
We'll be stuck in this recession for years, economists say - paulpauper
https://www.erienewsnow.com/story/42532778/well-be-stuck-in-this-recession-for-years-economists-say
======
TheCowboy
The grandstanding against economists is disappointing.

Let's say you were driving at night with someone in the country, and because
they either knew the road or could see farther ahead they said, "There's a
boulder in a road ahead, we're likely going to hit it if you don't slow down
and turn to avoid it."

And you do slow down and it allows you to turn to avoid a crash. How do you
respond? Mock them for always being wrong about predicting a crash?

People mistake warnings about possible recessions, which have a probability
attached, with forecasting an inevitable doomsday recession. There's no credit
given to economists for the recessions or depressions avoided.

Often the warnings are about the risk of a recession with no intervention, and
in an overwhelming majority of cases there is some action taken in fiscal and
monetary policy to soften the blow or avoid the worst outcomes.

~~~
twblalock
> There's no credit given to economists for the recessions or depressions
> avoided.

I don't think we have avoided any recessions, ever, based on the advice of
economists. They just aren't that good at forecasting. They don't even agree
on the policy that is appropriate to fight recessions when we know there is
one.

The "grandstanding" against economists in this thread is entirely justified.

~~~
TheCowboy
Public policy, monetary policy, and fiscal policy all have empirical evidence
in support of them, demonstrating the usefulness of the field. Your comment
does not.

~~~
AngrySkillzz
Backing you up here. There is a clearregime change in the data before and
after the advent of central banking. Recessions and financial panics are less
frequent, and less severe. Just looking at the US, there were ~15 recessions
since the adoption of central banking in the 1910's. In the same time period
during the 1800s there were >25 recessions, and that's not even comparing for
severity. You can see the Wiki[1] for an overview.

[1]
[https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...](https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States)

~~~
quintushoratius
It's also worth mentioning that older folks alive during the Great Depression
had a perspective on it vs the panics during the 19th century. Many observed
that the Great Depression, which was the worst in a generation, was tough but
manageable compared to the Panic of 1983 where people literally could not buy
food.

~~~
AngrySkillzz
Yup, there is a lot of interesting perspective you get from reading journals
and correspondence from the period. Sources from the late 1800s will include
bits from the lives of every day people, almost always along the lines of:
John opens a store, panic occurs, his business fails and he moves to a
different town; becomes a partner in a canal shipping company, panic occurs,
his business fails and he moves to a different town; etc.

------
ttul
Skip to the actual survey of economists:

[https://files.constantcontact.com/668faa28001/65165cb5-5c8f-...](https://files.constantcontact.com/668faa28001/65165cb5-5c8f-468d-8f5a-e80afc952435.pdf)

Summary “Nearly two-thirds of the National Association for Business Economics
members who participated in the August 2020 NABE Economic Policy Survey
believe the U.S. economy continues to be in a recession that began last
February,” said NABE President Constance Hunter, CBE, chief economist, KPMG.
“Almost half the respondents expects inflation-adjusted gross domestic product
to remain below its fourth-quarter 2019 level until the second half of 2022 or
later. And 80% of panelists indicate there is at least a one-in-four chance of
a ‘double-dip’ recession. “The panel is split in its view on Congress’s fiscal
response to the recession, with 40% calling the response insufficient, 37%
indicating the response is adequate, and 11% saying it is excessive,” Hunter
continued. “Nearly three out of four panelists believe the optimal size for
the next fiscal package to be $1 trillion or greater, compared to 17% who
favor a smaller package.” “More than three-quarters of panelists believe that
the current stance of U.S. monetary policy is appropriate, the largest share
holding this view since 2007,” added Survey Chair Gregory Daco, chief U.S.
economist, Oxford Economics. “The majority of panelists—58%—expects the
federal funds rate range to remain unchanged at 0-0.25%, or even drop lower,
by the end of 2021. Most participants—84%—expect that the funds rate target
will be higher by year-end 2022, but still within 100 basis points of where it
is currently.

------
Guzba
Economists are as effective as astrologists at predicting the future. For some
reason otherwise smart people don't realize this? I think it's something about
economists being associated with the university system.

I see this assured economic doom repeated so much without being questioned as
anything but guaranteed I wonder where this incredible confidence is coming
from? We have literally no idea what 2021 holds for us, in the same way we had
no idea 2020 would be so uh unique.

