This is the time period for OpenDoor to either be a proven business model or a failure. If they survive the next 24 months, their value should be absolutely huge. If they fail, it proves that the business cannot handle periodic downturns.
One thing I don't see in these announcements are extended exercise windows. That would be a basic thing to offer employees, and someone should keep a list of HR/Finance/C-suite people at companies that do or don't do this during this period.
> Third, if you have been with us for less than one year, we have removed your cliff and extended your PTE to 1 year from today. You joined Carta to create owners and to become one. Everyone affected today will be an owner of Carta.
I saw that, but what does that mean for an employee who has been there for 3 years and has a significant amount of equity vested? Do they have to buy it immediately? If so, they might as well not even bother since cash is going to be king for those employees and risking cash + tax liability is probably far from ideal.
If they are non-qual options, why not make them 10 years like other companies. Why the short expiration? I'd rather have ISOs and the chance to cut my tax burden in half. More importantly not having to pay taxes upfront to exercise the options. Doesn't seem employee friendly.
I didn't know this existed. However it seems California’s Governor, Gavin Newsom, has issued an Executive Order to suspend the state’s WARN Act until the end of the COVID-19 emergency.
The WARN Act is not severance! It requires that the company notify employees 60 days in advance of a mass layoff. They don't have to specifically notify the individuals being laid off.
There is no requirement for severance in California!
Most companies forgo notification and pay out two
months of pay. So it becomes a defacto severance. Do you know any company that actually gave notice and kept the employees on for two months?
None of the ibuyers are going to survive. They need a liquid market for their business model to survive. Covid19 is the blackswan event that i am sure their risk models didn't account for. Its not like we had a nationwide downturn in whole real estate sector 10 years earlier.
The long waited startup crash is happening but with a clever camouflage. None of the executives would ever have to admit their product sucked. They’ll simply blame it on the market. It’s employees who’ll face the worst. I hate the VC startup culture even more now.
well, most tech companies are non-essential by nature. There are lots of companies that are only feasible in a bull market. There are lots of product people can simply go without in most industries.
Tech just has more non-essential, nice-to-have companies than other industries.
There are lo-tech spaces, and a great many which are not, or avoid high technology, which is what most people. mean by "tech sector", if not the even narrower band of "high information technology".
Particularly the cited reference, the OECD definition:
Hatzichronoglou, Thomas: "Revision of the High-Technology Sector and Product Classification", OECD Science, Technology and Industry Working Papers, No. 1997/02, OECD Publishing, Paris.
Page 7 specifically divides industries into four technology levels, high, medium-high, medium low, and low.
Given J.S. Mill's wonderful definition of technology, 'the study of means", there's little in human activity which is ccompletely atechnological. There remains, however, much that is quite some remove from the cutting edge.
In the technology adoption lifecycle, high tech are innovators. An early-adopter firm is itself still not high tech itself.
No, companies who produce mission critical products like chemical modeling and database systems are always going to critical. A product can be essential and still made out of 1s and 0s.
In most cases it is not that their product sucked but rather it isn’t mission critical enough.
It is just a vitamin compared to other things companies/people are paying for. Nothing wrong with being a vitamin (you can be vastly successful) but it’s the first expense that is going to get cut in a recession.
Opendoor was trying to play real estate market maker. This is easy money during an expansionary upswing, and a dangerous game to be in near the end of the credit cycle (a phrase used elsewhere in the capital markets you might apply here: "Picking up nickels in front of a steamroller"); you could suddenly be holding an enormous amount of assets on your books you can't afford the carrying costs for and have to unload them at fire sale prices.
There are some business models that are attractive when capital is cheap, but not so great when the tide goes out and you suddenly have to be a real business, because capital is no longer freely available. I would propose that this is different than the discretionary businesses you describe, that are sustainable outside of extraordinary economic circumstances.
I wonder why this is a problem. Maybe our problem is with the assumption that companies should last forever in the first place. If it was not so difficult and stressful to change jobs, I think it would be better if more companies only existed for as long as they were useful/initiative, but when the steam runs out they are liquidated and everyone can walk away happily.
Anything that would make transitions between roles easier for employees during destruction of orgs sounds like good policy to support economic dynamism. A convo for another thread.
These things include universal health care, decent unemployment benefits, job retraining, child care, all things that business people hate because they need to be paid (usually from taxes).
Not only because they need to be paid but also because they give leverage to the employee.
You can see this in action with the healthcare system in the US, being dependent on your employer for healthcare gives them a huge leverage over an employee, business (on average) will always fight against policies that remove their leverage towards a more equal field.
It’s not a pricing issue, it’s a liquidity issue. Same reason the Fed has stepped into everything except equities. Illiquidity can quickly lead to insolvency.
I don't think you can tell whether something is a crash, a down turn, or just some companies using C-19 as a convenient cover to cut some dead wood until it's over and you can see the aftermath. This could be the beginning of a huge swath of staff cuts across the whole of tech or it could be a tiny bit of bad news. Shouting about how the sky is falling certainly isn't helpful without more data to back up the claim.
As an old trading friend of mine said, this is the “shakeout”[0] of a lot of unviable businesses in SV. He recalled similar things happening during the dotcom bubble.
I've been waiting for this to happen for years. Some of the unicorn/FOMO lunacy has faded in the last few years, but there still has been no big cull. At least if the economy at large recovers (which is a massive, huge if), the tech industry absolutely will be better for this. So many good ideas get crowded out by buzzword-compliant nonsense.
The thing about a big enough economic shock is that it can kill viable early stage businesses nearly as easily. Remains to be seen exactly what happens of course, but it's at least plausible this isn't going to just be a healthy shakeout.
Is it really a surprise though? Not all tech companies operate in "essential" sector and right now people I would consider essential ( say.. dentists ) are closing their doors until the worst is over. No one is immune now. Hmm. I could have said yet and no pun intended.
Very little oral procedures are essential. If people have to be in a lot of pain and otherwise not be able to function, they can get that checked at the ER.
Maybe it's a first world mentality to think oral procedures at the dentist are necessary. If it truly is, ie. in a life threatening way, then it should be treatable in the ER no? I guess the other reply put it more succinctly. It is rarely urgent.
Indeed, even periodontitis has been implicated in serious health developments like Alzheimer’s disease. Dental hygiene is very important but rarely needs to be done on a strict deadline.
That's not true. Periodontis may cause more beta amyloids but whether beta amyloids is the real cause of Alzheimers is not conclusive. Drugs that's suppose to down regulate beta amyloids have shown no efficacy on Alzheimer's. As in, it is not clear whether beta amyloid is a cause of or a symptom of the disease.
My dentist is closed for non-urgent/emergency but will take patients on an as-needed basis for things that need to be dealt with immediately. I imagine that's fairly common.
That was one of the best sites of the dotcom era, but not because it reported news of failures. It was because it reported news of wreckless stupidity, ludicrous excess, obviously bad decisions and then the inevitable failure that followed.
Without those traits of how utterly crazy startups could be back then FuckedCompany wouldn't be so much fun.
I've never understood why Aeron chairs are considered excessive in the US. They cost like $600, or one month's health insurance costs to the company, last for years, and have a decent resale value. Even for a company paying $20/hr (bare minimum for a desk job), that comes out to less than 1 week's wages.
I've had an Aeron chair at home for about 15 years. Paid for it myself. I'd guess it's a pretty good purchase on a per hour basis. (Especially as they did a warranty repair at about the 8 year point.)
I've had mine for about 9 years, also paid for it myself.
It's been one of my best purchases in terms of ROI. Used it almost daily when I worked remotely for a couple of years and it's the only piece of furniture I brought with me when moving abroad some 5 years ago, I'm sitting on it right now and it rolls around as smoothly as when I got it, all the adjustments are working flawlessly and the only damage it has are some minor cosmetic ones.
Its not that they were excessive... and they do last for years. Its that immediately after getting funding the startups of the period immediately spent a good chunk of it on high end quality of life items. The most visible was the chair. And they weren't that cheap then either (they're much less expensive now - in 2000, the chair was $1100 - which is $1650 in today's money. I can find a new Aeron chair for about half that and a refurbished one for a quarter)
> Aerons were hailed as triumphs of industrial design and were a whole different beast from the overstuffed leather power chairs that dominated the Old Economy. “They’re not in my mind an example of hubris as much as they are an example of companies trying to treat their staff more generously than they could actually afford,” says information architect Chris Fahey.
They were the most visible symbol of the excesses of the dot com startup office. The new pool table, the foosball table, ping pong table, espresso machines in the break room in the office that they just moved into. The chair is the one that people can point to being common to everything (and was also part of the stuff that was getting sold after the 95% layoff).
These are not companies that had lasted years to get the value out of the chair but rather in the range of months to a few years. They were spending money like it was free in hopes to get acquired before they had to sell it all and try again.
The chair? I love it and I would have seriously considered (gulp) another a month or so ago instead of a different mesh chair if I had realized that the refurbished ones were as affordable as they are.
The traditional business mindset says that fancy offices with Aeron chairs are things you buy using profits. If you're not making a profit then everything you do should be laser focused on making more revenue to eventually turn a profit. While VC money obviously existed before the dotcom era, it was usually to buy expensive equipment or to do research - it was never really spent on offices. Consequently when dotcom businesses started landing million dollar seed rounds and spending that money on things that weren't directly revenue generating, or even necessary, people thought it was being wasted.
And, given the number of dotcom startups compared to the number of successes, it kind of was. If those startups had been focused more on making a profit instead of unmeasured 'growth' or some strange notion of 'coolness' then maybe more of them would have survived.
I've never understood why high-quality chairs were ever symbols of excess. Ask anyone with bad sciatica how much they spend on PT a year. It's probably several multiples of the cost of a good chair. Then ask how much more they would spend to make the pain go away. It'll probably be some nontrivial fraction of their net worth. Bad back pain really takes the joy out of life.
Office people who make fun of good chairs are the whitecollar equivalent of shop/factory people who make fun of hearing protection.
Well no-one would have thought that this pandemic would have been the cause of exposing these startup companies (unicorn or not) that are struggling to generate revenue and that rely on endless VC funding rounds for hyper-growth to start shrivelling up right now.
Perhaps it's time to focus on startups that actually generate revenue and high profits and invest in technology that is a good for everyone, such as healthcare rather than 'nice to haves' which have no plan for profitability.
As Theranos amply demonstrated, being in an important industry like healthcare is no guarantee that you'll be able to generate real revenue or achieve high profits.
They could have asked to see the proof that it worked and asked an independent third party to verify it. That's usually what happens when people do due diligence, and it happens every day in the business world.
Also, experts raises the red flags years before the scam was finally revealed. The fraud was trivially discoverable; investors let their goals cloud good judgement.
You could claim the same about Tesla, it has a lot of expert criticizing their financials but it is still up in the air if they are right or wrong. I guess if it does fail people will claim that it was obvious all along...
Tesla sells a product. Whether or not their business model around the product will work and whether the company is well administered is debatable.
With Theranos the experts were skeptical that the product was theoretically even possible, and they never demonstrated it working to anyone. All the “demonstrations” involved cheap tricks of shuffling people from room to room so lab techs could manually process the samples.
Furthermore anyone doing basic due process could’ve gotten a traditional lab test and compared to the Theranos tests, exactly like investigative reporters did later. Such an obvious test would’ve revealed problems much earlier, and nobody on the inside decided to try that.
At least with Tesla you can actually buy a car and actually drive it.
No, you can't say that about Tesla, nobody ever said making an electric car was literally impossible. Quite the contrary, the technology is well understood.
