COVID Economy

[mu_hilltopper]

We should have a thread on economic stuff .. saw this tweet and found it interesting:


https://twitter.com/JustinWolfers/status/1255479750593859584


This is stunning: Nearly half of the Q1 decline in GDP can be attributed to healthcare, which is presumably delaying of elective procedures.

It's a strange reality that in the midst of a pandemic, we have a healthcare-led recession.

[forgetful]

Two aspects of that are pretty amazing.

1) Healthcare expenditures makes up 17% of our entire GDP.

2) Elective procedures make up enough of that to have a massive economic effect.

C) What happens in Q2, when economic impacts really starts to hit other sectors.

[MU82]

Two aspects of that are pretty amazing.

1) Healthcare expenditures makes up 17% of our entire GDP.

2) Elective procedures make up enough of that to have a massive economic effect.

C) What happens in Q2, when economic impacts really starts to hit other sectors.

Re point C -- you're right. But hopefully by then the health-care sector will be in full rebound mode. For example, the 2 major Charlotte hospitals, one of which is the largest employer in North Carolina, just started allowing "elective" procedures again.

Right now, it's almost impossible to get a dental or eye appointment that isn't an absolute emergency. That should change very soon, too. At least in theory. Those are big money-makers.

[MUBurrow]

Re point C -- you're right. But hopefully by then the health-care sector will be in full rebound mode. For example, the 2 major Charlotte hospitals, one of which is the largest employer in North Carolina, just started allowing "elective" procedures again.

Yup. If healthcare experiences April-like losses for another couple of months, the funding devoted to health care in the latest stimulus/bailout bill is going to look like an amuse bouche compared to what's required next. The healthcare system is at a point where if it isn't business as usual soon, we're going to have a system with all the costs of being totally reliant on government funding, without any of the consumer-side benefits.  Pretty neat.

[tower912]

Funding like single payer without the side benefits of universal coverage?!?!?   Sign me up!

[MUBurrow]

Funding like single payer without the side benefits of universal coverage?!?!?   Sign me up!

Hey now, that's not fair.  Look at all of this awesome innovation we are getting in exchange for our healthcare cost-induced bankruptcies.  If it wasn't for the awesome system we have now, our pharma overlords wouldn't have been incentivized to create all of the faulty tests and ineffectual off label treatments that are rescuing us from our covid nightmare.

[Jockey]

On the bigger picture of the Covid economy, what are the opinions for how long it takes to get back to normal - or at least 80%-90% of normal?

As things are now, I'm guessing 18 months to 2 years. If Covid comes back in the fall as bad as some predict, all bets are off and I see a prolonged depression.

[#UnleashSean]

On the bigger picture of the Covid economy, what are the opinions for how long it takes to get back to normal - or at least 80%-90% of normal?

As things are now, I'm guessing 18 months to 2 years. If Covid comes back in the fall as bad as some predict, all bets are off and I see a prolonged depression.

There will be a breaking point somewhere within the next 12. Those who are healthy will venture out and those who are not will bunker down.

[WarriorDad]

We should have a thread on economic stuff .. saw this tweet and found it interesting:


https://twitter.com/JustinWolfers/status/1255479750593859584


This is stunning: Nearly half of the Q1 decline in GDP can be attributed to healthcare, which is presumably delaying of elective procedures.

It's a strange reality that in the midst of a pandemic, we have a healthcare-led recession.

Good topic.

The two doctors I linked to their videos the other day that YouTube felt should be censored alluded to this.  Hospitals shutting down floors, urgent care centers are ghost towns, elective procedures delayed, and more serious stuff where patients that need care are staying away. 

The healthcare business is a relatively low margin business that depends on scale.  When scale isn't there, the system has a hard time recovering in short order.  Several nursing relatives have been assigned tasks like counting PVE supplies, guarding supplies, when they normally work to care for patients.  They just do not have the volume and both are in fairly large urban areas  (Miami and Denver).

[#UnleashSean]

Good topic.

The two doctors I linked to their videos the other day that YouTube felt should be censored alluded to this.  Hospitals shutting down floors, urgent care centers are ghost towns, elective procedures delayed, and more serious stuff where patients that need care are staying away. 

The healthcare business is a relatively low margin business that depends on scale.  When scale isn't there, the system has a hard time recovering in short order.  Several nursing relatives have been assigned tasks like counting PVE supplies, guarding supplies, when they normally work to care for patients.  They just do not have the volume and both are in fairly large urban areas  (Miami and Denver).

