This reflects my personal view of the "real" economy. Nearly everyone around me is absolutely destitute. Meanwhile, equities are trading at all time highs. There is an enormous disconnect, at least in my specific area.
It's bad here. I'd say at least 1/3 have lost their jobs and are having a really hard time finding work. More uber/lyft signs have popped up in cars in the parking lot. One of my neighbors had to move their family of 3 from an already-small 2br to a 1br (2 kids). I don't know how they can make it work. There's more people who sit on the sidewalk curb and drink cheap beer and chain smoke. They're nice folks (I talk to them), but they can't find work.
On the flips side, anyone who can WFH is doing better than ever before. They save money by not driving, eating out, or doing the other things they'd normally do. I've also seen A LOT of brand new cars show up, presumably buying because of low interest rates. WFH folks seem happier than before.
The disparity between the haves and have-nots looks like it's been rapidly accelerating. If you always stay in the HN bubble, you won't see these people. They're 'invisible', but I assure you they are real. They need help, and they're not getting it. It's honestly very, very sad - it makes me sad. My empathy is on overdrive because it's so easy to see myself in that position. If I hadn't chosen tech, I'd be right there with them with a 6-pack, Marlboros, and no hope.
This pandemic to me shows the fundemental problem with a lot of the fancy economic theories we've been living off of and the parasitic "financial engineers" fundamental failing. You can play all the games you want with numbers and spreadsheets to make it look like there is more money than there actually is, but you can't magically change the amount of stuff their is to buy. As such it doesn't matter what measure you use or what KPI you look at for the economy, if there isn't enough crap being produced for people to buy it at a reasonable price there isn't enough crap to buy, and telling people the economy is doing great when I can't afford a roast for dinner doesn't mean jack to me or anyone else.
If you want to actually help the economy you helicopter drop stimulus checks. The lower 95% spend more money when they have more, the top 5%/1%/.01% don't see a meaningful difference in their spending power.
I think this is a bit simplistic. This is also how you get hyperinflation.
Perhaps the government should just have a clean separation from money, much like they do from state?
Infact for the last 15 years I have made it a point to monthly expenses be less than 50% of my net income, which meant living with family, having room mate, Driving a very old car or doing other things to lower my expenses.
> The lower 95% spend more money when they have more
This isn't saying that the bottom 95% are incurring massive debt or "living beyond means". It's just saying that if you give someone in the bottom 95% an extra $100, they'll likely spend some of that money. If you give Bezos or Gates or Buffett $100, it's such an inconsequential sum to them that it wouldn't change their spending
They spend it on consumption and bid up the price of inputs while the people who own the businesses collect profit. I’m not sure thats any better than what the govt is doing now.
And when demand increases, temporarily prices may spike. Usually in a free market, supply increases and price can go down. That's pretty fundamental.
> People can eat?
Figure out how people can eat without someone working to produce and deliver that food and you can solve a lot of problems.
Instead, by purchasing large amounts of junk bonds, the Fed basically backstopped Wall Street, leading to the all-time highs in the stock market indices. The stock market completely decoupled from the economic reality on main street
I had friends 'in the market' who felt the rebounds after 9/11 were suspect already.
1) Inflation. You're living it. The stock market is inflationary. Printing money creates inflation. Yet somehow they will make everyone believe 2020 saw 2% inflation. The market is telling us it expects inflation to be higher; maybe. You don't want to hold cash or low interest bonds going into an inflationary period.
2) Global demand for US equities. If there is a global financial crises/disruption, and there should be, people view US stocks as safer than all other stocks. Money managers would be moving out of other stocks and into US stocks. Demand drives up price. It needs no further rationalization than risk management with limited optionality of where to put their money. US stock prices could be ridiculously overpriced on fundamentals but may still be viewed as safer than their emerging market alternatives.
They turned the only knob they have. It affected the only thing the knob is able to effect. Why are people acting surprised?
They’ve been clear it’s not a great solution and that Congress needs to do something. That their knob is not the best solution but they’ll do what the best they can.
Unemployment and suicide is already high here. Many feel a lack of future. We had been doing better but there was some backsliding these past few years. This has just sealed its fate for a decade or more. I'm lucky in my position but many haven't been.
That is a recent trend due to our governments selective action. Back in the 1929 crash it was the rich wall street types who lost everything and were jumping from tall buildings to their deaths.
The 1929 crash coincided with the great Dust Bowl, where many family farms were destroyed by a dust storm.
All those farmers left their broken farms, and went to the city looking for work... Only to find that the great depression wreaked the cities too. Back then, a much larger portion of America was farmers.
We are seeing a dramatic rise in the suicide rate in the USA in the last few decades as the middle and working classes lose the economic advancements that their parents generation worked to attain. All the while the economic have gain more.
Not saying the non-rich were spared from the great depression.
In my mind it's acting like a liger, but the lion bits are fundamental to the problem, and hence why the tiger is showing.
In ascribing economic inequality to capitalism when economic inequality is a consequence of a captured regulatory regime that prevents the capitalists from engaging in market activity that would rectify the inequality.
> In my mind it's acting like a liger, but the lion bits are fundamental to the problem, and hence why the tiger is showing.
In my mind its acting like a liger but the tiger bits are the cause of the problem so its inappropriate to call it a lion.
The state didn't do that well with Covid, mind you, but the local economy isn't dead, either.
You have to remember that a single empty table (on a Friday/Saturday night) could be enough to make a restaurant lose money before the pandemic. The pandemic's effects are much larger than a single empty table.
Here in Phoenix, AZ, things are basically normal. People have masks on when they're indoors, but businesses (including restaurants and bars) are all open. A rough metric I've been using since march is how far backed up the cars are from the stoplight in front of our house at rush hour, and it's pretty much back to where it was in February.
I've completely lost track of what you can do where in this country, and I think a lot of places are more open than I realize.