The experts raised the red flags very early that what Theranos was trying to do didn't appear to be scientifically possible based on current knowledge.
But they didn't. And there is zero guarantee it won't happen again to healthcare companies.
The whole point here is making some generic statement about an entire industry being a good investment is a simple-minded opinion. If this made any sense, the entire economy should be made of only healthcare companies, they're just so good, right?
Investors chose Theranos for the same reason they chose WeWork. It's not because they're making sound investments, it's because they have more money than they know what to do with, and it's becoming increasingly obvious that they don't deserve it.
Must "unicorns" are taking advantage of various levels of market fraud, on one side you have Theranoses, somewhere in the middle you've got WeWork, and far on the other end is Uber. All unproven, ridiculous ideas that are not making society better, but rather serve solely to funnel money into the hands of a few wealthy investors.
The American dream is finally dead, and it's SV that killed it.
Lots of VC backed companies fail. Many try to pivot. Had Theranos not been lying through their teeth and were actually developing tech, they probably could have pivoted to a slightly different direction or application.
Sure, maybe you can't diagnose an individual disease from a fingerprick, but maybe you can get useful data by doing it every time someone hits the doctor and looking at trends. Maybe you can get okay information from much smaller blood draws. Maybe you can optimize where the blood is drawn. Maybe you can get information from other fluids than blood.
There could have been useful science coming out of Theranos, but with con-people in the driver's seats, that was never going to happen.
Theranos was never fine because the tech they wanted to develop simply wasn't possible. Had they not lied, they would have crashed and burned anyway.
> Many try to pivot.
Theranos did. Originally they wanted the machines in every home, then they changed tack and tried to make more conventional testing equipment with fewer capabilities. Even then, what they wanted to do wasn't possible. Theranos was lead by a college dropout. The chance of them ever doing anything productive in the biomed industry was nil. They turned to fraud because everything else they tried failed.
I have read "Bad Blood" and am convinced Elizabeth Holmes believed they could actually make the tech work, given enough time and resources. It was fraud, but it didn't start off that way. I felt it was "fake-it-til-you-make-it" that got out of control.
FYI, lots of great companies were built by college dropouts. Microsoft, Apple, Facebook... on and on. That has nothing to do with it.
All the companies you listed are different though. Early on people were telling Holmes that whatever she wanted to do WAS NOT POSSIBLE. It became a fraud very early on.
Like all really good cons, you need to select good marks to pull it off. The way investors believed that someone else must have done due diligence on the product and the technical background was probably engineered from the start.
That makes no difference when the assertion is "invest in technology that is a good for everyone, such as healthcare." It's such a vague statement to be completely useless. Define "good" and tell me which companies are doing that in healthcare so I can invest in them.
You’re stretching to find a unreasonable interpretation of the above assertion. Theranos was a fraudulent company that never had a product to sell; trying to hold them up as an example of how even healthcare isn’t safe is ridiculous.
I wouldn't say that healthcare is unsafe. I'm skeptical of the original comment's entire thesis, that identifying companies in a socially useful space is a good investment strategy.
With hindsight you are able to claim this but it was highly controversial to even criticize Theranos back in the day. The book outlines how hard and how long it took to open the can of worms.
It was controversial to say that in public, sure. I have sympathy for that.
But the nominally sophisticated investors drank their own cool aid and didn’t take the most basic due diligence steps at multiple points in this journey. They absolutely were in a position to know better, and got greedy.
Surely you understand the fact that Theranos was a fraudulent company, that was able to receive funding from investors, means the same thing could happen again. I'm sure there are dozens or hundreds of better examples of companies we've never heard of that simply went under because they were not profitable.
In any case, the blanket assertion that healthcare companies should be invested in and they are "good" is stupid and should be scoffed at. Saying otherwise is ridiculous.
Plenty of companies that generate revenue and profit are going to go bankrupt in this crisis by virtue of not having a sufficiently large balance sheet to wait out the shutdown. In fact many of these will depend on the ability to draw funding or debt to survive.
And it would be great if we, as a society, had the capital to invest in them. But instead we've got WeWork and Bird.
California has been drinking the kool-aid for a bit too long, this is just exposing the pitfalls of allowing wealthy VCs to choose winners and losers by funneling billions of dollars into ridiculous and unprofitable ideas.
> And it would be great if we, as a society, had the capital to invest in them. But instead we've got WeWork and Bird.
Is it really "instead"? VC makes up a tiny percentage of investment overall. Most traditional businesses should get a bank loan. Amount of money for bank loans >>> money for startups IMO.
You think software VC's are bad? Two of the last biotech IPOs I followed in 2019 were pre-revenue companies: Frequency Therapeutics and Aprea Therapeutics. And this has been going on for decades as pharmaceutical companies steadily ran out of small molecule targets and started to shift drug discovery risk to biotech VCs and the public. I'm not talking about just losing money - they don't even have a product yet because it's still in clinical trials.
Anywhere from 25% to 75% of biotech IPOs in any given year are pre-revenue or unprofitable, depending on how the market is doing. That's obviously a small piece of the healthcare market in total but until the crisis, most other high growth healthcare company were moving in the same unicorn direction because of the easy access to capital.
The problem isn't the startups, its the investors who are advising and incentivizing everyone to grow out of control because they're sitting on too much money and can't find anywhere else that gives decent returns.
A difference between drug discovery and technology is that in the case of drug discovery product-market fit is not as much of an unknown. If your drug works, there will be a market, it is pretty easy to estimate the size of the market, and you have market exclusivity for a period of time. In the case of technology, you need for both the product to work and for the market to materialize.
How many tech companies have IPOd without product market fit? Their main problem seems to be reigning in the unrealistic growth they've been chasing.
Billion dollar biotech companies can evaporate almost overnight, especially during a fiscal crisis. All it takes is a clinical trial gone wrong (or a competitor's gone right) and most will not be able to find enough capital to keep going. Without revenue, their survival depends entirely on the FDA and investors. It's a binary result without many options like downsizing, hunkering down, renegotiating debt, or seeking a bailout except a massive down round acquisition (or government intervention).
It makes sense that biotech startups are pre-revenue: it is illegal to charge money for a drug until it's gone through FDA clearance. That usually requires a Phase III clinical trial.
After FDA, you're not done: the company must then convince doctors to prescribe the drug, and health insurance to cover it.
All takes years, and requires investment. The estimate is that it now costs $1B+ to develop a new drug and bring it to market.
Oh absolutely. Usually they're at least past phase 1 trials so at least investors know that the FDA has at least spoken to the safety. I've worked in startups in both fields so it's just fun to watch software people salivate over the impact of biotech while the biotech people salivate over the easy money and sky high valuations of software.
That seems the problem in itself. We should, as a society, figure out how to do that more cheaply and without the incentive of profit. Too much chance of someone telling a bunch of lies or misrepresenting in order to make a buck.
Agreed. Full disclosure - I work there, but I hope that Zocdoc can become an example of the good kind of startup that is actually viable on its own.
It helps that we provide a service that is still in demand with some modifications. We've been working hard to convert our in person appointment inventory to telehealth availability so that people have some basic access to medical care. Obviously this benefits us, cause it helps us keep the lights on. But it's also crucial for doctors - some of whom have seen their business almost go to 0, and patients who need to find ways to access telemedicine.
And for those in here who have been laid off - we are hiring software engineering roles as well as sales rep roles. Check us out if you just lost your job.
Everyone not involved in healthcare thinks that healthcare dependent businesses are safe. That’s far from the truth. Hospitals make their money from elective surgery. People are both postponing elective surgery and hospitals are keeping beds clear in anticipation of an outbreak. Also reimbursements for Covid related treatment is low.
"Perhaps it's time to focus on startups that actually generate revenue and high profits and invest in technology that is a good for everyone"
Thing is, there is a lot of focus on such startups/companies you describe...we all choose what we want to focus on. 10+ years in startups/tech and I know little (care even less) about "unicorns" considering there are far superior companies with legit model and justified valuations.
ITT is lots of failure to acknowledge the scope of this crisis. This isn't just a pruning of companies that had weak paths to profitability anway, few businesses have the capacity to completely halt revenue for months on end and survive. Plenty of otherwise good companies are going to go broke.
I really wonder how people are so blind to the current economic situation. Things would be bad enough if the problem was just with China. I believe economies will contract by up to 20% in the next few months, and lots of companies will go bankrupt at the end of this process.
In all honesty, how is it irresponsible? New York is really bad. The rest of the country is in considerably better shape, and hospitals aren’t even close to being stressed in many areas. You’ve got nurses and doctors getting their hours cut back to nothing because no elective procedures are being done and the expected Covid surge never happened (again, not New York). Who honestly would’ve imagined there’d be doctors and nurses sitting idle during all of this?
There aren’t going to be any large gatherings or sporting events for the foreseeable future, lots of people are starting to wear masks and are doing much better as far as hygiene and social distancing are concerned. Why _can’t_ we start to think about getting things to slowly go back to normal? Keep the elderly (way easier for them to quarantine) and sick at home. If you can work from home, continue to do so. Everything else, figure out how to make it work within the framework of social distancing. There has to be more than a choice between “total lockdown” or “everyone’s gonna die.”
> The rest of the country is in considerably better shape, and hospitals aren’t even close to being stressed in many areas.
Why do you think that is? Because the stay-at-home orders worked. NY is the worst case scenario and you want to stop things before they get that bad.
If we had a magic dial for precisely tuning social distancing measures to cause minimum economic harm and death, we'd use it. Since we don't we have to err on one side or the other. So far we've erred on the side of caution, accepting short-term economic damage. As things get less crazy these measures will be gradually scaled back. It doesn't mean they were never necessary.
A lot of this situation reminds me of Y2K planning, but your comment is really spot on. Thank you.
Y2K is going to be a big deal if we don't do anything about it. We do something about it. People complain Y2K wasn't a big deal.
That, like this, means we're doing things right. Maybe we're going a little extreme, but the alternative is likely worse, and there is never a magic dial to spend just the right amount of effort/money/time.
I remember that article but not your comment; that article made me realize that I had forgotten the science behind soap, and just knew that it was good to use. :)
It's unfortunate that it's so easy to find preparation wasteful when it ends up not being necessary. But, we all have different life experiences.
We had plenty of warning and time to prepare for Y2K and knew for certain that it was coming - neither of which is true for Covid-19. If the entire world had somehow only realized in June 1999 that Y2K would be a problem, they absolutely would have done everything possible to gain even a few more weeks.
NY is not even the worst case scenario. The worst case is NO ONE sheltering in place. Or the entire population of the US getting simultaneously affected. And nurse/doctor strikes or walkouts would make it FAR worse.
> Why do you think that is? Because the stay-at-home orders worked. NY is the worst case scenario and you want to stop things before they get that bad.
To be fair, though I agree with you in general, NY-- esp NYC-- is much more dense than the rest of the country and as a result R(effective) may have been much higher there than other places. It may be the case that much stronger measures were needed there then in many other places.
So while it is true that part of the reason other places are less bad is because the policies worked, differences between the locations may also play a significant role.
The combination of exponential growth with a sizeable lag means that you really don't want to come anywhere close to being stressed, because then you were just a few hours away from a calamity. Time for a car analogy: it's like braking on a wet road on a foggy night, then measuring the remaining few feet of road ahead and saying "we shouldn't have braked so soon".
New York waited for things to be bad before they shut down. San Francisco shut down incredibly early in comparison at a time when the city was essentially perfectly fine and largely unaffected. This led to an extraordinary difference in outcomes.
