Covid-19 Economic Impact

[Rover]

I think that guys ridiculous worst case scenario model caused everyone to panic, overreact and now that it’s clear he was wrong, he’s trying to save face.

Warning people of what CAN happen is not the same as saying it WILL happen. Ignoring the extreme possibilities tends to make the science ignorers go on infecting at will. However, early intervention severely curtails the extremes from happening. The science ignorers will just say “see, the worst didn’t happen..I was right” instead of realizing the fear of the worst caused significant responses that insured the worst wouldn’t happen. Those who don’t want to believe will just go on ignoring reality anyway. Our governments late reaction threatens severely, but it did finally realized the real danger and acted to put a lid on it. Now we will see if there is any discipline or whether we will revert to shoot from the hip policy making.

[Teo9969]

Once again, not doing much of anything about responding to the virus likely would have brought on a recession as well. Chaos, panic and hoarding possibly worse.

After all it did, the U. S. now leads the world in confirmed Coronavirus cases. India is on shutdown. It will be interesting to see if India can do enough to keep from replacing the U. S.

The recession was unavoidable. The recession, for all intents and purposes, started in November/December when China got hammered because supply chain economics were going to get nailed without it coming to the West's shores in an economy that already seemed braced for at least a mild-recession without a pandemic.

What we want to avoid is not a recession, but rather a meltdown of global capitalism and the damage that will do to democracy along with it.

[gopokes88]

This sucks.

https://twitter.com/iamstacetheace/s...039785473?s=21

[TheTravellers]

The whole thing about people thinking about a V-shaped quick recovery assumes that all these places that are closed (restaurants, coffee shops, bookstores, convenience stores, liquor stores, ad infinitum) are just temporarily closed and will re-open again to employ people. And in probably a way higher percentage than anybody wants to know, there just *won't* be as many restaurants, coffee shops, small business of any sort, they'll have just gone completely away and won't re-open again, ever, even if they have former employees waiting for them to re-open.

[gopokes88]

There is 0 chance of a V shaped. Behaviors and habits are forever changed. This is a 9/11 type event. No one behaved the exact same way post 9/11.

It's L not V.

[jccouger]

This sucks.

https://twitter.com/iamstacetheace/s...039785473?s=21

What is the rate usually? Restaurants close every week anyway, though I'm sure that is obviously accelerated during this.

[catch22]

There is 0 chance of a V shaped. Behaviors and habits are forever changed. This is a 9/11 type event. No one behaved the exact same way post 9/11.

It's L not V.

I think many were (are) thinking that this was a kink in the garden hose, and when unkinked things will surge and then settle back down to normal. The longer this goes on the less and less likely that is even a possibility.

I will say Lowe's is going gangbusters where I live as it is pretty much the only place open outside of grocery stores as we are under a mandatory shelter in place order. The checkout lines were 10-15 people deep. I predict many green lawns this spring.

[TheTravellers]

There is 0 chance of a V shaped. Behaviors and habits are forever changed. This is a 9/11 type event. No one behaved the exact same way post 9/11.

It's L not V.

Yes, that's my point, but many many many many people still think it could be a V, for some completely not-in-touch-with-reality reason, saying "When the stores/restaurants/etc. re-open, things will pick up and be back to normal in a few months....". Just trying to get the concept across in plain English.

[gopokes88]

I think many were (are) thinking that this was a kink in the garden hose, and when unkinked things will surge and then settle back down to normal. The longer this goes on the less and less likely that is even a possibility.

I will say Lowe's is going gangbusters where I live as it is pretty much the only place open outside of grocery stores as we are under a mandatory shelter in place order. The checkout lines were 10-15 people deep. I predict many green lawns this spring.

Exactly, now let me take it a step further.

Bob takes a paycut to keep his job. So he cuts the yard guys out of the budget.
Bob who purchases all the fertilizer, seeds, rakes, etc from Lowe's. Now he's not as bored, he's lost some weight, and the yard looks great.

Now let's say next spring things are somewhat back to normal. There's hundreds of people who are in Bob's shoes. 1/2 might hire the yard guys back, maybe even 75%, but there is no chance all of them hire the yard guys back. A good chunk will have learned to like and enjoy the challenge of maintaining their yard.

