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This is what concerns as many people have acted like the economy only effects rich people, or any move that trades the economy for lives is inherently immoral.

• empath75 7y ago
  In fact, government stimulus will just cause hyperinflation as more money chases less goods and services.
  • mlyle 7y ago
    Not clear. Demand has been pushed way down for things--- perhaps even more than production has been. Stimulus could improve the match of demand to production.
  • vkou 7y ago
    1. We would need to print quadrillions of dollars to get hyperinflation. Hyperinflation is a boogieman, unless this administration completely loses its mind. 2. Recessions cause the destruction of money (Due to defaults, and lack of new loans). This causes deflation. If the new money created by the printing press does not exceed these deflationary pressures, you won't even get inflation, let alone hyperinflation. 3. Deflation is horrible, and is much more dangerous than mild inflation. 4. The printed money is currently chasing investment assets (Mostly stocks), not flour and ground beef. Our previous experience with QE did not result in the prices of commodities inflating - only the prices of investments. Inflation is not the problem.
    • mlyle 7y ago
      Some stimulus measures are creating money to chase flour and ground beef-- the paycheck protection program, etc, are borrowing (and re-lending) in order to preserve pay to consumers. But I agree it's not most of it.
      • 0x8BADF00D 7y ago
        You won't see it until it's too late. Inflation is a backward looking measure. Expected inflation can be inferred by nominal interest rates. If you look at the corporate debt market those rates are already quite high. What happened in the oil market could easily happen in the gold market, but in reverse. Nobody wanted to take delivery on oil, but a lot of people are going to want to take delivery on gold, because there's a shortage of it. At what point does COMEX go bankrupt when nobody is honoring their word to deliver gold upon expiry? A high gold price would be very bad for dollars, because gold is an alternative reserve currency to dollars. Instead of buying a tbill, someone can just buy gold, hold it, and sell a small portion when they need to buy dollar denominated assets, mainly crude. And crude prices are at historic lows, so you don't need to buy as many dollars as you did before.
        • nradov 7y ago
          What exactly is the mechanism by which Comex would go bankrupt? Commodity delivery contracts are still legally enforceable through the court system, although some civil cases may be delayed several months. Gold is a commodity, not a currency. I can't pay my tax bill in gold.
          • 0x8BADF00D 6y ago
            > Gold is a commodity, not a currency. I can't pay my tax bill in gold. It was actually a currency longer than Federal Reserve notes were in existence. Not sure why you'd pay your taxes in gold, but you can, only it would be based on the face value of each gold coin.
    • missedthecue 7y ago
      >1. We would need to print quadrillions of dollars to get hyperinflation. Is there actually a mathematical equation that proves this or is that your conjecture?
      • wmeredith 7y ago
        I’d love to find out otherwise, but I don’t think so. Macro economics is social science, not mathematics.
      • vkou 7y ago
        Look at the MZM, which is a good proxy for 'all the money in the economy'. [1] There's ~20 Trillion of it. Hyperinflation is, by definition, 50% monthly, ~600% annual inflation. The Fed has, so far in this crisis, printed ~2 Trillion that is staying in the economy (The rest goes into very short term liquidity). It's not a hyperinflationary scenario, even if they print another 2, or 4, or 6 trillion. If they printed 20 trillion, that would be another story. [1] https://fred.stlouisfed.org/series/MZM https://fred.stlouisfed.org/series/MZM
    • simonh 7y ago
      All good points, deflation is a serious risk in a situation like this. But also a dose of moderate inflation for a few years or even a decade could help. One of the effects of inflation is to erode the value of loans, deficits and liabilities. In a way it spreads out their costs across the economy and over time.
    • tastygreenapple 7y ago
      Deflation isn't horrible unless you have a lot of debt, it rewards savers. It's probably less efficient for central banks to try to 'hack' inflation than just deploy fiscal policy. And we're almost definitely seeing inflation in the finanical markets. It's not great that valuations are so divorced from fundamentals.
      • mlyle 7y ago
        Deflation punishes investing in anything. Deflation rewards hoarding cash.
    • empath75 7y ago
      If there isn’t ground beef and flour being made, the price will go up.
  • csomar 7y ago
    Unless it's only given to the top 0.1%; then it'll make only stock prices higher and some studios in New York City.
