This is my essay over the Coronavirus, the current of the world economy, and where this is leading onto. Bear in mind, I have only around six college classes in business management and basic economics, over the past decade....probably put in a minimum of 1,000 hours into studying business success, economic spirals, and listening to various lectures.
1. Corona-tax-revenue-spiral. When political figures and national/state leaders (doesn't matter which country you bring up)....got into this discussion....they really didn't care about the economic 'end' of the disease, and the effect on people. Safety....at least at that point, was the priority.
So about four to six weeks into this (doesn't matter if chatting Italy, Germany or the US)....reality went to a new level as economic failures became obvious.
When you shut down the business sector, which is where your tax revenue comes from.....you ensure that tax revenues don't flow. If you sell garden furniture in Germany.....nineteen-percent of the cost is tax revenue. If you don't sell the stupid furniture....that comes up as a shortfall. If you do this for four weeks, you can figure that 7-to-10 percent of your tax revenue bucket is missing funds.
Same story in the US with a barbershop. If it's closed for four weeks by the order of the governor.....it's not paying into the pot. A bar, a restaurant, or a bookstore? Same story.
You can go four weeks in this type of game. But if you were talking about two months of this, it's a mess that can't be easily cleaned up. And the idiot suggesting three or four months? You can go and expect some type of revolution to start up because of massive debt that the nation or state is incurring.
2. Jobs. Just about every segment of the job market has gone to short hours or furlough. You can look at the Frankfurt Airport....where one entire terminal (two of them) is shutdown entirely (doors locked). From the other operating terminal, there's only one quarter of the work-force there, and out of 23,000....barely 4,000 total employees throughout the entire complex.
You can go into various areas of Chicago or Miami and find the same situation brewing.
The question on the minds of these....when will normal levels start back up? Then you go and try to be honest....suggesting that normal levels are a minimum of eight to twelve months away.
Purchasing power from this furlough group? Marginal....just enough to survive.
3. Pay-check to pay-check people. There's a large segment of society which got used to to pay-check to pay-check living style. There are couples who pull in $250,000 a year.....who are barely making it. There are couples who make $40,000 a year between them, and spend $44k a year (don't ask where the extra four-thousand comes from).
When you see all these cars lined up and people trying to get a free-bag or two of grocery items....you can figure that more than half of those people were in the pay-check group. There was no savings....no three-month stock of money sitting there for emergencies.
4. The arrival of dimwit PhD 'experts'. I've sat the past couple of weeks watching the Business Channel, Fox Business and CNN. Frankly, there are dozens of people who've shown up and seem to claim some 'expert-status' yet seem to be out of touch with regular people or the finance business.
On some of these occasions, it reminds of the crew that was trying to advise FDR in the 1930s....who seemed to have degrees and were always 'book-smart' but never ran a company, small-business, or a farm.
In the case of some of these professors....I'm kinda wondering what kind of students attend, and how they will handle reality when they graduate into the real world.
5. The business folks who are talking to bankruptcy experts after six weeks of shut-down?
Lets be humble and honest. If they are that bad off after six weeks.....they were marginally making it and this was simply a 'test'.
6. The number of products leading back to China?
Reality may have finally arrived and we all now realize that a vast majority of what Wal-Mart sells.....is non-American, and non-Mexican.
Maybe it bothers us a good bit, but you don't see any Senators or Congressmen reacting....do you?
7. So to the final topic....getting over this.
Most cultures will require a fair amount of time (you see that in Germany and Italy). The US situation? It'd different. I might agree that the next hundred days will be harsh and some folks will blame a lot of characters (not just Trump, but their Democratic governors as well).
The problem here is if you dwell a lot on the negative, and do virtually nothing....then we can enjoy a nice long recession and harsh year ahead. If you dwell on this as a test of your recovery ability, then you might come out ahead and see the light at the end of the tunnel by the end of 2020.
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