4 ms·

Fragile? We basically locked people in their homes. Shut down every imaginable business except those deemed "essential". Closed all retail and restaurants. Wh

Fragile? We basically locked people in their homes. Shut down every imaginable business except those deemed "essential". Closed all retail and restaurants. What would you expect to happen?

keithnoizu 6y ago
Buying starbucks, etc. People who work at one cafe spending money at another cafe, etc. is the economic version of busy work. It doesn't really impact the countries ability to produce food and goods. Yet with out it the economy grinds to malaise that may last for years. That is pretty fragile.
czbond 6y ago
You both have valid points; I think OP is talking about the U.S. economy being built on consumerism, materialism, and need to spend for growth. Growth requires the citizen base to continually spend more.
- gopalv 6y ago
  > Growth requires the citizen base to continually spend more. If the stimulus bill had gone directly to that, then this might have made a lot more sense. Forget UBI, the trillion dollars in PPP, if it was put into people's checking accounts as a reverse payroll tax might have had a very different (& aligned with consumerist values) economic result. As in, take the "employee as a cost" out of the employer's books & turn every extra employee just extra hands to work at your business, just paid for by the negative taxes (this punishes the under-the-table payment tax dodges directly). The fact that they gave PPP, without actually putting money into a paycheck absolutely sucked if your goal was to stop the money from slowing down in the economy. A dollar I spend turns into many more dollars spent, than a dollar I saved. But if I know I'm out on the street once that number drops to 0, I won't spend right now, even if it is a necessary purchase.
ravenstine 6y ago
Fragile, because corporations that have millions or billions in cash flow don't have the kind of savings to keep people staffed and make debt payments. No, we little people are supposed to "save for a rainy day" and flood the stock market with our 401ks while big business gets to grow grow grow, make little to nothing in profit, and bolster stock prices with corporate debt. This isn't just about big business. Small businesses notoriously operate on very thin margins. Though that's not necessarily because of debt, but because what it takes to run a business today takes a considerable amount of overhead. I know that the idea of saving money seems cliche, like some obsolete thing your grandpa might say, but we're going to have to wake up to the fact that if we want to finance everything with debt then we're going to be penalized every 10 years when there's an adjustment or a catastrophe that forces one. The catch 22 there is that using less debt also means less growth, and we've all gotten used to unprecedented amounts of growth.
- MattGaiser 6y ago
  > No, we little people are supposed to "save for a rainy day" We really aren't. Between government pension plans, unemployment insurance, and all the welfare programs, I would challenge whether this is a real expectation at this point.
  - throwlaplace 6y ago
    >and all the welfare programs hn right now is a great source of metadata for who to avoid when applying/hiring. i'm scraping all of these covid and economy threads for vile conservative comments and matching to names and making a "red flag" list. @gmail me if you want access to the list.
    - ravenstine 6y ago
      It's pretty despicable to show up in a thread where we are having an honest discussion, tag people as conservative(I think you mean "heretic"), and offer your blacklist to employers. Heck off.
flatline 6y ago
Except all retail and restaurants have not closed. I live in a state that has had one of the most aggressive and successful responses to the virus, and people are still out and about in nice weather. The big box stores and groceries were open the whole time. Most restaurants have been open for take-out only, the whole time or most of the time. Smaller retailers are now allowed to re-open. People have been ordering a ton of stuff from online retailers. Commerce has slowed, and if everything somehow went back to normal next week we'd see the effects of just this initial slowdown for years to come. We are a service-based economy that depends on continual consumer growth that will never come back the way it was. The deep systemic impacts of all this have not really started yet.
ianleeclark 6y ago
Well, it would seem that if we close down all the non-essential businesses, and the economy immediately hemmorhages 10s of millions of jobs, that most of what we're doing isn't essential. In some bizarre twist of fate, an enviable hegemonic position has been squandered: where Americans could have cemented their dominance by doing likely anything else, we instead de-industrialized ourselves into a service-based economy specializing in shuffling the same 300$ around between 300 million people while nose-diving off a cliff the second the invisible hand comes knocking.
spamizbad 6y ago
What state requires you to stay in your home?
jondubois 6y ago
I think that it's definitely fragile in the sense that there are a lot of people going through hardship at the moment. When so many people need to rely on friends and relatives to survive, it means that capitalism has already broken down. The system has already failed. Now we just have to wait and see the results of this weird socialist system that we just created.

