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Comment by brenden2 | Hacker News Reader

The Fed conveniently released an announcement about a new $2.3t free money program at the same time. The Fed's actions only serve to confirm what I think a lot of people already know: things are going to get really bad.

It's a bit strange watching the stock market continue to pump knowing many of these companies have had their revenues drop by as much as 100%.

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On the other hand, hasn't a lot of cash outflow been reduced right now too?

I feel like we're putting the economy on pause. If we can survive in this state for another 3 or so months, there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal.

Getting an economy back on track is somewhat of a chicken-and-egg problem: consumers need jobs to obtain income, but companies need sales from said consumers to generate profits, some of which in turn fund jobs.

If the economy were to just magically turn back on at its prior capacity whenever this all ends, so many consumer-facing business would die because it's going to take years for everyone who had jobs to get them back.

There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance. It's important to remember that such a quick recovery has never happened in history, and sure, technology will likely speed it up some, but it'll also hide and obscure many details because the BLS system is inherently antiquated.

"There's so much optimism around a quick recovery, but we've also gotten really bad at using poor KPIs (like the stock market) to judge economic performance." = fully agreed, and further wondering: what KPIs would you use?

I believe the way we collect data around the economy needs to be completely rethought. It's clear that the gig economy model is the future for many workers, but it's proliferated in a way that absolves companies of financial responsibility and has created massive inequality that our current system isn't able to effectively address.

We have to rethink the way we define and calculate employment, underemployment, and unemployment to more realistically align with how the labor market works today. It would be a very ambitious effort, no doubt.

I recall a time many moons ago when I was doing some research on the way in which my state determined their own employment/economic statistics.

It was quite an eye opening experience and exploration. State level economists/demographers are using totally obsolete methods, worse was they they didn't want to disclose certain key elements short of a DPA (state equivalent to FOI) which further led to believe that their archaic approach may be intentionally misleading because "look at how great our unemployment rate is" ;)

I can't speak to fed stuff, never dug in to deep. Totally agree with what you are saying and wondering what (trusted) existing KPIs out there would make sense to look at as say a subcategory of unemployment, if it gets any more granular?

Ultimately, the most hopeful future I see is one where all levels of government, from municipalities all the way up to the federal government report out raw data as close to real-time as possible so that academic institutions, non-profits, etc., can do data science for the public, so to speak.

Here's what looks like some new weekly research made public re. res rental payment: https://www.nmhc.org/research-insight/nmhc-rent-payment-trac...

There’s a good chance things will return quickly to normal? Where’d you get that from?

I don't think three months is right though. We need to wait at bare minimum until contagion goes back down to the level it was when we shut the economy down. Even if we say that's three months off, we'll just have to shut it back down again shortly after. Then cases will go way back up the way they currently are and we'll wait another few months until they go back down. A number of cycles of this until we hit herd immunity, which, if we say 1% of population catch it each cycle, that's quite a number of multi-month cycles.

Black Swan, 1:100 year event. It makes a lot of sense to spend the kind of money that you'd collect over two years of tax collection in order to support people through this. You can then recover that money over about the next 50 years.

I think Australia is trying to do this on the cheap and kinda of stuffing it up. We're going to see a lot of industries collapse. Tourism is dead for 36 months at least and so is the higher education sector. It's going to be bleak.

"there's a good chance things will quickly return to normal - or at least most companies will survive and start rehiring under a new normal." Other than optimism and hope, what is your basis here?

what's happening is the result of a medical emergency and not the economy. There's no financial reason or economic reason the job losses are so high. It's still there, the demand is still there, we artificially halted the economy and that generated the job loss. It's certainly not an on/off situation but the job demand is still there and we can get back to work.

This concept of an economy as some sort of Platonic ideal, disconnected from the processes of the polity in which it exists, is very odd to me.

It seems like having your heart stop and saying it isn't a "real" emergency, because the organs are all still there and ready to get back to work as soon as oxygenated blood starts arriving again. Sure, that's true for a minute or so, maybe two if you're young and healthy. After that...

For those who have completely surrendered to 'the economy', mostly neoliberal/laissez-faire, this is par for the course.

well take the analogy further, in this case to save the patient's life you have to stop the heart from beating for a time but that doesn't imply the patient has suffered a heart attack.

In that case, the analogy is to open-heart surgery, which typically results in significantly reduced capacity for a long time at best, and often permanently. It's certainly not something you bounce back from quickly or easily, and even if you're young and in perfect physical health, you have to be pretty lucky to come back all the way.

Staying within the increasingly strained analogy, I don't think it is reasonable to describe the US economy as "young" or "in perfect physical health", or indeed even as anywhere close to either of those. This is more like doing an emergency sextuple bypass on an obese 70-year-old with a lifelong pack-a-day habit - even if the patient comes off the table alive, it's going to take a long and careful period of physical therapy and recovery to keep him that way, and he's almost certainly never going to recover all of even the limited capacity he had before the crisis.

