4 ms·

The Normal Economy Is Never Coming Back

66 points by erentz 7y ago

PeterStuer 7y ago
OTOH Prepare for the Ultimate gaslighting "Pretty soon, as the country begins to figure out how we “open back up” and move forward, very powerful forces will try to convince us all to get back to normal. (That never happened. What are you talking about?) Billions of dollars will be spent on advertising, messaging, and television and media content to make you feel comfortable again. It will come in the traditional forms — a billboard here, a hundred commercials there — and in new-media forms: a 2020–2021 generation of memes to remind you that what you want again is normalcy." https://forge.medium.com/prepare-for-the-ultimate-gaslighting-6a8ce3f0a0e0 https://forge.medium.com/prepare-for-the-ultimate-gaslightin...
- partiallypro 7y ago
  I think a lot of people insulated from the current fallout have this view, but a lot of people...the majority of people, do want to "get back to normal." We are also operating a short time frame. Right now what is going on feels fine, for the insulated, but that will deteriorate as this drags on and the longing for "how it was" will intensify. I actually don't think a lot of these think pieces will end up being correct, and we will largely be back to "normal" with some cultural adjustments.
  - PeterStuer 7y ago
    The problem with 'normal' is it was a planet destroying sickening consumption madness with a majority on psych meds or other substances to numb the pain. Surely this pandemic is far from ideal, but can't we stop and think about a few things we perhaps need not return to?
    - new2628 7y ago
      This is an important point, a pity it is downvoted without any argument. Off the top of my head: Formula 1, Eurovision, auto shows, most spectator sports. I wish they all took a slightly longer hiatus.
simonh 7y ago
I think an important thing to bear in mind is that we don’t have a choice. There seems to be a misconception that if we don’t bother with a lockdown and just carry on as normal, just with a bit of social distancing, that we can accept higher deaths but save the economy. We can’t. A study of the economic effects of the Spanish Flu shows that cities which locked down hardest and earliest actually suffered less long term economic impact than cities that didn’t[0]. There’s no such thing as an option to “choose the economy”, the Spanish Flu shows us this. Aside from the millions of deaths this could lead to, and completely crushing the health care system, there would also be many tens of millions of people sick and unable to work, plus many tens of millions of people stuck caring for them. A lot of people would choose to stay at home anyway, especially as the carnage reached its peak. There’s just no way for the economy not to take an existentially threatening impact. This article is shocking, and I believe it’s right, but we need to buckle down and make some really hard choices about how to tackle this thing. However long term I am an optimist. The work force should largely survive and our capital investments still exist. We’ve got used to historically very low inflation, but a dose of inflation over the next 5 to 10 years could actually give use the the flexibility to spread out and absorb the costs across the economy and society. As a fiscal conservative I can’t believe I’m saying this, but there it is. [0] https://www.weforum.org/agenda/2020/04/pandemic-economy-lessons-1918-flu/ https://www.weforum.org/agenda/2020/04/pandemic-economy-less...
- standardUser 7y ago
  Today, Denmark, Austria and Czechia are all beginning to ease their lockdowns and allow parts of their economies to re-open. Their approach requires a spectrum of modern technologies and capabilities that were simply not available 100 years ago. The Spanish Flu may not be the most useful analogy for us to keep turning to. The last hundred years were a doozy.
  - simonh 7y ago
    This is true, as I said Im an optimist longer term. And yes, we shouldn’t need to stay under the harshest restrictions permanently. We need to flatten that curve and spread it out, but can’t expect to eliminate it completely. China shows that with a tight lockdown, you can gradually ease restrictions and get back to work. The behaviours people learn during the lockdown hopefully stick and enable us to resume critical economic activity, applying fresh lockdowns tactically as local outbreaks return.
Barrin92 7y ago
Good grief that's a dramatic article. The economic decline may be stark but that's what happens when you effectively freeze economic activity. I'm not really sure why exactly things are never supposed to be the same given that people still have their training, factories are still around and those can be reopened once sufficient safety is guaranteed. There's disruption in supply chains and business formation and whatnot, but I think it would be better to think about the economy in terms of actual resources and human capital rather than stock market figures, the former isn't vanishing into thin air. There's this tendency to dramatically overrate the impact of contemporary events. People said the same thing after 9/11 when it came to other aspects of life, and apart from increased airport security and a few costly wars there indeed was nothing new under the sun. The CDC estimated that the swine flu in 2009 may have killed up to half a million people globally. We'll see what the death toll of this is at the end but this isn't humanity's first pandemic and it isn't its worst, not by a significant margin.
- marcus_holmes 7y ago
  My father was telling me stories of the Swine Flu outbreak in 1957. It sounds very similar - he was in boarding school, unable to be sent home, and there were a couple of dozen schoolboys and staff nursing everyone else for a few weeks. 3 years later it was the "swinging 60's" and the economy boomed. I think the difference between then and now is the "sophistication" of the financial markets, and how intertwined they are with government. "Too big to fail" didn't work last time, will some heads actually roll this time?
