic income and housing, and a trusted set of expert institutions.
  - Nuzzerino 7y ago
    What part of it didn't you agree with and why?

Yes, but perhaps not in the way that you might think. There were a number of structural factors that led to the great depression: gold standard currency and restrictive monetary policy at the Fed, overly restrictive tariff laws, simultaneous drought that destroyed a lot of farmland, rampant financial fraud, lack of deposit insurance at banks causing numerous bank runs and failures. Basically all of the above is different now. The modern Fed is organized around preventing the monetary mistakes made during the depression. We are on purely fiat currency now, not the volatile gold standard. Food security is hugely increased, and restrictive tariffs have not impacted the ag industry of Canada and Mexico, which are key supports of the US's food supply chain. We have the FDIC for deposit insurance and increased post-Great Recession capital controls on systemically important financial institutions (SIFIs). We have also learned from the Roosevelt interventions of the 1930's that it requires both a strong monetary and fiscal policy to address a systemic shock to the economy. So it might take some time for stimulus to arrive, but it should be incoming. Finally, we have the internet. Not to oversell it, but it's a significant asset that can ensure a degree of continuity of supplies, services and employment in an event such as this. Yes - it's not perfect and many necessary jobs can not be done over the internet. But it's better than the alternative. So, my feeling is that we are heading into the most significant non-wartime economic event since the great depression, but if cards are played properly we should be able to mitigate the terrible effects to a much better degree than was possible in the 1930's.

wayne_skylar 7y ago
Without knowing as much about the topic I really feel the same way too. This pandemic might take a "long" time but it will end and we will find ourselves with the same knowhow and infrastructure that we had going in. Surely things will get shaken up but there is a strong desire to go back to life as it was before. It's mostly a question of how that happens.
- ethbro 7y ago
  The biggest consequence will be creating two tracks of people: those who immediately lost their job, and those who could work remotely. 3+ months of earning is non-trivial, and they'll never get them back. Hopefully any stimulus will be aimed at recently un- or under-employed folks. If I, as a working software developer, end up getting a check... the system is seriously unfair.
  - cmurf 7y ago
    Even three weeks of earnings is non-trivial. e.g. hair salons are shut down by government order as non-essential. Barbers and stylists typically rent their chair, are considered self-employed, and do not qualify for unemployment income. They are screwed right now. They are being told by their landlords they have to keep renting their chairs, perhaps at a discount, because it's a lease. They are being encouraged to get SBA loans by the government, and their landlord. This is vile and immoral. The mere suggestion is unethical feudal nonsense. Make some people go into debt in order to help secure the income of their lord? It's uncivil to say it out loud. Turning it into official policy is an abomination. It indicts the whole culture of a society to do this. I think as a class, they should declare bankruptcy. Force the next higher class to find redress, by mortgagees taking haircuts on loans, all the way up to pensioners and 401ks. The entire point of the free market is that it's supposed to account for these risks, and absorb them equitably. If the market or government demands some low rung people experience worse misery than others, it is a recipe for widespread loss of trust in a system, that quite frankly right now does not deserve trust.
  - mgkimsal 7y ago
    > If I, as a working software developer, end up getting a check... the system is seriously unfair. What if you end up losing your employment a month or so down the road? The 'everyone getting a stimulus check' isn't great, but the effort to means test and make those somewhat arbitrary decisions is non-trivial, and there will always be someone who really did need it, but didn't seem to need it based on some algorithm.
psfollow 7y ago
This reads like someone unleashed GPT2 on a bunch of CNBC interviews with a bunch of hedge fund managers making the case for why their portfolio deserves a "fair share" of the bailout pie.
- pbourke 7y ago
  > This reads like someone unleashed GPT2 on a bunch of CNBC interviews with a bunch of hedge fund managers making the case for why their portfolio deserves a "fair share" of the bailout pie. I am struggling to see why you think that, since I don't watch CNBC and was not thinking of hedge funds or the stock market at all when I wrote the above post. I didn't get into what I think should happen, which is this: - immediate expansion of unemployment insurance to 75-100% of income for at least 12 months, with no shenanigans allowed at the state level - for tip and gig workers and self-employed, 1040 income should be used to qualify for unemployment benefits up to a capped amount ($100k or whatever) - immediate expansion of Medicare to anyone who qualifies for the ACA - immediate open enrollment so people can switch to Medicare via the exchanges - immediate expansion of SNAP and WIC - 6 month moratorium on evictions nationwide - any bailouts should be patterned on the Obama administration's auto bailout, which is to say the capital structure should be rewritten so that workers are given a piece of the company, and the public should benefit once the economy improves
  - madhadron 7y ago
    This seems like the sensible minimum reaction to keep things functioning well to me. I also expect to see a change in perception in the US to thinking that any civilized society that wishes to keep running needs to have a comprehensive health care system, a social safety net for basic income and housing, and a trusted set of expert institutions.
- Nuzzerino 7y ago
  What part of it didn't you agree with and why?