
Why our economy may be headed for a decade of depression - Balgair
https://nymag.com/intelligencer/2020/05/why-the-economy-is-headed-for-a-post-coronavirus-depression-nouriel-roubini.html
======
kube-system
> Because tomorrow, every piece of consumer electronics, even your lowly
> coffee machine or microwave or toaster, is going to have a 5G chip. That’s
> what the internet of things is about. If the Chinese can listen to you
> through your smartphone, they can listen to you through your toaster. Once
> we declare that 5G is going to allow China to listen to our communication,
> we will also have to ban all household electronics made in China.

This is a ridiculous conclusion. Even if we make the generous assumption that
people want internet connected toasters, we're likely not getting rid of WiFi.
And even if we did ban hypothetical 5G toasters, manufacturers in China
wouldn't shut down their factories, they would simply make different toasters.

It is hard to take this article seriously as legitimate analysis after reading
things like this.

~~~
Aperocky
The article just want you to believe that 'The Chinese' would want to put a
microphone with 5G into your toaster.

So that they could listen to YOU through the said toaster, because whatever
shit you said near the toaster is obviously very important to the Chinese.

Is there a more moronic idea? If someone were to listen to you, wouldn't it be
easier to say... do it through the phone?

~~~
true_religion
Putting a microphone in the kitchen is probably one of the best ways to spy on
people in their homes.

The kitchen is a natural gathering place, and spot for conversations.

And if I thought someone was spying on me, I would check the inside of my
toaster last.

~~~
thephyber
> And if I thought someone was spying on me, I would check the inside of my
> toaster last.

I assume that organizations that spy for a living learn from their previous
mistakes and the natural selection effect means that the obvious places to
plant bugs are skipped.

------
SketchySeaBeast
I'm trying to decide where the line between sound economic advice and
scaremongering sits. I think it may be around "You’re going to start having
food riots soon enough."

At least I hope that's scaremongering. Given that everyone is doing their best
to return to normal, I feel like running out of unemployment may not be as big
of an issue as stated.

~~~
pm90
Wait what? Unemployment payments are the only things that are preventing a
full scale depression and hardship for millions. These people have lost their
jobs, have no savings or assets, nothing. How are they going to get food? Pay
rent?

The quick action by Congress in boosting unemployment payments has been the
only thing keeping the economy from going belly up. If that stops, we’re in
for a lot of hurt.

~~~
SketchySeaBeast
He argues that that's going to happen in July. I just can't see the States
letting that happening. Here in Canada they are continually expanding out
benefits, and I think the States will have to follow that as well. I can't see
the tap being just turned off.

~~~
derg
There are enough people completely divorced from reality in congress and in
and around the presidency that it will potentially get incredibly hairy. I can
absolutely see it getting to the absolute brink before they suddenly realize
"oh shit this is bad" and pass an emergency "freedom payment" which again will
be a one time thing and not be completely enough.

My pessimism says we're also going to be dancing from one stimulus to another
without addressing the long term

~~~
kube-system
The federal stimulus never was nor was intended to be a long term solution to
anything.

Social safety nets in the US are mostly handled at the state level, and that
doesn't look like it's showing any signs of changing.

~~~
derg
what happens when the states run out of money though, that is ultimately the
problem. how long are the states going to be able to keep up without federal
intervention?

------
sremani
Think of all predictions as set of possible outcomes. Yes, there is a possible
decade long depression outcome. Based on my reading its W recovery staggered
growth, with US pulling back all its supply chains to North America and
Export-Oriented economies holding the bag.

These economic and global dislocations resulting in events we have not seen
Post-WW2.

In spite of all these, US/North America is where you would rather be than say,
Europe, Africa or even Asia.

~~~
stepbeek
> In spite of all these, US/North America is where you would rather be than
> say, Europe, Africa or even Asia.

Why?

~~~
magicsmoke
Lower population density and land that's only been tapped for a few centuries
instead of millennia. When the famines and natural disasters start, it's going
to hit the old world a lot harder than the new.

~~~
stepbeek
I thought the parent to my comment was more an assertion around economic woes,
but I'll bite.

I'm interpreting your response as an assertion around the USA doing better in
the case of major climate shift. I don't perceive the US to be making
significant effort towards more sustainable agriculture (compared to say the
Netherlands) or keeping pace in proportion of energy generated from renewables
or implementing meaningful social policy to address the disproportionate
impact a climate crisis has on the poor.

The US has a lot to recommend it, but I find your argument to be a bit lacking
in convincing me it'll have and easier time in the coming decades.

------
StephenAmar
He is making lots of wild predictions about technology and automation.

5G in toasters? Come on. Is 5G really such a ground breaking technology that
will change everything?

Automating car manufacturing? Tesla tried and it failed them -
[https://www.theverge.com/2018/4/13/17234296/tesla-
model-3-ro...](https://www.theverge.com/2018/4/13/17234296/tesla-
model-3-robots-production-hell-elon-musk) No way Hyundai can do it tomorrow.

Replacing janitors with Roombas?? What the hell is he talking about.

Lots of promises about AI, but so far, it has underdelivered.