- ciconia 7y ago
  I agree it remains to be seen how the crisis will evolve, but I think the article makes a good case for why this crisis is different: the speed, the scale, and the fact that even before the crisis, since 2008, markets were being propped up by central banks.
- resu_nimda 7y ago
  I think it would be better to think about the economy in terms of actual resources and human capital rather than stock market figures, the former isn't vanishing into thin air. Agreed. This is why I don't get all the doom and gloom, and all the people saying the bailouts/stimulus/low interest rates are going to further wreck things. All of the actual value and technology that we've built up as a society is still there, ready and waiting to kick back into gear. I don't see how moving some numbers around in the meantime is going to create a long lasting deleterious effect. I feel pretty confident that, once the engine starts back up again, things are gonna boom. Would love to understand why I'm wrong, but this article just pointed out a bunch of statistics that are bad right now but didn't really seem to make an argument to back up its headline which I'm going to call BS clickbait.
vearwhershuh 7y ago
EDIT: Big Oops. This is Foreign Policy, Not Foreign Affairs (the CFR publication). :/ That explains why they would mention a debt jubilee. Foreign Policy is the main outlet for the Council on Foreign Relations (CFR), which is one of the main organizations of the establishment. It is useful to read to see what the establishment is thinking, although of course one should not expect too much honesty. This article is academically hysterical in tone and doesn't say very much, other than things are unprecedented and central banks are trying things on a scale never tried before. Of course the problems with globalization (which the CFR championed) will never be discussed. It does mention a Debt Jubilee, which is the best option we have right now, but doesn't drill down on it. It says something about how dire the situation is that they will even mention it without completely dismissing the idea. For those of you interested at home, Steve Keen is the economist who has done the most work on what a fair modern debt jubilee would look like: http://www.debtdeflation.com/blogs/manifesto/ http://www.debtdeflation.com/blogs/manifesto/ It makes sense to call instead for a more active, more visionary government to lead the way out of the crisis. But the question, of course, is what form that will take and which political forces will control it. The CFR has consistently advocated for global government, and you can expect this to be their solution to this crisis.
- 8note 7y ago
  I thought Foreign Affairs was the main output from CFR. Do they run both?
  - vearwhershuh 7y ago
    Gah, I got it wrong. I'll update parent.
- apsec112 7y ago
  Foreign Affairs is from the Council on Foreign Relations. Foreign Policy is a different publication.
donclark 7y ago
I hope and pray that this is the case. This may be the best time for us to make a change in the way the world works. Our lives have been disrupted, and we need to strive to make lasting changes for the greater good.
mlthoughts2018 7y ago
I haven’t seen much analysis of the possibility that most of the rapid job losses are in areas of the economy that just don’t matter much for aggregated productivity or economic health. Essentially, we really had ~10% “unproductive employment” or “discretionary employment” all along, and the virus just highlighted what was already there. Taking that group of previously employed people out of the labor market just doesn’t have a big side-effect. The spending they otherwise would have engaged in had they kept getting paychecks would is just not a significant amount of spending except in a few cases here or there, it’s not systemic, just a downward adjustment. Lots and lots of small shops, restaurants, pet groomers, or freelancers might not get jobs back, and things become a bit inconvenient for everyone else but life moves on, the general backbone of the economy is pretty much unchanged. Just about the same volume of food & staples, energy, rent, repairs, education, and entertainment will be purchased as before, set back by ~6 months of lost revenue. Obviously for the actual people laid off, it’s a disaster and they personally deserve economic help to sustain to find new work and have medical care throughout. But the experience of this group of people isn’t the experience of the overall economy. I have no idea if this is even remotely correct or what, but just feel like nobody is playing devil’s advocate and analyzing the economy this way just to investigate. What if it’s just true that there’s a pretty large layer of the workforce and employers that could disappear overnight and the economic response from everyone else is just that it’s sad but fine? We’d love the luxury of lots of coffee shops, start-ups, self-employed fringe service gigs, but at a moment’s notice you can take all that away and it’s fine. Those weren’t ever really real jobs, just floating “good times” jobs already not factored in much to stock market speculation or core economic growth and productivity.
- goodmachine 7y ago
  > We’d love the luxury of lots of coffee shops, start-ups, self-employed fringe service gigs, but at a moment’s notice you can take all that away and it’s fine. Those weren’t ever really real jobs, just floating “good times” jobs already not factored in much to stock market speculation or core economic growth and productivity. If I were the devil, I wouldn't want you for an advocate. I'm also pretty sure you don't mean to sound like a fool or a wretch, but here it is: in the UK, SME's (under 50 employees, ie the businesses most likely to die during the lockdown/ consequent upfuckery) make up fully three fifths of the employment base, and around half of turnover in the private sector. Not real jobs? Not core? FFS. https://www.fsb.org.uk/uk-small-business-statistics.html https://www.fsb.org.uk/uk-small-business-statistics.html
