COVID-19 pandemic could dampen economy for up to 70 years (USA Today)

[DeanFL]

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FRONT page/headline article of the online USA Today - right now:
COVID-19 pandemic could dampen economy for up to 70 years

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Yikes! This article is based upon a "study/Paper" by a Cambridge MA org. I'm certainly OK with reporting information, studies, research on various topics. MY concern is when it is "reported" as headline and main article. Reminds me of waiting in line at a supermarket and seeing the 'rags' with headlines "Alien Impregnated Hollywood starlet!", "Elvis found in Omaha!", "Hitler relative running for Senate!".

Many folks look at a headline, and...it's a FACT.

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first part of article - complete, in link below.

The nation is awaiting a vaccine that can halt the COVID-19 pandemic in its tracks, allowing life – and the battered U.S. economy – to return to normal.

But a new study suggests the crisis has generated fears that are likely to dampen risk-taking and economic output for decades by increasing the “perceived probability of an extreme, negative shock in the future.” Over time, the economic cost of that warier outlook is “many times larger” than the short-term damage, the study says.

The study, titled, “Scarring Body and Mind: The long-term belief-scarring effects of COVID-19,” attempts to quantify such long-term economic losses by assessing the toll taken by other economic upheavals, such as the Great Recession of 2007-09.

“While the virus will eventually pass, vaccines will be developed, and workers will return to work, an event of this magnitude could leave lasting effects on the nature of economic activity,” says the paper, which was released at the Federal Reserve Bank of Kansas City’s annual conference last week. “Businesses will make future decisions with the risk of another pandemic in mind.


COVID-19 pandemic creates fears that may constrain economic growth (https://www.usatoday.com/story/money/2020/09/03/economy-covid-19-pandemic-long-term-economic-effects/5696187002/)
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[Bjeanj]

Well, that’s a cheery article.
:-(

[Stu from NYC]

As long as we live in a capitalistic society where the govt allows people to start business life will be good in the future.

The more govt control the less good jobs and technological advances.

[coffeebean]

I'm not an economics expert but IMHO, 70 years seems like a bit of over kill.

[Swoop]

And after the terrorist acts of 9/11 they said air travel would never recover...

[Viperguy]

Any agenda in this research? I always question the source

[OrangeBlossomBaby]

Except, the headline IS fact. When you read it carefully you'll notice a word and a phrase: "could" and "up to."

There is nothing about this headline that is untrue.

Sort of like saying "oh right, and next thursday I might win the lottery."

Well - if you ever play the lottery, you just might win it next thursday. And even if you don't win it, someone could give you a ticket as a present, and you win. Or you could find one on the ground and pick it up and it ends up being a winning ticket.

It COULD happen. Is it likely to happen? Probably not. However, the issue wasn't whether it WILL or WILL NOT. It's whether or not it COULD happen. And so yes - the statement is true. It COULD happen.

Also, the statement is true regardless of whether it COULD last 70 years, because of the "up to" phrase.

That means, if the economic impact lasts only another 6 months, then that has satisfied the criteria of "up to" 70 years. As long as it doesn't go over 70 years, it satisfies the requirement of being true.

-She who studied semantics in college-

[Aloha1]

Except, the headline IS fact. When you read it carefully you'll notice a word and a phrase: "could" and "up to."

There is nothing about this headline that is untrue.

Sort of like saying "oh right, and next thursday I might win the lottery."

Well - if you ever play the lottery, you just might win it next thursday. And even if you don't win it, someone could give you a ticket as a present, and you win. Or you could find one on the ground and pick it up and it ends up being a winning ticket.

It COULD happen. Is it likely to happen? Probably not. However, the issue wasn't whether it WILL or WILL NOT. It's whether or not it COULD happen. And so yes - the statement is true. It COULD happen.

Also, the statement is true regardless of whether it COULD last 70 years, because of the "up to" phrase.

That means, if the economic impact lasts only another 6 months, then that has satisfied the criteria of "up to" 70 years. As long as it doesn't go over 70 years, it satisfies the requirement of being true.

-She who studied semantics in college-

Agree, BUT! It shows the intent, agenda, and bias of the authors to posit it the way they did.

[CoachKandSportsguy]

As long as we live in a capitalistic society where the govt allows people to start business life will be good in the future. The more govt control the less good jobs and technological advances.

I will take the total opposite side as a finance professional, who has working in many different industries, from buying and selling companies to performing pricing analysis as well as a programmer automating employees out of jobs

The end goal of any capitalistic endeavor is a monopoly, eliminating all competition. That is not a goal which is beneficial to society. The old model of land labor and capital is not the current structure of the competitive landscape. Capital created automation eliminating human labor and optimizing supply chains is the competitive nature as well as buying out competitors, ie facebook and google. FInally data and information is the newest competitive weapon, so these competitive advantages have nothing to do with government, but are occuring naturally as a result of competition.

