Bullard has always been extremely bearish, and is consistently a dissenter in FOMC meetings FYI. While his number is very high, I would take it with a grain of salt. It will be high, but not that high
"During a CNBC interview last week, Bullard said the jobless number “will be unparalleled, but don’t get discouraged. This is a special quarter, and once the virus goes away and if we play our cards right and keep everything intact, then everyone will go back to work and everything will be fine.”
Nothing is going back to business-as-usual after this event.
1. Companies that successfully transition to work form home will shed tens of millions of commercial real estate square footage.
3. This will accelerate online learning, especially in higher-ed. We are already planning our summer courses to be fully taught online as of this point in time.
4. Tying healthcare to employment in the U.S. will likely become unthinkable as a public health hazard.
This pandemic has an amazing ability to make everyone more confident in their personal preferences and pre-conceived notions.
Is it safe to assume that before this pandemic, you:
1. Preferred WFH to being in an office. You wished more jobs would accept remote employees like you.
2. Preferred online shopping wherever possible. When visiting retail stores, you wished a tech company would disrupt that industry so you wouldn't have to visit a store.
3. Prefer to learn on your own, at your own pace
4. Assumed that anyone who disagreed with your political leanings was just misinformed or morally bankrupt.
What's fascinating is that my social media feeds are full of people who are convinced that this pandemic is proving their pre-conceived beliefs to be more correct than ever. It's making it more difficult for people to see differing viewpoints, or understand why someone could have differing personal preferences.
The dust hasn't even settled yet, but my friends are either declaring WFH to be the way of the future or wholly untenable. I have numerous friends with children at home who are more eager than ever to return to their offices and go back to normal. My manager friends are all fretting the productivity drops as people struggle to get work done amid a 24/7 news cycle of impending doom. Yet the WFH champions are convinced this will prove WFH to be superior.
Personally, I think the long-lasting changes from this pandemic are far harder to predict than people are suggesting.
1. I teach in higher-ed. In a classroom. Working from home is the last thing on my mind as it would be detrimental to the teacher-student relationship.
2. I enjoy shopping. I browse bookstores, record shops, try on clothes at the mall, enjoy selecting my own produce and wine at the grocers.
3. I prefer learning in seminars and I use the socratic method with students. I do not let them use technology in the classroom unless they have a demonstrated need.
4. Not sure how you inferred this from my statement. It is reasonable to assume that persons in the U.S. who are unemployed or have limited access to healthcare will make less use of it, thus contributing to conditions that allow pandemics to spread. That is not a political statement.
I think that's too dismissive of some undeniably strong trends over the last 20 years. Remote work will continue to increase, brick and mortar retail will continue to suffer, more and more education will occur online and support for a more mainstream healthcare system will continue to increase. These things are all already happening and there is nothing to suggest these trends will slow or stop. But there is plenty of reason to believe this pandemic will accelerate those trends, simply by virtue of fast-forwarding the current trajectory.
Maybe the OP was offering a somewhat extreme take, but none of these phenomenon are controversial and no "pre-conceived notions" are required to acknowledge obvious trends already in progress.
I've worked from home for the past two years. I'm a bit worried that the sudden wave of people working from home unprepared is going to give the whole thing a bad reputation, making it more difficult for people like me to continue to work from home. My employer has saved a lot of money closing down various facilities but was already considering reopening them because times were good. We're an essential industry so likely will come out of this crisis in a good situation. Cheap real estate might tempt someone in the C suite to make every come back into the offices again.
> 4. Tying healthcare to employment in the U.S. will likely become unthinkable as a public health hazard.
Most people seem to agree with that already, but I'm not sure popular sentiment, or even what the political elite thinks matters.
If you look at the Affordable Care Act, plenty of Republicans had spoken positively about the ideas in the legislation prior to it being proposed, and have admitted they like parts of it after the fact. They violently opposed it regardless. Apparently it's easy to scare people about health care issues, and easy to turn that into anger at the other party.
You probably need to fully control congress and the presidency to make any changes to the fundamentals of how health care functions, unless somehow the culture of American politics gets fixed.
For comparison, a quick Google shows the unemployment rate in the US during the Great Depression was around 25% and during the 2008 recession was around 10%.
If this situation lasts too long, we'll all be saying hello to Great Depression v2.0.
