Almost 90 percent of NYC bars and restaurants couldn’t pay August rent

I know it's the onion, I'm responding to the commentary that it's making. Many of its articles have depth to them.

That would be fine and dandy if the decision to engage in risky behaviour only affects the individuals and businesses making them. However, this is not the case in reality.

This isn’t about people making decisions for themselves. It’s about preventing the spread of infectious disease.

You might be fine, but if you are asymptomatic, you can directly harm or kill others and not even know it.

That being said, I’m not sure what the best policy is. It doesn’t seem feasible to have a complete lockdown that extends for many months. So we have to be clever, keep learning, and find good solutions. We can minimize the risks and prioritize health while allowing society to function in an altered fashion.

> If people are scared and won't go to restaurants

If people are responsible and won't go to restaurants ...

Or long form: If people know there is infectious disease around with asymptomatic transmission and rationally decide not to go to restaurant to ...

Framing does a lot.

This is a story about the ability of human kind to work together to defeat a common enemy.

So far we have failed. The reasons for that failure are many, but it has become clear over this 6+ months that a coordinated top-down plan is what we’re lacking.

The “libertarian” approach like you mentioned has been tried- every relaxation of covid restrictions has been followed by acceleration in the case count. Turns out prayers and positive thinking were unsuccessful in limiting virus transmission.

Be honest Juan, when was the last time you really made your own decision anyhow?

Epidemiology is not accomplished by allowing people to make personal choices, because your average guy has no understanding of either epidemiology or statistics.

As we have already seen, what actually happens is that a small number of people with vocal delusional beliefs do wildly risky things that endangers everyone else.

Ignoring the whole "we should open/we should close" debate (I'm not an expert in economics or virology) it's perfectly possible for the vast majority of people to not want to go to bars/restaurants and to need to chose, as a group instead of individual, to close them to lower spread. I.e. >50% doesn't always have the same outcome as 100%

People do get a choice in the matter but part of that is people get a choice whether they want to act independently or enforce a choice (to some level) as a group.

Most people advocating for reopening would kick restaurant employees off of unemployment. Those employees are the people in the equation with the least power, and the most exposed to the risk.

> If people are scared and...

You're framing this the wrong way. It's not about being scared, its about being careful.

> Restaurants are pretty packed in the places that reopened

Not true of where I live in San Francisco

> they were pretty packed in NYC until literally the day the lockdowns started

That's before people got scared because NYC was literally the first place for this to happen and most people had no idea what was going on. You can see how restaurants performed in countries that remained open, like Sweden, where you can find lots of people talking about how their sales dropped 80% despite no lockdown. For a low margin business, that kills.

You know the point of a bar is not the alcohol, right?

> There's no reason that those bar sales, can't be from the restaurant over postmates or uber eats.

Except for the prices, maybe? While it is true that most restaurants make most (or even all) of their profits with drinks, customers probably realize that they are paying 200% markup for a zero-effort service if they ordered beers from a restaurant instead of getting them themselves...

It's easy to point out risk. Anyone can do that.

At what point do we fully re-open? Winter 2022 after everyone has had a mandatory vaccine?

Is there a particular portion of this study you're referring to? I don't see anything about risk at vs. beyond your table here.

the researchers' recommendation:

> "'Implementing safe practices to reduce exposures to SARS-CoV-2 during on-site eating and drinking should be considered to protect customers, employees, and communities and slow the spread of COVID-19,' Fisher and colleagues concluded."

which is exactly in line with opening restaurants with modest measures.

the study only provided impetus to look closer at restaurants as potentially not insignificant localities of spread due to self-reports citing slightly higher restaurant patronage in the 2 weeks prior. they declined to put forth any conclusions on prevalence or mechanisms for spread in restaurants because they didn't study those things. they only presented some statistics on the self-reports. that's it.

The Federal Reserve seems primarily focused on keeping asset prices high. Their policies seem to react directly to downward pressure in the equity markets.

When you consider that the appreciation of these markets only serves to widen the wealth gap, it becomes clear that the Fed's mandate is to preserve the wealth of the rich. They're pursuing "trickle down" economics at full speed, despite the overwhelming evidence that "trickle down" is a myth.

The US population is too busy arguing over race issues and partisan politics to realize the financial system is stealing from the poor and giving to the rich.

Everyone wants to blame someone - e.g. its the governments fault! In reality, its just an external force that everyone is dealing with, a plague, if you will - its not anyone's fault; it just must be faced, that during a plague, there will be suffering, and there will be casualties. It's that simple.

What about all the reits? A lot of bonds are backed by mortgages. If no one is paying rent then aren't all property owners in serious trouble? What about the massive tax hit for all local governments from property taxes. This isn't a simple problem.

It creates a cascading effect. There's an insane debt bubble and a lot of that debt will lose rating, so many investors will drop it creating a feedback loop. Dumb money have to drop it because of their mandate and/or rules, even if this is bad for their other assets (i.e. more debt they hold).