The end result? if you don't have the capital and the information or a specialty which automation can't replace, you will have a serf-ice job, as waitressing, cashere, inventory, stock shelves, truck driving, accounting, auditing, etc are starting to be replaced with automation.

Why has small business creation cratered in the last 10 or so years? because the above advantage of the large companies, with a cost advantage making competition impossible with out scale, which most if not all startups don't have.

So thinking the the problem is all about the government, is very simplistic, but an easy answer. In reality, the world is very complex, getting harder to manage, and is heading towards not enough jobs to support positive economic growth without government or federal reserve assistance.

In the 1930's to get the money out of the monopolistic trusts and back into circulation, income taxes were raised to 70%. . . that will be needed again for the same reason.

good luck but enjoy your lifestyle while you have it, and be very careful with your capital

sportsguy

[OrangeBlossomBaby]

Agree, BUT! It shows the intent, agenda, and bias of the authors to posit it the way they did.

It's just sensationalism. Nothing new. I don't know if you remember newsreels at the movies, but they were of the same ilk, with videos. If you've ever read the National Enquirer, or the Weekly World News, or any of those ridiculous newsrags, you'd see a lot of the same.

They take a fact, and twist and turn it and spin it into something more interesting than it really is to make an eye-catching headline. And then you find out that the story really isn't that interesting. But you got sucked into reading it because of that headline.

If you read it carefully and have a decent nose for actual journalistic writing, you can filter out what is sensationalist, and what is at least truthful, if not factual.

[Stu from NYC]

Nothing like a negative headline

[Stu from NYC]

I will take the total opposite side as a finance professional, who has working in many different industries, from buying and selling companies to performing pricing analysis as well as a programmer automating employees out of jobs

The end goal of any capitalistic endeavor is a monopoly, eliminating all competition. That is not a goal which is beneficial to society. The old model of land labor and capital is not the current structure of the competitive landscape. Capital created automation eliminating human labor and optimizing supply chains is the competitive nature as well as buying out competitors, ie facebook and google. FInally data and information is the newest competitive weapon, so these competitive advantages have nothing to do with government, but are occuring naturally as a result of competition.

The end result? if you don't have the capital and the information or a specialty which automation can't replace, you will have a serf-ice job, as waitressing, cashere, inventory, stock shelves, truck driving, accounting, auditing, etc are starting to be replaced with automation.

Why has small business creation cratered in the last 10 or so years? because the above advantage of the large companies, with a cost advantage making competition impossible with out scale, which most if not all startups don't have.

So thinking the the problem is all about the government, is very simplistic, but an easy answer. In reality, the world is very complex, getting harder to manage, and is heading towards not enough jobs to support positive economic growth without government or federal reserve assistance.

In the 1930's to get the money out of the monopolistic trusts and back into circulation, income taxes were raised to 70%. . . that will be needed again for the same reason.

good luck but enjoy your lifestyle while you have it, and be very careful with your capital

sportsguy

I hear you but still disagree.

People can still have a good idea and start a business. Lots of small businesses being created and lots will thrive.

One example is the people who pitch ideas on shark tank. Small number but does show what can and will be done,

Small business is still the engine of the economy.

[GoPacers]

I will take the total opposite side as a finance professional, who has working in many different industries, from buying and selling companies to performing pricing analysis as well as a programmer automating employees out of jobs

The end goal of any capitalistic endeavor is a monopoly, eliminating all competition. That is not a goal which is beneficial to society. The old model of land labor and capital is not the current structure of the competitive landscape. Capital created automation eliminating human labor and optimizing supply chains is the competitive nature as well as buying out competitors, ie facebook and google. FInally data and information is the newest competitive weapon, so these competitive advantages have nothing to do with government, but are occuring naturally as a result of competition.

The end result? if you don't have the capital and the information or a specialty which automation can't replace, you will have a serf-ice job, as waitressing, cashere, inventory, stock shelves, truck driving, accounting, auditing, etc are starting to be replaced with automation.

Why has small business creation cratered in the last 10 or so years? because the above advantage of the large companies, with a cost advantage making competition impossible with out scale, which most if not all startups don't have.

So thinking the the problem is all about the government, is very simplistic, but an easy answer. In reality, the world is very complex, getting harder to manage, and is heading towards not enough jobs to support positive economic growth without government or federal reserve assistance.

In the 1930's to get the money out of the monopolistic trusts and back into circulation, income taxes were raised to 70%. . . that will be needed again for the same reason.

good luck but enjoy your lifestyle while you have it, and be very careful with your capital

sportsguy

Small business had not cratered. There is more capital available to entrepreneurs than ever before. There has never been a better time to start a business and innovation continues to drive our economy. Not sure where your data comes from but it doesn't support what is happening in the capital markets. The amount of dry powder has never been greater. Lots of money looking for good businesses to invest in.