Now apply that to every single sector of the America economy.

I personally cut my cable bill in half. Less channels, less subscriptions, slower internet. Hasn't effected my quality of life even a little bit.

People are going to cut the fat out of their expenses, realize they didn't need or want it anyway, and will be slow to ramp up purchases.

L not V.

That's not to say there won't be winners, there will be some winners, but even more losers.

[catch22]

Exactly, now let me take it a step further.

Bob takes a paycut to keep his job. So he cuts the yard guys out of the budget.
Bob who purchases all the fertilizer, seeds, rakes, etc from Lowe's. Now he's not as bored, he's lost some weight, and the yard looks great.

Now let's say next spring things are somewhat back to normal. There's hundreds of people who are in Bob's shoes. 1/2 might hire the yard guys back, maybe even 75%, but there is no chance all of them hire the yard guys back. A good chunk will have learned to like and enjoy the challenge of maintaining their yard.

Now apply that to every single sector of the America economy.

I personally cut my cable bill in half. Less channels, less subscriptions, slower internet. Hasn't effected my quality of life even a little bit.

People are going to cut the fat out of their expenses, realize they didn't need or want it anyway, and will be slow to ramp up purchases.

L not V.

That's not to say there won't be winners, there will be some winners, but even more losers.

I think the key thing to watch, and it may be years before we are far enough away from this: is to see how behaviors actually change.

For example, to-go/delivery. It's the only option for eating out. When I worked at a large national change, our take out business was probably 10% of sales. And that is probably high for typical as we really pushed that offering and invested in that experience. In a year, will 25% of gross sales be normal for carryout? People getting used to the idea of drinking their own beer, watching their own TV, and not having to invite their date over "for dessert" after they are done at the restaraunt. Obviously that will have a huge negative impact on tips for servers, alcohol sales at restaurants (highest margin item, typically), and of course a positive impact for Trojan. (Trying to have some levity here)

Will the overall dollars spent be the same but in different areas? Will overall dollars spent be less and concentrated more? or more spread out? I don't think many, including myself, really think about where their dollars come from and where they go. This is an unfortunate crash course for everyone.

[gopokes88]

I think the key thing to watch, and it may be years before we are far enough away from this: is to see how behaviors actually change.

For example, to-go/delivery. It's the only option for eating out. When I worked at a large national change, our take out business was probably 10% of sales. And that is probably high for typical as we really pushed that offering and invested in that experience. In a year, will 25% of gross sales be normal for carryout? People getting used to the idea of drinking their own beer, watching their own TV, and not having to invite their date over "for dessert" after they are done at the restaraunt. Obviously that will have a huge negative impact on tips for servers, alcohol sales at restaurants (highest margin item, typically), and of course a positive impact for Trojan. (Trying to have some levity here)

Will the overall dollars spent be the same but in different areas? Will overall dollars spent be less and concentrated more? or more spread out? I don't think many, including myself, really think about where their dollars come from and where they go. This is an unfortunate crash course for everyone.

I know the greatest generation was notoriously cheap about everything because they lived through the depression.

I think millennials and Gen Z spending habits will be at least for a while, if not permanently, altered by this.

[HangryHippo]

I know the greatest generation was notoriously cheap about everything because they lived through the depression.

I think millennials and Gen Z spending habits will be at least for a while, if not permanently, altered by this.

To some degree, many were already frugal after 2008. This will only exacerbate that frugality.

[Teo9969]

The biggest problem here is going to be investor capital not having a clue where to pool resources.

The economy is very much like a car. it's easy to know where to start to fix the car when the only thing broken is the radiator and the alternator.

When the engine has been removed from the car and there are 12 other components broken at the same time, the complications are exponential.

Same thing will happen here: If you have capital, where are you putting your money in 18 months when we largely have this virus behind us: Are you going to restaurants for a quick win, investing in certain medical companies because you think this kind of stuff is going to become common place, do you invest in Liberal, KS because you believe the big cities are going to take a massive hit because of the contagion factor of those areas.

While those decisions are already difficult enough to make in an economy that operating at almost peak efficiency, they're substantially more difficult to do so when the whole thing has come apart.

It took us hundreds of years to get from the Industrial Revolution to peak markets in February 2020. We're going backward multiple decades at this point. The stock market may or may not reflect that immediately, but the economy is something far bigger than the stock market, and I think that's what people are not seeing in all of this.