kyuudou 7y ago
Always the warm and fuzzies when the CFR talks like this
LoSboccacc 7y ago
fault is not the coronavirus, is the massive delocalization. and the solutions are known, but the political landscape is too fragmented for the required corrective actions
scottLobster 7y ago
So to sum up the article: 1. The shutdown has put a lot of people out of work and closed many businesses permanently. 73% of Americans have experienced at least some loss in income as a result. 2. Most government aid is too little too late to prevent 1. 3. World economies were stagnating before the corona virus started, even in the developing world. Now consumers are going to get even more fiscally conservative, possibly exacerbating the stagnation. 4. Unprecedented levels of national debt kicks a much larger can down the road, and we have no idea what that means. 5. A long, halting recovery is more likely than a sharp V-shaped recovery. Yes all of that is a problem. Will it result in systemic changes to how we do things? To a point. Is it going to have killed the global economy 10 years from now? I doubt it. The only lasting difference might be a cultural surge in individual savings and drop in discretionary spending, but perhaps a more secure, slower growing economy is a good thing. It certainly wouldn't be the end of the world.
avgDev 7y ago
I just talked to my boss, how radical are the steps the US government is taking. We have a republican President and senate majority that just agreed to the biggest stimulus ever and while Trump is giving mixed signals (seems like he is trying to appeal to investors) there is no end in sight. My boss is a republican and it also scares him, he agrees that we need to help the people but the government has access to many great minds and they know more than us. My wife is a marketing director at large mall, and honestly I am trying to get her to switch either to digital marketing, or programming. Retail is going to suffer for a long time, and it has been suffering for years. When we start going back to normal, I expect retail traffic to be down or government may enforce rules limiting number of customers. People will have less money, less confidence and retail will be the last place where people spend money. Plus, our world is very complex, air traffic is down, fuel usage is down, plane orders are down, manufacturing is down, freight deliveries are down then cuts are going to be made to non-essential departments across different sectors. I am a dev in manufacturing, and so far I think I'm safe. However, I have a friend in IT, they service large retailers.....he thought he was safe, his company just announced a hiring freeze as some clients are looking to get out of contracts as they are 100% not operating. My comp sells products directly to larger manufacturers our orders March were down 25%, and April could be as much as 30-40%.
omgwtfbyobbq 7y ago
This collapse is not the result of a financial crisis. It is not even the direct result of the pandemic. The collapse is the result of a deliberate policy choice, which is itself a radical novelty. I feel like the author needs to acknowledge that not making a choice is still making a choice. Yes, the current situation is the result of a deliberate policy choice. The alternative, BAU because a government chooses not to shelter in place, could also result in a similar economic situation, plus healthcare being overwhelmed and an order of magnitude (base 10) or more increase in death rate. I wouldn't be surprised if the overall economic harm from choosing to do nothing is greater than the overall economic harm from choosing to shelter in place. The worst part is, the governments that choose to do nothing can actually make the economic situation worse for everyone else because they aren't doing anything to slow the spread of the virus.
seph-reed 7y ago
> The longer we sustain the lockdown, the deeper the scarring to the economy and the slower the recovery. In China, regular economic activity is inching back. I found this quote note-worthy.
aazaa 7y ago
The gist of the article is that there are few historical parallels. That seems fair. > ... In a crisis, it is easy to agree to spend money. But that fight is coming. We are engaged in the largest-ever surge in public debt in peacetime. Right now we are parking that debt on the balance sheet of central banks. Those central banks can also hold the interest rate low, which means that the debt service will not be exorbitant. But that defers the question of what to do with them. To the conventional mind debt must be eventually repaid through surpluses generated through tax increases or spending cuts. The most likely outcome is that the debt from the many fiscal stimulus packages to come (infrastructure, direct payments to taxpayers, tax holidays) will just stay parked on the Fed's balance sheet. The US can afford to do this, but only if the Fed commits to pegging the yield curve through unlimited treasury purchases. The dollar will head much lower, making US goods more competitive abroad. Nominally, the economy should start looking better pretty quickly. So in the short term, it seems plausible that the economy can return to normal outward appearances pretty quickly. In the long term, however, the Fed will be left with a balance sheet approaching or even exceeding GDP. Where that ends up going is anybody's guess. But historical precedents don't paint a pretty picture. The joker in the deck is how long the virus crisis lasts. Nobody knows the answer, so the degree of departure from normal will be a riddle for some time.
yters 7y ago
Is there any damage to priming the population to give up significant liberties if a crisis can be portrayed as serious enough?
fulafel 7y ago
Corona is small potatoes compared to climate change related changes.
jshaqaw 7y ago
Maybe. The author of this article wrote a book on how a decade of financial crises changed the world. Everyone who writes a book seems to try to shoehorn the current crisis into a blurb pitch for their last book.

