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On the other hand, hasn't a lot of cash outflow been reduced right now too? I feel like we're putting the economy on pause. If we can survive in this state for

On the other hand, hasn't a lot of cash outflow been reduced right now too? I feel like we're putting the economy on pause. If we can survive in this state for another 3 or so months, there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal.

gonzo41 7y ago
Black Swan, 1:100 year event. It makes a lot of sense to spend the kind of money that you'd collect over two years of tax collection in order to support people through this. You can then recover that money over about the next 50 years. I think Australia is trying to do this on the cheap and kinda of stuffing it up. We're going to see a lot of industries collapse. Tourism is dead for 36 months at least and so is the higher education sector. It's going to be bleak.
- deleted 7y ago
  [deleted]
threatofrain 7y ago
There’s a good chance things will return quickly to normal? Where’d you get that from?
_curious_ 7y ago
"there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal." Other than optimism and hope, what is your basis here?
- chasd00 7y ago
  what's happening is the result of a medical emergency and not the economy. There's no financial reason or economic reason the job losses are so high. It's still there, the demand is still there, we artificially halted the economy and that generated the job loss. It's certainly not an on/off situation but the job demand is still there and we can get back to work.
  - throwanem 7y ago
    This concept of an economy as some sort of Platonic ideal, disconnected from the processes of the polity in which it exists, is very odd to me. It seems like having your heart stop and saying it isn't a "real" emergency, because the organs are all still there and ready to get back to work as soon as oxygenated blood starts arriving again. Sure, that's true for a minute or so, maybe two if you're young and healthy. After that...
    - mercer 7y ago
      For those who have completely surrendered to 'the economy', mostly neoliberal/laissez-faire, this is par for the course.
    - chasd00 7y ago
      well take the analogy further, in this case to save the patient's life you have to stop the heart from beating for a time but that doesn't imply the patient has suffered a heart attack.
      - throwanem 7y ago
        In that case, the analogy is to open-heart surgery, which typically results in significantly reduced capacity for a long time at best, and often permanently. It's certainly not something you bounce back from quickly or easily, and even if you're young and in perfect physical health, you have to be pretty lucky to come back all the way. Staying within the increasingly strained analogy, I don't think it is reasonable to describe the US economy as "young" or "in perfect physical health", or indeed even as anywhere close to either of those. This is more like doing an emergency sextuple bypass on an obese 70-year-old with a lifelong pack-a-day habit - even if the patient comes off the table alive, it's going to take a long and careful period of physical therapy and recovery to keep him that way, and he's almost certainly never going to recover all of even the limited capacity he had before the crisis.
  - wjossey 7y ago
    Just because the cause of a crisis wasn’t financial, doesn’t mean that it doesn’t trigger a financial crisis. Financial systems are not impervious to medical disasters just because they aren’t financial in nature.
- wjossey 7y ago
  In fairness to the poster, this is the refrain you’d hear from many CNBC hosts all day, political appointees, etc. I’m old enough to remember the same positivity as the financial crisis unfolded, so I try to remind myself that public officials have no incentive to tell the public “the economy is going to be fubar till 2020. Hang on folks.”
  - mercer 7y ago
    In 'fairness' to the poster, if they're relying on CNBC for their perspective, they're idiots unless they're really young and haven't been burned before by the mainstream media's reporting.
save_ferris 7y ago
Getting an economy back on track is somewhat of a chicken-and-egg problem: consumers need jobs to obtain income, but companies need sales from said consumers to generate profits, some of which in turn fund jobs. If the economy were to just magically turn back on at its prior capacity whenever this all ends, so many consumer-facing business would die because it's going to take years for everyone who had jobs to get them back. There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance. It's important to remember that such a quick recovery has never happened in history, and sure, technology will likely speed it up some, but it'll also hide and obscure many details because the BLS system is inherently antiquated.
- _curious_ 7y ago
  "There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance." = fully agreed, and further wondering: what KPIs would you use?
  - save_ferris 7y ago
    I believe the way we collect data around the economy needs to be completely rethought. It's clear that the gig economy model is the future for many workers, but it's proliferated in a way that absolves companies of financial responsibility and has created massive inequality that our current system isn't able to effectively address. We have to rethink the way we define and calculate employment, underemployment, and unemployment to more realistically align with how the labor market works today. It would be a very ambitious effort, no doubt.
    - _curious_ 7y ago
      I recall a time many moons ago when I was doing some research on the way in which my state determined their own employment/economic statistics. It was quite an eye opening experience and exploration. State level economists/demographers are using totally obsolete methods, worse was they they didn't want to disclose certain key elements short of a DPA (state equivalent to FOI) which further led to believe that their archaic approach may be intentionally misleading because "look at how great our unemployment rate is" ;) I can't speak to fed stuff, never dug in to deep. Totally agree with what you are saying and wondering what (trusted) existing KPIs out there would make sense to look at as say a subcategory of unemployment, if it gets any more granular?
wjossey 7y ago
At least in tech, there have been waves upon waves of layoffs the last two weeks. Those jobs won’t instantly come back, even when the economy recovers. Beyond tech, many small business will never reopen. Their suppliers will now be over staffed, and need to lay-off. The suppliers of their suppliers will see a reduction in their order volume, and will do layoffs. Etc, etc. I’m not an economist, but it doesn’t take an economist to see that even if we had a vaccine every human being could get today, that there would still be a permanent jump in unemployment that will take time to recover from. Given there is no vaccine in the near future, the hope turns to NPIs or therapeutics. NPIs will continue to suppress the economy because many service workers won’t be able to resume their jobs, even as some people go back to work. Cruises won’t be back. Amusement parks won’t reopen. Stadiums will still be shut. Flights will still run mostly empty. Ubers will be avoided. So, the hope turns to therapeutics. Hopefully some drug cocktail can reduce the severity of symptoms so fewer people enter catastrophic distress. And/or, we discover some other way to treat those in the ICU to further lower the death rate. If we can lower the death rate to actually be the same as a bad flu season, maybe enough people will have confidence to resume their normal lives. For now, I don’t personally foresee a V shaped recovery. I’m not sure I buy a U shaped recovery either. But, I’m not an economist, so I shouldn’t be taken as anything other than a random internet person sharing their opinion.
- _curious_ 7y ago
  Honestly, I put more faith in a random internet person sharing their opinion on HN using a bit of logic, reason and current reality than I would someone who actually considered themselves to be an "economist" (which btw fully deserves air quotes whenever saying outloud).
  - IAmEveryone 7y ago
    I’m somewhat certain that viewpoint isn’t entirely original to the fifteen people posting it in this thread, but is fairly common among actual economists and has come to prominence precisely because there are still quite a few serious publishers recognizing expertise and connecting it to the public. It’s the professional media personalities impersonating economists based on their 30-year old mail-order PhDs that give the profession a bad name. Someone giving stock tips on their daily talk radio program is not an economist, almost by definition (the efficient market hypothesis is usually taught in the first semester)
daxfohl 7y ago
I don't think three months is right though. We need to wait at bare minimum until contagion goes back down to the level it was when we shut the economy down. Even if we say that's three months off, we'll just have to shut it back down again shortly after. Then cases will go way back up the way they currently are and we'll wait another few months until they go back down. A number of cycles of this until we hit herd immunity, which, if we say 1% of population catch it each cycle, that's quite a number of multi-month cycles.

