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Great Recession of 2020

Discussion in 'Off-Topic' started by Kaitzilla, Apr 1, 2020.

  1. Birdjaguar

    Birdjaguar Hanafubuki Retired Moderator Supporter

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    Trump thinks it's already over. He is a genius so he should know.
     
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  2. Hrothbern

    Hrothbern Deity

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    That toddler will get his double dip icecream
     
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  3. Cutlass

    Cutlass The Man Who Wasn't There.

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    Some economists think that the current situation, while it has no actual good parallels, more resembles 1979-1982 Volker recession than it does any other particular event. What makes the Volker recession different from other recessions was that it was caused by the government jamming down hard on the brakes of the economy. And so when the brakes were released, the economy came back pretty strongly. The current recession is also about the government jamming down hard on the brakes of the economy. So there's at least some chance of a V shaped recovery.
     
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  4. hobbsyoyo

    hobbsyoyo Deity

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    I feel that a key difference between now and then is that the proportion of non-living wage jobs is so much higher now (with attendant extreme wealth concentration) that any recovery will benefit shareholders while most of the population is forced into permanent welfare. And once the $600/week boost expires, desperation is going to set in. There's a generation of workers that was just now beginning to overcome the last recession and reach an employment status that allowed them some level of self-sufficiency and that's been entirely wiped out. We joke about the failure to launch kids that live with their parents but that is not a situation that anyone really wants and yet it's become so common.
     
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  5. Cutlass

    Cutlass The Man Who Wasn't There.

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    It's certainly true that the working class is in a much worse position now. But they weren't in a great one then either. Japan was making major inroads on American manufacturing, and Reaganomics was doing all in it's power to kill the golden goose. Likewise, an issue now is that Moscow Mitch is doing everything in his power to make certain the American economy is as weak as possible for as long as possible. And this isn't a question of an ideology of having a different approach to the problem. Moscow Mitch is deliberately and maliciously doing all the harm that he possibly can. And he's got a lot of help doing it.

    So the bigger obstacles to a strong recovery are the Republican party, and Republican priorities. Not the state of the economy in and of itself. No matter who wins the presidency, if the Republicans retain the Senate, there will be a Lost Decade. But again, that's not because of economic realities on the ground, that's because of Republican priorities in politics. So the economists who are looking at the possibility of V shaped recovery, and they aren't saying it's a certainty, just a possibility, are looking at the economy and not at the politics.

    https://www.axios.com/mcconnell-tru...ion-de76042f-38d2-43d2-a9e3-011253fd03a7.html
     
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  6. onejayhawk

    onejayhawk Afflicted with reason

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    It was in April.

    In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.
    https://www.politico.com/news/2020/05/26/2020-election-democrats-281470

    Funny, but not true.

    Trump thinks the recovery will be strong and soon. That does not mean he thinks that the recession is over, or even that we have bottomed yet.

    J
     
  7. Arwon

    Arwon

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    I think a V-shaped recession would require an A-shaped virus trajectory and that doesn't seem to be happening over there. As long as there's lots of infections and lots of risk, economic activity surely doesn't just rebound anything close to fully.
     
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  8. onejayhawk

    onejayhawk Afflicted with reason

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    Who says we do not have an A shaped virus trajectory? Have new hospitalizations not been declining for weeks?

    J
     
  9. Hrothbern

    Hrothbern Deity

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    That's the issue I see as well
    A M shaped Covid for a W shaped economy.

    Looking from Trump's options
    One could be:
    * sit out the lockout until medio June and then gear back asmuch as possible to normal economy regardless
    * Q1 was a bit worse, but Q2 will be hit heavily by the lockdown now and all the fired people.
    * Q3 will be a big improvement compared to Q2. The lower Q2, the easier that fast recovery in Q3.
    * In October the Q3 estmates followed up by the final results allign perfectly with the final touch of the election campaign
    * the second wave Covid will grow as well, but ofc in terms of body bags with 3 weeks delay and people have become more frightened about their jobs and the economy.

    October-November election campaign:
    Trump has the Q3 on Q2 economy improvement results... huge... promises further improvement by extrapolating, and yeah Covid.. some new hope story on some vaccin-medicin-whatever.
    The war on China all the time conveniently there as distraction and national spirit enhancer... and ofc needing a strong leader and not some Biden pushover.
    All who want to believe can believe.
    Hail the saviour Trump.
     
  10. EnglishEdward

    EnglishEdward Deity

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    The way I see it as soon as a partial technical economic recovery is underway and the welfare slows,
    the corporates will resume firing employees, liquidating small business and repossessing homes etc.

    Moral and therefore discretionary spending and therefore business is likely to remain low until 2021/2022.

    Donald Trump has screwed up big time on Covid and Black Lives and politeness, and his supporters know it.

    They are not going to come out and do the sack cloths and ashes apologies for voting for him, but many
    of them might just decide to stay at home or leave the box unticked. Republican candidates will likely delay
    abandoning him until it is too late for them. I think that a betrayed 'Donald. will make a late withdrawal.

    Joe Biden will make it to the Whitehouse but he will very rapidly be almost incapacitated by the strain.
    That is why I think it is very important who he puts on the Democratic ticket as vice-president.

    The character of the vice-president will likely decide whether the USA changes or keeps the status quo.
     
  11. Lexicus

    Lexicus Deity

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    I don't agree. At bottom the reason is that a global pandemic scared Americans into consuming way less than they were before mid-March.
     