66 points by erentz 7y ago

OTOH Prepare for the Ultimate gaslighting "Pretty soon, as the country begins to figure out how we “open back up” and move forward, very powerful forces will try to convince us all to get back to normal. (That never happened. What are you talking about?) Billions of dollars will be spent on advertising, messaging, and television and media content to make you feel comfortable again. It will come in the traditional forms — a billboard here, a hundred commercials there — and in new-media forms: a 2020–2021 generation of memes to remind you that what you want again is normalcy." https://forge.medium.com/prepare-for-the-ultimate-gaslighting-6a8ce3f0a0e0 https://forge.medium.com/prepare-for-the-ultimate-gaslightin...

partiallypro 7y ago
I think a lot of people insulated from the current fallout have this view, but a lot of people...the majority of people, do want to "get back to normal." We are also operating a short time frame. Right now what is going on feels fine, for the insulated, but that will deteriorate as this drags on and the longing for "how it was" will intensify. I actually don't think a lot of these think pieces will end up being correct, and we will largely be back to "normal" with some cultural adjustments.
- PeterStuer 7y ago
  The problem with 'normal' is it was a planet destroying sickening consumption madness with a majority on psych meds or other substances to numb the pain. Surely this pandemic is far from ideal, but can't we stop and think about a few things we perhaps need not return to?
  - new2628 7y ago
    This is an important point, a pity it is downvoted without any argument. Off the top of my head: Formula 1, Eurovision, auto shows, most spectator sports. I wish they all took a slightly longer hiatus.