gonzo41 7y ago

Black Swan, 1:100 year event. It makes a lot of sense to spend the kind of money that you'd collect over two years of tax collection in order to support people through this. You can then recover that money over about the next 50 years. I think Australia is trying to do this on the cheap and kinda of stuffing it up. We're going to see a lot of industries collapse. Tourism is dead for 36 months at least and so is the higher education sector. It's going to be bleak.

deleted 7y ago
[deleted]

threatofrain 7y ago

There’s a good chance things will return quickly to normal? Where’d you get that from?

_curious_ 7y ago

"there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal." Other than optimism and hope, what is your basis here?

chasd00 7y ago
what's happening is the result of a medical emergency and not the economy. There's no financial reason or economic reason the job losses are so high. It's still there, the demand is still there, we artificially halted the economy and that generated the job loss. It's certainly not an on/off situation but the job demand is still there and we can get back to work.
- throwanem 7y ago
  This concept of an economy as some sort of Platonic ideal, disconnected from the processes of the polity in which it exists, is very odd to me. It seems like having your heart stop and saying it isn't a "real" emergency, because the organs are all still there and ready to get back to work as soon as oxygenated blood starts arriving again. Sure, that's true for a minute or so, maybe two if you're young and healthy. After that...
  - mercer 7y ago
    For those who have completely surrendered to 'the economy', mostly neoliberal/laissez-faire, this is par for the course.
  - chasd00 7y ago
    well take the analogy further, in this case to save the patient's life you have to stop the heart from beating for a time but that doesn't imply the patient has suffered a heart attack.
    - throwanem 7y ago
      In that case, the analogy is to open-heart surgery, which typically results in significantly reduced capacity for a long time at best, and often permanently. It's certainly not something you bounce back from quickly or easily, and even if you're young and in perfect physical health, you have to be pretty lucky to come back all the way. Staying within the increasingly strained analogy, I don't think it is reasonable to describe the US economy as "young" or "in perfect physical health", or indeed even as anywhere close to either of those. This is more like doing an emergency sextuple bypass on an obese 70-year-old with a lifelong pack-a-day habit - even if the patient comes off the table alive, it's going to take a long and careful period of physical therapy and recovery to keep him that way, and he's almost certainly never going to recover all of even the limited capacity he had before the crisis.
- wjossey 7y ago
  Just because the cause of a crisis wasn’t financial, doesn’t mean that it doesn’t trigger a financial crisis. Financial systems are not impervious to medical disasters just because they aren’t financial in nature.
wjossey 7y ago
In fairness to the poster, this is the refrain you’d hear from many CNBC hosts all day, political appointees, etc. I’m old enough to remember the same positivity as the financial crisis unfolded, so I try to remind myself that public officials have no incentive to tell the public “the economy is going to be fubar till 2020. Hang on folks.”
- mercer 7y ago
  In 'fairness' to the poster, if they're relying on CNBC for their perspective, they're idiots unless they're really young and haven't been burned before by the mainstream media's reporting.

