The Economy and Rationing

[Zardnaar]

I have started this thread separate from the Corona virus thread to discuss the economic impacts.

None of us can reliably predict how things will go. Our government has point blank said there's gonna be a recession and is increasing benefits and a wage subsidy.

I'm not an economist but I have a history degree and have studied basic economic s along with the war economies if WW2. I've also worked on farms, ports, and logistics firms while my wife works in logistics as well.

I probably have an above average practical experience if how stuff gets from A to B and how it's produced.

I suspect things are not to different internationally except that some European countries are more efficient.

Our government is adopting a Keynesian approach to keeping the lights on. I've seen some idiots online complain about the government bailing out airlines to the tune of 80 billion dollars instead of helping the people.

If they helped the people each US citizen would get around $250 to panic buy toilet paper with. 80 billion to airlines keeps them running.

That's important because a lot of cargo went by air. This includes medicine which is important right now.

If they gave the money to the people it's a short term fix, if the airlines to under the money can't be spent anyway as there's no goods.

In WW2 terms airlines are a strategic industry. Shipping and trucking would also be important.

Personally I like the way our government has handled it. Yes business get money via the government but it's conditional on wages. The companies can't really fire everyone after free govenment money.

The intention is to keep people working with reliable income. This also keeps them spending. Up to a point. The economy is gonna take a hit. People on welfare also spend money. This is good more money spent is good.

In the war years rationing was introduced. This is to prevent panic buying and to make sure everyone got a fair share.

A side effect of rationing was for the poor in some countries such as Germany and the UK it improved their diet although later in the war German rations were cut. Wages went up in the war years apparently doubling in the US. Baby boomers exist because the parents could afford to have kids.

The UK government also worked out what the most efficient crops were in terms of calories. The USA infamously had generous rationing, the Soviets the least.

Some of you also saw me opposed to the UBI Yang liked. This wasn't because I'm opposed to the government giving out money but it doesn't go to who needs it the most.

Our welfare and pension system are more than the UBI and the wage subsidy is almost double the UBI. Middle and upper class people don't need it.

Even if things go really pear shaped economic activity continues even in the Great Depression.

 

[Timsup2nothin]

If toilet paper shortages actually hit homes (which only happens because the neighbor panic bought a five year supply) there will be a huge growth industry in unplugging sewers. I just read a bit about a police department posting a notice asking citizens to stop calling 911 over being out of toilet paper, in which they pointed out all the alternative paper sources that can be used. However, I'm sure their city public works department is headed directly down to the PD to explain to the chief that the cops are gonna be the ones cleaning all that crappy paper out of the sewers.

 

[Kaitzilla]

Shutting down an extremely indebted, debt-based society for a few months?

Make it the whole world too?

The whole thing is going to implode.

 

[Zardnaar]

Shutting down an extremely indebted, debt-based society for a few months?

Make it the whole world too?

The whole thing is going to implode.

They're not gonna shut down the whole world.

They can also print more money short term.

 

[Timsup2nothin]

Some of you also saw me opposed to the UBI Yang liked. This wasn't because I'm opposed to the government giving out money but it doesn't go to who needs it the most.

Our welfare and pension system are more than the UBI and the wage subsidy is almost double the UBI. Middle and upper class people don't need it.

Yang just said on CNN that there is no time to figure out who needs it, and there is no time to figure out who deserves it. The health department shuts down restaurants, the restaurant workers are fired. The parking lot attendants don't work for the restaurant, the health department didn't name them, but they are just as fired. The evil wealthy landlord has half his property filled with tenants who just lost their jobs and when his cash flow collapses all the supers and maintenance guys and the office people lose their jobs. The evil banker is going to see every evil landlord default and will have to fire all his little bank minions. Some people have some savings, some don't, but there is no time because if you fire millions of people all at the same time the economy just stops. There is no 'figuring it out,' you just have to put money in everyone's hands to keep things running and then try to sort it all out.

To a child of the cold war it boggles the mind; not with a bang, but a virus.

 

[Zardnaar]

Yang just said on CNN that there is no time to figure out who needs it, and there is no time to figure out who deserves it. The health department shuts down restaurants, the restaurant workers are fired. The parking lot attendants don't work for the restaurant, the health department didn't name them, but they are just as fired. The evil wealthy landlord has half his property filled with tenants who just lost their jobs and when his cash flow collapses all the supers and maintenance guys and the office people lose their jobs. The evil banker is going to see every evil landlord default and will have to fire all his little bank minions. Some people have some savings, some don't, but there is no time because if you fire millions of people all at the same time the economy just stops. There is no 'figuring it out,' you just have to put money in everyone's hands to keep things running and then try to sort it all out.

To a child of the cold war it boggles the mind; not with a bang, but a virus.

Yeah they don't need a ubi they need universal welfare though in a hurry.

 

[Timsup2nothin]

Yeah they don't need a ubi they need universal welfare though in a hurry.

They're talking about a proposal to just hand every adult USian a thousand dollars, hot off the press. Probably not the best moment to be deep off the grid I guess.

 

[Cloud_Strife]

I'm going to lose my job, what am I supposed to do? I'm so screwed it's unbelievable

 

[Timsup2nothin]

I'm going to lose my job, what am I supposed to do? I'm so screwed it's unbelievable

Sad times Cloud. Hang tough. Be safe.

 

[Zardnaar]

I'm going to lose my job, what am I supposed to do? I'm so screwed it's unbelievable

Same boat been kinda sick since January (something else).

