It’s startling how fast an economy can go into the toilet

People are talking about a recession, but honestly, it feels more like it might be headed straight for a depression.

Two weeks ago the transportation company I work for was thriving.  On Monday they laid off  half the workforce and pulled more than half of their vehicles off the lot and the insurance.

Small businesses will not survive this.  Or only a few will.  Most transportation companies are facing full on collapse in 30 or so days.  They carry a debt load on their fleet, not to mention the insurance and payroll.  Our company is in a better position than most because we don’t carry any debt but it’s just going make us last a bit longer.  Because without any income you cannot run a business.

Today I wondered what I would do differently if I were in charge of running this disaster.  And I think I would have focused entirely on high risk people.  Just make older people and people with pre-existing conditions self isolate.  Set up ways and means to support that isolation with food delivery and medical care and whatever support was needed.   But stopping the entire world when it seems like 97% of the sick are not going to feel any worse than having a cold, seems like we went at it wrong.

Of course, I’m not a public health expert.  I have no real knowledge on the spread of sickness and it’s consequences.   It’s probably a pipe dream to think it could have run it’s course mostly avoiding the at risk and giving the rest of us a cold to complain about.  But, if any countries are doing that, I would be interested to know if their outcomes are better/ worse on mortality and economy.

Image result for depression era

 

 

13 thoughts on “It’s startling how fast an economy can go into the toilet

  1. It’s tempting to try to second guess the decisions that were made and run through “what if” scenarios, but I’m not sure if there ever was a way to soften the effects of this to any great extent. Isolating the elderly and people with weakened immune systems might have helped, but heck, a lot of those people have to work too to pay rent, buy food, get insurance, etc.

    You’re right about businesses, I’m afraid. I don’t know how a lot of small businesses around here are going to survive this.

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    1. I think it’s safe to say they won’t. And industries like transportation are already in midst of turmoil because of ride share and sky rocketing insurance costs and requirements. It’s not a business that will be inviting for a start up business. If you already have a customer base it’s manageable and adaptable. But if you’re starting from scratch…

      So I think there may be big holes in parts of society when entire sectors collapse and rebuilding them is too daunting.

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      1. You’re right, there are going to be huge changes, disruptions and even bankruptcies because of this. In the EU they’re talking about 2/3rds of the airline companies going under in the next few months. The restrictions on travel extend to rail, Uber, traditional taxi service, etc. so they’re going to be in dire straights. I’d be willing to bet that probably half or more of the restaurants, taverns and pubs won’t survive. Some friends of ours just bought a small tavern in Milwaukee. I have no idea how they’re going to get through this.

        Liked by 1 person

  2. China bought us a ton of time–time to make tests, time to implement the WHO tests, time to dust off the binders that the Obama transition team gave Trump’s cabinet and personnel back in January of 2017 that were literally all about how to handle a flu pandemic (they called it H9N2). Time to ramp up production of ventilators and create drive thru test sites, just like South Korea did.

    But Trump refused to test, exposed sick Americans to healthy ones, and pretend it would all be fine.

    ANYONE with a modicum of sense and intelligence could have listened to experts or just read the news and done better. You and me included.

    Liked by 1 person

      1. I think we are learning from how well Biden is doing that this country has far too many misogynists who would rather vote for a man than a woman–even the stupidest, most corrupt, most self-aggrandizing man in all of history.

        Liked by 2 people

    1. Great post. I put my comment here, as I am in the middle of reading Michael Lewis’ “The Fifth Risk.” The premise is the “equal parts chaos and incompetence” that conservative pundit David Brooks calls the White House, started the week following the election. Trump fired the entire transition team and threw away their vetting of candidates. Candidates took weeks and months to get appointed as a result.

      Obama’s team, as required by law, set up the briefing books Autumn mentions and prepared for department by department briefings of the incoming Trump team. But, the latter rarely showed up and were not too informed to begin with when they did. So these briefing books just sat there.

      Lewis asked if he could see the largely unread books and they took him through them. He notes the people in public service are not political motivated and have been unfairly portrayed as such by weak-minded politicians who need a foil. He terms the unpreparedness and lack of understanding of what they do the fifth risk.

      But, this president does not learn from his mistakes. Shortly into his term in 2017, Trump announced a travel ban that he failed to vet with people before hand and no one knew what to do. It was such a disaster, it was pulled in two days. Last week, Trump announced a travel ban from Europe and failed to tell our EU friends before hand. They heard about it in the middle of the night. So, he did not learn from this first failure or any since.

      I have shared with others that taking the US president at his word is a fool’s errand. But, I knew that before the election. What has truly surprised me is what Brooks described – the chaos and incompetence. Stock markets like predictability. With this president, the market is seeing panic. One thing is for certain, The Federal Reserve is not supposed to, nor should it take instruction from Trump.

      Keith

      Liked by 2 people

  3. It’s strange, but it didn’t really surprise me that our “good economy” could tank so fast, because it has seemed to me to be a house of cards for a long while. Certain aspects made me nervous – like the way everyone – from the big companies to individual households and students live in perpetual debt. That one unexpected expense can cause so many people to begin tumbling financially. That health care is so tied to employment creating a kind of servitude. That short term thinking went from being a flaw to being a norm. I could go on and on. I’m not sure this is an economic system worth propping up any more, and definitely not at the cost of so many lives.

    PS. Sorry I have been off the grid for so long. It’s nice reading you again!

    Liked by 1 person

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