- Date published:
7:00 am, April 14th, 2020 - 116 comments
Categories: business, capitalism, class war, Deep stuff, Economy, equality, housing, jobs, minimum wage, overseas investment, socialism, unemployment, wages, welfare - Tags: commercial property, duopoly, housing market, retail industry, small and medium-sized enterprise, SME
We are all in the same boat now, rich and poor, more or less. We must not flout, we cannot flaunt, except online.
A common sentiment expressed is that we are all beneficiaries now. I know what they mean by it, but I think it misses the point that this has always been the case to a degree, even for the so-called and acclaimed self-made millionaires, who, arguably, have benefitted more from the State than most.
I suspect that when this is over – when it will truly be over and just another chapter in History books is anybody’s guess – a huge chasm will open and form an even bigger divide between the haves and have-nots and inequality will increase in society.
Many (?) SMEs with one or just a few employees will remain closed permanently, i.e. they won’t survive the lockdown. What will happen with their hardware and commercial space/premises? What will happen with the expertise, the goodwill, the networks of customers & business contacts, and the tacit knowledge of owning and/or operating a business that have been built with blood, sweat, and tears over the years?
The supermarket duopoly is likely to do well out of the lockdown although they claim they are not “super-profiteering” from it. Quite how they know this in advance I don’t know but we’ll take their word for it until the half-year financial reports are available. In any case, I doubt they will come out of this in a weaker position, which will put further pressure on and literally crowd out small food shops/outlets.
What will happen with small retailers and the retail space they rent or lease?
Many owners of commercial property will want (need?) to recoup any losses incurred during the lockdown and its aftermath. Who is going to cough up the money for this? Where will the money come from? From overseas?
People who have lost their jobs or experienced a large reduction in income may be forced to sell up their homes. Who will buy these homes?
I think it is fair to assume that in times of crisis the little people are generally worst off. You would think that those who can would extend a helping hand. However, apart from some targeted philanthropy, assistance has to come from the State.
The super-rich can afford to lose money, and they do in this crisis, as they don’t depend on it for the basics and necessities of life. People living in Struggle Street or SMEs that are under-capitalised and/or operate with very small margins have no buffer or safety net other than the State. However, this opens a whole can of worms as to what could or should be done with Taxpayers’ money. Bailouts of large companies (‘too big to fail’) tend to generate a lot of controversy, as we have seen during and after the GFC. At the same time, if a big one goes down, it usually drags down a whole lot of smaller ones into the deep dark waters of despair. There are no easy solutions given that everything is connected in some way or form.
I think there are exceptions, but even truly wealthy people are generally no different from the average person.
The rich aren’t different from ordinary folk, Matthews says. “They are just regular people with more zeroes in their bank accounts than the rest of us.”
Interestingly, this is not the sentiment you often hear from the wannabes, the ones who may have just one zero more in their bank accounts. They sometimes seem to believe that their success is through hard work, above-average intelligence, and making the right choices, not through (sheer) luck and most certainly not due to support/assistance from the State and Taxpayers.
With the astronomical stimulus packages almost everywhere in the Western world, there will be a lot of ‘rescue money’ floating around looking for a safe harbour and a good (read: cheap) bargain. Before the pandemic and global economic crisis, Little New Zealand was already on the watch list of many with money to spare for investment and/or speculation. Smaller investors could range from ‘Belgian dentists to Japanese housewives’. There can be no doubt that New Zealand has risen in the international preference stakes thanks to the way it has navigated through the pandemic so far. This will be further fuelled by our low NZ dollar.
I think it is inevitable that bargain hunters will snap up bargains here in NZ. To recoup or minimise losses, sellers (banks?) will try getting the best possible price in the market; one’s loss is another one’s gain. Businesses will need investment. Ordinary Kiwis won’t have a look in, as usual, only the ones with deep pockets who can afford to take a financial risk with backing of their banks – everybody is more risk-averse in a crisis. Thus even more money is likely to end up in the hands of fewer people, as it has always been the case with capitalism. These are opportune times but the question is, for me, can we do something about this and if so, should we do something to ensure that we don’t end up with a socio-economic desert where few survive and scavengers can pick the good parts off the dying and the carcasses and the rest turns to dust in the wind?
Now is the time to think about it and act, if necessary, because time is not on our side, it never is. Once the Alert Levels are being relaxed shit will hit the fan. Not only will we have tens of thousands out of a job but in the longer run, we may also find that more Kiwis find themselves having to work for less money doing the donkeywork for others, quite possibly including, but not limited to, overseas owners and investors. Lest we want to become serves and tenants in our own country and work for a minimum wage or be permanent beneficiaries, we’d better ask ourselves how we want to be as a nation and how we see ourselves in this brave new world.
This is not a call for protectionism, nationalism, anti-globalism, or even anti-capitalism necessarily but for a discussion about our daily lives, at work, in the social sphere, during our holidays (here or overseas), our retirements, our healthcare, et cetera.