
The Many New Indicators of an Epic Job Collapse - paulpauper
https://www.bloomberg.com/opinion/articles/2020-04-30/jobs-collapse-is-deeper-than-the-government-says
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ogre_codes
There is a pretty big disparity between these numbers and the optimism in the
stock market. The S&P indexes are only down about 14% right now since February
and were priced based fairly optimistic growth assumptions at that time.

~~~
cletus
I agree. Cue the next major correction.

I think markets here reflect the naively optimistic view of many people that
everything will return to "normal" in a month or two.

At some point the reality will sink in that a bunch of companies, businesses
and jobs are simply gone and demand will take a long time to return to 2019
levels even if supply was capable of 2019 levels of output tomorrow (which it
probably is).

EDIT: case in point [1]:

> Americans are so nervous about the state of the economy that they are
> stashing cash in the bank at a rate not seen since the first year of Ronald
> Reagan's presidency.

> The United States government's Bureau of Economic Analysis reported Thursday
> morning that the savings rate surged to 13.1% in March -- up from 8% in
> February.

> That's the highest savings rate since November 1981. Americans had $2.17
> trillion in savings last month.

[1]: [https://www.cnn.com/2020/04/30/investing/savings-rate-
federa...](https://www.cnn.com/2020/04/30/investing/savings-rate-federal-
reserve/index.html)

~~~
empath75
it's a little bit optimism and a little bit just printing money inflating
asset prices.

~~~
mercer
As an economist, I just want to add that money printer go brrr.

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JoeAltmaier
The old indicators don't necessarily work here. Unemployment is because of the
lockdown. Some of them (many of them?) will return after lockdown.

~~~
Ididntdothis
To me this feels a little like the situation around 2000 and 2001. A lot of
fundamentals were out of whack but things kept moving. Then 9/11 happened
which shouldn’t have derailed the economy by itself but it triggered the
unraveling. So the lockdown may just be the trigger that will pop the bubble
that has been building since 2008.

My prediction is that measures will be taken to reinflate the bubble which
will then go on for another ten years so we will probably have an even bigger
collapse around 2028-2030. And every time more wealth will get moved to the
top x percent.

~~~
gremlinsinc
I think they'll try, but I honestly think we've got a perfect storm coming.

Now's the best time ever for automation to take off. There's also going to be
more big businesses eating little businesses and consolidation.

Globalization's biggest leaders will come out ahead, and thrive as always -
but a LOT less workers are going to be needed in general from here on out
thanks to ML/AI/Etc...

It's first step towards post-scarcity, except for the millions who will be
hurt if govt's don't create repurposing plans to give people a purpose for
existing and enough $ to eat and live.

Also, I personally won't step foot in a sit-down restaurant or movie theater
for at least 2-3 years, or until there's a viable vaccine. I'm sure I'm not
the only person boycotting crowds.

Real estate analysts estimate that 50%+ of mall retailers will close their
door by q4 2021. that's a shit ton of jobs gone forever.

I was starting to get skeptical of the claim that 40% of jobs would be gone by
2030, but 2020 definitely is showing it's highly possible. What do we do w/
40% permanent unemployment?

~~~
gridlockd
> What do we do w/ 40% permanent unemployment?

This assumes that somehow people cannot be re-trained to do other things, if
those jobs really all disappear, which they probably wont.

There's always more work to do, things to improve, people to help. It will be
like that forever.

The question is, who allocates labor? Perhaps the kind of market system we
have has run its course, perhaps _this time_ it's over.

I predict that the market will recover, just like it always has, but feel free
to disagree.

~~~
JoeAltmaier
Pollyanna thinking.

We'll have what, 30M unemployed people? Who mostly can't be retrained to be
engineers, even if we needed that many engineers which we don't.

No, we're entering a post-scarcity economy. Never mind Marxism or Socialism or
Capitalism - when Labor has nothing left of value to offer, where do they go?
What leverage do they have?

"It'll be like that forever" flies in the face of history. When weaving
machines came in 1760, the weavers didn't just get reeducated or reallocated -
they starved and died, along with their families.

I always feel sad at the oft-repeated theme "We'll just get everybody working
again!". In the 1950's, lots of philosophers and writers imagined a future of
robots lifting the yoke of labor from our shoulders, freeing us for lives of
leisure. Now that it's happening, all I hear is schemes to make people work
again. The old Puritan ethic - if you're not working, your a waste of breath.

~~~
throwanem
Seems pretty pollyannaish to think we're heading into post-scarcity anything,
for anyone. Where is that idea even coming from? Or is "post-scarcity" just a
nice way of saying "massive social stratification built on the exploitation of
an effectively permanent underclass"?

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strict9
> _There are two main reasons: First, trillions of dollars of stimulus money
> from the Fed and Congress come with an implicit guarantee that the
> government will limit investors’ risk no matter how bad it gets._ [1]

When more people learn details about how much the Fed is pumping to keep the
stock market afloat, there may be a revolt.

Investors/retirement account holders can't continue as before with 30 million
(and counting) out of work.

1\. [https://www.nytimes.com/2020/04/29/business/stock-
markets.ht...](https://www.nytimes.com/2020/04/29/business/stock-markets.html)

~~~
JamesBarney
Why would they revolt?

~~~
sundaeofshock
They’ve lost their jobs and homes and can’t feed their families. Then they are
told there is no help forthcoming from the government as they watch that same
government point the money cannon at large corporations.

Why wouldn’t they revolt?

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rfreytag
If the Fed does this right the truly massive spending will be when businesses
reopen and will place money directly into consumers' wallets to restart
demand. Otherwise businesses will have nothing to be open for and layoffs will
continue and the downward spiral will steepen.

It will be difficult to time the reduction of business subsidies as consumer
demand gets supported. Get it wrong and business feel no price pressure as Fed
money overpowers the market signal of resource misallocation while consumers
lack the ability to pay 'old' prices or change the goods and services they
desire.

~~~
dividedbyzero
The way this is heading, and given that that point is probably, realistically,
quite far out – I guess there the very real possibility that a lot of people
will find themselves homeless and/or greatly and permanently impoverished in
the US. I fully agree with you, but even if they get that exactly right, lots
of markets will probably have pretty much disappeared and lots of companies
won't have a chance to make it. This feels like with all the pessimist views
pretty much everyone might still underestimate the sheer size of the tsunami
that is rolling in.

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Fluid_Mechanics
The economic collapse we’ve been waiting for since the 70s is here. Repent
sinners.

~~~
durnygbur
shame, shame, shame

 _[throws rotten apple]_

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yters
I think if we avoid heavy handed government intervention to "save the economy"
things will return to normal fairly quickly. OTOH, I expect gov to jump in as
always to create a self fulfilling prophecy.