simonh 7y ago

I think an important thing to bear in mind is that we don’t have a choice. There seems to be a misconception that if we don’t bother with a lockdown and just carry on as normal, just with a bit of social distancing, that we can accept higher deaths but save the economy. We can’t. A study of the economic effects of the Spanish Flu shows that cities which locked down hardest and earliest actually suffered less long term economic impact than cities that didn’t[0]. There’s no such thing as an option to “choose the economy”, the Spanish Flu shows us this. Aside from the millions of deaths this could lead to, and completely crushing the health care system, there would also be many tens of millions of people sick and unable to work, plus many tens of millions of people stuck caring for them. A lot of people would choose to stay at home anyway, especially as the carnage reached its peak. There’s just no way for the economy not to take an existentially threatening impact. This article is shocking, and I believe it’s right, but we need to buckle down and make some really hard choices about how to tackle this thing. However long term I am an optimist. The work force should largely survive and our capital investments still exist. We’ve got used to historically very low inflation, but a dose of inflation over the next 5 to 10 years could actually give use the the flexibility to spread out and absorb the costs across the economy and society. As a fiscal conservative I can’t believe I’m saying this, but there it is. [0] https://www.weforum.org/agenda/2020/04/pandemic-economy-lessons-1918-flu/ https://www.weforum.org/agenda/2020/04/pandemic-economy-less...

standardUser 7y ago
Today, Denmark, Austria and Czechia are all beginning to ease their lockdowns and allow parts of their economies to re-open. Their approach requires a spectrum of modern technologies and capabilities that were simply not available 100 years ago. The Spanish Flu may not be the most useful analogy for us to keep turning to. The last hundred years were a doozy.
- simonh 7y ago
  This is true, as I said Im an optimist longer term. And yes, we shouldn’t need to stay under the harshest restrictions permanently. We need to flatten that curve and spread it out, but can’t expect to eliminate it completely. China shows that with a tight lockdown, you can gradually ease restrictions and get back to work. The behaviours people learn during the lockdown hopefully stick and enable us to resume critical economic activity, applying fresh lockdowns tactically as local outbreaks return.

Barrin92 7y ago

Good grief that's a dramatic article. The economic decline may be stark but that's what happens when you effectively freeze economic activity. I'm not really sure why exactly things are never supposed to be the same given that people still have their training, factories are still around and those can be reopened once sufficient safety is guaranteed. There's disruption in supply chains and business formation and whatnot, but I think it would be better to think about the economy in terms of actual resources and human capital rather than stock market figures, the former isn't vanishing into thin air. There's this tendency to dramatically overrate the impact of contemporary events. People said the same thing after 9/11 when it came to other aspects of life, and apart from increased airport security and a few costly wars there indeed was nothing new under the sun. The CDC estimated that the swine flu in 2009 may have killed up to half a million people globally. We'll see what the death toll of this is at the end but this isn't humanity's first pandemic and it isn't its worst, not by a significant margin.

marcus_holmes 7y ago
My father was telling me stories of the Swine Flu outbreak in 1957. It sounds very similar - he was in boarding school, unable to be sent home, and there were a couple of dozen schoolboys and staff nursing everyone else for a few weeks. 3 years later it was the "swinging 60's" and the economy boomed. I think the difference between then and now is the "sophistication" of the financial markets, and how intertwined they are with government. "Too big to fail" didn't work last time, will some heads actually roll this time?
ciconia 7y ago
I agree it remains to be seen how the crisis will evolve, but I think the article makes a good case for why this crisis is different: the speed, the scale, and the fact that even before the crisis, since 2008, markets were being propped up by central banks.
resu_nimda 7y ago
I think it would be better to think about the economy in terms of actual resources and human capital rather than stock market figures, the former isn't vanishing into thin air. Agreed. This is why I don't get all the doom and gloom, and all the people saying the bailouts/stimulus/low interest rates are going to further wreck things. All of the actual value and technology that we've built up as a society is still there, ready and waiting to kick back into gear. I don't see how moving some numbers around in the meantime is going to create a long lasting deleterious effect. I feel pretty confident that, once the engine starts back up again, things are gonna boom. Would love to understand why I'm wrong, but this article just pointed out a bunch of statistics that are bad right now but didn't really seem to make an argument to back up its headline which I'm going to call BS clickbait.

