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Does it seem to anyone else that the global economy was a lot more fragile than we thought?

drstewart 5y ago
Rental car prices being slightly higher due to supply shortages doesn't make the economy seem fragile. In fact, if that's one of the worst after effects of a global pandemic, I'd call it extremely robust.
- skybrian 5y ago
  It’s not the worst shortage. It’s a fairly high-profile example, but there are a wide variety of shortages. I think it’s fair to say that a lot of consumers aren’t much affected by them. Many businesses are scrambling, though.
  - spookthesunset 5y ago
    > I think it’s fair to say that a lot of consumers aren’t much affected by them. Not directly but indirectly through higher prices on just about everything. Plus ever had your dishwasher break? Good luck getting parts… that stuff is in super short supply right now and that is just one instance. Think about elevators, MRI machines, you name it… The supply chain runs deep.
    - skybrian 5y ago
      Yes, it's all hiding just under the surface. If your dishwasher didn't break, you don't notice. Similarly, most of the time, most people don't need a rental car, but the price of car rentals suddenly becomes more relevant if your car is in the shop for repairs.
josephcsible 5y ago
You wouldn't call a building fragile just because it got destroyed by a thermonuclear bomb. I wouldn't call the global economy fragile just because it falls apart when every government at once imposes draconian lockdowns for months to years.
- inetknght 5y ago
  > You wouldn't call a building fragile just because it got destroyed by a thermonuclear bomb. Some very few buildings are designed to withstand (all but a direct hit by) a nuclear bomb. A failure of such a building would certainly exacerbate problems that arise from the nuclear war. Likewise, the U.S. government (and many other first-world nations' governments) was supposed to have been on the ball for a pandemic. Unfortunately it, uhhhh, failed. And it certainly exacerbated the problems that arose from the pandemic.
Someone1234 5y ago
Aside from maybe chips and PPE, I don't really believe so. The media just focuses on problematic areas, but if you consider how little goods disruption there was overall we fared fairly well. Rental companies sold off stock when demand decreased to stay afloat which was rational from their perspective (and something they've done before). Problem was that when they went to re-purchase inventory, there was a car manufacturing bottleneck caused by a chip shortage (both supply chain disruption, and vehicle manufacturers voluntarily giving up their limited fab slots to consumer electronics companies because they predicted incorrectly a decrease in demand). PS - And some seeming supply chain disruption was actually caused by panic buying instead e.g. toilet paper, water bottles, generators, etc.
- asdff 5y ago
  Chips, PPE, skilled construction labor, resources for construction, trucking, freight rail, shipping, the list goes on. If you think its just chips and PPE and occasional runs on toilet paper, you aren't seeing the entire picture of just how jammed up the supply chain is currently and how uncertain the paths forward are as critical pieces have only so much slack left to stretch.
  - Someone1234 5y ago
    > trucking, freight rail, shipping When demand exceeds 100% of normal capacity it reflects a lack of elasticity in the system rather than fragility. I'll acknowledge the wood shortage though due to beetles eating the supply and saw mills ramping down right as demand was shooting up. More broadly, no, I am not seeing this "critical pieces have only so much slack left to stretch." Seems like hyperbole without substance. What are these critical pieces that are just about to fail?
  - ishjoh 5y ago
    Also worth noting that meat processing plants in the US were temporarily shutting [1] down as well due to Covid, which was causing famers to start euthanizing live stock [2]. The Trump administration took action [3] to compel those plants to open under the Defense Production Act, although it's unclear if the executive order would have withstood a legal challenge [4], it did have the desired effect and farming and food processing resumed. Had the government not interfered in the operation of meat processing we might have much higher meat prices as well not to mention we would have likely had the same issues with food supply chains for raising live stock. [1] - https://www.ers.usda.gov/covid-19/rural-america/meatpacking-industry/ https://www.ers.usda.gov/covid-19/rural-america/meatpacking-... [2] - https://www.cnbc.com/2020/05/02/coronavirus-devastates-agriculture-dumped-milk-euthanized-livestock.html https://www.cnbc.com/2020/05/02/coronavirus-devastates-agric... [3] - https://www.cnn.com/2020/04/28/politics/defense-production-act-executive-order-food-supply/index.html https://www.cnn.com/2020/04/28/politics/defense-production-a... [4] - https://www.washingtonpost.com/outlook/2020/05/04/trump-meat-processing-order/ https://www.washingtonpost.com/outlook/2020/05/04/trump-meat...
spookthesunset 5y ago
I mean we deliberately took a wrecking ball to our supply chain (destroying folks livelihood along the way) for a year and a half. You can’t just pay people to stay home... those people were doing something “essential” to somebody and they were all forced to close or dramatically alter their business. All the people not producing things no longer doing so is gonna have a huge impact on literally everything. Dunno how anybody could be surprised at the outcome; people warned of exactly this happening back in March of 2020 but they were harassed, mocked, shamed and yelled at. The second and third order effects from the last year and a half will no doubt have more of a negative public health impact than covid ever did.
- mrtranscendence 5y ago
  But neither the automobile shortage nor the chip shortage that caused it were themselves caused by lockdown restrictions. This would have happened anyway. > The second and third order effects from the last year and a half will no doubt have more of a negative public health impact than covid ever did. Really? COVID killed millions and made millions more very sick. Meanwhile industrial economies are doing overall quite well despite lockdowns and some labor shortages.
  - josephcsible 5y ago
    > But neither the automobile shortage nor the chip shortage that caused it were themselves caused by lockdown restrictions. This would have happened anyway. What would have caused them other than the lockdowns?
    - puetzk 5y ago
      The texas blackout was a major factor - it hit an NXP plant that didn't manage to complete an orderly shutdown in time, and caused enough equipment damage that they couldn't get operating again at all for a month, and at reduced capacity for a long time after. https://www.statesman.com/story/business/2021/03/12/nxp-could-lose-100-million-due-weather-shutdown-austin-plants/4664621001/ https://www.statesman.com/story/business/2021/03/12/nxp-coul... There was also a Samsung plant similarly affected, which I think didn't really get back operational until the end of March.
foxfluff 5y ago
Crazy GPU prices aside, I haven't really noticed any problems. So maybe the global economy is fine, or the local economy here isn't nearly as affected by the global economy as one would think.
micromacrofoot 5y ago
Inconveniences aside the economy seems to be doing rather well despite 4.5 million people dying over the course of 18 months due to a new disease. I do think it has exaggerated some long-time inequities and we have an opportunity to make improvements (for example, look at who's net worth increased the most during the pandemic, and by how much).