But yeah sucks.

Ironically started looking into command economies. Only thing I'm sure of is the free market is gonna fail hard government intervention is required probably on a scale not seen since the war.

Long term depending on how it shakes out might need to look at something else. Great leap backwards or MMT or whatever.

 

[Cloud_Strife]

Nevermind that all the stores have been ransacked

If this continues there might be riots

 

[Valka D'Ur]

To a child of the cold war it boggles the mind; not with a bang, but a virus.

Yep, despite decades of reading dystopian science fiction, this situation isn't what I expected. For the first 25 years of my life I was taught to be afraid of - and expect -World War III. I'm still trying to wrap my mind around it actually being medically dangerous to go shopping or order a pizza.

Thank goodness all the worst stuff happened last year. If I had to deal with two weeks in the overcrowded hospital, two surgeries, getting through a month and a half of freezing weather with inadequate insulation, and my dad's death now, on top of everything else, I don't think I could have coped, either mentally or physically. Last year was hard enough.

 

[Zardnaar]

Nevermind that all the stores have been ransacked

If this continues there might be riots

Worst case scenario is something like this IMHO.

https://en.m.wikipedia.org/wiki/Hooverville

Supermarkets in Australasia are enforcing limits to combat panic buying.

Government's offering wage subsidies. They've told us expect recession and worse than GFC. GFC barely touched us so yeah.

Depends how long this goes on for. Election year as well. Point blank told it's going to be terrible.

 

[Zardnaar]

Crap it's only for 3 months.

https://i.stuff.co.nz/national/heal...billions-to-spend-on-its-coronavirus-response

 

[Traitorfish]

Shutting down an extremely indebted, debt-based society for a few months?

Make it the whole world too?

The whole thing is going to implode.

The only way to prevent it will be to introduce long-lasting debt and rent holidays, perhaps even large-scale debt forgiveness. Capital will be forced to take more radical action out of necessity than a scary populist like Sanders or Corbyn would ever have proposed.

 

[Kaitzilla]

The only way to prevent it will be to introduce long-lasting debt and rent holidays, perhaps even large-scale debt forgiveness. Capital will be forced to take more radical action out of necessity than a scary populist like Sanders or Corbyn would ever have proposed.

Ya, the Fed has already made 7 huge interventions to keep things running, and that was only just last week.

The financials are going to have a much harder time collecting on debts this time around.
The level of anger at pandemic profiteers is much higher than even for war profiteers.
That Republican senator without the blind trust is in deep crap.

Even the most steadfast conservatives are proudly talking about mailing out checks to everybody; an unheard of about-face and an embryonic nod toward universal basic income.

The long lasting nature of this outbreak, possibly of even 18 months, might even cement some changes.

 

[Estebonrober]

Massive debt holiday or it all implodes. S&P here in the US is down some 30% right now? I'd expect that to hit 50 within the next two weeks and possibly lower. The instantaneous nature of this event is unprecedented.

 

[hobbsyoyo]

Massive debt holiday or it all implodes. S&P here in the US is down some 30% right now? I'd expect that to hit 50 within the next two weeks and possibly lower. The instantaneous nature of this event is unprecedented.

The one big advantage (for lack of a better word) that this economic crisis has is that it has an expiration date. The source of the crisis itself (the virus) can either be stopped dead in its tracks or else will infect everyone in which case, the crisis ends. This is a huge advantage because in '08 we didn't know how long it would take to put the banking sector back together.

This crisis has underlined a ton of fault lines in the economy and while this may make recovery longer, it may also speed recovery if we are able to actual try and make things right. For example, I would never invest in Boeing as constituted. However, if the government broke it up as part of the proposed bailout, I'd likely invest in several of the pieces. Or if the government decides healthcare and UI are required for modern society as part of the fallout, again, I think people will rally once the virus has burned out one way or another.

This could all be fantasy in my head though.

 

[tetley]

Even the most steadfast conservatives are proudly talking about mailing out checks to everybody; an unheard of about-face and an embryonic nod toward universal basic income.

This seems like it's falling more along party lines to me, but in reverse.

Trump says he's going to rescue everybody by printing money and handing out $1000 checks to everybody. Republicans are all ogling over it, like "Wow! Free government money!" The House is like, "wait a minute." If Trump says it, then it's wonderful--even if it's outright socialism.

 

[hobbsyoyo]

The one big advantage (for lack of a better word) that this economic crisis has is that it has an expiration date. The source of the crisis itself (the virus) can either be stopped dead in its tracks or else will infect everyone in which case, the crisis ends. This is a huge advantage because in '08 we didn't know how long it would take to put the banking sector back together.

This crisis has underlined a ton of fault lines in the economy and while this may make recovery longer, it may also speed recovery if we are able to actual try and make things right. For example, I would never invest in Boeing as constituted. However, if the government broke it up as part of the proposed bailout, I'd likely invest in several of the pieces. Or if the government decides healthcare and UI are required for modern society as part of the fallout, again, I think people will rally once the virus has burned out one way or another.

This could all be fantasy in my head though.

Related to the above post -

(Another awesome quip from reddit)

Covid-19 is the blacklight on the hotel bedsheets of capitalism.

If we are smart, we can take this opportunity to restructure the economy. The Democrats are already pushing to get national sick leave and PTO for everyone. Now imagine what they can get done if the coming election is a bloodbath for the GOP that it seems to be shaping up to be?

That's a huge "if" though.