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  12. Kaitzilla

    Kaitzilla Lord Croissant

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    Ya, I think we are screwed and just haven't realized it yet.
    https://www.businessinsider.com/mit...s-economic-aid-bill-senate-republicans-2020-5
    In my opinion, the $600 per week is the only thing keeping the train from derailing, and once it stops on July 31st, employers are only going to take back 80% of their workforce permanently since demand is so soft.
    The remaining 20% people's income will drop from $900 per week down to $300 per week as they truly become jobless.
    This compares to the Global Financial Crisis of 2008 when businesses found that they worked just fine with 90% of their workforce.

    The math to terminate the $600 per week benefit at the right moment is an unsolvable puzzle, so it won't get solved.
    https://www.chicagotribune.com/coro...0200528-skxom4r2obczxa6vef5b7iivz4-story.html
    I favor lowering it $20 per week until it runs out, but that's just me.

    The Republicans don't seem to realize that the pandemic and fear of death guarantees an economic trough through December 31st.
    Thus extending benefits to the end of the year is precisely "designed to get you through a trough until you can get back to work."

    I guess they figure the pandemic really will be over by mid-summer?
    A terrible miscalculation.

    The disease is the main problem, and even opening everything up won't fix the economy or create a V-shaped recovery this year.
    It will look more like a check-mark.
    Think through the implications of every restaurant taping off every other dining table to maintain social distancing.

    A debt-based society with staggering bankruptcies and emergency laws changing contracts retroactively is going to cause chaos.
    Courts are too slow to handle what is coming lawfully, and the people on the ground on both sides are going to get creative.



    Hotels are dead.
    Movie theatres are dead.
    Theme parks are dead.
    Airlines are dead.

    Any group activity is dead, especially those frequented by senior citizens.

    The oil industry is hurting, but with prices back to $40 per barrel, they might survive this year somewhat intact.
    Major pandemic bankruptcies so far: (Not that they are closing for good, but losing access to credit in this economy will cause massive shrinkage)
    https://www.nbcnews.com/business/co...-bankruptcy-coronavirus-pandemic-hit-n1207866

    Hertz Car Rental - $10 billion per year revenue
    J.C. Pennies - $12 billion per year revenue
    Pier 1 Imports - 900 stores
    Neiman Marcus - $5 billion per year revenue
    JCrew - $2.5 billion per year revenue
    Gold's Gym - 700 Gyms (Not really a biggie, I like them though)

    Boeing is cutting 16,000 jobs, and I don't see them ever coming back.
    Reputation is an unfair currency, and Boeing spent all of theirs using hundreds of formerly alive people to debug their airplane designs.
    https://www.theguardian.com/busines...oronavirus-airline-industry-travel-job-losses
     
    Last edited: Jun 2, 2020
  13. Arwon

    Arwon

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    It does not appear to be going away anywhere near as quickly as it spread, which makes for something not V or A shaped
     
    Last edited: Jun 2, 2020
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  14. Estebonrober

    Estebonrober Deity

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    Yea I'm also in this camp, even when the economy does get back employment will never be the same.

    https://marker.medium.com/our-economy-was-just-blasted-years-into-the-future-a591fbba2298

    The coronavirus has erased all of that, returning many of the newly hired workers to jobless status and making the prior year’s wage raises look hollow. According to "); background-size: 1px 1px; background-position: 0px calc(1em + 1px);">a new paper published by the National Bureau of Economic Research, 42% of those laid off won’t get their jobs back. How most will ever regain what they have lost is not clear since the economy had almost no cushion for them, says Rick Wartzman, director of the Center for a Functioning Society at the Drucker Institute. “The progress that was finally beginning to be made in raising all boats is now sinking the smallest boats most rapidly,” says Josh Bolten, head of the Business Round Table and former chief of staff to President George W. Bush.
     
  15. hobbsyoyo

    hobbsyoyo Deity

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    I think we are moving to a point of ignoring the pandemic entirely. States are lifting restrictions on schedules that seem at best loosely tied to lessening infection rates. Between that and the protests, we're probably in for a second peak of infections in the next month but it seems that the zeitgeist is moving on from dealing with the pandemic. After all, as long as it's only the grandpa that we visit once a year in the nursing home that dies, does it really count? (/s)

    That's been probably the most frustrating aspect of this pandemic in the US - we as a society are crap to our old people and tend to put them in homes and more or less forget about them until they die. And even when 3,000 of them were dying every day, a huge chunk of the population was ready to move on as if the virus was over. This is also sadly reflected in the actions of our government - now that the immediate crisis is out of everyone's mind, the GOP in the Senate have balked at doing anything else to help the unemployed and distressed industries. There game plan is to just force all the wage serfs back to work, pandemic be damned.
     
  16. Traitorfish

    Traitorfish The Tighnahulish Kid

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    It feels very much like any sort of lockdown was only imposed for just long enough to allow the proles to get used to a 9/11 death-count every day; that the plan was always to go back to normal when people had become numb to statistics, regardless of the progression of the pandemic.
     
  17. Farm Boy

    Farm Boy You gave me my own tail?

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    I think that's exactly what the abeyance will have accomplished. But then again, anything that works always looks like overreaction. If any of it was.
     
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  18. Birdjaguar

    Birdjaguar Hanafubuki Retired Moderator Supporter

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    I'm not ignoring the pandemic.
     
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  19. onejayhawk

    onejayhawk Afflicted with reason

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    It sort of is, though the tail will linger quite while. The first signs of this were late last year. It took about three months to get rolling and another month or six weeks to peak. It is not yet two months after that, with no sign of a much predicted second wave. So, a true A form would run out in mid to late August.

    J
     
  20. Birdjaguar

    Birdjaguar Hanafubuki Retired Moderator Supporter

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    So what are your predictions for 2nd and 3rd Q GDP and unemployment?
     

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