8 ms·

> fragile ... the word is fragile. We've built an insanely fragile economy. Take a look. There's been no war. 100% of the (not so great) US infrastructure that

• MattGaiser 6y ago
  > There's been no war. 100% of the (not so great) US infrastructure that was there before SARS-COV-2 is still there. The infrastructure may not be physically destroyed, but it is effectively out of commission. Same with everything from warehouses to meat cutting plants. You could make the same argument if a gas attack were used on a factory instead of a bomb.
  • pjc50 6y ago
    This was Keynes' point: the productive capacity is there, it's the question of putting it to work somehow.
  • PragmaticPulp 6y ago
    Are you actually seeing out of commission infrastructure in your city or your business? I’ve seen virtually no impact on the services I depend on locally (except toilet paper for a few weeks). Some supply chain delays on the business side, but it’s delays due to temporary shutdowns rather than permanent factory closures. The orders are still coming through a few weeks later than expected.
  • aSplash0fDerp 6y ago
    The service economy will continue to be fragile for years. The resilient parts of the economy are already planning for EMP protection from disruption and developing space exploration economies.
• rurp 6y ago
  Well said. People often forget that optimizing for efficiency isn't free, it has a cost in flexibility. The modern economy is heavily optimized which, yes, can produce enormous profits, but it also makes the economy extremely brittle. Approaches like just-in-time manufacturing or loading up on debt in a good economy to expand faster work out great... until they don't. And when things go bad, they can go bad quickly. I've heard a number of people referring to COVID-19 as a black swan event, but it's really not. Pandemics are a known risk that have happened many times in the past and will happen many more times in the future. The fact that such an unsurprising disaster has stressed modern economies so tremendously makes me really pessimistic for our society's long term prospects.
  • chkaloon 6y ago
    Yes! That is an astute point. Corporate farms are efficient. Monoculture forests are efficient, etc. But they are fragile. Unions and income transfers cause inefficiencies, but without them, society becomes fragile.
    • ethbro 6y ago
      Efficiency has to be integrated over a timespan. Despite all the disruption, I'd be surprised if it were on the whole more efficient for companies to optimize for resiliency... for an event that happens once in 100 years. Rather than fall back on central banks & governments, and expect them to throw everything and the kitchen sink at it. Ideally, though, what the government will and won't do should have been communicated well in advance of a pandemic, so that everyone had an even investment playing field. Piecemeal bailouts are asking for insider trading.
  • pragmatic 6y ago
    Yes. Hospitals in particular. One I'm familiar with moved to a LEAN system where they did not keep large inventory of supplies. There was some protest about not keeping essential supplies on hand for the lab etc. And now we see the problem with this. Profit margin over safety.
  • mikekchar 6y ago
• ed 6y ago
  > the mere fact of people stopping doing a bunch of stuff Lol this is condescending, this isn’t due to millennials forgoing their avocado toast
  • freehunter 6y ago
    No, it’s due to people not going to movie theaters and not going to Home Depot and not going out to eat at restaurants. You know, things they would normally do but haven’t been doing because it’s not essential.
    • pgodzin 6y ago
      They are definitely still going to Home Depot
      • grogenaut 6y ago
        Agreed, home depot is hopping
      • StillBored 6y ago
        Yah, I should take my own advise here and buy HD, I'm pretty regular at the one near my house. I don't think i've ever seen HD as busy as its been recently. I guess instead of going to restaurants people are fixing all the little things wrong in their houses.
        • karatestomp 6y ago
          Everyone who's still got stable employment used that stimulus check to DIY-reno their kitchen, I think.
• closeparen 6y ago
  Fragile compared to what? Which economies can comfortably absorb the indefinite suspension of nearly all activity?
  • xvedejas 6y ago
    Fully automated ones, I'd guess.
  • vkou 6y ago
    I'm not sure what country you live in, but here in the US, the overwhelming majority of activity was not suspended. My city has been in lockdown for two months, yet I look out my window, and see a full freeway of people going to work, going from work, transporting goods, transporting themselves... Look through the list of essential activities in your local shutdown orders. By the time you get through all the pages of it, you'll be wondering what the hell is left that's non-essential.
• crazygringo 6y ago
  > We've built an insanely fragile economy. Citation needed. Things seem to be functioning pretty well, all things considered. I can still buy virtually everything I need from the local grocery store and Amazon. I've lived in third-world countries where regular products would be out of stock for months at a time under normal circumstances. To me, the economy looks insanely resilient in a global pandemic. > the mere fact of people stopping doing a bunch of stuff has the potential to cause complete economic disaster for, what 15-20M Americans? That's just how it works, if people stop buying the stuff that 20M people produce, the work for those jobs stop existing for the moment. That's neither good nor bad, it just is. There's literally no way around it. The problem isn't fragility or doing unnecessary things. You just need a social safety net, which Europe has been better at providing than the US, but the US could easily provide if it wanted. If you want to have a conversation, the one to have is about social safety nets, not an "economic resilience" bogeyman.