save_ferris 7y ago

Getting an economy back on track is somewhat of a chicken-and-egg problem: consumers need jobs to obtain income, but companies need sales from said consumers to generate profits, some of which in turn fund jobs. If the economy were to just magically turn back on at its prior capacity whenever this all ends, so many consumer-facing business would die because it's going to take years for everyone who had jobs to get them back. There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance. It's important to remember that such a quick recovery has never happened in history, and sure, technology will likely speed it up some, but it'll also hide and obscure many details because the BLS system is inherently antiquated.

_curious_ 7y ago
"There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance." = fully agreed, and further wondering: what KPIs would you use?
- save_ferris 7y ago
  I believe the way we collect data around the economy needs to be completely rethought. It's clear that the gig economy model is the future for many workers, but it's proliferated in a way that absolves companies of financial responsibility and has created massive inequality that our current system isn't able to effectively address. We have to rethink the way we define and calculate employment, underemployment, and unemployment to more realistically align with how the labor market works today. It would be a very ambitious effort, no doubt.
  - _curious_ 7y ago
    I recall a time many moons ago when I was doing some research on the way in which my state determined their own employment/economic statistics. It was quite an eye opening experience and exploration. State level economists/demographers are using totally obsolete methods, worse was they they didn't want to disclose certain key elements short of a DPA (state equivalent to FOI) which further led to believe that their archaic approach may be intentionally misleading because "look at how great our unemployment rate is" ;) I can't speak to fed stuff, never dug in to deep. Totally agree with what you are saying and wondering what (trusted) existing KPIs out there would make sense to look at as say a subcategory of unemployment, if it gets any more granular?

wjossey 7y ago

At least in tech, there have been waves upon waves of layoffs the last two weeks. Those jobs won’t instantly come back, even when the economy recovers. Beyond tech, many small business will never reopen. Their suppliers will now be over staffed, and need to lay-off. The suppliers of their suppliers will see a reduction in their order volume, and will do layoffs. Etc, etc. I’m not an economist, but it doesn’t take an economist to see that even if we had a vaccine every human being could get today, that there would still be a permanent jump in unemployment that will take time to recover from. Given there is no vaccine in the near future, the hope turns to NPIs or therapeutics. NPIs will continue to suppress the economy because many service workers won’t be able to resume their jobs, even as some people go back to work. Cruises won’t be back. Amusement parks won’t reopen. Stadiums will still be shut. Flights will still run mostly empty. Ubers will be avoided. So, the hope turns to therapeutics. Hopefully some drug cocktail can reduce the severity of symptoms so fewer people enter catastrophic distress. And/or, we discover some other way to treat those in the ICU to further lower the death rate. If we can lower the death rate to actually be the same as a bad flu season, maybe enough people will have confidence to resume their normal lives. For now, I don’t personally foresee a V shaped recovery. I’m not sure I buy a U shaped recovery either. But, I’m not an economist, so I shouldn’t be taken as anything other than a random internet person sharing their opinion.

_curious_ 7y ago
Honestly, I put more faith in a random internet person sharing their opinion on HN using a bit of logic, reason and current reality than I would someone who actually considered themselves to be an "economist" (which btw fully deserves air quotes whenever saying outloud).
- IAmEveryone 7y ago
  I’m somewhat certain that viewpoint isn’t entirely original to the fifteen people posting it in this thread, but is fairly common among actual economists and has come to prominence precisely because there are still quite a few serious publishers recognizing expertise and connecting it to the public. It’s the professional media personalities impersonating economists based on their 30-year old mail-order PhDs that give the profession a bad name. Someone giving stock tips on their daily talk radio program is not an economist, almost by definition (the efficient market hypothesis is usually taught in the first semester)

daxfohl 7y ago

I don't think three months is right though. We need to wait at bare minimum until contagion goes back down to the level it was when we shut the economy down. Even if we say that's three months off, we'll just have to shut it back down again shortly after. Then cases will go way back up the way they currently are and we'll wait another few months until they go back down. A number of cycles of this until we hit herd immunity, which, if we say 1% of population catch it each cycle, that's quite a number of multi-month cycles.