> the demand is still there

Right. Common belief in 1930-1931, too.

Psychology is malleable, and consumption patterns beyond food and shelter are driven largely by psychology. In the great depression, consumption behavior of an entire generation was permanently changed, no matter how much better the economy got. Those mental scars lasted forever.

What percentage of the population will watch a parent, spouse, best friend, or grandparent slowly asphyxiate to death and develop a lifetime aversion to casual dining, tourism, mall shopping, non-business air travel, fast food, staying in hotels, visiting family for holidays, casino gambling, meeting with potential clients, going to class, etc?

And then what are the second order effects of not needing the suits/ties/dresses, jetliner inventory, commercial real estate, gasoline, cruise ships, university buildings, casinos, etc required for the above activities?

Which of the economic sectors predicated on those activities will "bounce back"? What is the current high-yield debt load associated with these sectors?

Or the Great War, famines in Europe and 1918 flu pandemic? Which was followed by the roaring 20's. As to what % of the population will watched a loved one die and then retrench psychologically for an extended period of time? IMO, a very very small percentage. History has seen people suffer much much MUCH worse loss and then bounce back with a vengeance shortly afterwards.

People and societies are not as fragile as many people seem to imagine today. People and societies are, in fact, quite resilient. They can withstand the horrors of war, plague, famine and more. And then bounce back rapidly within a few years. I'm not trying to minimize the sorrow or severity of those that suffer from this pandemic. But relative to past mass trauma, there is little to suggest it's a major turning point in global culture.

well, we can argue but in 6-8 months we'll know for sure.

Just because the cause of a crisis wasn’t financial, doesn’t mean that it doesn’t trigger a financial crisis. Financial systems are not impervious to medical disasters just because they aren’t financial in nature.

In fairness to the poster, this is the refrain you’d hear from many CNBC hosts all day, political appointees, etc. I’m old enough to remember the same positivity as the financial crisis unfolded, so I try to remind myself that public officials have no incentive to tell the public “the economy is going to be fubar till 2020. Hang on folks.”

In 'fairness' to the poster, if they're relying on CNBC for their perspective, they're idiots unless they're really young and haven't been burned before by the mainstream media's reporting.

At least in tech, there have been waves upon waves of layoffs the last two weeks. Those jobs won’t instantly come back, even when the economy recovers.

Beyond tech, many small business will never reopen. Their suppliers will now be over staffed, and need to lay-off. The suppliers of their suppliers will see a reduction in their order volume, and will do layoffs. Etc, etc.

I’m not an economist, but it doesn’t take an economist to see that even if we had a vaccine every human being could get today, that there would still be a permanent jump in unemployment that will take time to recover from.

Given there is no vaccine in the near future, the hope turns to NPIs or therapeutics. NPIs will continue to suppress the economy because many service workers won’t be able to resume their jobs, even as some people go back to work. Cruises won’t be back. Amusement parks won’t reopen. Stadiums will still be shut. Flights will still run mostly empty. Ubers will be avoided.

So, the hope turns to therapeutics. Hopefully some drug cocktail can reduce the severity of symptoms so fewer people enter catastrophic distress. And/or, we discover some other way to treat those in the ICU to further lower the death rate. If we can lower the death rate to actually be the same as a bad flu season, maybe enough people will have confidence to resume their normal lives.

For now, I don’t personally foresee a V shaped recovery. I’m not sure I buy a U shaped recovery either. But, I’m not an economist, so I shouldn’t be taken as anything other than a random internet person sharing their opinion.

Honestly, I put more faith in a random internet person sharing their opinion on HN using a bit of logic, reason and current reality than I would someone who actually considered themselves to be an "economist" (which btw fully deserves air quotes whenever saying outloud).

I’m somewhat certain that viewpoint isn’t entirely original to the fifteen people posting it in this thread, but is fairly common among actual economists and has come to prominence precisely because there are still quite a few serious publishers recognizing expertise and connecting it to the public.

It’s the professional media personalities impersonating economists based on their 30-year old mail-order PhDs that give the profession a bad name. Someone giving stock tips on their daily talk radio program is not an economist, almost by definition (the efficient market hypothesis is usually taught in the first semester)

> things are going to get really bad.

Yes, they will. Just look at countries like Italy, Spain, etc. It will proportionally be the same in the USA, or any other big country. Whoever was smart enough to look at the first affected/infected countries and react quickly will probably be a bit ahead of others, but sooner or later, with the way our global economy works, the lockdown will crush a lot of jobs, and it doesn't matter how much money you have left in your bank (as a country). The only way is to reintroduce people into work slowly, and in order to do so we need to understand who can go out and who can't. Of course, the vaccine would solve a lot of troubles, but who knows when.

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