The interior of the country doesn’t have the infrastructure to support exponential growth. Nurses and doctors and hospitals being idle is a sign that we chose the SF path, not the NY path.
The economic impact is of course absolutely terrible and this is shaping up to potentially be as bad as the Great Depression was. But letting the virus ravage small towns and cities without adequate support would be worse both economically and in terms of loss of life.
SF also lacks the density, and more critically the scale of NYC. Though credit to Mayor London Breed and Gov. Newsom for early and effective action.
Regions hardest hit by COVID-19 seem (informal take) to have largely been large, dense, sprawling cities. with poor public health infrastructure or responses.
In the US, it's currently mostly Northeast cities, generally surrounding New York, doing the worst. Wuhan (11 million) is also huge. Milan (Italy), Madrid (Spain), Tehran (Iran), London (UK) have also fared poorly, especially relative to their countries.
Outbreaks in less populated regions can and do occur. -- though often within institutional populations or equivalents -- cruise ships, retirement / nursing homes, prisons and jails, as well as anti-science religious groups, notably.
And not all megacities have been hit, especially those with solid monitoring systems, response plans, and infrastructure: Hong Kong, Seoul, Taipei, Singapore, especially.
Nobody wants to go down in history as the person responsible for a large number of short-term deaths by giving the directive to lift the stay-at-home directives too soon.
That's one explanation for politics, another explanation is that politicians do not care because they are not economically affected by their decisions, they have steady jobs and income, many have significant accumulated assets.
Unfortunately, both options are not mutually exclusive
Are you suggesting they’re shutting the economy down just for the hell of it? I can assure you that politicians do not harm the pocket books of their campaign donors on a whim. There is almost no one profiting from this.
I think we can all agree that the shutdown happened because of a genuine concern for what the new unknown virus could do. The last coronaviruses SARS and MERS could wipe 10-20% of the population, so that the baseline to prepare for.
Now we know the virus is not quite as deadly as anticipated (around 2%). And we know the economic impact is disastrous (+15% unemployment in the US after 3 weeks). So the strategy will have to be re-evaluated eventually.
My opinion is that politicians taking the decisions are too remote from people experiencing economic hardship, so they will let the economy get much much worse for way too long.
Every elected official has to care about economic outcomes. Because the electorate cares. Hell, some political scientists think that this is the most prominent issue people vote on. And that's assuming elected officials actually don't care about their responsibilities to their constituents, which may well be true for some, but it's wrong to assume as a blanket motivation (and I'd go farther: it actively aids corruption to cast all politicians in the same mold, because to do so is to lazily shrug off the responsibility of making case-by-case judgments, which is itself what enables uncaring leadership to operate without pushback).
The only thing that might matter more broadly than prosperity/poverty is life and health.
Nobody else wants to go down for creating more Hoovervilles than ever thought imaginable. Millions upon millions of lives ruined, but hey we save 100K social security recipients right?
The virus itself did all this damage. Again, you're conflating the response as being the cause when it's really the virus itself that's the cause. Social distancing and economic shutdown isn't optional at this point; it would all be happening anyway.
By delaying the formal response it would have been possible to get most of of the economic harm of distancing while only getting a small part of the benefit.
Many people started distancing in the couple weeks before the shelter in place orders started. I know people that quit jobs to get away from the public, etc.
Yet many of those people who were increasing their distance, lowering their economic activities, etc. were also living with others who were in denial about the pandemic and where nothing short of a vague threat of citation/arrest or a closure of their hangouts would cause them to reduce their interaction... at least until people they know started dying, which would be too late for intervention (yet at that point they'd still drop out of economy!). In a "no order" world, you'd still get most of the economic hit of that household shutting down-- but they might often still get the infection, contribute load on the hospitals, and potentially die because one member of the household was less responsive to common sense.
Various legal and economic mitigations would also be less likely to exist absent an official response.
I think we're going to see three basic categories:
1. Essential+Unaffected: demand will be steady because there is no other choice, i.e. food, communication, ecommerce.
2. Horribly Affected: maybe even illegal to open right now, and when they open demand will be down significantly i.e. restaurants, bars, live entertainment, travel, some segments of education like language schools that cater to international, conferences and trade shows. Maybe back to full strength in 2 years but not going to be fun for a while, huge hit to demand.
3. Affected proportional to total global economy: If the overall economic activity goes down 20%, some businesses are going to track that. Transportation, business services, maybe banking.
The governments of the world certainly have the ability to stimulate asset bubbles, but I'm not sure that they can generally stimulate business activity other than on the demand side, i.e. rising incomes for labor. I think there could be a stratification of national economies performance over the next 2 years based on the ultimate success of their COVID-19 response. I'm seriously considering if I should try to predict the most robust regional response and look at moving there post crisis for the next 2 years or so. I think there could be significant differences. Not necessarily who is suffering the least, but who is going to emerge most vigorously.
I don't think even #1 is out of the woods. Demand for food will change and probably not for the better with so much people without a job. E-commerce will increase in some areas, but lots of companies that are not dealing with essencial products will close again due to the large number of unemployed. If the rest of the economy tanks, advertisement will also be in a difficult position.
"I'm seriously considering if I should try to predict the most robust regional response and look at moving there post crisis or the next 2 years or so. I think there could be significant differences. Not necessarily who is suffering the least, but who is going to emerge most vigorously."
Same...always better to thrive than to survive and we all get to choose :)
Also don't forget the effect of competitive position within an industry.
I have a friend who owns a factory in a very unsexy niche industry (packaging). They're relishing this crisis, because they manage the business very conservatively in terms of cash flow and leverage, and are expecting many of their competitors to go bankrupt in the near future. When the dust settles, they'll be one of the few left over, which means they can charge much higher rates. This'll likely be the story in many industries.
Rich monopolies like Google and Facebook are going to do fine. (And note that both of them are still hiring, meaning they can potentially clean out the supply of engineers while many of the newer growth unicorns have instituted hiring freezes.) Marginal players in competitive industries are going to get killed.
Yeah, but look at their cash positions. I posted an analysis [1] based on their published financials in another thread; basically their revenue could go to zero and they'd be fine for a year and a half. With a more realistic 75% drop in revenues they'd be fine for about 5 years; with a 50% drop in revenues they'd still be profitable.
That's one factor. Also great margins, a disciplined acquisition strategy, monopoly position, an inherently labor-efficient business model, and a shrewd prop-trading desk.
I'm thinking about supply side and demand side differently right now. The supply side business outcomes are going to be based on the customer profile, the financial strength, and some localized effects of the pandemic situation. I'm not sure that we'll see an '08 style credit crunch. I think governments want to stimulate and credit is one of the main levers they can try to push. I don't know if it will work to keep failures down, but I certainly think they'll try. But I think the supply side will collectively adapt as necessary to supply the demands for products and services as they exist. I think consumer demand is going to be the constraint for the next 2 years.
With a true safety net a 20% contraction doesn't cause loss of life. Choosing to let this push people out on the street or into otherwise dire straits is a government's choice, not an inevitability. If companies fold and people can switch seamlessly from position to safety net to new position, allegedly the market will normalize and reallocate resources efficiently. You can't reallocate without freeing resources!
A contraction of 20% only puts us nominally back less than a decade. People didn't have to be sacrificed back then, and they don't today.
There are interventions we do need, but if everyone took a 20% hit as a group instead of a de facto Hunger Games, it wouldn't be nearly as ghastly.
I did. It was tough, not a lot of "interesting" companies, but if you road it out doing government contracting or working at a boring-but-stable financial firm, you were fine.
The dotcom bust was only brutal if you were either working for a non profitable VC backed startup or your profit depended on VC spending. Regular old big enterprise kept chugging along and were still hiring. I was looking for a job in early 2000 as a software developer with three years of experience in Atlanta and there were plenty of companies hiring.
The dotcom bust was bad for the software and computer industry (and, yeah, it was definitely brutal) but didn't affect the larger economy all that much. Take a look at the list of recessions in the US (https://en.wikipedia.org/wiki/List_of_recessions_in_the_Unit...) and you can see it was relatively mild by the numbers.
This time, it's global and nearly every sector is affected; there won't be a place to hide. The US is already at unemployment rates not seen since the recessions of the 1920s/1930s and the bleeding hasn't stopped yet.
These unicorn collapses are just the rumble, not the avalanche itself and anybody not terrified right now, darned well should be.
ITT also will be lots of people blaming this economic impact solely on the social isolation measures, ignoring the fact that a pandemic ravaging unchecked through the entire population would be having an even worse effect. Once the pandemic started, there was no way it was gonna end well, regardless of our actions in response to it. At least with the social isolation measures, fewer people are dead by the end of it.
I'm trying to donate plasma. Unfortunately, that's very much a 1-at-a-time kind of thing and doesn't scale well. We also don't know how effective it actually is.
Demand started dropping before official shut-down orders arrived, as risk-conscious citizens cut down on high risk activities before officially ordered to do so.
San Francisco shut down incredibly early compared to most of the US, especially compared to their case load. By the time SF shut down they had 50 cases, while NYC waited until they had 10,000 cases to shut down.
That probably is why the shut down and lack of demand line up so closely for businesses in the Bay Area.
No, De Blasio wanted to issue a shelter in place order on March 17 and Cuomo said absolutely not. Then eventually Cuomo comes around and they start a shelter in place on March 22nd.
They both dropped the ball big time. de Blasio went to the gym on literally the last day before those kinds of businesses were shuttered. He kept waffling on shuttering the schools and waited way too late. He only started taking things seriously when the heads of his department of health threatened to resign if he didn't take more action. See e.g.: https://www.cityandstateny.com/articles/politics/new-york-ci...
They both started off as a complete joke on this. Cuomo has at least since been improving, but de Blasio remains a complete joke. He's incapable of so much as even closing some empty streets (or some lanes on streets) to give pedestrians more space to spread out. Other cities have been doing this to great success, but de Blasio has only ever understood things from the perspective of being behind a windshield.
The disease hit New York first before it hit anywhere else in the US and hence had a lot of time to develop. I heard from one source, that it was already present in New York back in december and that one of the first worldwide cases came to New york early. that was from a Joe Rogan podcast episode.
Given the close economic and cultural ties between the west coast and Asia, I find it very hard to believe that Coronavirus travelled through Europe to NYC before it travelled directly from China to LA or SF.
NYC was the best city on the entire east coast back then. We closed early and had fewer deaths because of it. Unfortunately that lesson wasn't learned (likely because nobody in charge of anything back then is still alive today), and this time we were unfortunately saddled with an incompetent governor and mayor who hadn't learned from history and didn't take action soon enough.
Scroll down and click "city" instead of country. SF bookings on OpenTable were consistently down starting the last week of February. Your restaurant might have had different performance for a number of reasons.
As A san francisco resident, I got take out a couple times but I would not have considered eating sit down in the couple weeks prior to the formal orders. I was, however, marveling at how many people were still eating sit down.
They would have nearly all vanished once the hospitals started filling up had there been no formal order. And then it would have lasted longer.
There were a few activities I did in the last week before I stayed home that definitely felt unsafe, and were the last time I did those things (in advance of official shutdowns). I went to the gym and it felt unsafe, I saw a play on Broadway and felt unsafe, and ran on the East River and felt unsafe, and then we settled in to not go anywhere anymore the next week (still a week prior to the official orders), but by then I'd already caught it. My first symptoms appeared on March 16th, meaning I'd most likely gotten it within the past week, and NYC didn't shut everything down until the 23rd, when I was already at the peak of the illness.
