6 ms·

The points made are fine insofar as they go. At the same time, the current economic situation is, very literally, unprecedented. It has aspects of a war, a nat

by JackFr 7y ago

The points made are fine insofar as they go. At the same time, the current economic situation is, very literally, unprecedented. It has aspects of a war, a natural disaster and a secular recession. Economists should try to estimate its effects, but in this case their predictions need to be taken with an extra large grain of salt.

epistasis 7y ago
It's not completely without precedent, in that the 1918 flu pandemic was only a century ago. We don't have a ton of good data, but some researchers are looking at its effects in the US: https://www.bloomberg.com/news/articles/2020-03-27/pandemic-shutdowns-actually-helped-economic-growth-in-1918-flu https://www.bloomberg.com/news/articles/2020-03-27/pandemic-... But I do agree 100% with taken current economic estimates with a huge brain of salt, as our economic machine is far different from the past.
- umanwizard 7y ago
  Were virtually all businesses shut down for weeks or months during the 1918 flu pandemic? All I can find is reports of localized shutdowns in certain cities. If not, I don't think you can say it's comparable.
  - _curious_ 7y ago
    As a percentage of population (and volume of dollars) then vs now: how many are negative net worth? Break even/neutral net worth?
  - clairity 7y ago
    > "Were virtually all businesses shut down for weeks or months... If not, I don't think you can say it's comparable." that's the (over-)reaction. the precedent is the more-virulent-than-usual infectious disease. the precedent is the need to break the infection chain to slow/stop the pandemic. you wouldn't expect the reaction to be 'comparable' after 100 years. you'd hope that we'd have developed methods to better assuage fear and panic though.
  - CydeWeys 7y ago
    Yes, there were very large, long shutdowns during the 1918 flu pandemic. And they had more of an effect than what we're doing now, because people couldn't work remotely.
    - SpicyLemonZest 7y ago
      Do you have a source for that? I've seen charts purporting to show that, but digging in always revealed that they showed "social distancing measures" more broadly, limited to things like public gatherings bans and restaurant closures. I haven't seen any record of general business shutdowns or bans on private gatherings in 1918.
danielfoster 7y ago
This. It's pretty clear some aspects of the economy could suffer permanently. For example restaurants may reopen and decide they no longer need service staff. Or maybe warehouses accelerate the shift to automation to prevent closures due to illness. Perhaps commercial real estate will suffer, too. But other areas of the economy could take off just as quickly and in unexpected ways.
twelve40 7y ago
How is it very literally unprecedented? Spanish flu had much deadlier properties, "work from home" wasn't even possible, there were no antibiotics and almost none of the modern med tech, yet there is no mention of a "1919 economic collapse". Death toll in the US was <700k, which is not great, but actually less than some of the insane apocalyptic predictions you hear about this time around, especially considering that in 100+ years we probably improved just a bit. So I'd say it looks very much "precedented", and during the last precedent the situation was much much worse, and the world moved on just fine for another decade after that.
- frosted-flakes 7y ago
  It also occurred during World War I. That changes the situation somewhat.
  - twelve40 7y ago
    Changes how? I'd say being in WWI was much much worse, no? And yet you still don't hear about a great 1919 depression.
    - kazen44 7y ago
      depression of what? The end of world war 1 had an enourmous impact on continental europe, with many nations simply ceasing to exist at the end of the war. Germany for instance, had a state of near constant poltical and economic anarchy during the weimar republic. And the austrian-hungarian empire ceased to exist. Many people seem to forget that world war 1 was suchs a massive shift in terms of the geopolitical landscape that many nations simply had no functioning economy or proper goverment to speak off.
      - twelve40 7y ago
        If I have to clarify down to the last word, I'm talking about the total implosion of US economy, which is what a lot of people are currently hyping up and clickbaiting on. You don't hear about a great 1919 economic disaster in the USA despite a much more vicious illness and no modern tech (no antibiotics, no concept of a ventilator, etc etc etc). I can't answer for Austria, Hungary, Germany or any other collapsed empires past or present, I don't have any data on that.
fullshark 7y ago
These predictions are so vague as to be basically unfalsifiable, I'm not sure it matters.
proverbialbunny 7y ago
If you look at stock market data from the 1910s, when spanish flu ripped everything and everyone apart, the economy then dropped in a similar way today, well, until the Fed started pumping trillions into the market, and now the market is looking different then than today. The economic collapse from the Spanish Flu was so devastating it was used as a selling point to create the Federal Reserve, which was sold to help a situation similar to today. Today, the Fed's marketing is on the line.

