Your argument can be extended infinitely. It's pretty easy to understand that Tesla (and any other assembly plants that fit in this window) is simply getting special treatment here.
The factory that makes hydraulic fluid for Tesla's presses that stamp out car parts is also part of the transportation supply chain, As is the oil refinery that supplies feedstock to the hydraulic oil vendor.
Honestly, your point is valid except for the part about special treatment. From what I've heard, window tint shops are staying open too based upon the same exemption. Its a confusing time and the regulators haven't fully thought this exemption through.
(Just to be clear, I'm not defending Tesla here. They have the choice to shutdown regardless of government order or exemptions)
If a business owner wants to skirt the regulations by following the letter of the law instead of the spirit of it, that's fine and we can consider them all assholes. The rules are to keep people from getting sick. I hope all of his employees go on strike like the Mercedes and VW ones.
If the largest business in the area was producing nail varnish, you might find that "beauticians are staying open too based upon the same exemption" - it would still be special treament because neither of them should be open.
You're absolutely right; our economy is far too interconnected to isolate specific industries. Right now it's a bit of a "tragedy of the commons" situation where the companies that are able to sustain operations (legally or illegally) will reap huge rewards when everything starts to go back to some version of normal.
I honestly think the thing we will learn from this pandemic is that we can't stop a modern economy like this for a couple months without also incurring significant loss of life. If this shutdown extends more than a month we're going to see supplies start to run low and people will panic. Grocery stores around me (large northeastern city) are already having trouble restocking.
Careful, things may not go back to normal and we may have a lasting recession. This is especially so if we don't do things to help the rest of the economic ecosystem alive during this period of little to no commerce in some sectors.
At the same time, I hope Tesla is going as far as they can to protect their workers... and that will probably be the real story at the end of all of this, "What companies did to protect their workers and the economy around them."
I think it's already too late; we've ground the nation to a halt and it will take a while to restart. I work for a company that is often cited for knowing these kinds of things, and we were told today to operate under the assumption that the economy will be more or less shut down until May/June, with normal economic activity not resuming until the end of Q3. All that said, the companies that can keep as much of their operations going until then will be in a much better position to come out of this intact.
We're heading into the next great depression, and it's going to take a New Deal type of effort to recover. Trump is actually in a remarkably similar position to Hoover in all this too; so it's not unprecedented to be headed into something like this with a nincompoop at the helm.
A severe and sustained global economic depression could kill significantly more people than CV19, mostly in Africa and other poor regions. It could also trigger a half-million first-time homeless in the US.
We need to "Flatten the curve" enough to spread out critical care capacity surges without over-achieving to the extent we cause even more harm long-term to the world's poorest populations. We need a constant gradual rate of CV19 spread. If we "full stop" CV19's spread now, when social distancing and lockdowns lift, we'll be facing Wuhan/Italy surges again.
This is the time I really miss having adults running the federal government. Individual states are flying blind while everyone at the federal level is too worried about how the boss will take it to effectively coordinate.
> The factory that makes hydraulic fluid for Tesla's presses that stamp out car parts is also part of the transportation supply chain, As is the oil refinery that supplies feedstock to the hydraulic oil vendor.
Yes, I believe that is rather the point of the exemptions laid out in the order. The health commissioner is trying to prevent infections of Covid-19, not destroy the economy.
Tell me how you feel about drycleaners. They are also explicitly exempted as businesses providing essential services.
Actually, now that I think about it, you're right: It is more important to have a crisply-pressed suit than transportation to the grocery store for food. Grab the pitchforks, let's get Elon!
Dry cleaners are essential services because they are necessary for sanitation. They may not be for you, but for example my pillow is dry clean only and it would be a problem if I spilled my morning tea on it and then ants showed up because I couldn't have it cleaned because someone thought I could live with limp creases.
I’m going to ignore the thinly veiled personal insult and focus on why I wrote the above comment: I find it irritating when people assume that if they can’t see an obvious reason for something then there must not be any reason at all, and doubly so when they assume an air of superiority about it. In hindsight, it was a bit off-topic for this thread and maybe I should have held my tongue.
However, I’d like to point out that you’ve done the same thing again: while I do not personally have a maid, I might have been disabled and require a housekeeper to do some cleaning that I was incapable of. Fortunately, unlike you, the public health department has also thought of that scenario and covered it in their order as well.
Spreading the problem out over a long period of time keeps the company in business. It's a no-brainer good idea for the SBA to do this. Not sure what you would prefer instead.
I'll take a crack at it. I would prefer commercial rent abatements combined with commercial property tax abatements. The same would make sense for residential as well. Unemployment payments should be increased and restaurants should temporarily lay off staff as needed.
It is like CPR. It is better than doing absolutely nothing and gives extra time for more extreme measures, but on its own it is just delaying the inevitable.
It is not delaying the inevitable. There will be many profitable restaurant businesses who find their business lacking liquid cash over the next few months. Being thrown a credit lifeline means that they can make it through this period of time and come out on the other side as a profitable business again. Paying down the debt is a common business practice that people do all the time.
Throwing out a credit lifeline can be a practice that benefits everyone in times of crisis.
>There will be many profitable restaurant businesses who find their business lacking liquid cash over the next few months
Like I said in my earlier comment, the best hope for these businesses is to return to normal revenue numbers. They aren't going to make up for the business they are currently losing. They don't have a liquidity problem. They have a lost revenue problem. They are still accruing costs without accruing revenue. Delaying those costs doesn't fix that disconnect.
>Paying down the debt is a common business practice that people do all the time.
Taking on debt to allow you to make investments and improve future outlook is a smart business decision. Taking on debt in order to meet recurring operating costs rarely works out when there is no hope of future growth.
