HACKER Q&A
📣 TeMPOraL

Economy after coronavirus – what can we do?


As all of us are acutely aware, the current pandemic is dismantling the economy worldwide. With luck, few months from now the world will either recover or adapt to the new reality, but we'll still end up with seriously damaged national economies. Particularly hurt are all the people whose livelihood is tied to physical workspaces - gastronomy, services sector, manufacturing, etc.

My question is a call for ideas and analyses. What can we do to help our economies recover faster? That is, to help those badly hurt by present disruptions recover? What do you think the needs will be? What market opportunities?

Don't be reluctant to share your best ideas - after all, execution is king, and in the post-pandemic world, there will be plenty of space for competing approaches.


  👤 geofft Accepted Answer ✓
One interesting idea I've heard recently is gift cards - essentially a way for people with enough disposable income to sustain gig workers across a shutdown. I know I'll be back at my local coffeeshop and taqueria as soon as I can. I know I'll be taking Lyft again. I know I'll be wandering through bookstores and going to theaters and so forth. And I'm not spending that money right now because I'm staying at home.

If I can buy gift cards for these sorts of services and that money can be used to fund workers, that's going to help them with cashflow. There's still going to be this several-week gap of lattes and tortas that went unpurchased, but it can be smoothed out a little bit.

There are logistical difficulties to sort out here to make sure money gets to the right place, including that food service workers rely on tips and that gig workers (like Lyft drivers) aren't the platform (like Lyft itself). So probably this would have to be worked into the concept of a gift card to make it solve the problem properly.


👤 bwb
Boost unemployment payouts in the USA, make it 60 or 90 days with ~80% of what you made at your job. Then taper it down after that on a monthly period (and you can improve that in times of crisis). You will need to pump up contributions, but the gov can seed that with bailout money. Long term you gather those payments with a progressive tax per business, not the silo model we use now. Some countries in the EU do something like this, basically, your unemployment is pegged to your salary.

This makes it somewhat "easy", if a restaurant in Seattle sees foot traffic at an 80% decline they fire their team and hunker down for 2 months. Then start back up once we get this thing beaten. And, this invests in labor/consumption and doesn't have the negative side effect of keeping businesses afloat that shouldn't be.

High rent is a killer, that is a harder one to solve. But, you could start a rainy day fund (and seed it with a bailout). Basically offer a 0% loan to any business that needs to pay rent during a time of officially declared national crisis, but the deal is the loanee has to take ~50% off the rent payment for the month in order to get it. And, make that work its way of the pyramid. The idea being the person running the building takes a hit, the bank with the mortgage takes a hit that month...

Note - In the USA unemployment maxes at 790 a week, and it scales depending on some calculations. It doesn't include tips too so most people who work in restaurants are really in trouble.


👤 michelleby
What industries will be unaffected? Most big tech, media, healthcare. What industries will take a huge hit? Small business, retail and travel. Will this leave permanent effects? My theory is that consumer discretionary industries will struggle and that may last a long time. Biotech may be eclipsed for awhile by the outbreak. It's been said that eventually we would transition to a post-consumer economy and it seems like this outbreak could be a major catalyst to making our goods, services and distribution almost exclusively digital with the exception of food and necessary items. It seems like now is the time to capitalize on escapism and "netflix and chill" culture, (i.e. games, eBooks (or paper books) and VR). I've seen tons of user-generated home cooking/and home projects happening. If your company is direct to consumer and enables people to eat or make perishables like food/bev/cannabis (with some DIY aspect) it seems like a good bet for the next few months.

👤 hanoz
It seems clear to me that the economically productive section of society is going to be in hiatus for a significant period of time, which in itself is going have a massive and widely shared impact on the consumers of their production, but the elephant in the room is to what extent the rentier class is going to take its fair share of the pain.

If families and businesses are going to be hitting pause, through necessity and for the public good, then we can't have landlords expecting to be paid in full all the while.

Of course some of them will take a hit anyway when their tenants go to the wall, but it would be better for all concerned if the economically productive can do what they can, without the threat of the rug being pulled out from underneath them.


👤 ohiovr
Start thinking in terms of years from now, this isn't going to be papered over like last time in 2008. Don't execute any business plan without revenue in sight immediately. Shun all forms of debt. Raise capital. Protect what is close to you. Be safe out there.

👤 forkexec
Amazon, shipping, streaming games/media, ebooks, healthcare, internet-based medical services will be fine.

Many people are about to have enormous amounts of idle time to dedicate towards home-based hobbies, creative projects or entertainment, especially elderly told to self-isolate for several months.

Domestic healthcare product manufacturing will be high-incentivized for a decade or so.

Disposable income industries, especially travel and tourism, will be in free fall for months to a year. Luxury goods tend to also mostly dry up.

New ventures should focus on much improved (and defensible) essentials and better delivery of essentials that aren't as painless as ordering from Amazon.


👤 cl42
I've been thinking about this a lot and will be writing a blog post soon in terms of thinking about risk post-COVID-19. Thanks for asking the question because it's an important one -- it's easy to lose sight of the longer-term implications, given that we DO need to focus on saving lives in the short run.

There are a few things I'd say...

(1) COVID-19 is destroying international trust. The EU nations are closing their borders to each other, there is hoarding of supplies between countries, and stories are coming out now that countries might want to have exclusivity to vaccines. This is NOT supposed to happen with allies, and I think countries will have major trust issues and collaboration issues post-COVID-19.

