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Old 05-04-2020, 06:58 AM
 
4,559 posts, read 3,407,775 times
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Quote:
Originally Posted by redguard57 View Post
I'm not sure if this is true. Chains like TGI Fridays, Applebees, etc.. were already hurting really bad. Millennials hate those kinds of places.

I think fast casual places like Chipotle will see a boost.

I live in a place that saw a micro-brewery explosion in the past 5 years. Not to say that I don't like micro-breweries, but honestly I could not taste the difference between many of the new entrants. I expect a number of those will go under.
Micro breweries are a bubble and will struggle after this. Micro breweries primarily exist to be bought out by a global company. Also, it doesn't require significant startup money to start a brewery, so it was easy to acquire investors and sell a vision. I'm in Arkansas and we had plenty of breweries come online in the last 5 years. We could see some breweries that were struggling.

Millennials have no choice on where to eat if the Chipotle style restaurants do not survive. I'm not saying I just love TGI Fridays either, but I'm not going to say it's just terrible either. Cost are low, since most of their food is delivered frozen and they microwave. Serving primarily fresh food, like Chipotle, is a struggle in this climate. I live in a town of 100k where fast food and chain restaurants are king. I love all the farm to table offerings in the restaurant business, but their future outlook doesn't look promising. The amount of debt they've likely incurred, on top of food costs, doesn't bode well in this environment.
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Old 05-04-2020, 08:53 AM
 
Location: Mount Airy, Maryland
12,103 posts, read 6,841,156 times
Reputation: 19359
Quote:
Originally Posted by seain dublin View Post
Restaurants and small businesses for the most part are done.
I have literally not heard of one restaurant or small business announce they have gone out of business in our area. Not saying that won't happen in the future but to announce they are all done today is not true.
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Old 05-04-2020, 11:20 AM
 
Location: Bothell, Washington
2,766 posts, read 4,898,781 times
Reputation: 3865
Quote:
Originally Posted by seain dublin View Post
Well that is good to hear, and I hope it stays that way for you and your area.

But I don't see the same thing being so positive for other states like mine (CA) that have shut down now for going on 7 weeks. The small businesses and restaurants I don't see most of them coming back.

It's easy to say when your area(and again I hope it stays that way) isn't as impacted.

With 30 million Americans now out of work, there aren't going be anything close to new jobs created.

We thought 2008 was bad, where you had what 300 people apply for one job.

I think too much damage has been done in most of the country. The GD was 12 years before the US made a complete recovery.
I do want to point out that 30 million are on unemployment, but the vast majority of them have not lost their jobs per se, they are on furlough until things open back up again. Most of those have a job to go back to when that happens- but of course there are some who have lost work completely and there will be more down the line- but it won't be this massive, dramatic number we are seeing right now.
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Old 05-04-2020, 12:55 PM
 
12,265 posts, read 11,157,019 times
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Morningstar will have to re-evaluate their initial thoughts on this as it was reported this morning that J.Crew has filed for bankruptcy. Moreover, J.C. Penney, Sears and Nieman Marcus may soon follow. Although Sears and J.C. Penney have been struggling for years, this virus looks to be the final nail in the coffin. I fear more companies will follow if things don't turn around soon.

https://www.msn.com/en-us/money/comp...DLo?li=BBnb7Kz
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Old 05-04-2020, 01:41 PM
 
6,928 posts, read 3,126,539 times
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Quote:
Originally Posted by redguard57 View Post
Taxes had been lowered throughout the 1920s and early 1930s. When the crisis got worse and tax receipts declined, the Hoover administration freaked out. Deficit spending outside wartime was something that political leaders back then had a hard time wrapping their heads around, and they were more concerned about debt back then than we are now. The dollar was also not the world reserve currency back then, an advantage 1931-32 America didn't have that we take for grated today.

Smoot-Hawley didn't help things, but keep in mind that the depresison was global. Germany - the 2nd or 3rd biggest economy in the world (basically China's current position) never really recovered from WWI and was a house of cards. The nature of the sectors the depression hit - heavy industry especially - meant that both Germany and U.S. were relatively more susceptible to its worst effects. France and Britain did somewhat better since they were not so dependent on things like auto manufacturing.



The idea that the government should just spend-spend-spend to combat a recession/depression was incomprehensible to people like Hoover and even on the fringe of the thinking of FDR.


Keep in mind that Morgenthau was one of the most conservative members of the FDR administration, and not necessarily a reliable source. That quote only reflects his opinion. He believed that a balanced budget should be the highest priority and was always the one arguing that New Deal programs should be smaller, temporary, and limited in scope. He was not a liberal like Sec of Agriculture and later Vice President Henry A. Wallace, who would certainly have argued that they did a LOT more than Hoover did.


But certainly, the Fed and antiquated thinking coming out of the federal government at that time made things worse.

I don't understand how you can minimize Hawley Smoot's effects. Not only did it raise import prices by 45%, but retaliatory tariffs reduced farm exports by a full two-thirds. And this damage fell disproportionately on rural America, which was already the source of a great deal of pressure on the banking system. Farm loan defaults became a torrent, which resulted in a surge in bank closures.

Global trade dropped by 65%, which meant an estimated 5% drop in the GDP all by itself. While countries such as Germany were in a fragile state due to the effects of the Depression, Hawley Smoot help ensured that the global economy would buckle further.

Top tax rates were at 7% in 1915, and were raised because of World War I, slowly being lowered back down to 25% in 1926, but still ten points higher than a decade before. And all tax rates were raised once again in 1932, regardless of income level. For example, a household earning $4,000 a year in saw its tax rate increased from 3% in 1931 to 8% in 1932, or 266% higher.