So I would have needed to have stopped doing things several weeks prior to the government actually getting off its ass and acting in order to be safe, but I didn't have the understanding of how widely in the community it was already spreading at that point, or how severely we were under-testing. As a city we were unbelievably late to act, and the over 10,000 dead in NYC alone (with ~750 more every day) are a testament to that.
It's the peak of absurdity to imagine the city somehow going on as normal under this unbelievable toll if only we weren't being told to shelter in place, when the only street noise you can hear a lot of the time is ambulance sirens.
Hope you are doing better, if you don't mind me asking, how were the worst of the symptoms and did you recover completely? any breathing complications? any tips you felt helped you fight it off, assuming you didn't get hit with with the full force of the virus.
Wishing you a speedy recovery fellow HN reader friend.
I had all the listed symptoms including headache, fever, sore throat, muscle ache, and diarrhea, but those were all pretty mild compared to other illnesses I've experienced in the past, like the flu or even a bad cold. The one symptom that was unlike anything else I've ever experienced was the shortness of breath. There was a period of several days where it felt like I was at several miles' altitude. When I was being sedentary I was OK, but I was noticeably not getting enough oxygen even just while walking around my apartment, like I couldn't catch my breath or suck down enough oxygen.
I've since mostly recovered, but my lungs are still giving me problems (this is apparently expected; it can take months to recover from severe pneumonia, so I'm doing better than that at least). I haven't gone running in over a month whereas I used to go several times a week, and even stuff like playing Beat Saber has kicked my ass. Ironically, wearing masks is hard for me now because they interfere with how much oxygen you can take in, so I can wear them while walking leisurely, but I start walking faster, or try to carry a heavy load (groceries), or climb stairs with a mask on, then I really start feeling shitty. So I haven't been wearing a mask while outside and only don one for being inside stores (which is fine, it's been way more than 14 days since I last experienced any symptoms of infection).
So yeah, a weird illness, quite different from the usual human viruses like the cold flu that we all know and "love". I don't know if I have any tips other than don't expect to get better from it quickly (you don't bounce back in a few days like you would from the cold), and lying prone helps you breathe better (but I fortunately never got serious enough to the point where I was struggling to breathe even while being sedentary; it was only after activity). Oh, and if you do anything like smoke or vape (I don't), quit that right now. You want your lungs to be in the best possible condition before going into this because you're gonna lose a lot of capacity and if that puts you below the level required to sustain your basic sedentary metabolism, you could die, or at the least require supplementary oxygen in a hospital. Heck, take up running or some similarly aerobic activity now if you haven't already; that'll help.
In Seattle, people were dining out at about 80% until the official shut down of businesses. Things like IHOP and Denny's were still fully packed, but more niche were often sparse.
Weeks before the official lock down, coworkers were already changing behavior. Going out to dinner less, stocking up on food, buying extra supplies, etc. Not everyone was doing this, but it was not uncommon. This was weeks before the first case hit the area.
I think a lock down of sorts would've happened eventually, no matter what. Once restrictions are relaxed, a large percentage of people are still going to be very, very cautious. I will not board a plane or sit in a movie theater any time soon.
Come on man (or woman ;-)). That's a silly, obviously incorrect statement. Not shutting down would have lead to many many more cases. Look at Louisiana. Secondly, the only hope of not shutting down is having widespread testing and tracking of limited cases. The US doesn't have that either.
You can get pretty far with a decent model when it comes to counterfactuals.
We moved the economic impact earlier to trade down health impacts. In order for there to not be some similar level of impacts, we either have to imagine a scenario where the disease was many times more benign than it has demonstrably been in some places, or where people ignore news as things get sufficiently dire and continue business as usual rather than dramatically adjusting behavior from normal circumstances. And both those things have to be true in order for the latter not to make a terrifying contribution, which would also make dire economic impacts: dead or damaged people are much harder to get back into the demand side of the economy than housebound or unemployed people.
If you're thinking of worldwide counterfactuals, and know of any society that has a story involving staying broadly open that didn't use effective mass testing and contact tracing early, then specifics would be an interesting contribution.
That’s the wrong question. The right one is whether the economic downturn would be worse if we had a multiple amount of deaths.
Additionally, we have saved lives (and animal lives) by shutting down parts of the economy. That should be included as a silver lining to the whole thing.
The other side of the argument is also just an opinion. What’s your point?
The way I read it is that we have no reason to think the economic drop would be less severe if we didn’t have a shutdown. This is because people dying could hurt the economy just as much, if not more.
It is assuming facts not in evidence to suggest the economy would be better off with more deaths but less of a lockdown.
To be fair, if it went on unchecked, after the massive and tragic loss of life/health, it would be over in weeks instead of years. Not that I'm volunteering to go into the 'herd immunity' group.
Well possibly many more than that, since we would have run out of hospital beds and oxygen tanks etc. But in the fall we'd be able to football games again.*
And yes assuming immunity, which seems likely to be the case for most people, even if not permanent.
You're off by a factor of ten; assuming 2%, that would be 6 million Americans dead, not 600k.
The death rate isn't likely to be that high (even without medical treatment), but if even a million Americans die, that's a cost of $10T to the economy right there.
You can easily why see shutting things down to prevent all those deaths is worth it.
We didn't do this to benefit the economy, and it didn't. Losing 0.3% of the population (and maybe my mom) is a tragedy for the families but would not cost the economy $10T (that's half of GDP!)
We did it because risking 30M pneumonia victims was unthinkable, even before we count the extra heart attack/assault/cancer victims while the hospitals collapse.
The actuarial value of a human life is $10M, so that really is how the math works out. Don't underestimate the lifetime output of a human, plus all the non-monetarily-compensated labor they do that is nevertheless valuable. Especially if there are dependents involved (younger or older), the costs of that death rise well above just that person's economic output, but also the total cost of the state having to take on the burden of caring for those dependents. And we haven't even started getting into what the emotional burden on everyone who knew those people looks like.
The numbers work out; it's absolutely worth shutting down the economy for some number of months to prevent the loss of a million lives. Obviously the numbers don't work out to do so indefinitely, but for the one month so far and the upcoming few, definitely.
Right, but the economic impact is largely determined by the protective measures taken. It's entirely fair to conclude that less restrictive measures could have led to substantially less economic loss for relatively little in terms of health impact. Some countries, like Sweden, are not nearly aggressive in social isolation as others. Time will tell whether this was the right approach.
"It's entirely fair to conclude" does not mesh with "Time will tell whether this was the right approach".
If the same protective effects could have been achieved with a less disruptive move, then your conclusion would be justifiable. It is not, however, at all appropriate to jump to that conclusion yet-- time has not told.
It will probably be years before good conclusions can be drawn from this due to the difficulty of correcting for starting conditions and intrinsic factors.
Sweden is a relatively insular, already 'socially distant' community. It appears infections there started with fewer parties later. So it would take considerable analysis using data that doesn't exist yet (including the eventual outcome in Sweden) to draw any conclusions about what might have happened had their approach been applied to, say, NYC.
Within the US-- a more comparable population-- there are many locations where the response was weaker and so far the results don't look especially good.
Ultimately the fact remains that the majority of the economic "losses" we have now are hallucinatory. When a building is bombed it is physically destroyed and the labor and most of the materials that went into building it are irretrievably lost. The people inside are killed and cannot be productive in the future. In our current crisis, our losses are primarily losses of confidence (sure, there are some cases of agricultural goods spoiling). The people our response have saved but left without work are still alive and can go back to work when the crisis is over, particularly if we act to make sure they're protected in ways other than their health. Even if we cared exclusively about the economic consequences of this event it would be extremely foolish to favor the increase destruction of productive human lives in order to optimize for short term market confidence.
> "It's entirely fair to conclude" does not mesh with "Time will tell whether this was the right approach".
It doesn't mesh because you're omitting, "...could have led to substantially less economic loss".
It won't be years before good conclusions can be drawn. Some states are already reporting that cases have already gone past their peak. Most countries that had outbreaks in March are seeing rates of cases going down. We'll probably be able to have a good idea of the scope of this pandemic by the end of summer.
The economic harm is not hallucinatory. What is hallucinatory about 3 million people out of work in the span of a few weeks? You write that these people can go back to work when the crisis is over, but that is not true. If your employer goes out of business, or has too few customers to sustain as many employees, people are going to have to find new jobs. You also write about the loss of productivity in terms of the people who died due to the virus. That is something to account for, but the bulk of the virus' victims are not of working age.
Whether or not you're comfortable with valuing human live does not alter the fact that we put value on life all the time. Whether it's deciding insurance payouts, worker's compensation, or healthcare spending we're constantly expressing the value of lives in dollar terms. Current predictions put the economic impact per life saved by social distancing at ~$190 million. Even if we assume that social distancing is only responsible for half the economic downturn, we're still talking about nearly $100M per death averted. Saying that this is excessive, and concluding that restrictions were excessive is entirely fair. How much money would a state funded healthcare system spend on its worst case patients? A lot less than $100 million.
> Current predictions put the economic impact per life saved by social distancing at ~$190 million.
That sounds, on the face of it, implausibly high. To run some numbers - estimates of how much of the population would be infected without countermeasures run 40-70%, and death rates run 1-2% (this would be much worse if hospitals were overrun by an estimated 8 million ICU patients over a few months, but we'll use very conservative numbers). The US population, with 40% infected and 1% of those dead, leaves us with about 1.3M deaths, times your $190M per life is $25T, or about 15 months of US GDP. Is that really the claim here? The equivalent of bringing GDP to 0 for 15 straight months?
The death rates so far have been dropping considerably once further testing becomes available. Right now, most tests are being performed in response to patients presenting symptoms. This creates artificially high results. The majority of COVID-19 infections do not result in symptoms, and these people would likely never be reported. Nor would a significant portion of people who did present flu-like symptoms but did not need medical care.
Italy and Denmark have initiated random testing have revised death rates to be far lower, less than once percent. Random testings substantially increases the denominator, since it captures the vast majority of people who did not have serious symptoms. The infected cruise ship had a death rate of 0.7%, which is even more surprising giving the older average age of cruise passengers. The fact that places are reporting higher death rates than a population disproportionately older should have raised eyebrows. Again, the data itself is not suspect it's failing to account for the selection bias it imposes. But this does result in some very skewed conclusions on your end:
> The US population, with 40% infected and 1% of those dead, leaves us with about 1.3M deaths, times your $190M per life is $25T, or about 15 months of US GDP. Is that really the claim here? The equivalent of bringing GDP to 0 for 15 straight months?
1.3 million deaths is an order of magnitude more than what is being projected. Earlier this month, the range given was 100,000 - 240,000. Now this projection has been lowered first to 80,000 and now to 60,000:
Yes, those projections are that low precisely because the strict social distancing is worsening, and we are managing to keep things within the capacity of the healthcare system. Reopen everything immediately and you'd see the death toll shoot right back up into the previously estimated, much higher ranges.
> Right now, most tests are being performed in response to patients presenting symptoms. This creates artificially high results.
You don't think anyone else has noticed this? The estimates have been based on lower numbers than the raw data.
> The infected cruise ship had a death rate of 0.7%
I agree that the Diamond Princess was particularly interesting because of the high testing rate. Your number is very clearly wrong, though. The actual numbers reported was 13 deaths in 712 cases, or 1.8%. They also have 55 unresolved cases, and someone who has been sick for this long is looking at worse odds than the general population.