~~~
TeMPOraL
> _Is 5G really such a ground breaking technology that will change
> everything?_

If it enables cheap enough connectivity - i.e. being able to place a 5G chip
with a prepaid SIM card in a low-cost device - then absolutely, companies will
jump at the opportunity to do everything from inventing bullshit "smart"
"value-add" features, to selling surveillance to marketers.

------
djsumdog
Predicting the future is inherently stupid. Trying to show what will happen in
our complex world using models is the stuff of Science Fiction.

Going back to the article and economics, if you follow David Graber (Debt The
First 5,000 Years and Bullshit Jobs), he talks in his books about how every
great civilization needs to have debt resets. Going back to the Babylonians,
the Sumerians, and tons of others, there were always leaders or kings or
emperors who would rise to power on the promise of debt relief. Israel had the
year of Jubilee, where ever 50 years debts would be forgiven and slaves set
free.

Continue inflationary debt is never sustainable. At some point, the world bank
will lose its influence, smaller autocratic States will pull out of the "debt"
they "owe" to their "liberators" and larger States will no longer be able to
extract resources without force, that they're going to have a harder time
paying for.

Debt reset needs to happen. Ever American student loan, loans with ballooning
interest, medical debt, debt that's normally written off, debt that's never
written off ... at some point we need less tracking and a bigger reset for
each human being to start fresh.

~~~
tonyedgecombe
Student loan debt is interesting because it could swing an election. All it
needs is a candidate offering to write it off and a large enough portion of
the population that stands to gain. I'll be surprised if it doesn't happen in
the next decade or two.

~~~
lotsofpulp
I doubt it. Less than 15% of adults have student loan debt, and only a small
portion of those are past due. Plus young people don’t vote. The only thing
that might happen, is what has happened which is to delay payments or maybe
interest, but politically, student loan borrowers are not a sympathetic group
to other voters.

[https://www.investopedia.com/student-loan-
debt-2019-statisti...](https://www.investopedia.com/student-loan-
debt-2019-statistics-and-outlook-4772007)

~~~
csharptwdec19
Any solution to student loan debt that doesn't fix the problem of how we wound
up in the situation shouldn't (and probably won't) get widespread support for
at least another 5 years or so.

Even as someone who's still paying off student loans, it's hard to want
blanket forgiveness unless there is a system put in place to help minimize the
number of people taking out loans for degrees that have a low chance of being
able to make enough to make the cost worth it.

IOW, if a degreeholder in Underwater basket weaving on average makes only
5k/year more than someone who doesn't, we probably should limit the number of
loans given to people pursuing those degrees.

Yes, this means many universities will have to trim down or eliminate
programs. Perhaps it doesn't make sense for more than one or two colleges in a
state (especially in smaller states) to have underwater basket weaving
degrees.

There's also the psychological aspect to keep in mind; I recall my time in
college and the first few years of what I was doing with my career, versus
many of the people I know who are now complaining about student loans.

I graduated close enough to the 2008 crash that I couldn't get a job in my
field after college. Building my career was years of long hours, cost me my
marriage, and left me without a social life. Most of my associates who now
complain about their student loans constantly were waiting for the next job to
'drop in their lap' (I even helped one get a job. They eventually got fired
because they were incapable of even showing up to work less than an hour late
for 6 months straight. No, they didn't think to save any of the extra money
they made.)

That really there is the biggest rift: What's the solution that doesn't make
people who sacrificed other parts of themselves to pay their bills feel like
they got ripped off for doing the right thing?

~~~
mikem170
I agree, it is completely unfair to give one group of people tens of thousands
of dollars. If they are going to do that, then they should give everyone the
same amount of money, even if you repaid your loans, even if you didn't take
out loans!

On the one hand I worry about the moral hazard, the devaluing of the currency,
and the debt being passed to future generations. On the other hand I recognize
that it is almost criminal how we pressured 18 year olds into this situation.

------
aeternum
Some interesting points but some of them are not internally consistent:

Author claims that the stock market is up because people are sitting at home
day-trading driving up prices. Then a few paragraphs later claims that cash is
king and people are unlikely to spend.