But FDR's administration continued the madness in 1936, raising the top tax rate to a staggering 79%. Unmployment began rising once again, topping out at 20% in 1938, a full five years after FDR took the oath of office.

And that's the problem. People like to cherish the myth that FDR made a nice little speech how 'the only thing we have to fear is fear itself,' an alphabet soup of agencies were formed overnight, and American got to work. In truth, had Hoover, FDR, and the Federal reserved kept taxes low and the money supply high, the Great Depression wouldn't have been great. It most likely would have been a blip on the country's and the world's economic history.
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Old 05-04-2020, 06:28 PM
 
Location: Oregon, formerly Texas
6,400 posts, read 4,338,664 times
Reputation: 11109
Quote:
Originally Posted by MinivanDriver View Post
I don't understand how you can minimize Hawley Smoot's effects. Not only did it raise import prices by 45%, but retaliatory tariffs reduced farm exports by a full two-thirds. And this damage fell disproportionately on rural America, which was already the source of a great deal of pressure on the banking system. Farm loan defaults became a torrent, which resulted in a surge in bank closures.

Global trade dropped by 65%, which meant an estimated 5% drop in the GDP all by itself. While countries such as Germany were in a fragile state due to the effects of the Depression, Hawley Smoot help ensured that the global economy would buckle further.

Top tax rates were at 7% in 1915, and were raised because of World War I, slowly being lowered back down to 25% in 1926, but still ten points higher than a decade before. And all tax rates were raised once again in 1932, regardless of income level. For example, a household earning $4,000 a year in saw its tax rate increased from 3% in 1931 to 8% in 1932, or 266% higher.

But FDR's administration continued the madness in 1936, raising the top tax rate to a staggering 79%. Unmployment began rising once again, topping out at 20% in 1938, a full five years after FDR took the oath of office.

And that's the problem. People like to cherish the myth that FDR made a nice little speech how 'the only thing we have to fear is fear itself,' an alphabet soup of agencies were formed overnight, and American got to work. In truth, had Hoover, FDR, and the Federal reserved kept taxes low and the money supply high, the Great Depression wouldn't have been great. It most likely would have been a blip on the country's and the world's economic history.

In theory.



Hawley-Smoot was also bi-partisan, although not overwhelmingly so. But it relfected prevailing economic thinking among the GOP that they'd had for decades... "we need to protect our industries." A lot of Americans were blaming immigration and foreign trade for their problems. It actually looked like it had its intended effect for the first year or so, then the chickens came home by '32. It's not clear things could have gone differently. In order to veto it, Hoover would have had to side with his most visceral opponents and go against his strongest supporters in the congress, something few presidents are likely to do, especially when he probably agreed with the general thrust of its intention.


For the record FDR campaigned against it in 1932, but then Democrats tended to be the low-tariff party back then. From the 1932 DNC platform: "We advocate a competitive tariff for revenue with a fact-finding tariff commission free from executive interference, reciprocal tariff agreements with other nations, and an international economic conference designed to restore international trade and facilitate exchange." Of course it was easy for them to complain about it in hindsight.

And yeah, they were more concerned with balancing budgets back then, so felt that revenue needed to be as close to outlays was was practicable. As tax revenue declined they felt the only option was to raise rates to close the gap. The federal budget was approached by administrations back them more like how state budgets are approached by governors today. The Fed board didn't really understand the extent of their powers, etc...

In reality, doing nothing might have brought to power a demagogue. FDR considered his greatest political threat to be Huey Long. The fear of social unrest was much more salient in the 1930s than is easy for us to imagine. We think of Hitler as a monster now because of what happened in WWII, but in the context of the 1930s he looked like kind of like a political genius that might be at the forefront of a new political paradigm.

Last edited by redguard57; 05-04-2020 at 06:49 PM..
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Old Yesterday, 07:58 PM
 
Location: Guadalajara, MX
7,525 posts, read 3,657,357 times
Reputation: 14315
Quote:
Originally Posted by Therblig View Post
Just to pick one of your points...

Do you really think there will be fewer restaurants and 'small businesses' around in, say, July 2021?

This vague claim that any business that fails this summer leaves some permanent void in a local economy and employment is... mystifying.
replied to with...

Quote:
Originally Posted by seain dublin View Post
July 2021?

They won't be here in July 2020.
Checking in.... given we're a week out, you still feeling good on your prediction that there will be no more small business and restaurants in Jul 2020?
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Old Today, 02:44 PM
 
Location: Las Vegas, Nevada
1,182 posts, read 729,502 times
Reputation: 2953
Quote:
Originally Posted by lieqiang View Post
replied to with...


Checking in.... given we're a week out, you still feeling good on your prediction that there will be no more small business and restaurants in Jul 2020?
I do not see where the poster said that ALL small businesses and restaurants would close by July 2020? Perhaps you should start making some predictions yourself instead of attacking others when you have no skin in the game.

41% of businesses closed on Yelp have shut down for good during the coronavirus pandemic

https://www.marketwatch.com/story/41...article_inline


I personally have said all along that small businesses would be hit really hard, and they have, just as I predicted in my own thread.

Last edited by Katie the heartbreaker; Today at 02:53 PM..
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Old Today, 03:02 PM
 
80,273 posts, read 78,622,557 times
Reputation: 56791
Quote:
Originally Posted by DaveinMtAiry View Post
I have literally not heard of one restaurant or small business announce they have gone out of business in our area. Not saying that won't happen in the future but to announce they are all done today is not true.
Here in nyc I lost count how many locally are now gone or for sale
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