If only Snippa actually read some economics

Spudda’s prediction:

We face the risk of an economic downturn of almost unprecedented scale as a result. Of course, this may not happen, but the likelihood is that it will.

I am expecting the shortfall in government revenue that results from this to make the deficit of 2008 look to be of modest proportion.

The likely loss of GDP is at present almost impossible to estimate, but I am expecting it to be substantial.

An actual economist who has modelled the effects of a pandemic:

This ‘direct’ impact of the pandemic will reduce GDP in that quarter by a few percentage points. The precise number will depend on what proportion of the population that get sick, on what the fatality rate in the UK turns out to be, and how many people miss work in an attempt not to get the disease. The impact on GDP for the whole year following the pandemic is much less at around 1% or 2%, partly because output after the pandemic quarter is higher as firms replenish diminished stocks and meet postponed demand.

This is, once again, the usual Snippa problem. Which is to ignore that other people have already chewed through the problems that he’s starting at afresh. And that it would really aid his thought processes to go look at what these other people have worked out.

That is, not all economics previous to the Sage of Ely is to be disregarded. Instead there are interesting things to be known as a result of tens of thousands of clever people having chewed through a lot of scenarios over the past few centuries. That Spudda’s entirely ignorant of the conclusions they reached is only one reason why his own output is so miserably tuberous.

15 thoughts on “If only Snippa actually read some economics”

  1. Bloke in North Dorset

    There’s something to be said for looking at a problem from first principles even when it’s already been done as a good way to counter group think. The problem is his lack of ability and understanding of first principles. Instead he speculates as a means of confirming his prejudices.

  2. The Meissen Bison

    BiND: The problem is his lack of ability and understanding of first principles.

    Yup. The World is flat – that’s the underpinning of Elynomics, understandably enough, some might argue.

  3. What “economic downturn” there is will be as a result of media panic-stirring rather than actual illness caused by the virus.

  4. We face the risk of an economic downturn of almost unprecedented scale

    Hasn’t he been saying this for years now? (Can’t be arsed to check)

    Anyway, as heartless as it may be to notice, Wu Flu is mainly killing the very elderly and infirm.

    We’ve had a growing problem across the developed world as a result of oldsters refusing to kick the bucket and soaking up enormous healthcare and social care resources in the final, often lonely, miserable and senile, years of their lives.

    Coronavirus probably won’t put a noticeable dent in that socioeconomic problem, but if it spares poor old Joe Biden further public humiliation, mebbe it isn’t the worst thing that’s ever happened?

    Do you really want to live forever?
    Forever, and ever?

  5. Governments around the world seem to be taking fairly resolute action to close down aviation, cruise liners, hotels and any building where someone has sneezed recently. I think the economic damage will be rather higher than a couple of percent of GDP

  6. We face the risk of an economic downturn of almost unprecedented scale

    I know we often mock Spud’s prose, but I do rather admire the wiggle room he leaves in his dramatic pronouncements.

  7. My current six-month contract ends in two weeks. Which means that I’ll be adding to the unemployment statistics and the downturn in GDP!!!!

  8. As regards the contention that the elderly cost a fortune in health care, the majority of the costs are incurred in the last 2 years of life. Whether that is at 65 or 85 makes very little difference.

  9. @jgh

    Market yourself as a Coranavirus Prevention Consultant. Run hand washing, correct mask (N95 / FFP3 BS EN149) etc in-house seminars

  10. Bloke in North Dorset

    Steve,

    “Anyway, as heartless as it may be to notice, Wu Flu is mainly killing the very elderly and infirm.

    We’ve had a growing problem across the developed world as a result of oldsters refusing to kick the bucket and soaking up enormous healthcare and social care resources in the final, often lonely, miserable and senile, years of their lives.”

    To that end I can report that at last night’s (6 Mar) regular gathering us us oldies in the local we continued to greet each other in the traditional manner of shaking hands and hugging. We also laughed at the MSMs over reaction.

    The only dissenter was Mrs BiND who always takes the advice seriously. She caused me some alarm when she tried to recall the ingredients of a bacterial hand wash she got from the WHO as it sounded more like an IRA bomb recipe. I’m currently staying on Portland and leaving her to her bomb making experiments.

  11. PCar: my current job is working in dozens of GP surgeries, so while dodging spluttering patients I could stock up on snaffled face masks. 😉

  12. It’s well known that people became quite wealthy after the Black Death, well, the survivors anyway, as the devastation killed off many skilled labourers so they became hard to find and wages went up. It is spectulated that the longer term effect of this may have ushered in the enlightenment, as people got richer they changed clothing more often, leading to more rags, leading to higher quality paper, and 100 years later the printing press was invented.

    Richie is one of those people who think we are only “two weeks from barbarism” and the whole capitalist economy is on a knife edge waiting to collapse entirely, he could not be more wrong.

  13. Like a stopped clock, I think Ritchie may actually be right this time, if only by accident.

    I was with a friend yesterday who does lighting engineering for gigs and functions. He said his calendar has become cancellations as far as the eye can see almost over night.

    I’m looking at my own employment, and wondering what happens if we get locked down. My employer doesn’t do anything for the necessities of life that couldn’t wait for 6 months (although we are partly in the water utilities industry), but the cash flow effects of everything getting shut down for say a month would kill it dead. I could afford to sit at home for several months on my savings, but most of our staff operate paycheck to paycheck, often whilst well in debt. What’s going to happen to all the PCP car companies when all their victims can’t afford their payments at the same time?
    If my work goes under, it will probably take some suppliers with it.

    Look at what’s currently occurring in Italy, they have just put 16 million people into lock down. Assuming none of them die, and they are all released healthy in a months time, working out who pays (or doesn’t pay) for that lost time is going to be a major crisis all of it’s own.

  14. @Steve

    Joe Biden further public humiliation

    – Joe Biden’s ‘confused crazy rants’ should have discounted him years ago
    https://www.youtube.com/watch?v=L4VH2JjWDnk
    “Can you imagine Biden in a presidential debate with Donald Trump? There’s not enough popcorn in the world.”

    Biden thought Corn Pop was a bad dude

    Biden: I love having young children on ny lap

    – Clinton ‘waiting in the wings’ for her close up
    There is speculation former presidential candidate Hillary Clinton is waiting “somewhere in the wings” to be tapped as Joe Biden’s running mate
    https://www.youtube.com/watch?v=sgYNE6tTgFg

    Please God, No

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