22MM total out of 157MM working Americans ~14%. More lost than have been added since 2008. Does anyone have a good idea about the actual prospects of a V shaped recovery?
Because, to your point, a restaurant can't just rehire all the chefs and cooks and waitstaff and go buy food and pay all of its overhead on day 1 with out some sort of influx of cash and guarantee of cashflow to service debt. And I'm assuming that model scales to larger industries as well.
When an economic crisis comes along they get canned and the business realizes that they weren't actually needed. When the good times come back they don't hire those employees back. They continue operating with a smaller staff and pocket the extra profit.
- There's not enough tests still - People are scared of doing anything even if stores open up - Most importantly, sales just don't magically appear with the snap of your fingers, takes time to ramp up again - Companies are still heavily on only essential spending, that doesn't change overnight
They're talking no public events til 2021 now. I think the realization is that this isn't just a 1-2mo ordeal. It's going to be a 1-2yr shift.
This is what happens when captains of the industry ignore pretty much any pandemic model that has been release in the last 50 years. Unless everyone catches it instantly and the whole process is over quick (which leads to massive death and long term economic impact), that it always takes a year or two of massive public change and a vaccine to get beyond the pandemic.
Essentially the rest of the world has caught up with where the epidemiologists were in January.
One thing is that to a certain extent an economy is psychological. Yes, certain things are physical realities (such as crop yields) or political realities (e.g. states of war) or legal realities (like regulations against selling homemade beer), but a lot else is purely based on sentiment. And it doesn’t matter how good reality is if people think it’s bad: they won’t act in the market more than they must to survive, and it will actually be a bad market, even if the fundamentals justify a good one — at least for awhile, until enough contrarians seek to take advantage of good prices (a kind of sentiment arbitrage, I suppose).
But something I worry about even more is well-intended interventions which make things worse and prolong the poor economy. There’s precedent for this in history: the Smoot-Hawley Tariff Act was intended to alleviate the Great Depression but instead exacerbated it. Specifically, I can think of laws against so-called ‘price-gouging’ (which is a myth: no-one in all of human history has ever paid more for something than he felt it was worth to him at the time he bought it, because whenever anyone feels the all-in price for something is more than the all-in value … he doesn’t buy it): by interfering with the price mechanism which is the fundamental method for economic actors to bid for their needs and desires to be met, it will result in less-efficient allocation of resources (capital and labour) across the entire market. This misinvestment will by definition lead to a poorer economy than would otherwise be the case.
You're laying on the operating table in the ER with a heart attack. Surgeon says, "OK before we put you under, in compensation I want 70% of your income for the rest of your life, or I'm not doing this. Deal?"
Ah, so you believe that medical care should bankrupt an individual every time they use it because it is priceless.
Dead cat bounce and then stagflation?