Jobless claims in the US

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black_son_of_gray
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Joined: Fri Jan 02, 2015 7:39 pm

Re: Jobless claims in the US

Post by black_son_of_gray »

Shutting down the economy is kinda like killing a car engine that has no battery. While it's running, the engine powers the alternator which fires the spark plugs which powers the engine. This is the interaction between supply and demand. Once it's off, there's no way to start the car without jumping it from some external source.

There are two strategies the government can take: 1) don't let the car stop! or 2) find an external source to jump the car.
1) Incentivize employers keeping on their workers, rent and mortgage relieve, small business "loans"/grants / unemployment or helicopter money -> this is the government acting as life support for both sides while they are decoupled from each other.
2) Shut everything down and go dormant/hibernation, then try to fire it up later e.g. maybe with some dramatic fiscal injection (massive infrastructure spending, etc.). Low capital sectors might be able to just spontaneously pop back up.

Some industries need 1 (e.g. food production). Some will need 2 (e.g. travel industry, entertainment). No idea how the coordination will work out. Maybe the life-supported industries from 1 will bootstrap up the industries in 2 over time. It's a mess.

Lucky C
Posts: 561
Joined: Sat Apr 16, 2016 6:09 am

Re: Jobless claims in the US

Post by Lucky C »

+6.66 million last week
Time to go log scale on some economic graphs.
https://www.advisorperspectives.com/dsh ... another-3m

Matt3121
Posts: 56
Joined: Mon Sep 09, 2019 7:45 pm

Re: Jobless claims in the US

Post by Matt3121 »

Nearly 10x the pre Corona record of something like 700k. Interesting times ahead. Very glad I learned about ERE. When you need way less money to live on the thought of not having money is a lot less scary

nomadscientist
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Re: Jobless claims in the US

Post by nomadscientist »

black_son_of_gray wrote:
Thu Mar 26, 2020 5:55 pm
Shutting down the economy is kinda like killing a car engine that has no battery. While it's running, the engine powers the alternator which fires the spark plugs which powers the engine. This is the interaction between supply and demand. Once it's off, there's no way to start the car without jumping it from some external source.
I completely disagree with this premise. Look at Germany after WWII. In recent years, poor countries that have adopted Western market institutions - that "start from flat" - have had by far the highest growth rates.

black_son_of_gray
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Joined: Fri Jan 02, 2015 7:39 pm

Re: Jobless claims in the US

Post by black_son_of_gray »

@nomadscientist What specifically do you disagree with? What specifically about Germany after WWII am I to look at? (I'd call the Marshall Plan an external source of "jump start," but I, like most Americans, am admittedly almost entirely ignorant of WWII history...) And which poor countries that have "started from flat" but have adopted Western market institutions have had high growth rates without external inputs?

nomadscientist
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Joined: Fri Mar 13, 2020 12:54 am

Re: Jobless claims in the US

Post by nomadscientist »

I disagree with the idea that it is hard to get economies running again if they stop. It is hard to stop economies and hard to keep them stopped. Maoism, for example, stops them quite well, but requires great exertion.

(it is interesting to see why people might be taking the other side of my recent stock market trades though - maybe I will even turn out to be wrong)

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Bankai
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Re: Jobless claims in the US

Post by Bankai »

Did the West German economy really stop after WWII? I remember reading that the West German economy was actually in better shape in 1945 than it was in 1939 as wartime investment > wartime destruction and immigration after war quickly replaced lives lost. Also, most services operated as normal during the war and never stopped operating; it was a matter of switching industry from weaponry to civilian production. Also, was it not after the reforms in 1948 & when the Marshall Plan started to kick in when the economy really took off?

I think what we see now with forced closures for a prolonged period is unlike anything before including WWII.

ertyu
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Re: Jobless claims in the US

Post by ertyu »

I am with those who see this as expediting automation and shortening supply chains. If the US manages to automate production and move it locally before most other countries, the situation in the states may very well begin to resemble that of early-industrialization UK: very few very rich industrial barons, imperialism abroad to capture resources and sell the resulting industrial output at prices that suppress local less technologically advanced enterprises, a swath of great unwashed living in abject poverty at home, this time with wifi.

Alphaville
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Re: Jobless claims in the US

Post by Alphaville »

From this morning:

701,000 non-farm jobs estimated lost in March
https://www.bls.gov/news.release/empsit.nr0.htm

The curve is too steep at the moment and it’s going to be a huge drop from March to April though.

“The Employment Situation for April is scheduled to be released on
Friday, May 8, 2020, at 8:30 a.m. (EDT).”

See also note on Covid-19 at bottom of document.

Lucky C
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Joined: Sat Apr 16, 2016 6:09 am

Re: Jobless claims in the US

Post by Lucky C »

Forecast was only -100k so at -700k it's the biggest surprise on record.

giskard
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Re: Jobless claims in the US

Post by giskard »

ertyu wrote:
Fri Apr 03, 2020 3:51 am
I am with those who see this as expediting automation and shortening supply chains. If the US manages to automate production and move it locally before most other countries, the situation in the states may very well begin to resemble that of early-industrialization UK: very few very rich industrial barons, imperialism abroad to capture resources and sell the resulting industrial output at prices that suppress local less technologically advanced enterprises, a swath of great unwashed living in abject poverty at home, this time with wifi.
Could be an interesting time to make bets on specific companies that support the manufacturing industry.

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