You want to crush investment in early stage businesses then raise capital gains taxes on those investments and that will destroy the innovation economy. Why would an investor take added risk for no incremental return? You say your a finance guy. You should know this.

Investors won't take that risk and as a result they will keep that money out of circulation even more than you think is happening today.

[Aloha1]

It's just sensationalism. Nothing new. I don't know if you remember newsreels at the movies, but they were of the same ilk, with videos. If you've ever read the National Enquirer, or the Weekly World News, or any of those ridiculous newsrags, you'd see a lot of the same.

They take a fact, and twist and turn it and spin it into something more interesting than it really is to make an eye-catching headline. And then you find out that the story really isn't that interesting. But you got sucked into reading it because of that headline.

If you read it carefully and have a decent nose for actual journalistic writing, you can filter out what is sensationalist, and what is at least truthful, if not factual.

Exactly. But when all that is printed is nothing but sensationalism it's hard to find even a kernel of truth in it.

[CoachKandSportsguy]

St Louis Fed database

Business Formations Within 4 Quarters for the United States (BF4QSAUS) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/BF4QSAUS)
Business Formations Within 4 Quarters for the United States (BF4QSAUS)

Mental math: down 45 % from 2005 to 2010 and has not recovered, nor improved in 10 years.

Data driven answer, so from where are you getting your data to support your claim?

sportsguy

[CoachKandSportsguy]

St Louis Fred database:
Shares of gross domestic income: Compensation of employees, paid: Wage and salary accruals: Disbursements: to persons (W270RE1A156NBEA) | FRED | St. Louis Fed (https://fred.stlouisfed.org/series/W270RE1A156NBEA)
Shares of gross domestic income: Compensation of employees, paid: Wage and salary accruals: Disbursements: to persons

percentage hi in 1970 51.5%
2014: 41.9%
2019: 43.4%

So all companies have reduce the compensation by almost 10%, done with computers, and automation, as I have mentioned I have done.

The trend of lower corporate pay as a percentage of profits continues, which means that jobs are trending to senior mgmt or serfdom, and it will continue.

Data driven answer, have any offsetting data?

The point is that jobs are getting fewer, and the pay is not improving relative to the growth of the company. how? with acquisition and job elimination, with technology and job elimination. So how would advise people who have had their jobs eliminated with technology get retrained? technology? too late for that.

sportsguy

[Dana1963]

.
.
FRONT page/headline article of the online USA Today - right now:
COVID-19 pandemic could dampen economy for up to 70 years

--------------------------
Yikes! This article is based upon a "study/Paper" by a Cambridge MA org. I'm certainly OK with reporting information, studies, research on various topics. MY concern is when it is "reported" as headline and main article. Reminds me of waiting in line at a supermarket and seeing the 'rags' with headlines "Alien Impregnated Hollywood starlet!", "Elvis found in Omaha!", "Hitler relative running for Senate!".

Many folks look at a headline, and...it's a FACT.

--------------------------
first part of article - complete, in link below.

The nation is awaiting a vaccine that can halt the COVID-19 pandemic in its tracks, allowing life – and the battered U.S. economy – to return to normal.

But a new study suggests the crisis has generated fears that are likely to dampen risk-taking and economic output for decades by increasing the “perceived probability of an extreme, negative shock in the future.” Over time, the economic cost of that warier outlook is “many times larger” than the short-term damage, the study says.

The study, titled, “Scarring Body and Mind: The long-term belief-scarring effects of COVID-19,” attempts to quantify such long-term economic losses by assessing the toll taken by other economic upheavals, such as the Great Recession of 2007-09.

“While the virus will eventually pass, vaccines will be developed, and workers will return to work, an event of this magnitude could leave lasting effects on the nature of economic activity,” says the paper, which was released at the Federal Reserve Bank of Kansas City’s annual conference last week. “Businesses will make future decisions with the risk of another pandemic in mind.


COVID-19 pandemic creates fears that may constrain economic growth (https://www.usatoday.com/story/money/2020/09/03/economy-covid-19-pandemic-long-term-economic-effects/5696187002/)
.
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We may see the way Corporations change with Covid more Companies have employees telecommuting. Quite possibly we will see a glut in OFFICE SPACE for 6 months we have seen this with corporations not expecting a return of employees to traditional work locations maybe early 2021. Most offices are leased do to tax incentives the same productivity can be achieved with work at home. The ones with Real Estate will be left holding the bag. We have seen similar with shopping malls same can be achieved with shop from home with free delivery again property owner left holding the bag.

[Dana1963]

Just an added note to us locally. “ Lack of commercial demand fuels Developer’s desire for apartments at Spanish Springs”

[Stu from NYC]

This will hurt commercial real estate for years. Companies finding they do not need all the space they have let their employees work from home instead.