Economic crisis coming up? (user search)
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  Economic crisis coming up? (search mode)
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Author Topic: Economic crisis coming up?  (Read 8940 times)
💥💥 brandon bro (he/him/his)
peenie_weenie
Junior Chimp
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Posts: 5,476
United States


« on: March 28, 2020, 03:06:14 PM »

Also, the damage being done thus far feels largely impermanent; yes, people are losing their jobs, but many of them are being told that their job will be waiting for them once the quarantine is lifted. That did not happen in 2008, when companies cut costs by automating jobs away and outsourcing-- those jobs never came back.

I hope you're right but you can also imagine a scenario where small businesses which fail during the crisis don't come back and are replaced by larger corporate stores which were able to absorb losses and retain their workers and continue to pay rent and upkeep on their physical stores. In a situation like this, you'd see a larger supply of workers than what businesses are willing to hire as the economy comes back to life; this is not an environment favorable to labor.

It's true that this current crisis is currently limited to a shock to consumer spending which can be easily resumed. But, if the crisis goes on long enough and aid to uninsured/underpaid workers continues, this could percolate up to affect banking. For example if there's no prolonged rent relief and mortgage payment moratorium then housing may be affected which could lead to another banking crisis. This isn't guaranteed to happen but, for a prolonged enough panic, it's possible.
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