This would be the dumbest idea right now. I hope government agencies worldwide can resist the attack from media.

[Don't get me wrong, fuck banks, evil hedge funds, and speculative landlords, but they are barely going to be hit by something like this.]

It’s a problem when you consider the trillions more the fed sent to loans for big businesses + banks, buying stocks, and buying mortgage bonds (which also kinda went to banks).

Those seeking rents should be where the buck stops in a paused economy.

I always see the argument of "when all the mom & pop landlords are gone, major corporations will own everything, so we have to protect them".

That consolidation is going to happen anyways. It's inevitable. The only factor is how long it takes for it to happen, and how big the payout will be for small landlords when they finally decide to cash out. There's much more at stake for the renters.

Forcing small landlords into choosing between selling immediately or facing bankruptcy in the near future is morally preferable to putting the burden on renters. The world isn't really a worse place if a landlord has to liquidate their assets at a 150% net profit now instead of 320% in ten years (after accounting for all rent collected and taxes paid).

If they had the capital to afford a commercial property in the first place, this won't be potentially life-ruining. You can't assume the same for a non-chain restaurant or grocer that serves as the owner's livelihood.

Landlords were/are bailed out in US. Landlords are businesses. MY LLC got a 30 year very low fixed interest loan, first 10K of loan automatically forgiven, based solely on the LLC's income from last year. The loan amount was roughly 60% of last year's revenue. Oddly enough, actual lost revenue was about equal to the loan amount, but the gov't had no way of knowing that and didn't even ask. I'm sure every landlord in the country signed up for that or one of the several other coronavirus relief options. Any wonder why the stock market is up? That's a lot of free money sloshing around.

So, not Germany.

Nitpick, that's "force majeure".

French always sounds more impressive.[1][2] Lawyers love to sound grand, as though they're worth what they're paid.

1."Paté de foie" sounds a lot nicer than "liver paste," n'est-ce pas?

2. https://en.wikipedia.org/wiki/Force_majeure

Looks like it's often insufficient:

> Q: If a contract does contain a Force Majeure clause that includes “epidemic” or some form of the “other causes beyond the reasonable control of a party” language, does that mean one or more of the contract parties do not have to perform, as a general rule?

> A: Not necessarily. First, it should be noted there is not much jurisprudence in the U.S. that address “epidemics” as a Force Majeure event. So the courts have not, to date, had an opportunity to provide clear interpretation or guidance. That is likely to change soon. Second, there needs to be a real causal connection between the occurrence of a Force Majeure event and a party’s ability or inability to perform under the contract. By way of an over-simplified comparative example, consider today’s situation, where there is undoubtedly an “epidemic” of COVID-19 occurring. Most homeowners cannot simply stop paying monthly home mortgage payments even if the loan documents contain language that includes “epidemic” as a Force Majeure event. This is because the Force Majeure event, as expressly stated in the contract, has not directly created an effect that excuses the homeowner’s performance – to pay monthly installments to the mortgage company. In contrast, if a public school district engages a consultant to observe and evaluate students’ use of a new technology in the classroom, and the contract contains similar Force Majeure language, the government’s decision to temporarily close all public schools because of the epidemic precludes the consultant from completing the evaluation.. Very likely, the Force Majeure clause would excuse the delay in the consultant’s performance.

> In between these very simple examples are countless real-world situations that will likely arise as businesses try to predict their respective futures.

https://www.lexology.com/library/detail.aspx?g=5e3f36b8-6ce8...

How do you have a business of any size without a banking relationship?

That seems plausible. Both New York and New Jersey have lots of high density areas, yet their numbers are very flat now. There's also some speculation that some people might have a natural immunity.

That might explain it--this is just a baseline level of spread and herd immunity knocks it down. It also begs the question of how to loosen restrictions because if NYC actually hit herd immunity for the current level of social interaction, not relaxing restrictions is unethical. You can't keep everything closed forever, and if there's a sign you've hit herd immunity, 3+ months of this is it. It might also be what spread looks like post-vaccine. How to know you're at that point where you can reopen is tricky.

To add to this, Sweden isn't seeing the big surge that France and Spain are seeing (among others, including Belgium and the Netherlands, both at or near record highs). Sweden's cases have dropped lower and have stayed there. Given their comparatively open approach to the virus, they should be seeing a surge. While it's possible it'll show up in the near future as it again spreads across parts of Europe, I think it's also plausible they've reached a partial herd immunity. The commonly repeated premise that you need ~60% to reach herd immunity is plainly false, that's a calculation meant for a vacuum. In reality people aren't numbers on a sheet or living in a vacuum, all people don't behave the same way, don't spread a virus the same way, aren't all similarly at risk, some large percentage of the population may already have immunity thanks to prior exposure to other coronaviruses, and so on.