~~~
Afforess
> _Economists are as effective as astrologists at predicting the future._

[citation needed]

> _I see this assured economic doom repeated so much without being questioned
> as anything but guaranteed I wonder where this incredible confidence is
> coming from?_

All the stock market gains are from big tech. Any other markets are flat or
down. (
[https://finviz.com/map.ashx?t=sec&st=ytd](https://finviz.com/map.ashx?t=sec&st=ytd)
)

~~~
Guzba
Quick Google search, nearly top result. Committing the sin of just reading the
headline but man this is not hard to find evidence:
[https://www.bloomberg.com/news/articles/2019-03-28/economist...](https://www.bloomberg.com/news/articles/2019-03-28/economists-
are-actually-terrible-at-forecasting-recessions)

Or maybe? [https://fivethirtyeight.com/features/economists-are-bad-
at-p...](https://fivethirtyeight.com/features/economists-are-bad-at-
predicting-recessions/)

"All of the gains are from big tech". All of the gains are always from some
companies and all of the losses are always from others. This is just how the
pie got sliced 2020. I don't think it has any special meaning we can divine
from it?

~~~
Fellshard
Economics isn't a sliced pie like that.

~~~
Guzba
I just used that as an expression, no special meaning intended.

------
JackFr
I wish people would stop calling the CARES Act a ‘stimulus package’. It was a
relief package. Stimulus refers to creating a secular demand in an economy
that is not operating at full employment to prime the virtuous cycle of
employment and demand. Relief on the other hand means to replace lost income
due to the natural disaster of the pandemic and the necessary public policy
response. I think conflating the two could end us down a bad path.

------
freeone3000
If only there was a term for a prolonged economic retraction, like a
recession, but longer and worse.

~~~
inetknght
A really long and protracted economic contraction is just _depressing_ to
think about.

------
jmnicolas
A recession that last years is called a depression. It's not like not saying
the D word will avoid anything ...

~~~
TheCowboy
Within the field of economics, depression is not a well-defined term. When
phrasing survey questions it's ^not desirable to have the meaning of the
question itself subject to variation if you want the responses to be useful.

------
zackmorris
I think we've reached the point where politicians shouldn't pretend that they
want to prevent recessions.

It's like with day trading: once you realize that volatility is all that
matters, it explains why key players are in favor of recessions and even
actively work to cause them.

Some of the biggest fortunes in history started when someone had a little
extra money to buy undervalued revenue streams when the economy was down.

So yes, there will be a recession, but it won't be triggered by fundamentals.
It will be due to things like politicians politicizing mask wearing. And
killing the financial regulations that smooth out economic highs and lows. And
removing the social safety nets that help people get back on their feet again
by avoiding long-term unemployment.

This basically all comes down to spite. The powers that be can't stand that
FDR instituted the New Deal, starting with the Glass-Steagall Act in 1933,
resulting in almost 70 years of relatively stable economic growth. So they
repealed it in 1999 with the Gramm–Leach–Bliley Act. That along with telecom
deregulation and countless other things put us back on 10 year boom-bust
cycles so that the elite could amass fortunes again.

We've already had the dot bomb, housing bubble pop and now the looming
COVID-19 recession (caused by the Trump administration's hands-off approach to
governing) in just the 20 years since I graduated college. This is so not the
future I signed up for. My finance friends think it's great. But it's pretty
much the worst possible outcome for makers. Which is why I consider the 2000s
and 2010s to be lost decades, with another one looming.

------
hbosch
Are we actually in a recession right now?

~~~
glouwbug
Considering the unemployment rate, yes. Considering the stock market, no.

~~~
ipnon
It seems like we have 2 economies now. One that works, and one that doesn't.
The one that works seems to be much more exclusive.

~~~
lotsofpulp
It's been that way for decades. Top two quintiles and deciles have been far
outpacing the rest, who are basically flat or in decline. Last few years were
a little bit better for them, but that came to an end of course.

------
rdlecler1
I see so many bear cases and they all play to my expectation. What I would
like to see are thoughtful arguments why this won’t be the case.

------
Animats
Many businesses will not come back or be replaced because they were marginal -
worth keeping open, but not worth starting. Restaurants that weren't all that
great, small clothing shops, old hardware stores hanging on - gone and won't
be replaced.