Some good to come out of this will be universal income and national healthcare.

[MU Fan in Connecticut]

On the bigger picture of the Covid economy, what are the opinions for how long it takes to get back to normal - or at least 80%-90% of normal?

As things are now, I'm guessing 18 months to 2 years. If Covid comes back in the fall as bad as some predict, all bets are off and I see a prolonged depression.

I saw this in my newspaper today in the business section:


Economists: Quick rebound unlikely

Hopes are beginning to arise that the U.S. economy might be poised to rebound by the second half of the year. The idea is that the economy might be able to mount a sharp comeback if more employees and consumers were to gradually return to working and spending. Yet most economists say such expectations should be kept in check. Among their concerns is that the coronavirus could flare up again after the economy is re-opened, forcing reopened businesses to shut down again. Another is that people will remain too wary of contracting the coronavirus to return to anything resembling normal economic behavior.

[Jockey]

I saw this in my newspaper today in the business section:


Economists: Quick rebound unlikely

Hopes are beginning to arise that the U.S. economy might be poised to rebound by the second half of the year. The idea is that the economy might be able to mount a sharp comeback if more employees and consumers were to gradually return to working and spending. Yet most economists say such expectations should be kept in check. Among their concerns is that the coronavirus could flare up again after the economy is re-opened, forcing reopened businesses to shut down again. Another is that people will remain too wary of contracting the coronavirus to return to anything resembling normal economic behavior.

I think theee are exceptional points.

But they don’t take human nature into account. As people go back to work and get a regular paycheck again, most of that money (at least for a while) will be used to pay off the debts incurred over months with little or no income. What’s left will be put away as insurance for when/if there is a second wave. Not a lot of the money will be streaming back into the economy. So, without demand, it will be harder for the economy to rev up.

[jesmu84]

If either of these are unrelated to the topic, please remove:

1. Why is it "okay" to bailout large corporations that are struggling due to the impacts of the virus, but not "okay" to bailout states that are struggling due to the impacts of the virus?

2. I sincerely fear for the post-covid economy. When the country was stabilized following the recovery from the 2008 recession, we easily saw where the vast majority of resources/money ended up. I fear it could be even worse this time.

[JWags85]

If either of these are unrelated to the topic, please remove:

1. Why is it "okay" to bailout large corporations that are struggling due to the impacts of the virus, but not "okay" to bailout states that are struggling due to the impacts of the virus?

2. I sincerely fear for the post-covid economy. When the country was stabilized following the recovery from the 2008 recession, we easily saw where the vast majority of resources/money ended up. I fear it could be even worse this time.

There is a big difference between states that have been bleeding money and a financial disaster for years like Illinois, and a company that’s been profitable until all opportunity to make money was turned off.

I realize that you’ve been banging in this corporate bailout drum pretty obsessively, but comparing corporations to states is not apples to oranges.

[pbiflyer]

I am confused why we are supposed to have a 3-6 month savings safety net, but corporations, especially those makings billions a quarter in profit, aren't.

[Jockey]

I am confused why we are supposed to have a 3-6 month savings safety net, but corporations, especially those makings billions a quarter in profit, aren't.

You’re right. I agree with Wags that states are different than corporations, but a ton of money went and will be going to corporations that were brazenly careless with their huge corporate profits - airlines may be the best example.

[jesmu84]

There is a big difference between states that have been bleeding money and a financial disaster for years like Illinois, and a company that’s been profitable until all opportunity to make money was turned off.

I realize that you’ve been banging in this corporate bailout drum pretty obsessively, but comparing corporations to states is not apples to oranges.

Fair.

But what if those currently bailed-out corporations also had pre-existing issues that greatly impacted the virus effects? Is that significantly different?

[The Hippie Satan of Hyperbole]

God
@TheTweetOfGod
America has to have a healthy economy for people to die in.

[jesmu84]

There is a big difference between states that have been bleeding money and a financial disaster for years like Illinois, and a company that’s been profitable until all opportunity to make money was turned off.

I realize that you’ve been banging in this corporate bailout drum pretty obsessively, but comparing corporations to states is not apples to oranges.

Correct. Not that I'm upset with the government for giving out money in the time of need, but I believe it belongs in the hands of the people first.