vearwhershuh 7y ago

EDIT: Big Oops. This is Foreign Policy, Not Foreign Affairs (the CFR publication). :/ That explains why they would mention a debt jubilee. Foreign Policy is the main outlet for the Council on Foreign Relations (CFR), which is one of the main organizations of the establishment. It is useful to read to see what the establishment is thinking, although of course one should not expect too much honesty. This article is academically hysterical in tone and doesn't say very much, other than things are unprecedented and central banks are trying things on a scale never tried before. Of course the problems with globalization (which the CFR championed) will never be discussed. It does mention a Debt Jubilee, which is the best option we have right now, but doesn't drill down on it. It says something about how dire the situation is that they will even mention it without completely dismissing the idea. For those of you interested at home, Steve Keen is the economist who has done the most work on what a fair modern debt jubilee would look like: http://www.debtdeflation.com/blogs/manifesto/ http://www.debtdeflation.com/blogs/manifesto/ It makes sense to call instead for a more active, more visionary government to lead the way out of the crisis. But the question, of course, is what form that will take and which political forces will control it. The CFR has consistently advocated for global government, and you can expect this to be their solution to this crisis.

8note 7y ago
I thought Foreign Affairs was the main output from CFR. Do they run both?
- vearwhershuh 7y ago
  Gah, I got it wrong. I'll update parent.
apsec112 7y ago
Foreign Affairs is from the Council on Foreign Relations. Foreign Policy is a different publication.

donclark 7y ago

I hope and pray that this is the case. This may be the best time for us to make a change in the way the world works. Our lives have been disrupted, and we need to strive to make lasting changes for the greater good.

mlthoughts2018 7y ago

I haven’t seen much analysis of the possibility that most of the rapid job losses are in areas of the economy that just don’t matter much for aggregated productivity or economic health. Essentially, we really had ~10% “unproductive employment” or “discretionary employment” all along, and the virus just highlighted what was already there. Taking that group of previously employed people out of the labor market just doesn’t have a big side-effect. The spending they otherwise would have engaged in had they kept getting paychecks would is just not a significant amount of spending except in a few cases here or there, it’s not systemic, just a downward adjustment. Lots and lots of small shops, restaurants, pet groomers, or freelancers might not get jobs back, and things become a bit inconvenient for everyone else but life moves on, the general backbone of the economy is pretty much unchanged. Just about the same volume of food & staples, energy, rent, repairs, education, and entertainment will be purchased as before, set back by ~6 months of lost revenue. Obviously for the actual people laid off, it’s a disaster and they personally deserve economic help to sustain to find new work and have medical care throughout. But the experience of this group of people isn’t the experience of the overall economy. I have no idea if this is even remotely correct or what, but just feel like nobody is playing devil’s advocate and analyzing the economy this way just to investigate. What if it’s just true that there’s a pretty large layer of the workforce and employers that could disappear overnight and the economic response from everyone else is just that it’s sad but fine? We’d love the luxury of lots of coffee shops, start-ups, self-employed fringe service gigs, but at a moment’s notice you can take all that away and it’s fine. Those weren’t ever really real jobs, just floating “good times” jobs already not factored in much to stock market speculation or core economic growth and productivity.

goodmachine 7y ago
> We’d love the luxury of lots of coffee shops, start-ups, self-employed fringe service gigs, but at a moment’s notice you can take all that away and it’s fine. Those weren’t ever really real jobs, just floating “good times” jobs already not factored in much to stock market speculation or core economic growth and productivity. If I were the devil, I wouldn't want you for an advocate. I'm also pretty sure you don't mean to sound like a fool or a wretch, but here it is: in the UK, SME's (under 50 employees, ie the businesses most likely to die during the lockdown/ consequent upfuckery) make up fully three fifths of the employment base, and around half of turnover in the private sector. Not real jobs? Not core? FFS. https://www.fsb.org.uk/uk-small-business-statistics.html https://www.fsb.org.uk/uk-small-business-statistics.html

kyuudou 7y ago

Always the warm and fuzzies when the CFR talks like this

LoSboccacc 7y ago

fault is not the coronavirus, is the massive delocalization. and the solutions are known, but the political landscape is too fragmented for the required corrective actions

scottLobster 7y ago

So to sum up the article: 1. The shutdown has put a lot of people out of work and closed many businesses permanently. 73% of Americans have experienced at least some loss in income as a result. 2. Most government aid is too little too late to prevent 1. 3. World economies were stagnating before the corona virus started, even in the developing world. Now consumers are going to get even more fiscally conservative, possibly exacerbating the stagnation. 4. Unprecedented levels of national debt kicks a much larger can down the road, and we have no idea what that means. 5. A long, halting recovery is more likely than a sharp V-shaped recovery. Yes all of that is a problem. Will it result in systemic changes to how we do things? To a point. Is it going to have killed the global economy 10 years from now? I doubt it. The only lasting difference might be a cultural surge in individual savings and drop in discretionary spending, but perhaps a more secure, slower growing economy is a good thing. It certainly wouldn't be the end of the world.