------
bmitc
It won’t be just a year or two. This is going to have long term repercussions.
Basically everyone from the age of 5 to 22 will have a year or two of missing
education. We’re losing tons of immigrants and non-immigrant foreign workers,
of the latter many of which are doctors or advanced degree holders. Many
Chinese are simply leaving the U.S. on their own accord, even if they aren’t
caught up in the travel bans or other such issues, because life is better for
them in China right now. Many businesses are gone and won’t come back. Nearly
everything in the U.S. is happening in slow motion. Everything takes at least
twice as long as it did.

People act as if even if Trump is voted out and a vaccine suddenly appears,
that everything will turn back on. No. Not only have things been delayed
during Trump’s presidency and during the pandemic, they have explicitly
regressed. The government has basically been shutdown for the past four years,
just bleeding money and limping along, and that’s especially true for the past
eight months or so. This is not a one or two year thing. We’re talking multi-
years if not decades of reverberations.

~~~
tonywastaken
If and when Trump gets voted out of office or finishes his second term, we
will have another Trump-like candidate. His cult of personality is here to
stay for generations to come.

~~~
bmitc
I think what Trump's presidency has shown, if only because he is a catalyst
for hate and ignorance and little else, is that the sentiments that drove the
civil war never actually went away and have probably gotten worse and drifted
even further apart. His presidency gave a conduit for these things to bubble
up to the surface. And there's a certain political party that partially shares
the more hateful sentiments but also just wants to profit from them and
manipulate the very people who are a subset of people that their policies
hurt.

------
haltingproblem
Asking an economist to diagnose is to ask the doctor who operated on you and
removed a kidney when you were just there for a root canal to fix the problem.
He goes in and performs a lobotomy but you are so taken by their lab coat and
academic credentials and best paper awards and citations that you ask them to
fix it. They go in and install a stent. A few days later you are dead because
your forgot to take your anti-rejection drugs because of your lobotomy.

Obligatory Nassim video dunking on Economists:

[https://www.newyorker.com/video/watch/nassim-n-taleb-and-
rob...](https://www.newyorker.com/video/watch/nassim-n-taleb-and-robert-
shiller)

------
torgian
Wait, are you saying we left the 2008 recession already?

------
dboreham
We can soothe ourselves with the thought that Economists are usually wrong.

~~~
david927
I'm a bit shocked that that seems to be the take here.

You don't need to have a background in Economics to see what has been
happening even before the pandemic, and what is certainly to come. What is
happening in the bond market? What has the Fed been doing for about a year
now? What is the normal rate of zombie firms? What is it now? How many
companies simply won't reopen? I could go on for hours.

This isn't tea-leaf reading. The signs are 100ft high and in neon.

------
ffggvv
always remember: social science isn’t science. no matter how bad they want it
to be

------
HenryKissinger
.

~~~
UncleOxidant
But employers aren't in business to supply jobs, though, right? If the revenue
and profits aren't there they can't print up their own money.

EDIT: parent comment now empty initially said that companies should hire more
people to help keep the economy going.

~~~
xxpor
This is essentially the reason behind Keynesian stimulus, isn't it?
Something's gotta bootstrap the recovery.

~~~
UncleOxidant
Exactly. Like in the 30s the government should step in and hire people.
Companies can't do that in a recession/depression. However, the other side of
Keynesian economics that's not as often cited is that during the good times
the government saves up for the inevitable bad times - we haven't done that
for a long time.

~~~
daenz
>Like in the 30s the government should step in and hire people

What does the government usually hire people to do in this situation?

~~~
mikeyouse
In the 1930s, it was the PWA which built tons of long-lasting infrastructure
including the Hoover Dam and many substantial other projects;

[https://en.wikipedia.org/wiki/Public_Works_Administration](https://en.wikipedia.org/wiki/Public_Works_Administration)

That was probably the best use of funds at the time since there was broad
based unemployment among a largely unskilled population. This time around, it
seems like it's mostly service businesses that are struggling so it's not so
clear what the best use of labor would be..

