About the unemployment rate: It should get better initially as the country “reopens,” but there is a possibility it then goes in the wrong direction after businesses realize the economics of social distancing rules make profitability tough. The danger is that then spirals...— Andrew Ross Sorkin (@andrewrsorkin) April 28, 2020
Have you considered that it's not social distancing rules that make profitability tough, but a populace refusing to put their lives and the lives of others at risk until the Trump admin can get testing and contact tracing going at a level to make people feel safe?— Kurt Maier (@krtmaier) April 28, 2020
Businesses will probably permanently layoff 5-15% of their workforce to cut costs. Aggregate this and you get structural unemployment— Rahim R. Jiva Lila (@r_jiva) April 28, 2020
I think this is likely as business reopen in places like Texas, and customers either don't come back, or get scared away (a little contagion'll do it). I don't see large venues like malls and movie theaters opening soon, especially places like Alamo Draft House, which serves food and has a bar in the lobby (or any multiplex with lots of screens and lots of customers walking around at any given time). Even closing the bar won't cut back on the ticket holders wandering the building, as well as waitstaff. And with sharply limited attendance, what's the point of opening the kitchen? Probably cost more than they'd recoup. I'm not sure there's any benefit to non-food service theaters, either. Most of their money comes from selling popcorn, but they can't have crowds gathering around hastily trying to buy the food before the picture starts. So why open at all?
Malls won't even bother. The big one across the street from me, how do they regulate how many people are in the building? There's an open air "mall" a short distance away. How do you regulate who's on the sidewalks or in the stores? And what if crowds scare people away (they will me, for some time)?
100 percent right. There is going to be a “demand” problem for lots of reasons that stimulus alone can not address.— Andrew Ross Sorkin (@andrewrsorkin) April 28, 2020
And in a situation like this:
I'd take the other side of this...it will be difficult to police businesses when they realize that social distancing rules make profitability tough. Will you close a shop for being at 75% capacity when it's supposed to be at 50%?— Scott Alvis (@Scott1Alvis) April 28, 2020
The virus will police the business. Probably police them right into bankruptcy, in fact. We still face the intractable problems: we can't close business for the duration. We can't reopen businesses until we have a vaccine. Even widespread testing doesn't mean much, even with ground level one-on-one tracing, because the next person you meet could be an asymptomatic carrier; or you could be, since your last test.
We're gonna go through hell, one way or the other. I'm lucky; I'm semi-retired and my "company" has told me to work from home for the rest of the year. But this is gonna be the shit, no matter what we do.
It's some catch, that Catch-22.
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