> 1.3 million deaths is an order of magnitude more than what is being projected. Earlier this month, the range given was 100,000 - 240,000. Now this projection has been lowered first to 80,000 and now to 60,000:
First of all, those numbers are going down precisely because of the measures you're complaining about. Second, they're clearly implausible. The 60,000 estimate is from 9 days ago. Meanwhile, the current official count is just shy of 40,000, and the excess deaths have consistently been double or more of the estimate for COVID-19 deaths (Italy, for example, is reporting 6x [1], while NYC was until a recent change in their reporting showing 2x [2] - but we haven't seen these changes anywhere else in the country).
It looks to me like you are incorrectly believing that I am making an argument that attaches intrinsic value to human lives. I am not.
If we assume humans are slabs of talking meat which are worthless except for their economic properties (productivity and consumption), it is still not a likely economic win to let enormous numbers of them die because the economy is made of people. If you kill the people you kill the economy directly-- and, of course, people aren't going to continue like normal while others are dying around them regardless of what state policy is.
So you are making a false comparison of the economic cost, the alternative is not "do nothing, let millions of innocent people die, and have the economy continue as if nothing happened". That isn't a possible alternative-- the economy couldn't continue as if nothing had happened if millions have died or are dying.
Imagine for a moment, for the purpose of discussion, that we didn't need to keep food, medical supplies, power, etc flowing during the intervention. In that silly and unrealistic hypothetical it would be reasonable to pause the economy-- basically say "okay, for the next year all contracts are paused, all transfer of value prohibited, and in a year we just start 2020 over again for all legal and contractual purposes". Just like weekends are often disregarded in contracts but at a massive scale. No businesses would fail, nothing would change (except the people that died along the way).
It's not possible to actually do this fanciful thing, because, unfortunately, we still need to keep utilities, food, medical services, etc. running and because everything is interconnected you can't just pause everything else. But if we could it would be a completely reasonable response.
To the extent that, e.g. businesses fail due to this is a failure of our imagination and political will. Other than the small amount of actual damage done from spoiled goods (and deaths from the pandemic)-- all other economic consequences are a product of our beliefs and actions, and are not actual unavoidable losses in the same way that a death is. The stimulus is just one (half-assed) example of the potential ways that we can act to mitigate the direct economic harms while still protecting lives.
Of course, I do also think that people's lives have tremendous intrinsic value, but that isn't part of my argument here. Instead, I was attempting to argue that even a dispassionate spherical economist murder bot should-- if it were behaving rationally-- respect that the irrecoverable loss of many human lives is something of tremendous economic significance because of the central role of as agents and targets of all economic activity.
You're also disregarding the potential economic benefits of this disruption. Causing weak businesses to fail can be economically beneficial in the long run, as might the radical increase in telecommuting and video conferencing, or the development of more pandemic robust services (e.g. will we finally see automated grocery stores become a thing?) or the numerous other ways that this event might help the economy escape other local minima.
Again, people keep talking about millions of people dying. The current US death projection is 60,000. Let me put this in context for you: 600,000 people die each year due to cancer. ~30,000 due to car crashes. Additional mortality amounting to one tenth as many people dying from cancer is not going to crash an economy. Both you and the other respondent are multiple orders of magnitude off in terms of your projected death rates for this virus.
The idea that the economy would collapse due to the amount of people dying of coronavirus does not hold water. Even if widespread infection did occur, the mortality rate among working age people is well below 1%.
The current US death projection is 60,000 precisely because the strict social distancing is working. You sound like an anti-vaxer, arguing that measles isn't that bad and that the vaccine isn't necessary, when the vaccine is precisely the reason in the first place that measles isn't that bad!
You can't argue against measure X by using the successful results of X to say that X didn't work in the first place!
Unlike a vaccine, social distancing likely won't reduce the total of people that will get infected. Social distancing also doesn't increase your chances of surviving an infection. It is useful in reducing the rate of transmission, so it slows down infections rather than immunizing people against them. Trying to equate opposition to social distancing to denying the effectiveness of vaccines so so overly simplistic that I have a hard time it was written in good faith.
And right that the question is to compare the actual death toll to the death toll that would have happened without social distancing. Say 310,000 people would have died without social distancing (more than 5x the current projections). That's 250,000 additional deaths. That would be $100M per death averted assuming a $2.5T cost of the social distancing measures - that's ~10% of GDP. The US so far is expecting losses about twice that.
> social distancing likely won't reduce the total of people that will get infected. Social distancing also doesn't increase your chances of surviving an infection.
There is substantial evidence for other viral infections that infection severity (spanning from asymptomatic to dead) is related to dosage.
There is limited information so far for covid19 but some informal evidence that this is true for it too: Young healthcare workers appear to be dying a a much higher rate than similarly healthy members of the public who are sars-cov-2 positive.
If this is the case, social distancing will reduce the number of people who get serious infections and reduce the number who die.
Even if not, preventing overload of the hospitals will significantly reduce the number who die. Delaying infections until we better know how to treat the disease from anti-virals to simply care techniques will almost certantly reduce the number who die.
> Say 310,000 people would have died without social distancing (more than 5x the current projections). T
CDC's projection was 1.7 million dead before accounting for hospital overload.
These early predictions were based inflated fatality rates. Early on, testing was only done on sick patients. People who contract the virus and don't get sick or don't get sick enough to go to the hospital aren't counted. So this is a huge selection bias. You didn't bother to cite where you're getting this figure, but it looks like this projection dates back to March 13 [1] or earlier.
If you have a study that projects what the fatalities would have been with a shorter isolation period (e.g. only march and first two weeks of April), that would be noteworthy. Pointing to this early CDC study as a figure for what would have transpired had the economy not been shut down is not sound.
> These early predictions were based inflated fatality rates.
Not so, for example the mortalities from the diamond princess are _higher_ than the ones being used to drive those projections. The fact that it takes time for people to die has held down the estimated mortality during exponential case growth.
The diamond princess' fatality rate was less than 1% - lower than the 1-3% used to drive early projections. Not to mention the fact that the cruise liner is disproportionately older, and the whole vessel recirculates its ventilation. This was, quite possibly, the worst population and location to have an outbreak and yet the death rates there were lower than the figure used for country-wide projections.
Effectively every reputable source is observing that the early death rate projections were substantially inflated. China's reported death rate is 0.5% - and they're the ones with the most experience with the virus. Germany only recent started random testing. They previously had a fatality rate of 2%, but after random testing they found that 14% of the population already had antibodies - thus lower the death rate down to 0.37% [1]. There's a vast difference between asking "out of the people who got sick enough to go to the hospital, what portion people infected with coronavirus died?" and "what portion of people infected with coronavirus died".
You still don't seem to understand that most of the social distancing was inevitable, not a choice. There is the worst fucking worldwide pandemic going on in over a century now. People are not going to be going about their everyday business. There was always going to be many trillions of dollars in economic damage once COVID-19 reached our shores, period, end of story. You're living in a fantasy land by pretending that none of that was going to happen without the social distancing measures.
I would love to be able to look inside your head and see what you think society would look like right now in the middle of an uncontained global pandemic with everyone just going about business as usual, continuing to pack bars and restaurants, no companies cutting back on jobs, etc. It's an utter, complete fantasy land.
It's not a fantasy land. It's called Sweden. Estimates are placing the actual IFR at about 0.5 to 0.3%. For comparison, the seasonal flu averages 0.1%. A country in the middle of a coronavirus epidemic looks mostly like a country that's not in the middle of a coronavirus epidemic, save for 3-5x as many people dying of coronavirus as the flu. Saying that it's not wise to devastate one's economy over such an illness is a perfectly reasonable position.
The projections without measures were well over a million dead and those projections did not consider the additional deaths of non-covid19 persons due to overloaded hospitals.
These projections were based on fatality rates well above what is actually being observed by countries conducting random testing. We're talking about an order of magnitude off.
Consider 20% of Sweden is over 65. (USA 16%) That factors into it. In fact, it factors into every discussion on mortality but is rarely broken down. Makes comparisons problematic.
In point of fact, they're pretty much the same thing. A population being ravaged by an unchecked pandemic is, needless to say, not likely to continue packing restaurants and theaters every weekend.
Social isolation happens to have been (responsibly!) instituted as a matter of public policy, but it was going to happen via fear at some point anyway. The economics doesn't care, really.
I’m a little surprised considering the recent legislation that should have basically had the government loan you money which would then be forgiven if you retain staff. Is this not working out in practice, or companies of a certain size that are phased out are doing the firing?
There are different tiers of loans based on company size. While I don’t have the tiers memorized, I think most unicorns would be excluded from the very generous terms.
That loan (the Paycheck Protection Program (PPP) loan) is capped at 2.5x monthly payroll, so at best it only helps companies survive 2 months or so without layoffs.
Also, companies backed by Venture Capital or Private Equity can't currently access these funds in most cases. Nearly 100% of these unicorns fail the affiliation test.
I wonder how AWS market share will be impacted by startup's going through a bear market. No doubt AWS has a big enterprise component that should weather fine, but they're also generally the default 1st choice for a lot much smaller more vulnerable shops.
I wonder myself. AWS has been pushing out more changes to their "IP Ranges" file recently. I've been keeping count, just to make sure it's not me inventing a thing:
Per week, there's much more activity recently, and some digging into it suggests they are bringing in more IPs. Could mean they're busier, or could just be longer term plans coming to fruition now.
I suspect that true startups (i.e. pre-Series-B companies) are rounding error in AWS earnings. They give out $100K-$1M credits like candy to accelerators as a loss-leader to get startup business.
Growth companies (like unicorns) might be a hefty chunk, but I suspect that a lot of Amazon's revenue comes from Fortune-500 companies, academic research labs, and other major tech companies (like Netflix or Snapchat) that don't run their own clouds.
The data may not be too reflective of the current situation on the ground, however. From the website:
"Note: Executive Order N-31-20 (PDF) temporarily suspends the 60-day notice requirement in the WARN Act. Visit COVID-19: WARN FAQs for more information."
I've thought a lot of VC money was extremely suspicious. These gigantic unicorns run at losses for what, a decade? Where's the value in any of this? To call this high risk is an understatement. Take Uber, for example. They're betting on self driving cars and that the populous (or politicians) allow them to operate. Mean while they've been a money hole for 11 years?
I guess Covid will be a good time to test how much of this is all hot air. I imagine those who provide or can pivot to vital services reliably will survive. These are the kinds of times where capitalism thrives, provided a majority of actors are operating in good faith.
The interesting thing about Uber is before Covid-19 I thought that the ride sharing arm of the company was the profitable path and the food delivery arm, Uber Eats was a lost cause. Now it seems like that theory has been thrown on its head as ride shares plummet and takeouts soar. But still I think profit margins on food delivery are not that high so I wonder if Uber will escape unscathed from layoffs/closures, VC funding will only last so long when a majority of your business dries up.
>> In a statement provided to TechCrunch, the company’s CEO Eric Wu said that 35% of its employee base would be eliminated to “ensure that we can continue to deliver on our mission.”
Do they really need to use such coarse language as "eliminated" - these aren't badies in a computer game, these are real people whose lives could be seriously derailed by losing their income.
I totally agree. The word eliminated is surprisingly common in the US but I think it has violent connotations. Alternatives are harder than I thought but separating, off-boarding, and reduction in force (RIF) might help depending on the context.
Personally, I would be much more offended by a company using corporate speak like "off-boarding" rather than the more direct and accurate "eliminated".
As a Brit (residing in Australia), US communication always feels so direct and littered with unnecessary complex words.
A few of my colleagues dread speaking with US counterparts because they always come across as condescending (when they're definitely not meaning to be).