avgDev 7y ago

I just talked to my boss, how radical are the steps the US government is taking. We have a republican President and senate majority that just agreed to the biggest stimulus ever and while Trump is giving mixed signals (seems like he is trying to appeal to investors) there is no end in sight. My boss is a republican and it also scares him, he agrees that we need to help the people but the government has access to many great minds and they know more than us. My wife is a marketing director at large mall, and honestly I am trying to get her to switch either to digital marketing, or programming. Retail is going to suffer for a long time, and it has been suffering for years. When we start going back to normal, I expect retail traffic to be down or government may enforce rules limiting number of customers. People will have less money, less confidence and retail will be the last place where people spend money. Plus, our world is very complex, air traffic is down, fuel usage is down, plane orders are down, manufacturing is down, freight deliveries are down then cuts are going to be made to non-essential departments across different sectors. I am a dev in manufacturing, and so far I think I'm safe. However, I have a friend in IT, they service large retailers.....he thought he was safe, his company just announced a hiring freeze as some clients are looking to get out of contracts as they are 100% not operating. My comp sells products directly to larger manufacturers our orders March were down 25%, and April could be as much as 30-40%.

omgwtfbyobbq 7y ago

This collapse is not the result of a financial crisis. It is not even the direct result of the pandemic. The collapse is the result of a deliberate policy choice, which is itself a radical novelty. I feel like the author needs to acknowledge that not making a choice is still making a choice. Yes, the current situation is the result of a deliberate policy choice. The alternative, BAU because a government chooses not to shelter in place, could also result in a similar economic situation, plus healthcare being overwhelmed and an order of magnitude (base 10) or more increase in death rate. I wouldn't be surprised if the overall economic harm from choosing to do nothing is greater than the overall economic harm from choosing to shelter in place. The worst part is, the governments that choose to do nothing can actually make the economic situation worse for everyone else because they aren't doing anything to slow the spread of the virus.

seph-reed 7y ago

> The longer we sustain the lockdown, the deeper the scarring to the economy and the slower the recovery. In China, regular economic activity is inching back. I found this quote note-worthy.

aazaa 7y ago

The gist of the article is that there are few historical parallels. That seems fair. > ... In a crisis, it is easy to agree to spend money. But that fight is coming. We are engaged in the largest-ever surge in public debt in peacetime. Right now we are parking that debt on the balance sheet of central banks. Those central banks can also hold the interest rate low, which means that the debt service will not be exorbitant. But that defers the question of what to do with them. To the conventional mind debt must be eventually repaid through surpluses generated through tax increases or spending cuts. The most likely outcome is that the debt from the many fiscal stimulus packages to come (infrastructure, direct payments to taxpayers, tax holidays) will just stay parked on the Fed's balance sheet. The US can afford to do this, but only if the Fed commits to pegging the yield curve through unlimited treasury purchases. The dollar will head much lower, making US goods more competitive abroad. Nominally, the economy should start looking better pretty quickly. So in the short term, it seems plausible that the economy can return to normal outward appearances pretty quickly. In the long term, however, the Fed will be left with a balance sheet approaching or even exceeding GDP. Where that ends up going is anybody's guess. But historical precedents don't paint a pretty picture. The joker in the deck is how long the virus crisis lasts. Nobody knows the answer, so the degree of departure from normal will be a riddle for some time.

yters 7y ago

Is there any damage to priming the population to give up significant liberties if a crisis can be portrayed as serious enough?

fulafel 7y ago

Corona is small potatoes compared to climate change related changes.

jshaqaw 7y ago

Maybe. The author of this article wrote a book on how a decade of financial crises changed the world. Everyone who writes a book seems to try to shoehorn the current crisis into a blurb pitch for their last book.