• mlyle 7y ago
  I agree totally, but I don't think that provides guidance here. The meat plants have largely stayed open as essential businesses, only closing or even putting in controls when there's a number of employee cases that can no longer be ignored. So in this case, we're not looking at the trade-off between closing companies preemptively to save lives and economic output, but instead the trade-off between closing companies in response to severe sickness throughout the workforce vs. whatever economic could remain in these conditions. I -do- think in a lot of jurisdictions, e.g. the SF Bay Area-- we are going too far. We've had slowly declining ICU occupancy for the past 3 weeks (a trailing indicator behind disease) and now even case counts are falling noticeably even though testing has improved. We should be -slightly- easing controls and seeing if we can keep the disease load constant or falling. Instead we won't even talk about it until May 4th, and I worry we'll either take too much of a step at once or make a tiny movement much later than we should have tried it.
  • bsder 7y ago
    > Instead we won't even talk about it until May 4th, and I worry we'll either take too much of a step at once or make a tiny movement much later than we should have tried it. The problem is we STILL don't have enough equipment for healthcare workers if that ICU starts filling up. Part of the reason for the lockdown was to give time for all the equipment industries to spin up. Unfortunately, the US federal government squandered that. Until the hospitals can deal with a New York scenario and not have the healthcare workers contracting it due to lack of equipment, we shouldn't relax.
    • mlyle 7y ago
      Right now in the SF Bay Area, ICUs are below typical seasonal usage and the usage has been declining slowly for 3 weeks. I'm not saying we should "relax", but I think we have evidence that the slightly looser controls employed from mid-March to early April were effective-- that would be a good first step to go to now. Odds are that results in continued reduction, but if it results in slow growth instead we'd be OK in the time it takes to notice, react, and have the effect of our reaction seen. Frequent, small changes are good. Not big steps and milestones. Population behavior has further changed in beneficial ways, too-- e.g. mask wearing. Step back to the initial health order -now-. In a couple weeks, consider opening a slightly larger chunk of retail. After each step, watch what happens.
• vkou 7y ago
  You're missing some key facts. 1. Meatpacking, and its supporting supply chains is an essential business. No state in the US has lifted a finger to shut it down. 2. These plant shutdowns are caused by people working in meatpacking plants getting sick, and being unable to work. I don't understand how you can blame this on an economic shutdown. If anything, without the shutdown, the meatpackers would have gotten sick sooner, and in greater numbers.
  • mlyle 7y ago
    Nit on #2 --- usually these shutdowns are caused by too many people getting sick at the plant, and local authorities pressuring it to shut down, or the plant shutting down out of fear of liability to employees. There has been slowed production due to inadequate workforce, but I don't think many plants have -closed- for this reason.
  • deleted 7y ago
    [deleted]
• nkozyra 7y ago
  Boy I just don't think that's a fair summary of the general view on "the economy." The markets have cascading effect, even if individuals don't own equity. Unemployment is a huge factor in what people generally refer to as "the economy." It's all intertwined and I think most people realize that.
• BLKNSLVR 7y ago
  That becomes an exercise in defining essential services. I'd be interested in seeing the web of dependency for the absolute basics like food, and what other seemingly non-essential services are required in the production and distribution of food. Then, just within food itself, what of people with allergies and special needs, and separating the "real" from the "I think gluten free means healthier" types. It's the kind of dependency complexity that economists would drool over, but during good times it's probably a far less profitable area of research than those that cause economics to be looked down upon as part of the problem.
  • vkou 7y ago
    > That becomes an exercise in defining essential services. I'd be interested in seeing the web of dependency for the absolute basics like food, and what other seemingly non-essential services are required in the production and distribution of food. There aren't any. If you grow food, you're essential. If you ship food, you're essential. If you fix the trucks that ship food, you're essential. If you fix the air conditioner in the auto shop that fixes the trucks that ship food, you're essential. If you make screws for the air conditioner that gets installed in that auto shop, you're essential. Read the shutdown orders. They enumerate essential industries, and the list of them is incredibly broad. In Washington state (Which has one of first, and furthest reaching shutdown orders), if you make literally anything that the military uses... You're essential. The list is incredibly broad. These disruptions are caused directly by the virus getting people sick, and taking them out of work (And their workplaces, until people can get tested, and their workspace can be sanitized) - not the shutdown. The shutdown actually serves to keep these facilities open, because it has reduced the virus's spread through the population.