[brian72]

Maps 4 being passed now looking like a bad thing at this point. The Independent restaurants type of businesses are Done. Downtown may never get back to where it was just a Year ago. Sad situation but hopefully not a reality. Hopefully I'm Wrong.

[TheTravellers]

Maps 4 being passed now looking like a bad thing at this point. The Independent restaurants type of businesses are Done. Downtown may never get back to where it was just a Year ago. Sad situation but hopefully not a reality. Hopefully I'm Wrong.

Mayor Holt was on Lackmeyer's chat yesterday, someone said the same thing and he responded that it's an 8-year tax and every MAPS has had some kind of recession during its collection period and they've all been fine. This time, it's a pretty exceptional event, so the tax collection won't recover as well as the others, but it has 8 years to do it in.

[soonerguru]

My concern is that the small business assistance is through the SBA. I don't know if you've every worked with that agency but it is incredibly lumbering and bureaucratic. It took my friend two days to be able to get his forms submitted because the website cannot handle the traffic. Also, there are not nearly enough workers at SBA to process the claims coming in. They probably need 100x more workers.

What this means is that most businesses will not get the relief money soon enough and will just fail. Think of all the small family-owned businesses, the businesses owned by immigrants.

I'm glad the relief bill passed but it doesn't begin to scale to the need.

This will be a restaurant and retail apocalypse for OKC.

[TheTravellers]

My concern is that the small business assistance is through the SBA. I don't know if you've every worked with that agency but it is incredibly lumbering and bureaucratic. It took my friend two days to be able to get his forms submitted because the website cannot handle the traffic. Also, there are not nearly enough workers at SBA to process the claims coming in. They probably need 100x more workers.

What this means is that most businesses will not get the relief money soon enough and will just fail. Think of all the small family-owned businesses, the businesses owned by immigrants.

I'm glad the relief bill passed but it doesn't begin to scale to the need.

This will be a restaurant and retail apocalypse for OKC.

That's exactly what I posted here, and it has more detail about why SBA isn't going to work out very well.

https://www.okctalk.com/showthread.p...07#post1111207

[mugofbeer]

I'm not making claims and l know there is zero evidence of it but if the Russians and Chinese were to ever secretly try to get together to launch a totally devious plot to destroy the American economy - between killing off our newfound petroleum exports (with virtually free oil) and the majority of the rest of the economy (with COVID), they couldn't have done much better of a job. ;p

[Teo9969]

I'm not making claims and l know there is zero evidence of it but if the Russians and Chinese were to ever secretly try to get together to launch a totally devious plot to destroy the American economy - between killing off our newfound petroleum exports (with virtually free oil) and the majority of the rest of the economy (with COVID), they couldn't have done much better of a job. ;p

The way China has handled this whole thing should be causing pause throughout the entire Western world.

If i were POTUS, i would be pulling leaders from the EU and Mercosur into a room and strategizing how to get Latin America to become the supplier of the Western world and quickly work towards closing out China from the western markets.

China doesn't play by the same rules as the rest of the world and the advantages of censorship and dictatorial leadership are being made uncomfortably palatable through this crisis. Here is an article that lays some of these things out further.

https://foreignpolicy.com/2020/03/25...V51bihrtUQCghY

Obviously, if the virus were ever to be found out to have been created by the Chinese gov't or a state sponsored entity, it's worthy of considering Covid-19 an act of war. By way of comparison, I think such a situation would be tantamount to murder whereas I think Covid-19 is simply a matter of manslaughter. Either way, there should be consequences.

[ON EDIT: It goes without saying that 99.9999% of Chinese people have nothing to do with the actions of the high levels of government. Until we can prove that this intentionally created by the Chinese gov't, i'm staunchly against calling this the "Chinese Virus" or "Wuhan Virus" as this does not serve any productive purpose]

[Rover]

The way China has handled this whole thing should be causing pause throughout the entire Western world.

If i were POTUS, i would be pulling leaders from the EU and Mercosur into a room and strategizing how to get Latin America to become the supplier of the Western world and quickly work towards closing out China from the western markets.

