Breakdown

Folks, see what Mike writes:

The issue is that after a certain point — and I think it’s about three months — economic relations break in a way that cannot be mended. There will be no repair, only destruction. The economy isn’t a Windows 95 machine that can be rebooted when it crashes. It doesn’t work like that at all.

Mike is anything but a Trump fan, by the way. But he’s absolutely right. Maybe it’s a bit longer than 3 months but I’ve personally experienced the kind of disintegration of the economy that he’s talking about back in 1990. And, folks, he’s right. Our economy back then was a lot less complicated and interconnected, and it was still a total bastard trying to get it working again. People went completely nuts. Yes, it was a different situation but still there are gigantic similarities. Everybody was sent home overnight. Everything closed down. Even toilet paper shortages were part of it. I’m telling you, it’s not a game you want to play.

It’s not insane, immoral or Trumpist to care about this. And I’m not saying let’s all head back to work today. I’m saying let’s not pretend like this isn’t a very big deal.

9 thoughts on “Breakdown”

  1. I think that’s a legitimate concern, but the US is not the only one going through this, there are examples of how things will shake out from Hong Kong, Italy, etc. And it’s not like the economy fully stopped; many (most?) people still work in some fashion. It’s definitely an economically precarious situation, but it’s one where “quarantine, wait and see” is probably the best way to go for now.

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  2. OT: you hate videos but some of your readers may be interested in the link below. This is the youtuber that convinced me that coronavirus was potentially a very dangerous thing.

    He addresses the 21 million missing phones and carefully doesn’t say he thinks that’s how many people died but it is weird and there has been no convincing explanation from anyone so far (he doesn’t address the idea that the companies had been using artificially inflated numbers before which…. might be a factor).
    He does say he thinks the real number of victims in China is somewhere around 10 to 100 times higher than the official numbers.

    He also talks about how the CCP is in frantic mode changing stories almost daily about the origins of the virus (and many young educated Chinese are experiencing intellectual whiplash trying to follow the ever shifting party line).
    The latest version is…. the Russians did it! (no explanation about how or why….)
    Also…
    The reason for the big push by the CCP for overseas Chinese to come back to the country is probably that they want a convenient scapegoat for the second round (we beat it but these ingrates brought back the foreign contamination!)

    and for dessert: the Wuhan Institute of Virology was advertising for someone to study bat immunity to SARS viruses in November of 2019… (that’s from their official website).

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  3. Re economy, a question to Mike and others here: He wrote he was tempted to present his economic analysis of “how complex dynamic systems function and fail” because of being “frustrated by how poor an understanding liberals have of the economy, what makes it run and their vast misperception of how easily it can be restarted after a protracted complete shutdown.”

    Are there good websites and/or accessible books on the subject? The funny thing is that I studied economics years ago, yet didn’t work in the field and forgot most of what knew. Besides, taking university courses is not sufficient imo, unless one does additional work of researching and lots of reading to attain real understanding.

    Clarissa, since we are stuck at home (in my case literally inside a flat since the day I stopped working), may you one day put up a post where readers may share recommendations of websites and books they’ve enjoyed? With you sharing the latest sources on neoliberalism. 🙂 A similar idea to your Link Encyclopedias, but only with good sources.

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  4. OT:

    Коронованные Куршавелем

    Когда я буду писать сценарий фильма о коронавирусе, сюжет будет об инфекционном отделении Александровской больницы. Это воистину эпический сюжет, который многое говорит о нас и о нашем государстве и обществе. Украина – страна парадоксальной драматургии, здесь всегда происходит самое невероятное.

    Итак, 8 марта 2020 года, в международный женский день, несколько групп очень состоятельных людей, включая высокопоставленных государственных деятелей Украины и долларовых мультимиллионеров и даже миллиардеров (вы не ослышались) из Украины и России, собрались веселыми компаниями на знаменитом французском курорте Куршевель, который так любит наш бомонд. Они являются гражданами мира, для которых полет личным самолетом или в крайнем случае чартером – банальная обыденность. Они могли собраться на любом курорте любого континента, но что может произойти плохого с теми, у кого вообще все уже давно есть – власть, связи, известность – в милейшем Куршевеле?

    https://trim-c.livejournal.com/3482568.html

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  5. Re economy, a question to Mike and others here: He wrote he was tempted to present his economic analysis of “how complex dynamic systems function and fail” because of being “frustrated by how poor an understanding liberals have of the economy, what makes it run and their vast misperception of how easily it can be restarted after a protracted complete shutdown.”

    If you sit there and think about it for half a second, a lot of businesses and services depend on preexisting demand. Shutting down the economy for a protracted period wipes so much of that out. Most businesses aren’t like Post-It notes which met a demand that hadn’t been articulated. So if there’s no demand, there’s no reason for them to exist. A lot of businesses are second hand or third hand from core businesses.

    So it’s not like say a beauty supply store is going to start roaring back after three months because the beauty supply store depends on a clientele of hairdressers and barbers who depend on clients with extra income and no fear of plague to get their hair done. The beauty supply store depends on so many different suppliers who have supply chains, which will definitely be disrupted by 3 months of plague shutdown. People will not sit around and wait for a supply chain to resolve itself. Maybe they start cutting their own hair, mixing up their own supplies (inferior goods become “preferred goods.”) Etc. So not only is the beauty supply store dealing with reduced consumer demand, it has to contend with changed habits and an inability to get supplies. Further, I haven’t even talked about the amount of running capital it would take to even restart a business and keep it running. Which again, will be in extremely short supply even at a 0% interest rate.

    *I’m not an economist, don’t @ me.

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    1. What Shakti said.

      Last week, 3,200,000 people in the US filed for unemployment. The idea that they just need to stick it out for a few months and then all their jobs will come back is unsupported by any evidence. We all remember what happened in 2008 and how long it took to recover. This is worse.

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  6. This is all true, but I’m seeing many conservatives pushing for a much quicker timeline of “everything back to normal in a few weeks,” which is just unrealistic. In addition, millions of people dying would also destroy the economy. People aren’t going to start going out and consuming just because economists and politicians will it so. At this point I’m just accepting that we’re in for some bad times ahead.

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