    • BLKNSLVR 7y ago
      That's exactly why I'd like to see some kind of dependency web. I was going to mention additional things such as the utilities: power, gas, water, but food made the point well enough, and you've demonstrated the reach of one of its tentacles very well. > The shutdown actually serves to keep these facilities open, because it has reduced the virus's spread through the population Yes, in total agreement. I'm in favour of the shutdowns because I can see far enough ahead to know how much worse things would be if they didn't happen. Those who bemoan the damage to the economy strike me as either incredibly short-sighted or selfish or both. Admittedly, however, I'm coming from the lucky and mightily privileged position of not having lost my job (at this point), although I do have "that Damocles feeling" fairly constantly.
• throwlaplace 7y ago
  >Food falls under the economy, the economy isn't just the stock market or things rich people do rich people things in. i'm not a vegetarian but if the choice is between people living and me having access to pork i choose the former.
  • armenarmen 7y ago
    good for you!
    • throwlaplace 7y ago
      are you really being sarcastic? you wouldn't?
  • perl4ever 7y ago
    I don't need pork, a friend sent me some canned spam! But seriously, it's never going to be a binary thing. 100 years ago, people ate far less meat, because it was relatively more expensive and scarcer. While avoiding shopping, I've not been eating meat on a daily basis. Once a week or so is fine.
    • throwlaplace 7y ago
      >But seriously, it's never going to be a binary thing the person i responded to is portraying it as a necessary dichotomy i.e. some sort of catastrophic disruption to the food supply chain. the article in particular discusses pork, not even chicken or beef.
  • CWuestefeld 7y ago
    Luckily, this kind of supply shock isn't possible with produce. </sarcasm> This isn't a problem specific to meat at all; the same kind of interruption to supply chains can occur anywhere through the economy. So you don't necessarily have the option of falling back on veggies.
    • throwlaplace 7y ago
• barkingcat 7y ago
  If you didn't get the memo - meat plants and slaughterhouses are places where you definitely don't want sick workers handling raw meat. If you think about it, meat plants are the wet markets of the US. Albeit with sanitary standards, refrigeration, etc, but if there was going to be another zoonotic crossbreeding event, where the human coronavirus from a sick plant worker merges and mutates with a bovine coronavirus within dying slaughterhouse animals - you could be looking at a worse event. These plants are not shutting down because of precautions, they are shutting down because the plant workers are sick and test positive.
• markdown 7y ago
  > or any move that trades the economy for lives is inherently immoral. I'd love to see some rich people forced to work in meat packing plants alongside men and women infected with this coronavirus. It's inherently immoral to force people to work at great risk to themselves and their families just because "the economy", as would be the case in states where the abhorrent practice of at-will employment is law.
  • mlyle 7y ago
    Of course, this raises the question-- what's an unacceptable level of risk? We obviously don't shut everything down because of 1 in 1,000,000 risks. We don't shut everything down for 250 in 1M risks (the flu). Here we have what's likely to be a 1,800 in 1M risk, based on the latest infection fatality rate numbers and the estimate of how many people would be infected before herd immunity. It's 7x worse than the flu. It's also not a risk that it's clear we'll be able to avoid. So here it gets hard to reason about what's right to do. And, of course, we obviously can't act to protect people at a level that will result in worse outcomes, like starvation or famine or collapse of public order.
    • markdown 7y ago
      Which is why shutting down non-essential services is a good half-measure. Meat-packing plants are an essential service, so they are allowed to remain open, but they are temporarily shut down once it becomes evident that a few workers have been infected and the risk of infection for the other workers rises to... as you put it "unacceptable". Sadly, in at-will employment states, only the rich get to decide what is an acceptable level of risk.
      • mlyle 7y ago
        In most at-will states, public health officials have been making the decision about "acceptable level of risk". And, of course, any at-will employee is free to choose to not work in an environment that they personally consider to be too high of a level of risk, even if their employer and local public health officials disagree. I'm in an at-will jurisdiction-- there's a whole bunch of people here who want to work but have been precluded from doing so because of public health orders.
• deleted 7y ago
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