Rental car prices being slightly higher due to supply shortages doesn't make the economy seem fragile. In fact, if that's one of the worst after effects of a global pandemic, I'd call it extremely robust.

skybrian 5y ago
It’s not the worst shortage. It’s a fairly high-profile example, but there are a wide variety of shortages. I think it’s fair to say that a lot of consumers aren’t much affected by them. Many businesses are scrambling, though.
- spookthesunset 5y ago
  > I think it’s fair to say that a lot of consumers aren’t much affected by them. Not directly but indirectly through higher prices on just about everything. Plus ever had your dishwasher break? Good luck getting parts… that stuff is in super short supply right now and that is just one instance. Think about elevators, MRI machines, you name it… The supply chain runs deep.
  - skybrian 5y ago
    Yes, it's all hiding just under the surface. If your dishwasher didn't break, you don't notice. Similarly, most of the time, most people don't need a rental car, but the price of car rentals suddenly becomes more relevant if your car is in the shop for repairs.

josephcsible 5y ago

You wouldn't call a building fragile just because it got destroyed by a thermonuclear bomb. I wouldn't call the global economy fragile just because it falls apart when every government at once imposes draconian lockdowns for months to years.

inetknght 5y ago
> You wouldn't call a building fragile just because it got destroyed by a thermonuclear bomb. Some very few buildings are designed to withstand (all but a direct hit by) a nuclear bomb. A failure of such a building would certainly exacerbate problems that arise from the nuclear war. Likewise, the U.S. government (and many other first-world nations' governments) was supposed to have been on the ball for a pandemic. Unfortunately it, uhhhh, failed. And it certainly exacerbated the problems that arose from the pandemic.