Pinterest went down briefly yesterday and I was alarmed that its funding had been cut off. Many of us visual designers rely on it. Pinterest is one of those companies that may or may not be a Unicorn, it looks like it has a viable path to profitability but who knows.
I suspect this would have happened sooner if it weren't for the 2017 tax act. Corporate income tax receipts alone dropped by almost $100 billion the year after it was enacted, which is almost 2 million jobs at an average $50k/year.
I'm sure a lot of that went to the corporate bottom line, but the individual tax cuts were even larger, which also contributed positively to jobs.
The hotter the economy is, the farther it's going to fall when something like COVID-19 hits.
none of this is unexpected. most of SV VC backed businesses are not sustainable. so the first instance of pressure, they crack and fold. and worse everyone is drunk and high on their own kool-aid. instead of iterating quickly on products they focus on playing around with tech. for business instead of getting paying customers, they focus on the next round. instead of having few expenses as possible, they would rather have a ice sculptures
I'm still amazed that companies like Zume were getting funded in the first place. Not that there was anything inherently wrong with what they were trying to do, but just... was it even appropriate for a startup to be taking on these tasks.
With Zume specifically, they were working on compostable packaging. Great... though most people aren't going to be able to actually do composting. If this packaging does perform as good or better than conventional plastic packaging, why does Zume need to do that? Is it really central to their mission?
Oh, I met the Zume guy last year. His whole thing was to sell the idealized future without worrying about whether it was feasible in the present or even the medium term - if he could just convince people to keep funding it, he’d make it happen. If an engineer said - real example
here - you can’t charge an electric delivery truck in 5 minutes without melting the charge plug, he’s say “then we’ll refrigerate the charge plug,” they say you’d need more than refrigeration you’d need to pump liquid nitrogen through it, he’s say “great, we’ll pump liquid nitrogen through it”
Sort of like the Fyre Festival of startups, really
Someone must have said “pizza delivery isn’t green because of all those boxes” and his response to was have someone invent a new box. And then ship the first attempt without worrying about whether it’s food safe! Well, it sounded great as a slide in a pitch deck.
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[ 3.7 ms ] story [ 320 ms ] threadOne thing I don't see in these announcements are extended exercise windows. That would be a basic thing to offer employees, and someone should keep a list of HR/Finance/C-suite people at companies that do or don't do this during this period.
PTE = Post-termination Exercise
There is no requirement for severance in California!
Tech just has more non-essential, nice-to-have companies than other industries.
https://en.wikipedia.org/wiki/High_tech
Particularly the cited reference, the OECD definition:
Hatzichronoglou, Thomas: "Revision of the High-Technology Sector and Product Classification", OECD Science, Technology and Industry Working Papers, No. 1997/02, OECD Publishing, Paris.
https://read.oecd-ilibrary.org/science-and-technology/revisi...
Page 7 specifically divides industries into four technology levels, high, medium-high, medium low, and low.
Given J.S. Mill's wonderful definition of technology, 'the study of means", there's little in human activity which is ccompletely atechnological. There remains, however, much that is quite some remove from the cutting edge.
In the technology adoption lifecycle, high tech are innovators. An early-adopter firm is itself still not high tech itself.
https://en.wikipedia.org/wiki/Technology_adoption_life_cycle
I don't think they will ever represent "most tech companies," though.
It is just a vitamin compared to other things companies/people are paying for. Nothing wrong with being a vitamin (you can be vastly successful) but it’s the first expense that is going to get cut in a recession.
There are some business models that are attractive when capital is cheap, but not so great when the tide goes out and you suddenly have to be a real business, because capital is no longer freely available. I would propose that this is different than the discretionary businesses you describe, that are sustainable outside of extraordinary economic circumstances.
You can see this in action with the healthcare system in the US, being dependent on your employer for healthcare gives them a huge leverage over an employee, business (on average) will always fight against policies that remove their leverage towards a more equal field.
I personally wouldn't be that harsh. IMO, I used to come across a lot of founders who just didn't understand the point of running a business.
It's an easy trap to fall in when there's lots of investors looking to put their money and willing to work with 1 in 10 success rates.
[0] https://en.m.wikipedia.org/wiki/Shakeout
I know 2 (SoftBank funded) companies that are in trouble.
https://en.wikipedia.org/wiki/Fucked_Company
Without those traits of how utterly crazy startups could be back then FuckedCompany wouldn't be so much fun.
I’ve been in some hilariously elaborate offices housing companies with literally no plan to ever generate revenue.
It's been one of my best purchases in terms of ROI. Used it almost daily when I worked remotely for a couple of years and it's the only piece of furniture I brought with me when moving abroad some 5 years ago, I'm sitting on it right now and it rolls around as smoothly as when I got it, all the adjustments are working flawlessly and the only damage it has are some minor cosmetic ones.
https://nymag.com/news/intelligencer/21364/
> Aerons were hailed as triumphs of industrial design and were a whole different beast from the overstuffed leather power chairs that dominated the Old Economy. “They’re not in my mind an example of hubris as much as they are an example of companies trying to treat their staff more generously than they could actually afford,” says information architect Chris Fahey.
They were the most visible symbol of the excesses of the dot com startup office. The new pool table, the foosball table, ping pong table, espresso machines in the break room in the office that they just moved into. The chair is the one that people can point to being common to everything (and was also part of the stuff that was getting sold after the 95% layoff).
These are not companies that had lasted years to get the value out of the chair but rather in the range of months to a few years. They were spending money like it was free in hopes to get acquired before they had to sell it all and try again.
The chair? I love it and I would have seriously considered (gulp) another a month or so ago instead of a different mesh chair if I had realized that the refurbished ones were as affordable as they are.
Speaking of blasts from the past - when was the last time you saw an information architect?
And, given the number of dotcom startups compared to the number of successes, it kind of was. If those startups had been focused more on making a profit instead of unmeasured 'growth' or some strange notion of 'coolness' then maybe more of them would have survived.
Office people who make fun of good chairs are the whitecollar equivalent of shop/factory people who make fun of hearing protection.
Perhaps it's time to focus on startups that actually generate revenue and high profits and invest in technology that is a good for everyone, such as healthcare rather than 'nice to haves' which have no plan for profitability.
As strangely predicted here: [0]
[0] https://news.ycombinator.com/item?id=21627809
With Theranos the experts were skeptical that the product was theoretically even possible, and they never demonstrated it working to anyone. All the “demonstrations” involved cheap tricks of shuffling people from room to room so lab techs could manually process the samples.
Furthermore anyone doing basic due process could’ve gotten a traditional lab test and compared to the Theranos tests, exactly like investigative reporters did later. Such an obvious test would’ve revealed problems much earlier, and nobody on the inside decided to try that.
At least with Tesla you can actually buy a car and actually drive it.
The experts raised the red flags very early that what Theranos was trying to do didn't appear to be scientifically possible based on current knowledge.
The whole point here is making some generic statement about an entire industry being a good investment is a simple-minded opinion. If this made any sense, the entire economy should be made of only healthcare companies, they're just so good, right?
Must "unicorns" are taking advantage of various levels of market fraud, on one side you have Theranoses, somewhere in the middle you've got WeWork, and far on the other end is Uber. All unproven, ridiculous ideas that are not making society better, but rather serve solely to funnel money into the hands of a few wealthy investors.
The American dream is finally dead, and it's SV that killed it.
Lots of VC backed companies fail. Many try to pivot. Had Theranos not been lying through their teeth and were actually developing tech, they probably could have pivoted to a slightly different direction or application.
Sure, maybe you can't diagnose an individual disease from a fingerprick, but maybe you can get useful data by doing it every time someone hits the doctor and looking at trends. Maybe you can get okay information from much smaller blood draws. Maybe you can optimize where the blood is drawn. Maybe you can get information from other fluids than blood.
There could have been useful science coming out of Theranos, but with con-people in the driver's seats, that was never going to happen.
> Many try to pivot.
Theranos did. Originally they wanted the machines in every home, then they changed tack and tried to make more conventional testing equipment with fewer capabilities. Even then, what they wanted to do wasn't possible. Theranos was lead by a college dropout. The chance of them ever doing anything productive in the biomed industry was nil. They turned to fraud because everything else they tried failed.
FYI, lots of great companies were built by college dropouts. Microsoft, Apple, Facebook... on and on. That has nothing to do with it.
Were all those investors duped?
Like all really good cons, you need to select good marks to pull it off. The way investors believed that someone else must have done due diligence on the product and the technical background was probably engineered from the start.
But the nominally sophisticated investors drank their own cool aid and didn’t take the most basic due diligence steps at multiple points in this journey. They absolutely were in a position to know better, and got greedy.
In any case, the blanket assertion that healthcare companies should be invested in and they are "good" is stupid and should be scoffed at. Saying otherwise is ridiculous.
California has been drinking the kool-aid for a bit too long, this is just exposing the pitfalls of allowing wealthy VCs to choose winners and losers by funneling billions of dollars into ridiculous and unprofitable ideas.
Is it really "instead"? VC makes up a tiny percentage of investment overall. Most traditional businesses should get a bank loan. Amount of money for bank loans >>> money for startups IMO.
Anywhere from 25% to 75% of biotech IPOs in any given year are pre-revenue or unprofitable, depending on how the market is doing. That's obviously a small piece of the healthcare market in total but until the crisis, most other high growth healthcare company were moving in the same unicorn direction because of the easy access to capital.
The problem isn't the startups, its the investors who are advising and incentivizing everyone to grow out of control because they're sitting on too much money and can't find anywhere else that gives decent returns.
Billion dollar biotech companies can evaporate almost overnight, especially during a fiscal crisis. All it takes is a clinical trial gone wrong (or a competitor's gone right) and most will not be able to find enough capital to keep going. Without revenue, their survival depends entirely on the FDA and investors. It's a binary result without many options like downsizing, hunkering down, renegotiating debt, or seeking a bailout except a massive down round acquisition (or government intervention).
After FDA, you're not done: the company must then convince doctors to prescribe the drug, and health insurance to cover it.
All takes years, and requires investment. The estimate is that it now costs $1B+ to develop a new drug and bring it to market.
It helps that we provide a service that is still in demand with some modifications. We've been working hard to convert our in person appointment inventory to telehealth availability so that people have some basic access to medical care. Obviously this benefits us, cause it helps us keep the lights on. But it's also crucial for doctors - some of whom have seen their business almost go to 0, and patients who need to find ways to access telemedicine.
And for those in here who have been laid off - we are hiring software engineering roles as well as sales rep roles. Check us out if you just lost your job.
Thing is, there is a lot of focus on such startups/companies you describe...we all choose what we want to focus on. 10+ years in startups/tech and I know little (care even less) about "unicorns" considering there are far superior companies with legit model and justified valuations.
> invest in technology that is a good for everyone
'Nice to haves' are good for everyone. People want to have fun in life, not just work, eat, sleep, and go to the hospital...
There aren’t going to be any large gatherings or sporting events for the foreseeable future, lots of people are starting to wear masks and are doing much better as far as hygiene and social distancing are concerned. Why _can’t_ we start to think about getting things to slowly go back to normal? Keep the elderly (way easier for them to quarantine) and sick at home. If you can work from home, continue to do so. Everything else, figure out how to make it work within the framework of social distancing. There has to be more than a choice between “total lockdown” or “everyone’s gonna die.”
Why do you think that is? Because the stay-at-home orders worked. NY is the worst case scenario and you want to stop things before they get that bad.