China doesn't play by the same rules as the rest of the world and the advantages of censorship and dictatorial leadership are being made uncomfortably palatable through this crisis. Here is an article that lays some of these things out further.

https://foreignpolicy.com/2020/03/25...V51bihrtUQCghY

Obviously, if the virus were ever to be found out to have been created by the Chinese gov't or a state sponsored entity, it's worthy of considering Covid-19 an act of war. By way of comparison, I think such a situation would be tantamount to murder whereas I think Covid-19 is simply a matter of manslaughter. Either way, there should be consequences.

[ON EDIT: It goes without saying that 99.9999% of Chinese people have nothing to do with the actions of the high levels of government. Until we can prove that this intentionally created by the Chinese gov't, i'm staunchly against calling this the "Chinese Virus" or "Wuhan Virus" as this does not serve any productive purpose]

u
There is no evidence of China deliberately starting or strategically spreading this. The constant blaming and deflecting by our own administration hinders world cooperation to solve a worldwide threat. Instead of trying to dialog and learn, we blame and alienate.
Secondly, our problems were way more affected by what we did after awareness, which was months ago. Denial, deflecting, posturing, blaming has exacerbated the problem and results in more deaths. Trying to act as a cowboy to pose as a hero is deadly.

[chuck5815]

u
There is no evidence of China deliberately starting or strategically spreading this. The constant blaming and deflecting by our own administration hinders world cooperation to solve a worldwide threat. Instead of trying to dialog and learn, we blame and alienate.
Secondly, our problems were way more affected by what we did after awareness, which was months ago. Denial, deflecting, posturing, blaming has exacerbated the problem and results in more deaths. Trying to act as a cowboy to pose as a hero is deadly.

well of course there is not. China would never admit it nor would it allow a third-party into the country to investigate the origins.

[mugofbeer]

I'm curious. When the day comes the Shelter in Place is lifted and, through whatever means, the virus seems under control, how are some of you "forever" changing the living habits you had prior to COVID?

[mugofbeer]

well of course there is not. China would never admit it nor would it allow a third-party into the country to investigate the origins.

Apparently there are ways to detect the origin and its pretty much accepted worldwide this was simply another animal virus that transmitted to humans. It's not uncommon for that to happen but is particularly deadly this time.

What China needs to do and show they are doing is launching educational programs to keep people away from messing with certain types of animals.

[PhiAlpha]

u
There is no evidence of China deliberately starting or strategically spreading this. The constant blaming and deflecting by our own administration hinders world cooperation to solve a worldwide threat. Instead of trying to dialog and learn, we blame and alienate.
Secondly, our problems were way more affected by what we did after awareness, which was months ago. Denial, deflecting, posturing, blaming has exacerbated the problem and results in more deaths. Trying to act as a cowboy to pose as a hero is deadly.

Purposefully causing it...probably not. But they definitely shoulder some blame for willfully neglecting to regulate their wildlife meat industry and the wet markets through which they sell those products. Hopefully all of this leads the Chinese government to add regulations that at least require a more sanitary environment to make something like this less likely to occur in the future.

[Teo9969]

u
There is no evidence of China deliberately starting or strategically spreading this. The constant blaming and deflecting by our own administration hinders world cooperation to solve a worldwide threat. Instead of trying to dialog and learn, we blame and alienate.
Secondly, our problems were way more affected by what we did after awareness, which was months ago. Denial, deflecting, posturing, blaming has exacerbated the problem and results in more deaths. Trying to act as a cowboy to pose as a hero is deadly.

Nobody is blaming China for our response. I'm sorry you decided to infer that from my statement.

What I said, was China's shutting out of the international community (i.e. substantially more than just the good 'ole USA) is negligent much in the same way manslaughter by way of drunk driving is. Did China intend to throw the global economy into a recession with risk of a major depression? Probably not. Did they? Yes, yes they did. Refusal to organizations like the WHO to come in and 1. provide assistance and 2. get a leg up on understanding this is gross negligence similar to running someone over while driving drunk.

All that to say, your response is spot on but responds in no way to my own. I'm denoting this because I imagine you believe that somehow your comments present a challenge to my own. If the international community lets this slide, then capitalism and democracy have shown a massive crack in the armor, one that, if not big enough to cause its downfall now, will certainly be used by a future opponent.