Fragile? We basically locked people in their homes. Shut down every imaginable business except those deemed "essential". Closed all retail and restaurants. What would you expect to happen?

keithnoizu 6y ago

Buying starbucks, etc. People who work at one cafe spending money at another cafe, etc. is the economic version of busy work. It doesn't really impact the countries ability to produce food and goods. Yet with out it the economy grinds to malaise that may last for years. That is pretty fragile.

czbond 6y ago

You both have valid points; I think OP is talking about the U.S. economy being built on consumerism, materialism, and need to spend for growth. Growth requires the citizen base to continually spend more.

gopalv 6y ago
> Growth requires the citizen base to continually spend more. If the stimulus bill had gone directly to that, then this might have made a lot more sense. Forget UBI, the trillion dollars in PPP, if it was put into people's checking accounts as a reverse payroll tax might have had a very different (& aligned with consumerist values) economic result. As in, take the "employee as a cost" out of the employer's books & turn every extra employee just extra hands to work at your business, just paid for by the negative taxes (this punishes the under-the-table payment tax dodges directly). The fact that they gave PPP, without actually putting money into a paycheck absolutely sucked if your goal was to stop the money from slowing down in the economy. A dollar I spend turns into many more dollars spent, than a dollar I saved. But if I know I'm out on the street once that number drops to 0, I won't spend right now, even if it is a necessary purchase.

ravenstine 6y ago

Fragile, because corporations that have millions or billions in cash flow don't have the kind of savings to keep people staffed and make debt payments. No, we little people are supposed to "save for a rainy day" and flood the stock market with our 401ks while big business gets to grow grow grow, make little to nothing in profit, and bolster stock prices with corporate debt. This isn't just about big business. Small businesses notoriously operate on very thin margins. Though that's not necessarily because of debt, but because what it takes to run a business today takes a considerable amount of overhead. I know that the idea of saving money seems cliche, like some obsolete thing your grandpa might say, but we're going to have to wake up to the fact that if we want to finance everything with debt then we're going to be penalized every 10 years when there's an adjustment or a catastrophe that forces one. The catch 22 there is that using less debt also means less growth, and we've all gotten used to unprecedented amounts of growth.

MattGaiser 6y ago
> No, we little people are supposed to "save for a rainy day" We really aren't. Between government pension plans, unemployment insurance, and all the welfare programs, I would challenge whether this is a real expectation at this point.
- throwlaplace 6y ago
  >and all the welfare programs hn right now is a great source of metadata for who to avoid when applying/hiring. i'm scraping all of these covid and economy threads for vile conservative comments and matching to names and making a "red flag" list. @gmail me if you want access to the list.
  - ravenstine 6y ago
    It's pretty despicable to show up in a thread where we are having an honest discussion, tag people as conservative(I think you mean "heretic"), and offer your blacklist to employers. Heck off.

flatline 6y ago

Except all retail and restaurants have not closed. I live in a state that has had one of the most aggressive and successful responses to the virus, and people are still out and about in nice weather. The big box stores and groceries were open the whole time. Most restaurants have been open for take-out only, the whole time or most of the time. Smaller retailers are now allowed to re-open. People have been ordering a ton of stuff from online retailers. Commerce has slowed, and if everything somehow went back to normal next week we'd see the effects of just this initial slowdown for years to come. We are a service-based economy that depends on continual consumer growth that will never come back the way it was. The deep systemic impacts of all this have not really started yet.

ianleeclark 6y ago

Well, it would seem that if we close down all the non-essential businesses, and the economy immediately hemmorhages 10s of millions of jobs, that most of what we're doing isn't essential. In some bizarre twist of fate, an enviable hegemonic position has been squandered: where Americans could have cemented their dominance by doing likely anything else, we instead de-industrialized ourselves into a service-based economy specializing in shuffling the same 300$ around between 300 million people while nose-diving off a cliff the second the invisible hand comes knocking.

spamizbad 6y ago

What state requires you to stay in your home?

jondubois 6y ago

I think that it's definitely fragile in the sense that there are a lot of people going through hardship at the moment. When so many people need to rely on friends and relatives to survive, it means that capitalism has already broken down. The system has already failed. Now we just have to wait and see the results of this weird socialist system that we just created.