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Well, the big reason is that the history gives us a tool of analysis to understand what we're going through & make sense of the world.
Clearly our leaders have absorbed the lessons of the past. If we'd have had both a central bank and government response to 2008 the way we have in 2020, there would hardly have been a "great recession" at all. It would have been much shallower. People like Paul Krugman were calling for the 2009 stimulus package to be about twice as large as ARRA ended up being, in the $2 Trillion range rather than $800Bn. That's what they've done this time, and more even - they are talking about a second round worth $3T more which will be pared down but likely still significant.
They are engaging in unprecedented and extraordinary measures to avoid another Great Depression. They are that scared of it. I think what we're seeing in response to covid19 is a paradigm shift in global economic thinking with only a few parallels - the Great Depression and end of WWII among them. Central banks are taking unprecedented moves to interwine themselves with their countries' stock markets. Governments have also sowed the seeds for what could easily become some kind of universal basic income. Use of the internet to do business is going to change significantly.
Just thinking about my micro level.... At like 8 out of 10 places Ive shopped at since covid started... - I can't use cash at the store even if I want to. They won't accept it from me. Only cards. So what is money anyway? Clearly the paper representation of money is going the way of the dinosaur the same way the JC Penneys of the world are.
These trends were bubbling under the surface but now they've breached like a humpback whale.
i'm curious where do you live? i haven't been to any store that are credit cards only.
i have gotten food from 2 small restaurants that are CASH only, although from what I understand cash only is a lot more common in NY than most places.
I am not sure where you live or if you have internet. I assume you have internet access at home. We have had no problem spending money. Even if we DIDN'T want to.
Stores are still open. Home Depot, Costco, Target, etc. Not even considering online retailing and restaurant delivery services.
Unless you live on an island, spending money is not an issue. WE're even considering upgrading our bed to a sleep number bed with the next stimulus payments.
Sure these stores are open but i doubt very many people are spending more in those places than their normal spending in those places. But most are spending way less than usual because they're home all day.
I've driven 300 miles in 2 months instead of about 800-1000 a month that I usually drive (and a lot of people drive more than me)
That's way less gas and tolls.
People who have long commutes to work are saving a ton. EVen more so if they have to get dressed up for work and spend money on dry cleaning.
I have gotten takeout a few times but i normally eat out way more often. I normally go to bars and baseball games. I normally travel and spend some money on hotels.
Sure i could order a bunch of stuff online that I don't want or need but I haven't yet.
I'm lucky enough not to need the 1200 stimulus- but it's not going to make me by anything i wouldn't have otherwise.
If you're referring to food/groceries/essentials, demand has actually went through the roof the past couple months. Especially mid-late March when people were panic buying food, toilet paper, hand sanitizer, and other essentials to stock up on/hoard. That is actually the one area where people are still spending money on, more money, as well buying it with their stimulus checks, so it doesn't surprise me food prices have gone up. Add in the meat plants shutting down due to COVID outbreaks causing shortages, then it makes even more sense.
Things like cars, gaming consoles, furniture, jewelry etc.... yeah, that stuff should be going down in price. Gas prices have fallen a lot, but that's a whole different animal, though is still influenced by supply and demand. Hence why a barrel of oil costed NEGATIVE money a week ago.
grocery shopping is definitely way up but it's still a lot cheaper to eat at home than eat out.
as for toilet paper and other panic buying, that stuff will be used eventually anyway. if someone panic bought toilet paper in march they'll just not have to buy that much in the future.
I was looking at hotel prices in Detroit for June and despite nobody is traveling(I can't even get there), the prices seem ridiculous ranging from 100$ to 300$ per night. Looks like hotels are still in denial about the new reality? They should be happy with any price over zero. Besides people not able/willing to fly because of the virus, unemployment may reach a 20%+ rate so I don't see how they can afford to keep the prices high.
I was looking at hotel prices in Detroit for June and despite nobody is traveling(I can't even get there), the prices seem ridiculous ranging from 100$ to 300$ per night. Looks like hotels are still in denial about the new reality? They should be happy with any price over zero. Besides people not able/willing to fly because of the virus, unemployment may reach a 20%+ rate so I don't see how they can afford to keep the prices high.
Give them a call for the unadvertised prices.
They have contracts with booking and travel sites(e.g. Expedia, Priceline) that prevent them from advertising prices below a minimum level. There are big penalties for breaking the contract.
I was looking at hotel prices in Detroit for June and despite nobody is traveling(I can't even get there), the prices seem ridiculous ranging from 100$ to 300$ per night. Looks like hotels are still in denial about the new reality? They should be happy with any price over zero. Besides people not able/willing to fly because of the virus, unemployment may reach a 20%+ rate so I don't see how they can afford to keep the prices high.
Yes, isn’t it interesting with travel down to essentially nothing, airlines and hotels are still pretending that the old pricing models for seats and rooms can still work.
Companies have gotten better at inventory management. There are algorithms and AI that help predict demand. No longer do you have manufacturers that are 30, 60, or 90 days behind current demand. Companies have done a pretty good job of recognizing certain demands for certain products during certain times of year and produce just enough to not have warehouses full of products. Which would cause an over supply, thus reducing prices so that they can move some of that overstock.
Right now, I don't think there are warehouses full of a lot of things to reduce prices. Especially when online shopping is still moving inventory. There's no overstock. Products are still being bought online.
On the other hand, watch what happens to new and used cars. Those prices are being slashed because dealer parking lots are full and they are paying for that dormant inventory. They need to move that inventory fast.
Airline prices have dropped. I got a discount on my auto insurance. Some things are cheaper.
Insurance prices dropped due to less vehicles on the road. The algorithm used to quote our insurance produced a smaller number. Also, once Geico or Progressive (I can't remember who was first) passed a 15% discount down to their customer base, all other insurance agencies followed suit. Primarily because that was what all insurance companies needed to do in order to just maintain their customer base. You can't keep your coverage at a set price, while your competition is publicly giving a 10%+ discount. You'll quickly erode your customer base.
I've yet to see any discounts on food, which is the main thing I've shopped for. The only discretionary spending I've had was for a dehumidifier.
I live in Arkansas and we're still under Phase 1 guidelines. Traffic is reduced from it typical day to day under normal circumstances, but I would say traffic has definitely been up in the last 2 weeks. We opened back up on May 4th.
I went to the grocery store on Sunday and not many people were wearing masks or practicing social distancing. I'd say 10% at best were wearing masks.
Yes, isn’t it interesting with travel down to essentially nothing, airlines and hotels are still pretending that the old pricing models for seats and rooms can still work.
it is interesting but there is some logic behind it. it you make those hotel rooms 20 dollars a night people aren't all of the sudden going to fill the hotel.you will get some more customers but not necessarily a lot more. these are very unusual times and people are afraid to travel for health reasons and there are still variable costs with filling a room.if you lower prices too much you also lose out on money from people who will take the room at 20 bucks but will also pay 150.most people traveling now are traveling for work anyway.
Also just messing around with some flight routes out of NYC flights seem way cheaper than usual and there are also 98 percent less flights than usual.
I was looking at hotel prices in Detroit for June and despite nobody is traveling(I can't even get there), the prices seem ridiculous ranging from 100$ to 300$ per night. Looks like hotels are still in denial about the new reality? They should be happy with any price over zero. Besides people not able/willing to fly because of the virus, unemployment may reach a 20%+ rate so I don't see how they can afford to keep the prices high.
I did some traveling from Arizona to Oklahoma a month ago. I stayed in two hotels on the way and did not reserve ahead because most are not very full. I got a 30% and 50% discount on the normal rate. But the official published price was the same.
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