Wasn't the Great Depression as much a product of the time it took to overcome as the unemployment rate? We have a greater ability to deploy resources today, and geography is less of an issue for many industries, so perhaps that will be a mitigating factor. The Great Repression?
IT was because of the GD, that the government began to spend money to aid the economy in the first place. A new Works Project Administration could do a lot to rebuild infrastructure that we need anyway.
> For comparison, a quick Google shows the unemployment rate in the US during the Great Depression was around 25% and during the 2008 recession was around 10%.
> If this situation lasts too long, we'll all be saying hello to Great Depression v2.0.
The most troubling is that there is no analysis being performed to determine what a proportionate response is, and I tend to think most people do not understand how interconnected the economy actually is.
At this rate, the deaths from draconian government responses will far outweigh the deaths from the Corona virus across all age demographics.
> At this rate, the deaths from draconian government responses will far outweigh the deaths from the Corona virus across all age demographics.
A reminder money is a paper money game and in contrast to the 30s, we easily produce more resources, food and abundance than we need to live with 30% unemployment.
But that's exactly why people are scared of the recovery. The phenomenon underpinning the economy isn't money flowing through accounts; it's networks of trade and service provision, and most of those networks are being snipped by the lockdown. We won't starve and we won't lose Netflix, but those networks can't be restored solely by financial stimulus and we can't recover our standard of living without them.
> "At this rate, the deaths from draconian government responses will far outweigh the deaths from the Corona virus across all age demographics."
> Care to elaborate?
The "current rate" assumes a large percentage of the economy being forced to shutdown by government order for an indefinite period. This rate is larger than everyone thinks because we are not just talking about restaurants, theaters and salons. There are all sorts of manufacturing, repair, and other businesses which are also shut down.
(Note that Americans have very little savings.)
The elderly largely rely on government welfare though Social Security, Medicare, and other programs to survive. With payrolls substantially contracted, this is going to cause a very serious burden on these systems. The likely result will be substantially reduced payments to care providers as well as significant delays in payment, which then likely causes some providers to stop accepting from these systems, thus overloading other providers who may follow and do the same.
Everyone needing medical care is reliant on the healthcare system receiving so much money for its services, but given that U.S. healthcare is tied to employment, a lot more people won't be able to pay their bills, so the providers will then increase rates to those who can pay, and employers will be forced to further shed employees to cover premium hikes. Even in the short term, this will reduce new investment in healthcare, such new facilities, equipment, and even equipment maintenance and repair, so the facilities will perform more poorly. Number of beds available will fall because there will be fewer beds per person.
There will also be increases in suicide from the increase in unemployment as well as the social isolation
Drug overdoses rise.
Property crime and violent crime nearly always increase during periods of economic decline.
People will consume less healthy foods and be in poorer health.
The government is now creating money and giving it directly to consumers. This will increase CPI and exacerbate pretty much everything.
"The likely result will be substantially reduced payments to care providers as well as significant delays in payment, which then likely causes some providers to stop accepting from these systems, thus overloading other providers who may follow and do the same."
Fed can print money and helicopter it out.
"Everyone needing medical care is reliant on the healthcare system receiving so much money for its services, but given that U.S. healthcare is tied to employment, a lot more people won't be able to pay their bills, so the providers will then increase rates to those who can pay, and employers will be forced to further shed employees to cover premium hikes. Even in the short term, this will reduce new investment in healthcare, such new facilities, equipment, and even equipment maintenance and repair, so the facilities will perform more poorly. Number of beds available will fall because there will be fewer beds per person."
Nationalize the healthcare system and move to single payer.
"There will also be increases in suicide from the increase in unemployment as well as the social isolation
Drug overdoses rise."
It will be interesting to track these numbers over time and compare them to the COVID-19 death toll.
> "The likely result will be substantially reduced payments to care providers as well as significant delays in payment, which then likely causes some providers to stop accepting from these systems, thus overloading other providers who may follow and do the same."
> Fed can print money and helicopter it out.
> "Everyone needing medical care is reliant on the healthcare system receiving so much money for its services, but given that U.S. healthcare is tied to employment, a lot more people won't be able to pay their bills, so the providers will then increase rates to those who can pay, and employers will be forced to further shed employees to cover premium hikes. Even in the short term, this will reduce new investment in healthcare, such new facilities, equipment, and even equipment maintenance and repair, so the facilities will perform more poorly. Number of beds available will fall because there will be fewer beds per person."
> Nationalize the healthcare system and move to single payer.