  • dvtrn 6y ago
    If you want to have a conversation, the one to have is about social safety nets, not an "economic resilience" bogeyman. Porque no los dos? You say you've lived in third-world countries, surely you can see the utility in a conversation on both and how much overlap there is between the two hemispheres of that particular socio-economic Venn Diagram..I'd hope?
  • save_ferris 6y ago
    > To me, the economy looks insanely resilient in a global pandemic. We’re still in the early days of this pandemic, as it usually takes many months for the upfront shocks to fully process through the economy. Numerous reports detail a potential collapse of the commercial real estate market, the government is signaling that it is going to hand out any more stimulus money, and health experts are warning about a second wave. Economists aren’t ruling out 40% unemployment down the road, which puts us firmly in depression territory. I have no idea where you live, but I live in Austin, TX, a fairly affluent city, and the changes to the city have been dramatic and very visible. So much retail is still closed, and many thousands are out of work with little opportunity to renter the workforce and likely without future stimulus. Just look at the George Floyd protests, there’s an inherent economic component to American racism and Covid provided a lot of fuel that the senseless killing of Floyd ignited. Those events did not occur in a vacuum, which is partially why we’re seeing unrest that we haven’t witnessed in 60 years. Not to mention that millions never recovered from the last major crisis while politicians and big business pretended like everything was back to normal after the big market rallies.
• PragmaticPulp 6y ago
  Obviously, companies that depend on crowds and foot traffic are seriously hurting right now. However, many other industries are still business as usual. E-commerce businesses might actually be doing better than ever. I tried to schedule a few contractors to get work done recently, thinking they’d have additional openings with the slowdown. Turns out, they’re booked farther out than ever. Everyone else working at home had the same idea to schedule that work. This will clearly shake a lot of businesses, but the real question now is which ones survive and which ones can’t come back. I suspect a lot of the businesses that don’t make it were nearing the end of their viability anyway.
  • IAmGraydon 6y ago
    As one data point, I run small online retail business and saw sales utterly rocket worldwide during this event. At the peak of the lockdowns, I saw a 200% increase in sales. I’m in the musical instrument accessories business. My wife has a retail business as well (photography accessories) which also saw large gains. In the last week or so, things have nearly normalized.
• vondur 6y ago
  I'm going to say most of the businesses at the smaller end of the scale would never have enough money to continue paying employee's without any income coming in. I think everyone kinda knew that shutting down the economy was going to be bad, unless it was only done for a very brief period. If the government can get no strings attached money to companies to pay their employees and get them to open as fast as possible we may come out of it.
• ojnabieoot 6y ago
  > Why? Because people have stopped doing things > We've built an entire economy around people doing things they don't really need to do. Even hunter-gatherers spend a great deal of hard-earned resources on things "they don't need to do," such as art, music, parties, luxury foods and jewelry, and so on. This is human nature. It has nothing to do with how the economy is structured. The stuff we're not doing that "we don't need to do" is not economically redundant make-work symptomatic of an inefficient economy. It's symptomatic of us being a species that prefers nicer digs to "a cave with access to rice and beans." In any economy, activity shuts down if individuals fear an active plague. Human nature also entails people being scared of choking to death on their own lungs. The last paragraph here is trying to sound profound but it's really just catastrophically stupid. There's really no such thing as an economy that has the "spare capacity" to offset 25% of the workforce being furloughed. There are political economies that can adequately respond to this shock - perhaps with a large Keynesian stimulus - but that's very different from having an economy that's somehow structurally immune to the impact of widespread inactivity. Unless its author means "give people free money until the crisis passes", the comment you're approvingly citing badly misunderstands what an economy actually is.
  • uoaei 6y ago
    I think you missed the point. If I understood GP correctly, the "things they don't really need to do" are the modern-day pencil pushers and middlemen who exist in industries that are basically modernized rent-seeking. Health insurance is an obvious example but we can also take it to the extreme and point out that there are sometimes (not often) 3 people at some grocery checkout counters: the cashier, the bagger, and the person who takes the bags and puts them in the basket. The latter two aren't really necessary, but we gave them jobs because it looks good when you report the quarterly unemployment stats. Think about who would be the first to be let go in the case of any economic disruption that impacted that grocery store.
    • ojnabieoot 6y ago
      Although I agree with the rent-seeker problem I really don’t think that’s what he was saying - for starters, the pencil pushers are much more likely to be at work (from home) than the food/entertainment/etc people I mentioned, and much more likely to keep their jobs during the pandemic. If your argument is what OP meant then I was giving them too much credit. > The latter two aren't really necessary, but we gave them jobs because it looks good when you report the quarterly unemployment stats. I don’t even know where to start with this. Clearly you have never worked in a grocery store. Beyond that - why would private businesses agree to hire unnecessary workers to juke unemployment stats? This entire argument makes zero sense. It seems like you have some strong views about the economy but they are disconnected from the facts.