Someone1234 5y ago

Aside from maybe chips and PPE, I don't really believe so. The media just focuses on problematic areas, but if you consider how little goods disruption there was overall we fared fairly well. Rental companies sold off stock when demand decreased to stay afloat which was rational from their perspective (and something they've done before). Problem was that when they went to re-purchase inventory, there was a car manufacturing bottleneck caused by a chip shortage (both supply chain disruption, and vehicle manufacturers voluntarily giving up their limited fab slots to consumer electronics companies because they predicted incorrectly a decrease in demand). PS - And some seeming supply chain disruption was actually caused by panic buying instead e.g. toilet paper, water bottles, generators, etc.

asdff 5y ago
Chips, PPE, skilled construction labor, resources for construction, trucking, freight rail, shipping, the list goes on. If you think its just chips and PPE and occasional runs on toilet paper, you aren't seeing the entire picture of just how jammed up the supply chain is currently and how uncertain the paths forward are as critical pieces have only so much slack left to stretch.
- Someone1234 5y ago
  > trucking, freight rail, shipping When demand exceeds 100% of normal capacity it reflects a lack of elasticity in the system rather than fragility. I'll acknowledge the wood shortage though due to beetles eating the supply and saw mills ramping down right as demand was shooting up. More broadly, no, I am not seeing this "critical pieces have only so much slack left to stretch." Seems like hyperbole without substance. What are these critical pieces that are just about to fail?
- ishjoh 5y ago
  Also worth noting that meat processing plants in the US were temporarily shutting [1] down as well due to Covid, which was causing famers to start euthanizing live stock [2]. The Trump administration took action [3] to compel those plants to open under the Defense Production Act, although it's unclear if the executive order would have withstood a legal challenge [4], it did have the desired effect and farming and food processing resumed. Had the government not interfered in the operation of meat processing we might have much higher meat prices as well not to mention we would have likely had the same issues with food supply chains for raising live stock. [1] - https://www.ers.usda.gov/covid-19/rural-america/meatpacking-industry/ https://www.ers.usda.gov/covid-19/rural-america/meatpacking-... [2] - https://www.cnbc.com/2020/05/02/coronavirus-devastates-agriculture-dumped-milk-euthanized-livestock.html https://www.cnbc.com/2020/05/02/coronavirus-devastates-agric... [3] - https://www.cnn.com/2020/04/28/politics/defense-production-act-executive-order-food-supply/index.html https://www.cnn.com/2020/04/28/politics/defense-production-a... [4] - https://www.washingtonpost.com/outlook/2020/05/04/trump-meat-processing-order/ https://www.washingtonpost.com/outlook/2020/05/04/trump-meat...

spookthesunset 5y ago

I mean we deliberately took a wrecking ball to our supply chain (destroying folks livelihood along the way) for a year and a half. You can’t just pay people to stay home... those people were doing something “essential” to somebody and they were all forced to close or dramatically alter their business. All the people not producing things no longer doing so is gonna have a huge impact on literally everything. Dunno how anybody could be surprised at the outcome; people warned of exactly this happening back in March of 2020 but they were harassed, mocked, shamed and yelled at. The second and third order effects from the last year and a half will no doubt have more of a negative public health impact than covid ever did.

mrtranscendence 5y ago
But neither the automobile shortage nor the chip shortage that caused it were themselves caused by lockdown restrictions. This would have happened anyway. > The second and third order effects from the last year and a half will no doubt have more of a negative public health impact than covid ever did. Really? COVID killed millions and made millions more very sick. Meanwhile industrial economies are doing overall quite well despite lockdowns and some labor shortages.
- josephcsible 5y ago
  > But neither the automobile shortage nor the chip shortage that caused it were themselves caused by lockdown restrictions. This would have happened anyway. What would have caused them other than the lockdowns?
  - puetzk 5y ago
    The texas blackout was a major factor - it hit an NXP plant that didn't manage to complete an orderly shutdown in time, and caused enough equipment damage that they couldn't get operating again at all for a month, and at reduced capacity for a long time after. https://www.statesman.com/story/business/2021/03/12/nxp-could-lose-100-million-due-weather-shutdown-austin-plants/4664621001/ https://www.statesman.com/story/business/2021/03/12/nxp-coul... There was also a Samsung plant similarly affected, which I think didn't really get back operational until the end of March.

foxfluff 5y ago

Crazy GPU prices aside, I haven't really noticed any problems. So maybe the global economy is fine, or the local economy here isn't nearly as affected by the global economy as one would think.

micromacrofoot 5y ago

Inconveniences aside the economy seems to be doing rather well despite 4.5 million people dying over the course of 18 months due to a new disease. I do think it has exaggerated some long-time inequities and we have an opportunity to make improvements (for example, look at who's net worth increased the most during the pandemic, and by how much).