I think you're overestimating the magnitude of lost revenue. We're talking about 1 month of lost revenue.
A profitable restaurant's unit model might be: 10% net profit, 30% COGS, 30% fixed cost, 30% labor cost
During this one month shutdown, the restaurants won't incur labor cost or COGS. So, they're really only in the hole 30% of one month's revenue. With a little back of the envelope math, you'll see that the restaurant owner can pay back a loan for this amount by allocating 10% of their monthly profits (or 1% of monthly revenue) to loan payback.
Now, if the restaurant is NOT profitable, then we have a problem. But, they were probably going to go out of business soon anyways in that case.
You're forgetting that businesses can jack up prices after a crisis. Let's say there are 10 restaurants. One of them survives because it has taken a loan and others just crumble. Suddenly all the competition is gone and people are storming your place.
Typically, For every dollar a bank "keeps" in your bank account, they are allowed to loan out some fraction of the dollar. Let's say that this is usually 90 cents. The amount of cash your bank actually has on-hand is 10 cents. This process is known as fractional reserve banking. Now, with 0 reserve requirement, the bank can lend out the whole dollar.
Fractional reserve banking has produced a tremendous amount of wealth for the world over recent centuries. It encourages assets to be used in a productive manner rather than hoarded, which is essentially wasteful.
Typically, the loans get paid off to the bank over time, and the bank originates new loans to continue to make a profit. Currently, there are two systemic risks:
1. If borrowers begin to default, the bank still must cover its expenses. Under stressful circumstances, they would normally not be allowed to draw down their reserve to meet their expenses. This change allows this. Once the economy recovers, the reserve requirements will be reimposed.
2. It encourages banks to continue issuing new credit to borrowers. This keeps economic activity flowing and prevents a situation where borrowers have nowhere to turn to find money to keep their business afloat until profitable times return.
Reserve requirements are typically made more stringent while the economy is doing well. The history of these changes by the Fed is available at the link below.
There is a large risk of inflation under UBI. You cannot make an honest argument about UBI without accepting this risk.
1. On the margin, UBI reduces employment and production. This contributes to inflation.
2. On the margin, UBI increases consumption of consumer staples. This contributes to inflation.
3. On the margin, UBI increases the velocity of money. This contributes to inflation.
4. Under most assumptions, UBI increases government spending. Either taxes will rise, increasing the real cost of goods and services, or the money supply will increase, contributing to inflation.
UBI advocates should not dismiss these effects outright but should argue that they are small in comparison to the benefits of UBI. The lack of proper consideration of these arguments (and other arguments) by UBI advocates is pretty dang spooky.
1. Early evidence of UBI reducing employment actually shows the opposite.
2. Increased demand for consumer staples, if met with increased supply won't lead to inflation, if suppliers and entrepreneurs see the increase in demand as stable, they will make investments to increase supply. As long as we allow the price seeking mechanism of the market reach equilibrium, inflation will be at most momentary.
3. Velocity of money doesn't, by itself create inflation. Said another way, it's not a sufficient condition to bring about inflation. Sometimes a massive increase in money is just hoarded and doesn't enter the economy in any real sense.
4. Taxes don't necessarily have to rise in a regressive way such as sales tax and instead could be redistribution. I suspect what we would see is less inflation in the luxury art and real estate market if taxes were increased and the proceeds redistributed.
1. Below is a summary of evidence that UBI reduces employment. The reductions of working hours are substantial, even in studies widely spun as "no change". Below that is also HN debate about it.
2. Assuming that the equilibrium point remains at the same price level is difficult. It requires assumptions about the elasticity of demand and the elasticity of supply. Generally, if UBI has disincentivized work, you would expect less work, less supply, and a higher equilibrium price.
3. Under a constant money supply, increased velocity of money does create inflation. This is fairly standard economic theory. Increased hoarding is definitively a decrease in the velocity of money.
4. Fair enough, but it requires you to trust the politicians to pass a tax that impacts only the extremely wealthy. This is not guaranteed or even likely.
The zero reserve requirements are intended to prevent the problems caused by a potential bank run. Once the economy is running smoothly again, reserve requirements will be made more stringent again. It seems likely that the Fed is more well informed of how quickly lending is drying up than most people are, and their injection of ~$1.5 trillion must have been prudent.
QE was the bullet the Fed still had in 2008, and it is the bullet the Fed still has in 2020. It seems that QE worked better than the negative interest rates Europe used.
Interesting thought, if cameras (and generally optics) wouldn't have bokeh, our eyes wouldn't have to focus either and wouldn't have bokeh in unfocussed areas as well.
Well like the others said, bokeh != Depth of field. That said even if you removed all depth of field (everything is in focus somehow) it would still be missed.
Depth of field is incredibly important for managing a viewers focus. Imagine a picture of a coffee in a coffeeshop with the background out of focus - you can clearly see a coffee cup. That same photo but with everything in focus will be much more confusing - what should I be looking at, it's too busy, etc.
If you think the median american had more disposable income in 1940 than today, you are hilariously uninformed.
https://fred.stlouisfed.org/series/DSPIC96 (only goes back to ~1960, and the I think this is mean, not median, but also a huge enough trend that it is impossible to deny).
I am trying to understand that graph, it is not so easy actually.
What does it mean that 2020 shows 15K average disposable income in the US? That the average person has 15K left once they pay absolutely necessary to subsist? I find it hard to believe.
I think most people using the word "disposable income" would use the term the way I stated. Also the post you reply to uses it in that sense, not as a relative value to taxes.
I believe this graph shows something different altogether, it simply shows wages - taxes. It has no bearing as to the purchasing power of that salary and what you could afford with it.
