So, it seems like current thought is to keep employees, instead of laying them off?

Calling @Unclehenry and other business gurus

Disclaimer: I have no experience working in management but I did take a bunch of business courses in college.

I don’t understand how they can realistically expect businesses to maintain a work force if there is no demand for their product, even if there are incentives.

I guess the thinking is to try and keep things going as strong as possible w/o letting the free market make adjustments? LOL

This would be a first.

What do you think?

This is a post dealing with economics, please keep the politics out.

The market crash of 2008 taught us that losses are REAL. It cost a ■■■■ load of money to foreclose on all of those properties.

This time it will be the bank owning a bunch of commercial properties instead of residential. I wonder how much that willl cost?

Edit: and as commercial properties go into foreclosure people willl then begin to lose their homes further burdening the banking system.

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maybe it’s just a philosophical change. i mean what good is the free market, if your employer is going to lay you off in a downturn and put you on the streets. i think with changing ideas about gov’t maybe they are trying to do more for employees since our culture can be changed with elections.

personally i wonder how many companies operate that arent really viable businesses. if they can’t afford to provide their employees with a decent life and have to keep labor costs down religiously.

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Yes, I know what you mean. They say most business fail because of bad management. At least that’s wheat they said 20 years ago in business 101.

With all of the economic expansion since the housing crisis it seems hard to believe people/businesses are so low on cash… I don’t get it…

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Well people and business have all been encouraged by economists to spend instead of save. It is in the US culture to spend first and ask questions later. Spending from an economic point of view improves the economy because it trickles down from one business/person to another thereby magnifying its effects. It doesn’t help companies have been doing share buybacks constantly. The last 10 years since the Great Recession is literally the Federal Reserve doing quantitative easing and constantly lowering interest rates over and over. Look how low rates are right now and a 2 trillion dollar deal to keep companies afloat. Its the only reason why the stock market has been up, because the US is literally a socialist economy now instead of capitalistic.

I do believe majority of companies are keeping employees because these days there is a lot more talk of corporate social responsibility. Companies have an incentive to maintain a good public image and not firing any employees can do that.

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I’m not sure about that.

Some people learn to manage money and some don’t. I didnt learn how to manage money until I was 30 and flat broke because of MI. I have a sister in her late 40s who fits the picture you paint of ‘spend first, ask questions later’.
I don’t see her ever learning the value of a dollar.

What country are you from?

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I am certain tons of people spend first and ask questions later in the US. Why would you think government need to step in for rent deferral. People cannot even afford their own place to live without their next paycheck. Why would you think the US government needs to offer tax deferral and pay US citizens, I believe 2000, cause majority of Americans have no savings at all.

I am from Canada but people have the same mentality as US here.

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Good question @anon99082702. The Fed and other central banks are trying to keep the financial economy from going bankrupt by printing unheard amounts of money because no one has saved enough over the years and the economy is heavily overloaded with debt. Meanwhile demand for most goods and services has dropped off so severely that many many businesses that only keep enough cash for a few weeks to a few months operations on hand are running out of cash. The result is massive layoffs but many many people are already staying at home because of the virus. Governments around the world are responding different ways and all are borrowing from the future by printing money to do something. Many governments are paying people directly to help people survive and avoid anarchy. Some governments recognize that if hundreds of thousands or millions of businesses go bankrupt and are dismantled with their assets sold off to pay creditors then there won’t be any businesses to return to to work for after the virus is brought under control. It’s a good idea I think for governments to do both things ; 1) pay people enough to get by and help them pay their bills to keep the economy sputtering along and 2) pay or finance companies to help them survive for the time being. Incidentally I think it would also be a good idea for governments to help businesses and individuals work out bankruptcy avoiding deals with creditors via government backed creditor proposals providing those filing for protection weren’t over leveraged with debt in the first place and their insolvency was caused by the virus. So getting back to your question… Because the virus makes it impossible for fuller employment and some people must stay home and because economic structural damage is resulting from the virus, a more multi pronged approach is required. Of course there are always repurcusions and there will a lot of bankruptcies and structural and social damage and death because of the virus and the economy being over levered and dependent on money printing for so long really has no other alternative than to kick the can down the road and print for the time being. However, I have long held the view that money printing must stop at least during good times because it results in enormous wealth redistribution from the broad based bottom and middle of the income and wealth pyramid to the millionaires and billionaires at the top. The situation that has resulted with the haves that have so much and the have nots that have so little is completely disgusting and repugnant to me and it demands global social and economic change to fix it. Mark my words, a new world order will emerge after the corona virus. Let’s make sure it’s more opportunity and equality for the have nots and less of a free ride for the haves. Don’t be surprised if the current form US dollar is replaced. Don’t be surprised if the Fed and other central banks iare abolished as money printing machines. Don’t be surprised if most countries pay all adults a basic living income whether they work or not. … And then mix in the change resulting from robotics, genetics, quantum computing, artificial intelligence and other advanced technologies. It’s going to be an interesting world after the virus if we live long enough. Let’s hope for the best.

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This is what I understand too. But I also haven’t heard of ‘borrowing’ money. So they’re just going to ‘print’ it? I guess you can do that? Idk… I suppose it will just drive inflation higher.

IMO the banks will be the ones to reconcile this, not the federal government. And that’s probably who you would want to handle such a mess. I’m not sure the public sector is up for it, lol.

But which companies will get the financing? Surely you can not bail out ALL of the companies are having financial difficulties. IMO if you can’t cover fixed costs for 2 months you don’t deserve to be in business. So we’re supposed to extend a lifeline to these already ‘failing’ (IMO) companies?

Probably big business will come out on top again. Boeing isn’t going anywhere…

But I do predict at least a couple surprises…

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Yeah, central banks like the US Fed just make an entry in their computer systems to create or “print” more money. They then use that money to buy financial securities from bank brokers and dealers for the central bank’s account. Securities bought include Treasury bonds or MBS (Mortgage backed securities) or corporate bonds (including high risk junk bonds). After laid off or quarantined people go back to work demand for products and services picks up but by then there is an awful lot of money sloshing around in the system and this cause prices to go up which is inflation. Until then, right now, there is not enough demand and we are heading into a deflationary world. The corona virus is causing havoc with our very fragile economic system. The way it is currently designed it is not very durable or resilient and only makes the rich richer and the poor poorer.

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Another really good way to fight the corona virus and address part of the rampant economic inequality problem is to implement Universal Basic Income programs worldwide. Just as I am writing this an article was published tonight by CNBC…

The coronavirus crisis could pave the way to universal basic income - https://www.cnbc.com/2020/04/16/coronavirus-crisis-could-pave-the-way-to-a-universal-basic-income.html

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Yes, I’m for UBI. However, I don’t ever see it comming to fruition in this country.

But I guess being universal that means EVERYONE would get it. Which is how it would have to work maybe? But if everyone had an extra $1,200 in their pockets that would essentially be a wash as the dollar would decrease so much in value, and it wouldn’t be as highly sought after. Does that make sense?

I suppose there’s another side to that coin, I’m not sure what it is though.

AFAIK there’s only 1 county in the states that practices UBI. And it’s somewhere in Californias tech country where there’s a ■■■■ load of money. I think everyone in the county gets $500/mo UBI.

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