------
uoflcards22
I trust this about as much as I trust my horoscope. There is a reason
economists are scolded left and right, and it's because of ludicrous claims
like this.

~~~
mschuster91
> There is a reason economists are scolded left and right, and it's because of
> ludicrous claims like this.

Ludicrous? Not at all. With evidence of people re-infecting themselves with
different strains of coronavirus appearing
([https://www.dw.com/en/coronavirus-reinfections-confirmed-
in-...](https://www.dw.com/en/coronavirus-reinfections-confirmed-in-the-
netherlands-belgium/a-54688064)), we are looking at years of dealing with a
deadly pandemic - which means that anything regarding travel and major events
is out of the question for a _long_ time, and that assumes that people
religiously vaccine themselves (a bold assumption given the rise of conspiracy
myths about "vaccines being used to implant mind control chips" and further
absurd).

That in turn has many effects: economies like Croatia which are dependant on
foreign tourism will be straight fucked, they will not survive without massive
aid - while the EU may prop up at least their governments, the situation for
other primarily tourist economies is even worse. The effect will also hit many
industries and their supply chains - most obviously plane makers and car
makers, both of which are huge cash cows and mega employers, as demand from
industry (airplanes) and private consumers falls to rock bottom (people will
hoard all money they can).

To make it worse, Chinese demand of its rising middle class has been the thing
that propped both their and our economy - in fact, depending on manufacturer,
anything from 24-40% of cars sold in 2018 went to China. And that's just cars.
With the trade war looming to escalate (which is one of the few things of
Trump that were an actually good idea) and that no matter if Biden or Trump
wins, China won't prop up the world economy again, Europe is too busy to save
its own butts, the US is too much in debt plus its social construct is falling
apart left and right...

~~~
nradov
Reinfections aren't a serious concern. Symptoms tend to be much less severe
the second time due to the actions of immune system memory cells. SARS-CoV-2
is just like every other coronavirus in that regard. For example see the
natural history of the OC43 coronavirus.

~~~
mschuster91
> Reinfections aren't a serious concern

They are, because reinfected people can infect people that have not had corona
before and it makes vaccine success rates lower (similar to the seasonal flu).

In the essence it will lead to yet another attempt of "herd immunity" and a
shitload of deaths.

~~~
SpicyLemonZest
Experts and health officials were already expecting vaccines to be only 50-75%
effective, so this isn't new information.

That's what's so frustrating to me about the "herd immunity" discourse. Health
officials have consistently said there's no way the disease is going to be
eradicated, but because of the way it gets discussed, a lot of smart people
have become convinced that the goal of a vaccine is to make sure nobody
catches it.

------
hkai
I'm inclined to believe the upcoming economic doom simply because anecdotally,
I hardly know anyone who is against continuous lockdowns for as long as
needed.

In fact, people even seem to believe that the dead economy brings positive
change: no more pollution from aircraft, no more racist tourism to other
countries, and so on.

~~~
JackFr
> I hardly know anyone who is against continuous lockdowns for as long as
> needed.

I’m sure that comes up a lot in conversation on line at the food bank.

------
joshuaheard
We aren't "stuck" in a recession. It is entirely man-made. In the past, a
recession was significant because it was a market indicator. Now, however,
this recession is artificial, so it does not indicate any market defects.

I believe we will have a V-shaped recovery and we will get back to normal
soon. In a market-based recession, the fear is how to get back to normal. In
this artificial recession, there is no fear, we just end the lockdowns. The
only issue is when.

It's like growing your lawn. If your lawn starts dying, and you don't know
why, that is like a market-based recession. However, if you turn off the
irrigation and the lawn starts dying, all you have to do is turn the
irrigation back on.

~~~
tsimionescu
If we get rid of all of the lockdowns, and force people to act as if
everything is normal (they won't) how will we handle the millions of people
dying?

~~~
twblalock
Do you honestly think that the lockdowns saved lives, rather than simply
delaying deaths for several months? Keep in mind that the lockdowns are merely
a rate limit, not a cure.

We are already in an uncontrolled situation re: covid. We are not seeing
millions of deaths. In most parts of the country literally nothing is being
done, yet we are not seeing bodies piled up in the streets.

~~~
freeone3000
Lockdowns prevent disease spread when actually implemented. The US never
bothered with an actual lockdown, and instead did arbitrary, self-enforced
partial closures. These half-measures predictably slowed the spread, but did
not stop it. US is at 181,000 deaths total and 1500 deaths per day (which is
increasing). Canada fully locked down for two months, and is at 0.8 deaths per
day, and decreasing. Canada will have saved lives. The US did not.

As for "no bodies in the streets": This is a long-lasting disease, you're sick
for days before you die. People don't die in the streets, they die in
hospitals and they die in their homes. The bodies are piled in morgues and
refrigerator trucks.

