If the plane isn't safe and can't be made safe then it's necessary. Also, the claim that Boeing halting 737 Max production will cause a recession seems like FUD to me.
The US's economy is projected to grow 2.1% in 2019 - reducing that by 0.6% would wipe out a major portion of that. And I am inclined to believe that number - 52 planes / month for 12 months at $100m is $62.4 billion directly, and the US economy is ~$20T - 0.6% of that is $120 billion. (so with knock-on effects, I find 0.6% a very reasonable estimate for the cancellation of a year's production. Probably not so reasonable for the 5 months left in 2019, though)
Not spending on A means more is left over to spend on B, C, D, etc. It is not a direct subtraction effect. Just like if you were hungry and the pizza joint was closed, you're still hungry and will end up eating something else.
Political concern would be the micro engineering of small towns focused on single product industries and promises made to them.
Edit: Of GDP refers to a stock. Of GDP Growth refers to a rate of change. These are different.
B, C, and D for small airliners are Airbus, Bombardier and Comac - EU, Canada and China. Yes, there will be some substitution, but it'll still hurt the US economy to lose those sales overseas.
EDIT: Also, "0.6% Of GDP growth" typically means 0.6% as relative to total GDP, not to whatever growth was expected to be. Yes it's stupid, but it's also the standard nomenclature.
And the direct quote from the article is "By one estimate, a production halt would shave about six-tenths of a percent off the gross domestic product growth rate, the financial equivalent of a prolonged government shutdown or a significant natural disaster", which clearly intends for 0.6% to be relative to GDP and not GDP growth.
Not spending on A means more is left over to spend on B, C, D,
That's not how economies work. The people who work at Boeing take home money and spend it in the local economy. That effect happens several times for each dollar taken home. Same thing happens for Boeing suppliers, they pay their people and those people spend in to the economy with a multiplier effect. This, spending money earned by workers, is how the engine of the economy is fueled when it is healthy.
Who do you think is going to be paid the dollars that Boeing workers are spending now, if they shut down?
There's more to the aerospace industry than Boeing alone. Aerospace is 1.8% of the GDP, whereas Boeing is 0.6% of the GDP. Damn impressive to be sure, but considering hundreds or thousands of lives lost are the cost to avoid a slump in that area, I'm pretty sure it's the right choice.
Comments
If the plane isn't safe and can't be made safe then it's necessary. Also, the claim that Boeing halting 737 Max production will cause a recession seems like FUD to me.
The US's economy is projected to grow 2.1% in 2019 - reducing that by 0.6% would wipe out a major portion of that. And I am inclined to believe that number - 52 planes / month for 12 months at $100m is $62.4 billion directly, and the US economy is ~$20T - 0.6% of that is $120 billion. (so with knock-on effects, I find 0.6% a very reasonable estimate for the cancellation of a year's production. Probably not so reasonable for the 5 months left in 2019, though)
Not spending on A means more is left over to spend on B, C, D, etc. It is not a direct subtraction effect. Just like if you were hungry and the pizza joint was closed, you're still hungry and will end up eating something else.
Political concern would be the micro engineering of small towns focused on single product industries and promises made to them.
Edit: Of GDP refers to a stock. Of GDP Growth refers to a rate of change. These are different.
B, C, and D for small airliners are Airbus, Bombardier and Comac - EU, Canada and China. Yes, there will be some substitution, but it'll still hurt the US economy to lose those sales overseas.
EDIT: Also, "0.6% Of GDP growth" typically means 0.6% as relative to total GDP, not to whatever growth was expected to be. Yes it's stupid, but it's also the standard nomenclature.
And the direct quote from the article is "By one estimate, a production halt would shave about six-tenths of a percent off the gross domestic product growth rate, the financial equivalent of a prolonged government shutdown or a significant natural disaster", which clearly intends for 0.6% to be relative to GDP and not GDP growth.
That's not how economies work. The people who work at Boeing take home money and spend it in the local economy. That effect happens several times for each dollar taken home. Same thing happens for Boeing suppliers, they pay their people and those people spend in to the economy with a multiplier effect. This, spending money earned by workers, is how the engine of the economy is fueled when it is healthy.
Who do you think is going to be paid the dollars that Boeing workers are spending now, if they shut down?
Aerospace is a sizable part of the US economy. It really isn't FUD at all.
There's more to the aerospace industry than Boeing alone. Aerospace is 1.8% of the GDP, whereas Boeing is 0.6% of the GDP. Damn impressive to be sure, but considering hundreds or thousands of lives lost are the cost to avoid a slump in that area, I'm pretty sure it's the right choice.
Oh shit, let's bail them out!
This has been recently discussed: https://mattstoller.substack.com/p/the-coming-boeing-bailout
https://news.ycombinator.com/item?id=20353342
Nationalize them.