BearGoggles said:
Unit2Sucks said:
BearGoggles said:
I can't think of a single scenario where a business would fail if we reopen now, but would have made if if we delay further.
Unfortunately, your inability to identify potential scenarios isn't controlling. For anyone interested, I've outlined two potential scenarios below of how this might go.
Scenario A: We open the whole country tomorrow. 80% of people don't feel comfortable widely engaging in in-person commerce. 20% of people do feel comfortable and do so vigorously, except that the social distancing measures are unsuccessful in theory or in practice. As a result, we suffer through many months of greatly diminished commerce because we are unable to tamp down spread of COVID and people continue to feel unsafe and remain at home. Perhaps, even worse, COVID spreads more widely than anticipated, and numerous states and localities are forced to endure second or even third SIP orders. The results are devastating to local businesses who have by now been completely depleted of resources and our federal government is no longer interested in extending financial disaster aid. And because we open up far and wide, the virus spreads easily from places that are current hotspots to places that are currently safe. Because of the difficulty limiting travel within the states, we can never really isolate open regions.
Scenario B: We remain in SIP until some period of time has elapsed where we have made far more of the populace comfortable engaging in commerce. N95 masks are widely available and in use by all employee-facing workers in commerce, as well as in applicable back of the house roles. We are successful in reducing the spread of COVID and our economy returns to almost full strength much quicker than in Scenario A.
This has been widely discussed and there are plenty of fine people who would argue that one side or the other is more likely. Conceptually, if we are "too early", Scenario A is the result. If not, Scenario B is the result. I can't say whether we're in Scenario A or B in any particular location although I suspect the answer is that there are many areas that are in Scenario B and can safely reopen (with mitigation measures in place) and some places that are too early. I've brought it up many times here and read numerous others who have said essentially the same thing.
We are all hoping for Scenario B to be the case everywhere that reopens. Unfortunately, that doesn't mean Scenario A won't occur if we're wrong.
This is fantastic - the best example yet of your twisting and not responding to the statement I made. I note you did not include my full post which specifically said that many businesses would not reopen - i.e., if they felt it did not make economic sense because the "afraid people" won't patronize them. Gyms are a great example of that.
My comment that you quoted was specifically referencing businesses that would choose to reopen now for economic reasons even with reduced revenue (the post I was responding to). I specifically said "Some may elect to stay closed or go out of business. But many will give it a shot and try to find a way to adjust their cost structure." You conveniently edited that out (aka the "Chuck Todd move").
Again, using a restaurant as an example, they all pay rent and have other costs which they have to pay no matter what (equipment leasing, insurance, utilities, security, etc.). So they will open even if they are paying only a portion of those costs - which is better than the owner writing a check for the full amount every month. Or stated differently, they will only remain closed if they can't cover their marginal costs - which is very unlikely for most businesses, particularly if they can adjust their cost structure as I originally mentioned. And those that can't cover marginal costs, will close and likely go out of business - exactly what I said originally.
I also note that your scenario A ignores the reality that most businesses have fixed costs and have owners that rely on the business for income (i.e., to feed their family). Many if not most businesses cannot (or will not) keep paying fixed costs and remain closed for an extended period. So your "depletion of resources" argument just doesn't make sense, particularly when you are unwilling (and unable) to tell me exactly how long SIP will continue under your scenario B. And again, businesses that reopen will at least cover their marginal costs - or they won't remain open. So they won't be depleting resources faster than remaining closed.
The amazing thing is that you admit you don't know how long SIP will take to "restore confidence" yet also claim that there are "many" areas that are already in Scenario B - all after posting graphs and articles showing that consumer confidence is low. So, according to you, we're in scenario B in many places, yet you keep repeating that we can't reopen because consumer confidence is too low. If that's the case, how are we in Scenario B? It literally makes no sense.
You admit many areas are in Scenario B and likely safe to reopen. It's almost like you don't want to reopen in those areas for some other reason - economy be damned.
I'm sorry, but this sounds like a hypothetical from the introductory chapters of an Econ 1 textbook
Quote:
Again, using a restaurant as an example, they all pay rent and have other costs which they have to pay no matter what (equipment leasing, insurance, utilities, security, etc.). So they will open even if they are paying only a portion of those costs - which is better than the owner writing a check for the full amount every month. Or stated differently, they will only remain closed if they can't cover their marginal costs - which is very unlikely for most businesses, particularly if they can adjust their cost structure as I originally mentioned. And those that can't cover marginal costs, will close and likely go out of business - exactly what I said originally.
That is well and good for Olive Garden. This bears no resemblance to real world for an individual restaurant owner. Because, no, it isn't true that they only don't remain open if they can't cover their marginal costs. Because behind that restaurant isn't a bunch of shareholders. Behind that restaurant is a guy's personal finances. And that individual doesn't have a corporate bank to give him a loan to get through this. So no, he doesn't necessarily keep paying his fixed costs so long as he can cover his marginal costs. He forfeits.
Further, in this unusual time, maybe his fixed costs aren't so fixed. If I were that restaurant owner, I would go to my landlord and make the argument that if he makes me pay my rent I will go out of business. He has zero hope of renting that space near term. If I go out, he is looking at potentially years of no rent and then when he does rent the place there is no way he is getting the same rent. So it makes business sense for him to hit pause on my lease until we return to normal business. I would make similar arguments for the equipment I am leasing. Maybe it doesn't work, but if they have a brain, it will.
Your arguments remind me of the arguments that we might as well put in the back up quarterback because he can't be worse. Yes he can. Your whole argument is based on it can't get any worse. But it can. If we reopen without reasonable safety measures and we suffer a spike in cases, confidence is going to crater and the next time you try and get people to go back out in the world, they will take even longer to trust you. If cases are traced to restaurants, restaurants become the new cruise ship industry.
Your assumption that the polls indicate that as some people go out in the world others will see and slowly gain confidence and will go out too. That is entirely predicated on the first people going out not getting sick. I don't know if they will or not, but you need to plan for both contingencies and above all try to prevent them from getting sick in great numbers.
I'm not at all saying not to start opening things up. (I've already argued colleges should open in the fall) We are doing that so I don't know what the argument is here. We are doing it in phases, opening more low risk and moving to higher risk things as we progress. In the meantime, many states like California are ramping up testing and contact tracing. Right now we have excess capacity to test people who have symptoms, but we don't have near enough capacity to test as a preventative measure. To have a restaurant say "we test all personnel weekly". But we are getting there. We have no ability to contact trace but we are getting there. We have no ability to get n-95 masks, and we aren't getting there because our federal government has screwed the pooch on the issue. So we open up lower risk activities and we bring more activities as we bring more capability on line. And by "open up" you can think of that as by government order or personal choice because personal choice will be driven by the preventative measures we take and how successful they are.
If we all had n-95 masks, the likelihood of football with crowds would skyrocket because people would have a means to protect themselves.
I also find this funny because poll after poll is showing overwhelming support for the safety precautions that have been taken. Yesterday Washington Post had a poll regarding the approval in each state of their governor's actions. The highest approval ratings are Ohio, NY and California. The lowest are Florida, Texas, and Georgia's governor is in the crapper. Notice a trend? Those that took strong action are highest. Those that have hurried to reopen are lowest. That doesn't make anyone right or wrong, but it does show where people's opinions are.
As for Gavin Newsom, despite the rants on this board, 79% of Californians approve of how he is handling this issue. To the dismay of some, he is doing what Californians want him to do. So people can disagree, but the narrative that some are trying to portray here of a state in revolt against his policies is a fiction.
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