[GooooMarquette]

I saw this in my newspaper today in the business section:


Economists: Quick rebound unlikely

Hopes are beginning to arise that the U.S. economy might be poised to rebound by the second half of the year. The idea is that the economy might be able to mount a sharp comeback if more employees and consumers were to gradually return to working and spending. Yet most economists say such expectations should be kept in check. Among their concerns is that the coronavirus could flare up again after the economy is re-opened, forcing reopened businesses to shut down again. Another is that people will remain too wary of contracting the coronavirus to return to anything resembling normal economic behavior.

I think the underlined part is a very real possibility. Governors/states could open up tomorrow, but if consumers do not feel safe going out, it won’t matter. The the businesses will open, but the stores will still be empty. That’s why I am concerned with the “just let the healthy/low-risk people go out“ attitude.

Yesterday, I heard an interview with an owner of a nail salon in Atlanta. She had been receiving calls from customers eager to return as soon as she could open up. She opened on Friday and had a surge of customers for a day or two, but then business dried up. The salon has been virtually empty for the past few days, and has few appointments booked. For now, she has decided to open on a “by appointment only“ basis.

That may work for a while and for some businesses, but it is not enough for a viable recovery.

[MU82]

There is a big difference between states that have been bleeding money and a financial disaster for years like Illinois, and a company that’s been profitable until all opportunity to make money was turned off.

I understand what you're saying about the states, and I actually agree ... but Boeing literally was killing people through utter incompetence and hubris, and the airlines were squeezing customers for every last nickel while using stock buybacks to enrich their upper 0.1%. Just to name a few of the one-time profitable companies who need bailouts now.

[JWags85]

I understand what you're saying about the states, and I actually agree ... but Boeing literally was killing people through utter incompetence and hubris, and the airlines were squeezing customers for every last nickel while using stock buybacks to enrich their upper 0.1%. Just to name a few of the one-time profitable companies who need bailouts now.

I understand, and that’s why I’m glad there are restrictions on the funds given to airlines and others.  Regardless, even with the massive damage to Boeing’s bottom line, without this pandemic they would have went through some pain, their stock would continue to get beat up, and then they would U back up cause they are one of 2 major players in a significant space, and still probably best of breed.

[jesmu84]

I understand, and that’s why I’m glad there are restrictions on the funds given to airlines and others.  Regardless, even with the massive damage to Boeing’s bottom line, without this pandemic they would have went through some pain, their stock would continue to get beat up, and then they would U back up cause they are one of 2 major players in a significant space, and still probably best of breed.

I want to believe in the restrictions.

A quick Google search brought up this: https://www.politico.com/news/2020/04/02/coronavirus-corporate-bailout-deal-161374

Anyone have anything more recent that demonstrates strict bailout conditions?

[Lennys Tap]

I think the underlined part is a very real possibility. Governors/states could open up tomorrow, but if consumers do not feel safe going out, it won’t matter. The the businesses will open, but the stores will still be empty. That’s why I am concerned with the “just let the healthy/low-risk people go out“ attitude.

Yesterday, I heard an interview with an owner of a nail salon in Atlanta. She had been receiving calls from customers eager to return as soon as she could open up. She opened on Friday and had a surge of customers for a day or two, but then business dried up. The salon has been virtually empty for the past few days, and has few appointments booked. For now, she has decided to open on a “by appointment only“ basis.

That may work for a while and for some businesses, but it is not enough for a viable recovery.

So now you’re concerned with the “just let the healthy/low risk people go out” attitude because you don’t think the businesses will get back to normal (or anything like it) right away? Of course they won’t. It will take time whenever (one month, six months, a year) we reopen to get back to normal. But I read a stat that 49% of workers in the US live paycheck to paycheck (down from 78% in 2017, thank God) and unemployment $ doesn’t last forever or even pay all the bills.

I wonder if any Scoopers who downplay what a prolonged shutdown could mean to our social fabric are among those 49% living paycheck to paycheck who have lost their jobs.

[GooooMarquette]

So now you’re concerned with the “just let the healthy/low risk people go out” attitude because you don’t think the businesses will get back to normal (or anything like it) right away? Of course they won’t. It will take time whenever (one month, six months, a year) we reopen to get back to normal. But I read a stat that 49% of workers in the US live paycheck to paycheck (down from 78% in 2017, thank God) and unemployment $ doesn’t last forever or even pay all the bills.

I wonder if any Scoopers who downplay what a prolonged shutdown could mean to our social fabric are among those 49% living paycheck to paycheck who have lost their jobs.

I am just being realistic. Sorry if that bothers you.