(2) A lot of the economic stimuli will lead to significant increases in debt, but also NEW monetary and financial strategies. Countries are discussing encouraging central banks to buy stocks, mortgage-backed security, nationalize factories, and more. This means government debt will increase significantly, and corporate debt will be an issue as well. As earnings announcements are made for Q1, Q2, etc... we'll see just how bad this has gotten.

(3) Small businesses will be shutting down. Even if there are debt forgiveness programs driven by government debt (i.e., #2 above), the stress and short-term cashflow issues of many small businesses will likely cause many to shut down.

I can go on and on... I can also provide citations for any part you'd like to see.

Having said all of that, I think a few things are important:

(1) Promote social cohesion. People are scared, nervous, unsure what to do -- organize online events, reach out to people, etc.

(2) When it's safe, SPEND MONEY with SMALL BUSINESSES. I think this will be critical.

(3) Encourage your governments to work with other governments, and speak out against the politicians/governors/MPs/whatever that specifically were irresponsible during this period. Don't let them get re-elected.

... I can go on and on... Just let me know. :-)


👤 Beman30
Ok, I'll be that guy... I think this recession will hit bigger companies rather than smaller one, small means resiliency. Online consumer companies like Amazon wins because of their ability to cut prices, what if: Sending goods will be more expensive than having a retail shop? If manufacturing goods will be cheaper in your home country? I think we will see local industries flourish at expense of multinational who will be not able to change that fast. Any tech business that is able to support local business with their daily troubles and help them cutting costs will build the future.

👤 smarri
My 2 cents. Interest rates are so low that central banks will no longer be able to use that lever to stimulate economies. One idea is salary tax holidays i.e. do not tax wages for a period of time such as one or two months. More money will be in the hands of people to spend in the local economies.

👤 lubujackson
A key issue for parents is kids stuck at home. Parents can't work, even remotely (very well), with kids cooped up for months. There is a huge lack of childcare now and it will be worse on the way back to normal until schools are open.

My idea is to facilitate linking teens to nearby families with younger kids for babysitting. This already happens normally, of course, but in cities like SF it is less common. With dual working parents solving the childcare issue is a requirement.


👤 _bxg1
There are lots of service workers who are about to be in trouble. In places where white-collar workers are staying home, baristas and waiters and Uber drivers are still at it. If they aren't sick enough to be hospitalized, they're probably still at work, because they can't afford not to be.

What opportunities might there be for "Uber for X" that people can do from home? Amazon's Mechanical Turk comes to mind, but I can't think of any others. And usually when the only present solution is a catch-all, there's space for more niche solutions that can thrive by specializing around specific sub-markets.


👤 yulaow
I think that, in the long run, we will see a de-urbanization movement pushed by all the works that, being potentially done from remote, will be done from remote.

This will bring _a_lot_ of consequences like a drastic drop on rent and prices of apartments, a fast reduction of small shop/pub/restaurants inside the big cities, a change in the way universities make courses, etc...

It is going to impact every aspect of life considering we pushed urbanization to its limit in the last 6-8 decades.


👤 buboard
move more of it online. Thanks to decades of e commerce the economy can already function without brick and mortar. More of this, in a health-conscious way (e.g. special uniforms for deliverypeople, drop-off stations for products, contactless payments). It needs to be deployed fast, too


👤 grandridge
Be more self sufficient,localize production

👤 DoreenMichele
This will be rambling, and I apologize.

I run r/GigWorks on reddit and I run some websites aimed at helping people trying to do GigWork.

I've been batting ideas back and forth with someone about a website called The Butterfly Economy, inspired by a comment I made on HN.

https://news.ycombinator.com/item?id=22028732

That website is currently a landing page.

While homeless, I developed an online income. It's never been enough, but it was better than not having it. I've been trying to lay the groundwork, both online and in meatspace locally, to help homeless individuals and others to connect with earned income via the internet.

I'm not getting a lot of traction and I'm not sure there's any point in continuing to push for something that no one else seems to want. I end up feeling like the world would literally rather let a bunch of people die than listen to me and I don't have a solution for that.

And talking about it that way is probably the worst way to talk about it, but a decade of getting kicked in the teeth and not taken seriously has taken its toll. I don't know how to escape that mental space while still stuck in that reality where I don't get taken seriously and so forth.

The old guard never seems to voluntarily step down. Perhaps this crisis is an opportunity.

From what I gather, people online are saying things like "Yeah, my boss, who always told me my job can't be done from home, is letting me do it from home now because of coronavirus. The asshole."

So I feel like we've long had the pieces in place to move to a different way of working and of living, we just dug our heels in and refused to jump on the bandwagon. But people are beginning to embrace it more now that the other option is death, basically.

I think -- and have thought for a long time -- that with 7 billion people on the planet, we need to change how we do things or there will be a massive die back of the human race. We do a lot of things that worked when population levels were lower and I think a major sticking point is germ control.

I'm aware of that because of my medical situation, but I get literally told I'm insane and making things up. So it's been impossible to tell people "I think you should do things differently." That's point and laugh at me, at best.

I'm tired and short of sleep and feeling pretty hopeless about a lot of things. I hope to be more productive on various projects in coming weeks.

And it's probably a mistake to answer this in public, but you and I aren't good friends and I don't want to bug you privately and blah blah blah. So there's some of my thoughts, fwiw.


👤 buboard
put extraordinary effort on developing suitable antiviral and a vaccine in a fraction of the ordinary time period.

👤 ilaksh
UBI