If we had a magic dial for precisely tuning social distancing measures to cause minimum economic harm and death, we'd use it. Since we don't we have to err on one side or the other. So far we've erred on the side of caution, accepting short-term economic damage. As things get less crazy these measures will be gradually scaled back. It doesn't mean they were never necessary.
Y2K is going to be a big deal if we don't do anything about it. We do something about it. People complain Y2K wasn't a big deal.
That, like this, means we're doing things right. Maybe we're going a little extreme, but the alternative is likely worse, and there is never a magic dial to spend just the right amount of effort/money/time.
It's unfortunate that it's so easy to find preparation wasteful when it ends up not being necessary. But, we all have different life experiences.
To be fair, though I agree with you in general, NY-- esp NYC-- is much more dense than the rest of the country and as a result R(effective) may have been much higher there than other places. It may be the case that much stronger measures were needed there then in many other places.
So while it is true that part of the reason other places are less bad is because the policies worked, differences between the locations may also play a significant role.
The interior of the country doesn’t have the infrastructure to support exponential growth. Nurses and doctors and hospitals being idle is a sign that we chose the SF path, not the NY path.
The economic impact is of course absolutely terrible and this is shaping up to potentially be as bad as the Great Depression was. But letting the virus ravage small towns and cities without adequate support would be worse both economically and in terms of loss of life.
Regions hardest hit by COVID-19 seem (informal take) to have largely been large, dense, sprawling cities. with poor public health infrastructure or responses.
In the US, it's currently mostly Northeast cities, generally surrounding New York, doing the worst. Wuhan (11 million) is also huge. Milan (Italy), Madrid (Spain), Tehran (Iran), London (UK) have also fared poorly, especially relative to their countries.
Outbreaks in less populated regions can and do occur. -- though often within institutional populations or equivalents -- cruise ships, retirement / nursing homes, prisons and jails, as well as anti-science religious groups, notably.
And not all megacities have been hit, especially those with solid monitoring systems, response plans, and infrastructure: Hong Kong, Seoul, Taipei, Singapore, especially.
But this is a pattern to watch going forward.
Developing nation megacities seem at high risk.
Unfortunately, both options are not mutually exclusive
Now we know the virus is not quite as deadly as anticipated (around 2%). And we know the economic impact is disastrous (+15% unemployment in the US after 3 weeks). So the strategy will have to be re-evaluated eventually.
My opinion is that politicians taking the decisions are too remote from people experiencing economic hardship, so they will let the economy get much much worse for way too long.
The only thing that might matter more broadly than prosperity/poverty is life and health.
https://en.m.wikipedia.org/wiki/Hooverville
Oh, then the lagging indicator which are deaths of despair will surely be worth it: https://www.npr.org/2020/03/18/817687042/deaths-of-despair-e...
By delaying the formal response it would have been possible to get most of of the economic harm of distancing while only getting a small part of the benefit.
Many people started distancing in the couple weeks before the shelter in place orders started. I know people that quit jobs to get away from the public, etc.
Yet many of those people who were increasing their distance, lowering their economic activities, etc. were also living with others who were in denial about the pandemic and where nothing short of a vague threat of citation/arrest or a closure of their hangouts would cause them to reduce their interaction... at least until people they know started dying, which would be too late for intervention (yet at that point they'd still drop out of economy!). In a "no order" world, you'd still get most of the economic hit of that household shutting down-- but they might often still get the infection, contribute load on the hospitals, and potentially die because one member of the household was less responsive to common sense.
Various legal and economic mitigations would also be less likely to exist absent an official response.
1. Essential+Unaffected: demand will be steady because there is no other choice, i.e. food, communication, ecommerce.
2. Horribly Affected: maybe even illegal to open right now, and when they open demand will be down significantly i.e. restaurants, bars, live entertainment, travel, some segments of education like language schools that cater to international, conferences and trade shows. Maybe back to full strength in 2 years but not going to be fun for a while, huge hit to demand.
3. Affected proportional to total global economy: If the overall economic activity goes down 20%, some businesses are going to track that. Transportation, business services, maybe banking.
The governments of the world certainly have the ability to stimulate asset bubbles, but I'm not sure that they can generally stimulate business activity other than on the demand side, i.e. rising incomes for labor. I think there could be a stratification of national economies performance over the next 2 years based on the ultimate success of their COVID-19 response. I'm seriously considering if I should try to predict the most robust regional response and look at moving there post crisis for the next 2 years or so. I think there could be significant differences. Not necessarily who is suffering the least, but who is going to emerge most vigorously.
Same...always better to thrive than to survive and we all get to choose :)
I have a friend who owns a factory in a very unsexy niche industry (packaging). They're relishing this crisis, because they manage the business very conservatively in terms of cash flow and leverage, and are expecting many of their competitors to go bankrupt in the near future. When the dust settles, they'll be one of the few left over, which means they can charge much higher rates. This'll likely be the story in many industries.
Rich monopolies like Google and Facebook are going to do fine. (And note that both of them are still hiring, meaning they can potentially clean out the supply of engineers while many of the newer growth unicorns have instituted hiring freezes.) Marginal players in competitive industries are going to get killed.
Both of those are primarily dependent on ads for revenue and ad spending is already dropping precipitously, as far as I've heard?
[1] https://news.ycombinator.com/item?id=22884042
A contraction of 20% only puts us nominally back less than a decade. People didn't have to be sacrificed back then, and they don't today.
There are interventions we do need, but if everyone took a 20% hit as a group instead of a de facto Hunger Games, it wouldn't be nearly as ghastly.
Off topic, but that is a brilliant framing. I'm going to steal and use that repeatedly.
This time, it's global and nearly every sector is affected; there won't be a place to hide. The US is already at unemployment rates not seen since the recessions of the 1920s/1930s and the bleeding hasn't stopped yet.
These unicorn collapses are just the rumble, not the avalanche itself and anybody not terrified right now, darned well should be.
That probably is why the shut down and lack of demand line up so closely for businesses in the Bay Area.
Either way, Inslee and Breed deserve more credit. Preventing a crisis is superior to responding effectively after its started.
They both started off as a complete joke on this. Cuomo has at least since been improving, but de Blasio remains a complete joke. He's incapable of so much as even closing some empty streets (or some lanes on streets) to give pedestrians more space to spread out. Other cities have been doing this to great success, but de Blasio has only ever understood things from the perspective of being behind a windshield.
The disease hit New York first before it hit anywhere else in the US and hence had a lot of time to develop. I heard from one source, that it was already present in New York back in december and that one of the first worldwide cases came to New york early. that was from a Joe Rogan podcast episode.
Scroll down and click "city" instead of country. SF bookings on OpenTable were consistently down starting the last week of February. Your restaurant might have had different performance for a number of reasons.
They would have nearly all vanished once the hospitals started filling up had there been no formal order. And then it would have lasted longer.
I also skipped a former colleague’s leaving town party for the same reason.
So I would have needed to have stopped doing things several weeks prior to the government actually getting off its ass and acting in order to be safe, but I didn't have the understanding of how widely in the community it was already spreading at that point, or how severely we were under-testing. As a city we were unbelievably late to act, and the over 10,000 dead in NYC alone (with ~750 more every day) are a testament to that.
It's the peak of absurdity to imagine the city somehow going on as normal under this unbelievable toll if only we weren't being told to shelter in place, when the only street noise you can hear a lot of the time is ambulance sirens.
Wishing you a speedy recovery fellow HN reader friend.
I've since mostly recovered, but my lungs are still giving me problems (this is apparently expected; it can take months to recover from severe pneumonia, so I'm doing better than that at least). I haven't gone running in over a month whereas I used to go several times a week, and even stuff like playing Beat Saber has kicked my ass. Ironically, wearing masks is hard for me now because they interfere with how much oxygen you can take in, so I can wear them while walking leisurely, but I start walking faster, or try to carry a heavy load (groceries), or climb stairs with a mask on, then I really start feeling shitty. So I haven't been wearing a mask while outside and only don one for being inside stores (which is fine, it's been way more than 14 days since I last experienced any symptoms of infection).
So yeah, a weird illness, quite different from the usual human viruses like the cold flu that we all know and "love". I don't know if I have any tips other than don't expect to get better from it quickly (you don't bounce back in a few days like you would from the cold), and lying prone helps you breathe better (but I fortunately never got serious enough to the point where I was struggling to breathe even while being sedentary; it was only after activity). Oh, and if you do anything like smoke or vape (I don't), quit that right now. You want your lungs to be in the best possible condition before going into this because you're gonna lose a lot of capacity and if that puts you below the level required to sustain your basic sedentary metabolism, you could die, or at the least require supplementary oxygen in a hospital. Heck, take up running or some similarly aerobic activity now if you haven't already; that'll help.
Isn't that entirely hypothetical though? Find it hard to take such statements seriously when the experience worldwide is so widely varied.
The evidence is clear that lockdowns have caused this economic impact, how can anyone actually make accurate estimates of the alternative?
I think a lock down of sorts would've happened eventually, no matter what. Once restrictions are relaxed, a large percentage of people are still going to be very, very cautious. I will not board a plane or sit in a movie theater any time soon.
We moved the economic impact earlier to trade down health impacts. In order for there to not be some similar level of impacts, we either have to imagine a scenario where the disease was many times more benign than it has demonstrably been in some places, or where people ignore news as things get sufficiently dire and continue business as usual rather than dramatically adjusting behavior from normal circumstances. And both those things have to be true in order for the latter not to make a terrifying contribution, which would also make dire economic impacts: dead or damaged people are much harder to get back into the demand side of the economy than housebound or unemployed people.
If you're thinking of worldwide counterfactuals, and know of any society that has a story involving staying broadly open that didn't use effective mass testing and contact tracing early, then specifics would be an interesting contribution.
Additionally, we have saved lives (and animal lives) by shutting down parts of the economy. That should be included as a silver lining to the whole thing.
That's not a fact. That's your opinion.
The way I read it is that we have no reason to think the economic drop would be less severe if we didn’t have a shutdown. This is because people dying could hurt the economy just as much, if not more.
It is assuming facts not in evidence to suggest the economy would be better off with more deaths but less of a lockdown.
And yes assuming immunity, which seems likely to be the case for most people, even if not permanent.
*assuming survival
The death rate isn't likely to be that high (even without medical treatment), but if even a million Americans die, that's a cost of $10T to the economy right there.
You can easily why see shutting things down to prevent all those deaths is worth it.
We did it because risking 30M pneumonia victims was unthinkable, even before we count the extra heart attack/assault/cancer victims while the hospitals collapse.
The numbers work out; it's absolutely worth shutting down the economy for some number of months to prevent the loss of a million lives. Obviously the numbers don't work out to do so indefinitely, but for the one month so far and the upcoming few, definitely.
"It's entirely fair to conclude" does not mesh with "Time will tell whether this was the right approach".
If the same protective effects could have been achieved with a less disruptive move, then your conclusion would be justifiable. It is not, however, at all appropriate to jump to that conclusion yet-- time has not told.
It will probably be years before good conclusions can be drawn from this due to the difficulty of correcting for starting conditions and intrinsic factors.
Sweden is a relatively insular, already 'socially distant' community. It appears infections there started with fewer parties later. So it would take considerable analysis using data that doesn't exist yet (including the eventual outcome in Sweden) to draw any conclusions about what might have happened had their approach been applied to, say, NYC.
Within the US-- a more comparable population-- there are many locations where the response was weaker and so far the results don't look especially good.