by JackFr 7y ago

epistasis 7y ago

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

umanwizard 7y ago
Were virtually all businesses shut down for weeks or months during the 1918 flu pandemic? All I can find is reports of localized shutdowns in certain cities. If not, I don't think you can say it's comparable.
- _curious_ 7y ago
  As a percentage of population (and volume of dollars) then vs now: how many are negative net worth? Break even/neutral net worth?
- clairity 7y ago
  > "Were virtually all businesses shut down for weeks or months... If not, I don't think you can say it's comparable." that's the (over-)reaction. the precedent is the more-virulent-than-usual infectious disease. the precedent is the need to break the infection chain to slow/stop the pandemic. you wouldn't expect the reaction to be 'comparable' after 100 years. you'd hope that we'd have developed methods to better assuage fear and panic though.
- CydeWeys 7y ago
  Yes, there were very large, long shutdowns during the 1918 flu pandemic. And they had more of an effect than what we're doing now, because people couldn't work remotely.
  - SpicyLemonZest 7y ago
    Do you have a source for that? I've seen charts purporting to show that, but digging in always revealed that they showed "social distancing measures" more broadly, limited to things like public gatherings bans and restaurant closures. I haven't seen any record of general business shutdowns or bans on private gatherings in 1918.

danielfoster 7y ago

This. It's pretty clear some aspects of the economy could suffer permanently. For example restaurants may reopen and decide they no longer need service staff. Or maybe warehouses accelerate the shift to automation to prevent closures due to illness. Perhaps commercial real estate will suffer, too. But other areas of the economy could take off just as quickly and in unexpected ways.

twelve40 7y ago

How is it very literally unprecedented? Spanish flu had much deadlier properties, "work from home" wasn't even possible, there were no antibiotics and almost none of the modern med tech, yet there is no mention of a "1919 economic collapse". Death toll in the US was <700k, which is not great, but actually less than some of the insane apocalyptic predictions you hear about this time around, especially considering that in 100+ years we probably improved just a bit. So I'd say it looks very much "precedented", and during the last precedent the situation was much much worse, and the world moved on just fine for another decade after that.

frosted-flakes 7y ago
It also occurred during World War I. That changes the situation somewhat.
- twelve40 7y ago
  Changes how? I'd say being in WWI was much much worse, no? And yet you still don't hear about a great 1919 depression.
  - kazen44 7y ago
    depression of what? The end of world war 1 had an enourmous impact on continental europe, with many nations simply ceasing to exist at the end of the war. Germany for instance, had a state of near constant poltical and economic anarchy during the weimar republic. And the austrian-hungarian empire ceased to exist. Many people seem to forget that world war 1 was suchs a massive shift in terms of the geopolitical landscape that many nations simply had no functioning economy or proper goverment to speak off.
    - twelve40 7y ago
      If I have to clarify down to the last word, I'm talking about the total implosion of US economy, which is what a lot of people are currently hyping up and clickbaiting on. You don't hear about a great 1919 economic disaster in the USA despite a much more vicious illness and no modern tech (no antibiotics, no concept of a ventilator, etc etc etc). I can't answer for Austria, Hungary, Germany or any other collapsed empires past or present, I don't have any data on that.

fullshark 7y ago

These predictions are so vague as to be basically unfalsifiable, I'm not sure it matters.

proverbialbunny 7y ago

If you look at stock market data from the 1910s, when spanish flu ripped everything and everyone apart, the economy then dropped in a similar way today, well, until the Fed started pumping trillions into the market, and now the market is looking different then than today. The economic collapse from the Spanish Flu was so devastating it was used as a selling point to create the Federal Reserve, which was sold to help a situation similar to today. Today, the Fed's marketing is on the line.