> "There will also be increases in suicide from the increase in unemployment as well as the social isolation
> Drug overdoses rise."
> It will be interesting to track these numbers over time and compare them to the COVID-19 death toll.
The way that the term "helicopter" is used in this comment and elsewhere recently suggests people using it may not be aware of its etymology. I believe it was first used when Milton Friedman used it euphemistically to describe the best way to generate inflation to consumers. It is highly undesirable. I'm pretty sure nobody takes the threat of inflation seriously, because the real issue is how to get out of inflation. The Fed had to increase interest to 20% the last time there were issues with inflation.
Nationalizing health care and single payer are different. Nationalizing something typically refers to having it managed by the Federal Government. Single payer refers to having the National Government pay healthcare providers.
This will not affect the funding issue because the money still has to come from some place, so either it comes from increasing the number of dollars in circulation or taking it from other sectors, resulting in layoffs.
I will be one of the skeptical ones in reports on deaths to COVID-19 because the government is now fully invested in maximizing the numbers to justify the incredible expense. A similar situation exists in current wars, where they claim every male killed over a certain age to be an enemy combatant because they need to justify their actions. They may likely claim that every person who dies with COVID-19 in their blood was a victim of COVID-19 (SARS2, or whatever the correct term is).
"Nationalizing health care and single payer are different. Nationalizing something typically refers to having it managed by the Federal Government. Single payer refers to having the National Government pay healthcare providers."
I do not disagree.
"I will be one of the skeptical ones in reports on deaths to COVID-19 because the government is now fully invested in maximizing the numbers to justify the incredible expense. A similar situation exists in current wars, where they claim every male killed over a certain age to be an enemy combatant because they need to justify their actions. They may likely claim that every person who dies with COVID-19 in their blood was a victim of COVID-19 (SARS2, or whatever the correct term is)."
My wife's hospital does not have enough test for the living. They do not use a nCov test on the dead as of 03/30/2020. To suggest that they are downplaying the cause of death to "justify their actions" is misleading and downright disrespectful to the departed. The comorbidity between COVID-19 and other causes of death, such as pneumonia is widely known. To downplay this fact is ignorant.
> "Nationalizing health care and single payer are different. Nationalizing something typically refers to having it managed by the Federal Government. Single payer refers to having the National Government pay healthcare providers."
> I do not disagree.
> "I will be one of the skeptical ones in reports on deaths to COVID-19 because the government is now fully invested in maximizing the numbers to justify the incredible expense. A similar situation exists in current wars, where they claim every male killed over a certain age to be an enemy combatant because they need to justify their actions. They may likely claim that every person who dies with COVID-19 in their blood was a victim of COVID-19 (SARS2, or whatever the correct term is)."
> My wife's hospital does not have enough test for the living. They do not use a nCov test on the dead as of 03/30/2020. To suggest that they are downplaying the cause of death to "justify their actions" is misleading and downright disrespectful to the departed. The comorbidity between COVID-19 and other causes of death, such as pneumonia is widely known. To downplay this fact is ignorant.
My stated speculations of government actions have nothing to do with the departed. You are making an appeal to emotion.
The government will have to convince the public that they are being thorough, which will only work when there is some belief in understanding how many are actually dying from the thing they claim to be fighting.
Ignorance is not a factor in government activities. We can clearly see there is no case presented to support the claim that damage done to the economy is offset by the benefits of the lockdowns. This is decision-making 101: will the action performed provide a net benefit. Absent such a case, it is imperative there be an appearance of high death rates so that whenever political pressures to provide a case emerge, they can have as much supportive evidence on their side as possible.
The absence of test kits may make things worse, because if they choose to claim that everyone who had symptoms of the virus and died was killed by the virus, this can often be accepted as evidence in government policy-making as they are not held to scientific standards.
You also fail to mention the marginal propensity to consume. Whereas poorer households tend to spend marginal income as opposed to higher income households who pay down debt or save the money. The former which tends to propel the velocity of money through the economy whereas the latter stagnates it via savings that have no where to go.
My argument is that the national security mechanisms of western nations are not so fragile to be brought to their knees by some people eating bats and snakes.
In WW2 the Japanese threatened to destroy key infrastructure using biological agents. the militaries of the world have had almost a century at the very least to prepare for this contingency. I don’t buy how unprepared they are.
I am curious to hear the thoughts of some smart people who hang out here.