Ultimately the fact remains that the majority of the economic "losses" we have now are hallucinatory. When a building is bombed it is physically destroyed and the labor and most of the materials that went into building it are irretrievably lost. The people inside are killed and cannot be productive in the future. In our current crisis, our losses are primarily losses of confidence (sure, there are some cases of agricultural goods spoiling). The people our response have saved but left without work are still alive and can go back to work when the crisis is over, particularly if we act to make sure they're protected in ways other than their health. Even if we cared exclusively about the economic consequences of this event it would be extremely foolish to favor the increase destruction of productive human lives in order to optimize for short term market confidence.
It doesn't mesh because you're omitting, "...could have led to substantially less economic loss".
It won't be years before good conclusions can be drawn. Some states are already reporting that cases have already gone past their peak. Most countries that had outbreaks in March are seeing rates of cases going down. We'll probably be able to have a good idea of the scope of this pandemic by the end of summer.
The economic harm is not hallucinatory. What is hallucinatory about 3 million people out of work in the span of a few weeks? You write that these people can go back to work when the crisis is over, but that is not true. If your employer goes out of business, or has too few customers to sustain as many employees, people are going to have to find new jobs. You also write about the loss of productivity in terms of the people who died due to the virus. That is something to account for, but the bulk of the virus' victims are not of working age.
Whether or not you're comfortable with valuing human live does not alter the fact that we put value on life all the time. Whether it's deciding insurance payouts, worker's compensation, or healthcare spending we're constantly expressing the value of lives in dollar terms. Current predictions put the economic impact per life saved by social distancing at ~$190 million. Even if we assume that social distancing is only responsible for half the economic downturn, we're still talking about nearly $100M per death averted. Saying that this is excessive, and concluding that restrictions were excessive is entirely fair. How much money would a state funded healthcare system spend on its worst case patients? A lot less than $100 million.
That sounds, on the face of it, implausibly high. To run some numbers - estimates of how much of the population would be infected without countermeasures run 40-70%, and death rates run 1-2% (this would be much worse if hospitals were overrun by an estimated 8 million ICU patients over a few months, but we'll use very conservative numbers). The US population, with 40% infected and 1% of those dead, leaves us with about 1.3M deaths, times your $190M per life is $25T, or about 15 months of US GDP. Is that really the claim here? The equivalent of bringing GDP to 0 for 15 straight months?
Italy and Denmark have initiated random testing have revised death rates to be far lower, less than once percent. Random testings substantially increases the denominator, since it captures the vast majority of people who did not have serious symptoms. The infected cruise ship had a death rate of 0.7%, which is even more surprising giving the older average age of cruise passengers. The fact that places are reporting higher death rates than a population disproportionately older should have raised eyebrows. Again, the data itself is not suspect it's failing to account for the selection bias it imposes. But this does result in some very skewed conclusions on your end:
> The US population, with 40% infected and 1% of those dead, leaves us with about 1.3M deaths, times your $190M per life is $25T, or about 15 months of US GDP. Is that really the claim here? The equivalent of bringing GDP to 0 for 15 straight months?
1.3 million deaths is an order of magnitude more than what is being projected. Earlier this month, the range given was 100,000 - 240,000. Now this projection has been lowered first to 80,000 and now to 60,000:
https://www.cnn.com/2020/04/08/health/us-coronavirus-wednesd...
https://www.usatoday.com/story/news/investigations/2020/04/0...
https://www.bloomberg.com/news/articles/2020-04-09/fauci-say...
You don't think anyone else has noticed this? The estimates have been based on lower numbers than the raw data.
> The infected cruise ship had a death rate of 0.7%
I agree that the Diamond Princess was particularly interesting because of the high testing rate. Your number is very clearly wrong, though. The actual numbers reported was 13 deaths in 712 cases, or 1.8%. They also have 55 unresolved cases, and someone who has been sick for this long is looking at worse odds than the general population.
> 1.3 million deaths is an order of magnitude more than what is being projected. Earlier this month, the range given was 100,000 - 240,000. Now this projection has been lowered first to 80,000 and now to 60,000:
First of all, those numbers are going down precisely because of the measures you're complaining about. Second, they're clearly implausible. The 60,000 estimate is from 9 days ago. Meanwhile, the current official count is just shy of 40,000, and the excess deaths have consistently been double or more of the estimate for COVID-19 deaths (Italy, for example, is reporting 6x [1], while NYC was until a recent change in their reporting showing 2x [2] - but we haven't seen these changes anywhere else in the country).
[1] https://nymag.com/intelligencer/2020/04/coronavirus-is-only-...
[2] https://gothamist.com/news/surge-number-new-yorkers-dying-ho...
If we assume humans are slabs of talking meat which are worthless except for their economic properties (productivity and consumption), it is still not a likely economic win to let enormous numbers of them die because the economy is made of people. If you kill the people you kill the economy directly-- and, of course, people aren't going to continue like normal while others are dying around them regardless of what state policy is.
So you are making a false comparison of the economic cost, the alternative is not "do nothing, let millions of innocent people die, and have the economy continue as if nothing happened". That isn't a possible alternative-- the economy couldn't continue as if nothing had happened if millions have died or are dying.
Imagine for a moment, for the purpose of discussion, that we didn't need to keep food, medical supplies, power, etc flowing during the intervention. In that silly and unrealistic hypothetical it would be reasonable to pause the economy-- basically say "okay, for the next year all contracts are paused, all transfer of value prohibited, and in a year we just start 2020 over again for all legal and contractual purposes". Just like weekends are often disregarded in contracts but at a massive scale. No businesses would fail, nothing would change (except the people that died along the way).
It's not possible to actually do this fanciful thing, because, unfortunately, we still need to keep utilities, food, medical services, etc. running and because everything is interconnected you can't just pause everything else. But if we could it would be a completely reasonable response.
To the extent that, e.g. businesses fail due to this is a failure of our imagination and political will. Other than the small amount of actual damage done from spoiled goods (and deaths from the pandemic)-- all other economic consequences are a product of our beliefs and actions, and are not actual unavoidable losses in the same way that a death is. The stimulus is just one (half-assed) example of the potential ways that we can act to mitigate the direct economic harms while still protecting lives.
Of course, I do also think that people's lives have tremendous intrinsic value, but that isn't part of my argument here. Instead, I was attempting to argue that even a dispassionate spherical economist murder bot should-- if it were behaving rationally-- respect that the irrecoverable loss of many human lives is something of tremendous economic significance because of the central role of as agents and targets of all economic activity.
You're also disregarding the potential economic benefits of this disruption. Causing weak businesses to fail can be economically beneficial in the long run, as might the radical increase in telecommuting and video conferencing, or the development of more pandemic robust services (e.g. will we finally see automated grocery stores become a thing?) or the numerous other ways that this event might help the economy escape other local minima.
The idea that the economy would collapse due to the amount of people dying of coronavirus does not hold water. Even if widespread infection did occur, the mortality rate among working age people is well below 1%.
You can't argue against measure X by using the successful results of X to say that X didn't work in the first place!
And right that the question is to compare the actual death toll to the death toll that would have happened without social distancing. Say 310,000 people would have died without social distancing (more than 5x the current projections). That's 250,000 additional deaths. That would be $100M per death averted assuming a $2.5T cost of the social distancing measures - that's ~10% of GDP. The US so far is expecting losses about twice that.
There is substantial evidence for other viral infections that infection severity (spanning from asymptomatic to dead) is related to dosage.
There is limited information so far for covid19 but some informal evidence that this is true for it too: Young healthcare workers appear to be dying a a much higher rate than similarly healthy members of the public who are sars-cov-2 positive.
If this is the case, social distancing will reduce the number of people who get serious infections and reduce the number who die.
Even if not, preventing overload of the hospitals will significantly reduce the number who die. Delaying infections until we better know how to treat the disease from anti-virals to simply care techniques will almost certantly reduce the number who die.
> Say 310,000 people would have died without social distancing (more than 5x the current projections). T
CDC's projection was 1.7 million dead before accounting for hospital overload.
If you have a study that projects what the fatalities would have been with a shorter isolation period (e.g. only march and first two weeks of April), that would be noteworthy. Pointing to this early CDC study as a figure for what would have transpired had the economy not been shut down is not sound.
1. https://nymag.com/intelligencer/2020/03/cdcs-worst-case-coro...
Not so, for example the mortalities from the diamond princess are _higher_ than the ones being used to drive those projections. The fact that it takes time for people to die has held down the estimated mortality during exponential case growth.
Effectively every reputable source is observing that the early death rate projections were substantially inflated. China's reported death rate is 0.5% - and they're the ones with the most experience with the virus. Germany only recent started random testing. They previously had a fatality rate of 2%, but after random testing they found that 14% of the population already had antibodies - thus lower the death rate down to 0.37% [1]. There's a vast difference between asking "out of the people who got sick enough to go to the hospital, what portion people infected with coronavirus died?" and "what portion of people infected with coronavirus died".
You're using old data. 2% of the diamond princess infected have died so far. Another 7% of the infected are still reported as not recovered yet.
https://www.mhlw.go.jp/stf/newpage_10867.html
I would love to be able to look inside your head and see what you think society would look like right now in the middle of an uncontained global pandemic with everyone just going about business as usual, continuing to pack bars and restaurants, no companies cutting back on jobs, etc. It's an utter, complete fantasy land.
That figure includes all mortality from pneumonia, a minority of which is caused by the seasonal flu.
Social isolation happens to have been (responsibly!) instituted as a matter of public policy, but it was going to happen via fear at some point anyway. The economics doesn't care, really.
Most cases undetected. Vast majority of people hit hard by it are the sickly elderly, people largely already out of the economic game.
This would have barely been an economic blip if not for the lockdowns.
[0] https://www.vox.com/the-weeds [1] https://www.congress.gov/bill/116th-congress/senate-bill/354...
https://www.jdsupra.com/legalnews/cares-act-can-private-equi...
Growth companies (like unicorns) might be a hefty chunk, but I suspect that a lot of Amazon's revenue comes from Fortune-500 companies, academic research labs, and other major tech companies (like Netflix or Snapchat) that don't run their own clouds.
Interesting to keep an eye on the CA EDD Warn Act page and see who else shows up:
https://www.edd.ca.gov/Jobs_and_Training/Layoff_Services_WAR...
The data may not be too reflective of the current situation on the ground, however. From the website:
"Note: Executive Order N-31-20 (PDF) temporarily suspends the 60-day notice requirement in the WARN Act. Visit COVID-19: WARN FAQs for more information."
I guess Covid will be a good time to test how much of this is all hot air. I imagine those who provide or can pivot to vital services reliably will survive. These are the kinds of times where capitalism thrives, provided a majority of actors are operating in good faith.
Do they really need to use such coarse language as "eliminated" - these aren't badies in a computer game, these are real people whose lives could be seriously derailed by losing their income.
A few of my colleagues dread speaking with US counterparts because they always come across as condescending (when they're definitely not meaning to be).
Do try to help out these individuals in case your company is hiring.
I'm sure a lot of that went to the corporate bottom line, but the individual tax cuts were even larger, which also contributed positively to jobs.
The hotter the economy is, the farther it's going to fall when something like COVID-19 hits.
The LPs are the ultimate marks.
With Zume specifically, they were working on compostable packaging. Great... though most people aren't going to be able to actually do composting. If this packaging does perform as good or better than conventional plastic packaging, why does Zume need to do that? Is it really central to their mission?
Sort of like the Fyre Festival of startups, really
Someone must have said “pizza delivery isn’t green because of all those boxes” and his response to was have someone invent a new box. And then ship the first attempt without worrying about whether it’s food safe! Well, it sounded great as a slide in a pitch deck.
(exit to fix typo)
A certain Boston based data science startup comes to mind.