Author claims that 2009 Fed spending made sense because it was an aggregate
demand issue. That was not very clear then as it was unclear that many of the
mortgage-backed securities actually had a positive value. Coronavirus in
comparison is much more clearly a demand issue (people are effectively being
ordered not to go out and spend).

~~~
mrlanderson
sorry but lmao at people who think small daytrading drives these markets.

The author has zero credibility. Never listen to this dangerous moron ever
again. He doesn't deserve a conversation thread.

------
ausbah
the headline is very optimistic for what the article contains

------
dehrmann
I'd take what Roubini says with a grain of salt. Economists have predicted 10
of the last 7 recessions, and a broken clock is right twice daily.

In recent history, he was a bit late to the coronavirus party, not really
being on-board until late February. Preppers were all over it in January.

~~~
NotSammyHagar
Preppers also predicted 10 of the last 1 world debacles too, so that's not
very predictive either (year 2000 crisis, nuclear war, etc). I'm no better
myself.

However, in 2008 there was a giant amount of poor mortgage debt, it was a real
thing. We've had near 0% interest rates in much of the western world, more in
europe, wasteful debt increases and tax cuts in the us that didn't go to long
term useful infrastructure. And our economy hasn't been growing that much.
China has a giant debt bomb, how will that work out?

~~~
dehrmann
Never mind China's debt bomb. Their demographic bomb is bigger. It's going to
look like Japan in 20 years. Between that, the possibility of parts splitting
off, and the possibility of the fall of the Communist part, The "China will
overtake the US" narrative is premature. If Xi can hold it together, maybe it
will, but that's not a given.

~~~
NotSammyHagar
I forgot about the age issue and also the too many males, too few females in
China. The Communist part is looking pretty strong right now. I wonder, is
there any reason to hope that China will eventually democratize? I see nothing
like the demographic trends that is so clear. China has a lot of room to grow
their economy and military before the demographic issues hit. Look at Japan,
very powerful in both dimensions.

------
rcpt
Stop it my SPY puts already expired worthless.

~~~
ChainOfFools
wallstreetbets in my HN? obligatory SPY 6/11 285c

------
mirimir
It sounds a lot like the jackpot, as William Gibson calls it in _Peripheral_
and _Agency_.

------
contrapunter
Can anyone explain why banning credit/usury wouldn't help in the longer term?

~~~
quacked
What, and force people reconcile with the real cost of owning material goods
and receiving services? Sir, this is America.

~~~
contrapunter
I've also heard _private debt jubilee_ put forward as a solution. Don't know
which (if either) is preferable.

------
vmchale
Given who's in charge of the CDC + Senate I can't say I'm holding my breath.

------
0x262d
Important to understand with all the US-China stuff - working class people in
both countries _should_ mutually benefit from higher productivity, the open
development and sharing of technology, from trade, etc. The only thing driving
a rift and opening up a "cold war" is that US and Chinese _capitalists_ can
never get along because they are competing for the same pool of profits.
Everyone else has pretty mutually beneficial material interests.

So when you read about "the Chinese" (who in China?) listening to you through
your toaster, there's really no reason to care or pay attention to that
absurdly nationalist sentence, just as there's no reason for anyone in China
specifically to listen, unless you're the owner of a significant portion of a
technology company and are hiding that company's tech knowledge from the rest
of the world in order to profit from it. And that's against all of the rest of
our interests.

~~~
chroem-
A lot of people in this country have lost their jobs due to outsourcing.

~~~
0x262d
Their jobs were most often outsourced by US companies looking to get higher
profits from cheaper labor. It would be a lot more effective to solve this by
enforcing equivalent, high working standards across the world, rather than
blaming Chinese people for desperately needing a job like everyone else. But
then profits would be lower, oh no.

~~~
sokoloff
Not only would profits be lower (disincentive for companies), Chinese [or
other off-shore] employment prospects would be worse (disincentive for them to
comply).

Trade makes people better off in general, but it doesn't make every person
better off.

~~~
0x262d
I don't understand, disincentive for who, to comply with what?

~~~
sokoloff
If China would make themselves less competitive "by enforcing equivalent, high
working standards across the world", they have clear disincentives to enforce
compliance.

~~~
0x262d
Oh, yes. That's been used to drive down the standard of living in the US
(including within it) forever. That's why competition is bad for labor. The
only real escape from the market's race to the bottom is a democratically
planned economy IMO.

~~~
sokoloff
Competition is both good and bad for labor. It’s bad for labor-as-suppliers.
It’s good for labor-as-consumers.

