Layoffs Are Just Starting, and the Forecasts Are Bleak

[Zorro]

Angela Gervasi was enjoying a day off on Thursday when she got a text from a co-worker: “Have you heard?”

Her co-worker quickly filled her in: P.J. Clarke’s, the restaurant where she worked in Philadelphia, was letting her and some other employees go. Confirmation came in a letter citing “developments” with the coronavirus outbreak. By Monday, the place had shut down.

Ms. Gervasi barely had time to process the bad news before she got more: The Florida radio station where she had been applying for a job told her that the hiring process might be delayed as the station shifted to a work-from-home setup. Then, on Monday, she learned that another local restaurant, where she was training as a cook, was closing.

“Everyone is afraid to hire,” said Ms. Gervasi, 24, who is looking for freelance work to support herself. “Nobody really knows what’s about to happen.”

https://www.nytimes.com/2020/03/17/business/economy/coronavirus-layoffs.html

[honest.abe]

1. Potentially 20% unemployment, according to Mnuchin.

U.S. Treasury Secretary Steven Mnuchin warned Republican senators that the unemployment rate could hit 20% if they failed to act on a proposed coronavirus rescue package and there was lasting economic damage, sources told Reuters.

https://www.cnbc.com/2020/03/18/mnuchin-warns-senators-of-20percent-us-unemployment-without-coronavirus-rescue-source-says.html

The "cure" may be worse than the disease.

[snpsmom]

3. Expect that to be a lowball estimate n/t

[honest.abe]

4. I certainly hope not and I don't think that is the case.

Even during the Great Depression, the highest unemployment rate was 25%.

The highest rate of U.S. unemployment was 24.9% in 1933, during the Great Depression.1 Unemployment remained above 14% from 1931 to 1940. It remained in the single digits until September 1982 when it reached 10.1%.2 During the Great Recession, unemployment reached 10% in October 2009.

https://www.thebalance.com/unemployment-rate-by-year-3305506

If we reach 20% unemployment we are in a heap of trouble. There will likely be more deaths from the ensuing economic crisis than from this virus.

[duforsure]

2. While trump and GOP stall critically needed financial support

And equipment needed to stop the spreading of this virus. They've known for months and did nothing, and now Paul Ryan is holding it up with Louis Gomert stalling help needed now. Trump is incompetent, corrupt, a serial liar has is worried about his image and himself politically over the truth and the American people. He's lazy and his dumping what he should be doing onto governors shows it. Trump's lost and incapable of doing his job, and in any company at this level he would have run him off long ago. Moscow Mitch helped stall things by giving the Senate a recess while all hell was breaking loose because they failed to have in place testing and needed equipment costing lives.. To effectively stimulate businesses they need to give everyone a $5000 check, and a bigger one adjusted for the size of their business for all small business checks, now, not 2 or 3 weeks away.

[Doodley]

5. Why give everyone $5000? To millionaires? To those who don't need it? And how is

that going to stimulate businesses? Will it stimulate the service and hospitality and entertainment and travel businesses that are worst affected? Or will it stimulate the big businesses that will get bigger, like Walmart and Amazon? What we need is to stop people from financial hardship and losing their homes and ability to feed themselves. We need unemployment benefit for all who are out of work, with immediate access and without jumping through hoops, and the banks need to give mortgage payers are payment holiday, instead of being too ready to foreclose.

[Happy Hoosier]

6. Listen to Austan Goolsbee

Direct payments are not intended to stimulate the economy, but to allow people to meet basic needs.

The reason it should NOT be means tests is because we don;t have a way of quickly determining who needs it and who doesn't, and getting it in to people's hands is crucial. Even people who have jobs and are still getting paid are likely to be affected by cascading effects. Also, some folks who don;t seem to need it now might very well in the near future.

Yes. That means some "undeserving" people will get the money. Too bad.

Stimulative efforts need to come after stabilization. He emphasized that to be of any use at all, these direct payment must be substantial, and must be fast. And we to consider they might need to be done again.

[Doodley]

7. This isn't a Trump casino. The nation would go bust. Literally, it would go bust.

Throwing money at the problem doesn't make it go away. It would cost $1.6 TRILLION to give everyone 5000. Are you going to repeat that every month?

Two actions are needed.

1/ Contain and control the spread of the virus. This is essential in any rescue package. Without this, we are fucked. We know how we can do that, and it must be done. Test everyone, not thousands, but everyone and quarantine everyone who tests positive. That would stop it in its tracks within weeks, save lives, save suffering, end the panic and bring the economy back quickly, and also avert a depression.

2/ Work with water, power, healthcare, and banks to ensure no one loses their home or loses their power or healthcare. Build a system that reaches all in need without delay to ensure all have food, water, shelter and medical supplies. I don't buy that it is beyond the ingenuity of the best lawmakers to find a rapid and efficient way of delivering that.

[Happy Hoosier]

8. I think your math is a bit off (I see you caught the error)...

It's $1.6 TRILLION.

Yup. It's expensive. But just last week the Fed printed $1.5 trillion and injected it into the market, to little effect and no one blinked an eye. The Fed can print another $1.6 trillion and it will have little to no effect, other than preventing a cascade of defaults. Economic activity is grinding to a halt. That injection will not cause inflation.

We hold all our debt in our currency. Time to pull out the BIG guns. Half measures will result in a LOT of pain.

[Doodley]

9. It isn't nearly as expensive as testing everyone. This epidemic could be halted if the political

will was there. It would be insanity to give everyone $5000 and still not pull out all the stops to kill the spread of infection. Printing money does not make the disease go away. It does not bring businesses and jobs back to life, until the virus is brought under control. Yes, I am in favor of helping those in need, but it would be foolish not to do everything needed at this point to stop the spread.

[Happy Hoosier]

12. Why not both?

I'm the camp of smashing this early and often, on all fronts.

This is not a time to be penny counting. Work with the Fed. Flood the system with money and get it DONE.

Hospitals, Equipment, Cash. All of it.

[sarcasmo]

10. Mnuchin says 20% the reality is 30-40%.

[MissB]

11. Locally, the Mcmenamins chain laid off 3,000 yesterday

Mostly restaurants and bars but they had some hotels mixed in there too.

That’s a lot of people suddenly without work.

And then you have all those soon-to-be college graduates looking for their first job. It’s going to be a brutal job market for them, and many if not most will have their first student loan payments looming over their heads.

So yeah. Horrible.