The 2022-23 Economic Crisis Megathread

[Sheilbh]

Fair enough, but as I recall, moving your contract to a new address is fairly straightforward and the penalty fees for early exit aren't horrendous either (could remember wrong though!).

Yeah and the flat I'm trying to buy got pushed back. So it's now going to be November/December (or the worst time to get a new energy supplier

But I think I came off fixed in April/May and I thought I'd be moving into a new place in July/August so it just didn't seem urgent. I was wrong.

[Tamas]

Fed chair Powell was speaking at some central banker vacation spot just now. Among other things seem to be slowly letting go of the soft landing narrative:

Powell: Reducing inflation will likely require a period of below-trend growth.

[Valmy]

That seems hard to believe around here because the economy seems very strong, especially the job market, coming off the pandemic. What would be the cause of a downturn?

[Sheilbh]

That seems hard to believe around here because the economy seems very strong, especially the job market, coming off the pandemic. What would be the cause of a downturn?

Raising interest rates.

I think if there's still growth and you avoid a recession while containing inflation, that's a soft landing.

[Tamas]

That seems hard to believe around here because the economy seems very strong, especially the job market, coming off the pandemic. What would be the cause of a downturn?

Smart-sounding macro people I listen to kind of agree with you that factually there is no recession yet, but most data are coming down and indicating we are heading there. They say the last bastion is going to be the job market. When/if that starts weakening things will start going sour for real.

[Sheilbh]

Interesting summary of European states' measures on energy. Slightly striking that a few countries are increasing subsidies for commuting and I suppose a return to the office could help with energy - heating in single large office blocks rather than every home?

[Jacob]

Interesting summary of European states' measures on energy. Slightly striking that a few countries are increasing subsidies for commuting and I suppose a return to the office could help with energy - heating in single large office blocks rather than every home?

You think homes will be kept cool during office hours?

[Sheilbh]

You think homes will be kept cool during office hours?

Yeah - no?

I have the central heating timed so it comes on in the morning (when I get up) and evening (when I get back) - is that not normal? I try to stick to that when I'm WFH - but it's more difficult.

[OttoVonBismarck]

Home heating and cooling tends to work a little differently. If you let a house get really cold, a furnace can have it up to tolerable temperatures within like 20 minutes of kicking on, so there isn't much reason to heat an empty home--other than some baseline low level of heating to prevent icing problems or pipes freezing.

With cooling, most home cooling systems have to "keep up" with the heating that happens throughout the day or they cannot cool the home at all. If it's a 95F day and you get home at 4-5pm, the house is going to be very hot, and the AC isn't going to get it down to reasonable temp for probably 4-5 hours or more, and a lot of that will just be because it is getting into the evening hours and the outside is cooler.

If you're trying to be energy / cost conscious with cooling, something you can do with a smart system is if say you "comfort" cool temp is 73F, you can put it up to 78F from the time you wake up until maybe 2 hours before you get home, then have it go to 73F at that point and it should be "mostly okay."

A lot of environmental types argue you should never cool a home below 78F or so anyway, but that's never been an indoor temp I consider particularly comfortable.

[Sheilbh]

On that I saw someone on Twitter mention this but I really feel there's a coming split in net zero/pro-environmental types - in part because I was with friends recently and there was a divide on some things. Basically on one side I think you're going to have the more, perhaps old school, conservationist greens who are leaning into things like degrowth and think the solution is going to have to be based on reducing demand; on the other hand you've got a more modernist/future solution which is that it's going to be a new industrial revolution that require significant infrastructure to de-carbonise our world and that can't be done through cutting demand or de-growth.

I'm very much in the latter camp but I think its going to be an important political divide - and (not this winter) but perhaps in the future I think heating and cooling will be a flashpoint on this. 

[Josquius]

Latter camp for me too. We have passed the point of no return so the only options open are onwards and upwards to the stars or back to the dark ages we go. Forever.

Though I'm not sure it need be such a stark division. The economic focus on endless growth need not be intrinsically linked to progressing technology and building of new infrastructure.


On the insulation topic... It seems a really tough sell to me. Its such fluffy stuff (no pun intended) and only pays off over the long term. It seems really hard to get people to accept the actual value of this.
I guess this also fits in with the housing crisis and there being no incentive for landlords to make homes energy efficient.

[Tamas]

I don't think de-growth is ever going to be a significant political force. Setting aside that people calling for it probably don't realise what it means in practice, people en mass won't go for the concept.

Maybe many will go for the "let's make everyone else do it except me" like they do now (although they wouldn't admit it for themselves either), but that's unlikely.

Especially if environmental concerns remain a middle class thing. The middle class can rile against the poor doing damage (like how air travel is their pet peeve for example) but they lack the numbers to bring back serfdom via democratic means.

Some new political force blaming climate change on the middle and upper classes could gain traction with some neo-communist agenda of "de-growth"-ing the better off, I guess, if things go bad enough.

[Tamas]

On the insulation topic... It seems a really tough sell to me. Its such fluffy stuff (no pun intended) and only pays off over the long term. It seems really hard to get people to accept the actual value of this.
I guess this also fits in with the housing crisis and there being no incentive for landlords to make homes energy efficient.

We should move this to the Brexit or climate change topic but if any significant portion of British houses are like the flat we are renting (I think it was built in the 60s or the 70s), then insulation could be a massive help. Bloody hell this country has pretty mild winters but we had to drag our bed away from the outward-facing wall to the middle of the bedroom because our heads were getting so unbearably cold (through the wooden headrest) on our first winter here that it really freaked me out how bad it got.

[Sheilbh]

I don't think de-growth is ever going to be a significant political force. Setting aside that people calling for it probably don't realise what it means in practice, people en mass won't go for the concept.

Maybe many will go for the "let's make everyone else do it except me" like they do now (although they wouldn't admit it for themselves either), but that's unlikely.

Maybe - I think it's basically environmentalism pre-Green New Deal v environmentalism after the Green New Deal. I think that idea and way of communicating green politics have been transformative.

But you see it all the time in Green NIMBYism which is a thing everywhere. I was thinking about it because talking with friends and someone who is very much on the left and always been concerned about climate was sceptical about changing heating systems for housing because it would involve construction on every house/block of flats etc which would be environmentally bad - even though, as I said, the current alternative is most houses burning gas. I think their view was sort of neo-Malthus plus just consuming less. It's not a niche opinion I think it comes up a lot.

I think degrowth won't survive contact with no growth because we'll see that it's bad. But I definitely think it's a big thing in left/green circles.

Edit: I think in part it's an individualist/morality based approach (just like we saw with people shaming others during covid) rather than a collective/political approach so I think it's doomed, but it is, I think, there.

[OttoVonBismarck]

I think if we're trying to make big changes in carbon emissions it really has to start with efficiency standards in the heaviest industries--cement manufacturing, fossil fuel production, and power generation are all massive orders of magnitude bigger than whether our homes are 70F/21C all winter versus 65F/18C. In America at least most people like it warmer than 70F/21C all winter long. I'm personally fine at 65/18C because I actually wear "winter appropriate clothing" and don't dress indoors in January like it's June. But these are going to be minor movers.