I'm one of those who tested positive for IgG antibodies in April. Same in June, August. These were Mount Sinai's quantitative research tests, with a high titer. I donated plasma twice. The only symptoms occurred in mid March. Then I got an Abbott qualitative IgG test earlier this month, because I was about to fly to Italy. Still positive. Once there, to end quarantine before the customary two weeks, I got two negative swabs and another Abbott test, but this time they also tested IgM (short term response), which quite surprisingly still came back positive. Since this was the first time it ever got checked, it's not clear if I was IgM positive for the entire six months or I got some exposure in August or early September that didn't result in symptoms or infection.

I don't know what this means or if I'm just a rare case, but my inkling is still to explain NYC's current rates with mask wearing and reduced indoor interactions. I guess we'll see in the next four to six weeks.

It's not antibody immunity. That's why I said we don't understand. 20% is nowhere near enough to explain the patterns we're seeing.

The good news is that even though we don't understand it, the NY experience does point towards a potentially more muted second wave in areas which were hit hard the first time round (as long as they take precautions at least), but we just don't know enough to be sure - anyone who is sure about the outcome at this point is probably overconfident and wrong.

I think spring was "the wave".

In Nashville they closed bars and restaurants for 6 months because .004% of the cases came from bars and restaurants.

We need to give people choice.

If we wait until we get a vaccine it will be Fall 2022 and many Americans won't get it. What then? No bar and gym re-openenings until X percent of the population is verified to be vaccinated? Mandatory vaccination checks on entrance? Punt again and find reasons not to re-open until 2022?

Let people and businesses make their own choices.

Allow all re-openings and let people choose.

I answered that already.

Because they paid taxes and employed people. It's like an insurance company that drops you as soon as you file a claim... you pay into a pool, expecting it to be there when you need it.

This is an unheard of situation, don't forget. The government (rightfully so, in my opinion) is forcing these restaurants to shut down dining. It's not like they're shutting down because they're "lazy".

What do you think restaurants are for?

It sounds like you think they’re a scam.

We should just use the same objective approach as we use for classifying other drivers: anyone going faster than me is a dangerous asshole and anyone going slower than me is a dangerous idiot.

But with salary instead of speed, I guess.

Link to the Pew research?

It reminds me of way back in 2000 when the NDP Party of Canada (left wing) said "we need to tax the rich way more" and a reporter finally asks "what do you mean by rich?" and the NDP leader inferred "a family of four making more than $60,000".[1]

That turned some heads, especially among the labor unions who typically vote NDP and typically make more than that.

[1]https://www.cbc.ca/news/canada/income-over-60-000-qualifies-...

Don't tax the high income bracket, tax the rentier bracket.

The commonly used definition, even among non-economists, comes from the OECD and Eurostat. You are rich if your equivalised household income is over 150% of the median.

Absent units don’t pay the mortgage either. It’s not like there’s a glut of buyers out there that your tenant is blocking you from.

Throughout most of human history wealth/power has been wildly skewed into a small number of hands. The historical anomaly is that equality today has become pervasive to the point that we find inequality to be noteworthy. Current trends may be reversion to the historical mean without anything being fundamentally broken.

It's been a hell of a good few centuries for much of humanity. We should keep it up, of course, but a reversion is normal in a dynamic system with feedback even when an upward trend is "sticking".

I don't want my tax money used to bail out landlords. Let the lenders foreclose. If the landlords didn't want to deal with loans then they should have paid cash for the properties.

Do I get a bailout for my losses on the share market? What if I had bought shares on margin?

Why does one class of investor get a bailout but not others?

(Why bailout any investor? Risk is part of investment.)

God no. They've been sitting on empty buildings for years. It's time for them to default on the underwater loans and let people actually put the wasted space to use.

Every city in the US has a similar issue including the one near where I grew up and it's the weirdest most broken thing. I remember many times walking down streets flanked by empty buildings with homeless people sleeping outside.

And property taxes.

Would you also bail out those who bet on black and got red?

When you bail out something like Ford you keep it running and collect tax revenue. If you don't, factories stop and the business essentially disappears.

When a landlord goes bust nothing happens, other the financial loss for the landlord.

Mandatory rent holidays.

Yah, those numbers just cover rent. If you want to cover payroll as well those numbers are going to skyrocket.

If you think that's a good use of money, well, make your argument. But please include a cost while doing that. You can't just say "bail them out" and not say how much that will cost.

Maybe it's affordable, maybe it's not - but be upfront with your numbers.

Let's walk forward some more. Every restaurant in the country goes out of business and stops paying rent. People still want to eat out, so when it becomes legal to serve that market again new restaurants will reopen - and likely with cheaper rent. In the interim, commercial property investors get the shaft.

Those unemployed cooks and wait staff won't be unemployed for long, and perhaps throwing money at commercial rents isn't the best way to help them.