Relaxation of Restrictions, Part IX *Read OP For Mod Warnings*

Graham wrote: »

I know you'd like to just ignore the pandemic and hope it goes away without any significant economic or societal impact.

Pandemics don't work like that.

no what I'm asking is how will the economic impact on smes be any different because it was caused by a pandemic? also i would love to know where you got the rest of your post from because I've never said anything of the sort

Graham wrote: »

Are you talking about the measures that subsequently allowed us to have a much lower level of restrictions for a large part of last year?

Tbf what did that do for business? They still had to close again, and then again. It was barely worth their time opening up at Christmas with how little they opened.

To me, you can open up more than there is now (so hairdressers, non essential retail can open) and by removing those from pup and supports and getting their taxes on, you have more money to support the busineses that unfortunately do have to stay closed (hospitality mainly)

LuckyLloyd wrote: »

Humans will have a huge desire to be together and be merry together. We will spend hugely on socialising and hospitality when our broader circle of friends have been vaccinated and we have confidence in being close to each other again.

One strand on this thread that i agree with is the fact that we have not all been affected equally by the pandemic. For those who have been lucky enough to continue working from home, they will have cash on hand and a desire to spend it when they receive the opportunity. There is a pent up demand to buy property, perform home improvements, go and trips away, etc - and the money is there within the economy to fund these things.

More importantly, the financial system has money to lend. There has been no credit crunch or stock market crash. There is money to invest in business ideas. Covid has forced innovation and invention and there will be things to invest in as a result.

The government has no funding difficulties and has no motivation to trend towards austerity.

I'll be honest - to think there will be no significant economic recovery seems mental to me. It is such a short sighted and incredibly negative position. As Graham says, I simply cannot share it.

I think in this case though Lloyd, it’s not so much a question of recovery as it is a question around the equitable nature of recovery — and the resentment this will fuel.

This is not a typical recession, and we cannot expect that our emergence from it will be typical. The Financial Crisis was a harrowing economic event which coloured the way world politics has unfolded over the last 10 years, but the fundamentals of how human beings move and interact were unchanged. This pandemic has forever changed that — the way in which we live and and work will never be the same again. There are elements of that which in the long run may prove beneficial to society, but the sudden and destructive way in which change has been accelerated will leave the most economically vulnerable blowing in the wind. When one segment of society (older settled professionals) emerge from this pandemic with a bank account stashed with savings from remote-working salaries in their lovely homes, and another segment (the young, the economically vulnerable and those not able to work remotely) emerges with nothing but less opportunity and the inability to afford accommodation — we may reap a whirlwind.

My other concern is that the market will now drive towards a bias for “depersonalised” business models and products — that investors will favour ‘pandemic-proof’ investments. That’s because we all know what’s going to happen — for decades to come we will be bombarded with scare stories in media and social media of the ‘next pandemic’. Every new disease which emerges will suddenly have much greater media traction and with that will come anxiety and, ultimately, market volatility. Quite simply, why would capital ever flow back towards things that bring people together physically when the whisper of a new virus in the Far East can shatter any semblance certainty overnight ?

All I see is people nowadays talking about how we should have locked down faster — so the precedent is there — wherever a disease rears its head in any notable form, that question of “is a lockdown coming?” will loom like a spectre over business. So business will gravitate towards things that pandemics affect less. Yes, innovation and invention as you suggest — but innovations and inventions that will make the world ever less personal.

Graham wrote: »

I don't think it's particularly clear what you're asking for ypres5.

You've previously suggested we just get more vaccine which of course is much easier said than done. You've certainly expressed your dissatisfaction with the current approach.

What are you suggesting?

Quote: walus
And no, this time will be no magic recovery because this recession/depression is somehow different to others. It is not.


Quote: Graham
Apart from the fact it's been brought on by a pandemic.

Which is different.



This is the post of yours that i initially responded to in response to the economic impact of restrictions and you've gone off on a tangent of putting words in my mouth and vaccines so ill ask again. what makes this recession being caused by a pandemic any different for businesses?

Graham wrote: »

My opinion; the speed and nature of the post pandemic recovery will be the major differentiator.

This is naive.

Still quite a bit of latent job and lifestyle snobbery around it seems. Do people really think that those working in hospitality, tourism and entertainment/events, aviation, small independent retail and personal services exist there for your service alone?

They buy property and cars, have weekends away and meals out, get their hair cut and nails done, go to concerts and festivals - if you think half a million people on PUP will go right back to their spending habits of pre-Covid anytime soon, after being burnt so badly, you’re badly mistaken. And worse than naive if you think it won’t eventually affect those to date not impacted financially.

The above also not factoring in the fear of socialising instilled in many people who won’t have confidence to mix again in society for quite some time.

Regardless of how secure you may be financially, are you happy to live in a society so divided - with public services like health, education and policing poorly funded for years to come, a society reverting to one where rich get richer and anyone unlucky enough to be poor, sick or vulnerable will be worse off?

Deleted User wrote: »

So what if livelihoods are lost. Reveals much about you, reminds me not to take a single offering of yours seriously.

paw patrol wrote: »

he ignores the fact that the business closing will lose money - the owner probably too from their funds. regardless of who opens up in their place the financial hardship and emotional loss is just poo-poo'd by LL.

not through mismanagement but due to government decree.

heartless is the polite word for his posts

Yes I understand the feeling involved by those who poured their heart and soul into their business or their job. I am not pooh pooing it, and I am fully behind continued government support for SMEs directly impacted by Covid. The pandemic is an incredibly unfortunate and debilitating occurrence that has claimed the lives and livelihoods of good honest people who did nothing to deserve their fate.

OwenM wrote: »

You have no idea, none. Leasing, small business loans, licensing legislation, the list goes on and on. And if one closes then it's often a lifetimes work or a chunk of it in tatters with debts to banks and revenue that will follow you for years.

Oh I have some idea. It's incredibly tragic and distressing for those involved, just as it is incredibly tragic and distressing for those who have lost loved ones to covid or are having to manage debilitation from long covid. It isn't easy and it isn't fair for anyone catastrophically impacted by the pandemic.

That said, the macro economic reality remains the same. Lots of small businesses went to the wall between 2008 - 2010, and yet Ireland was thriving once again a half decade later. The economy will move on as it always does.

You can choose to ignore this or pretend we will experience some other future once covid is in the rear view mirror as is your prerogative. But victory is at hand and optimism is soon to rise.

ArthurDayne wrote: »

I think in this case though Lloyd, it’s not so much a question of recovery as it is a question around the equitable nature of recovery — and the resentment this will fuel.

This is not a typical recession, and we cannot expect that our emergence from it will be typical. The Financial Crisis was a harrowing economic event which coloured the way world politics has unfolded over the last 10 years, but the fundamentals of how human beings move and interact were unchanged. This pandemic has forever changed that — the way in which we live and and work will never be the same again. There are elements of that which in the long run may prove beneficial to society, but the sudden and destructive way in which change has been accelerated will leave the most economically vulnerable blowing in the wind. When one segment of society (older settled professionals) emerge from this pandemic with a bank account stashed with savings from remote-working salaries in their lovely homes, and another segment (the young, the economically vulnerable and those not able to work remotely) emerges with nothing but less opportunity and the inability to afford accommodation — we may reap a whirlwind.

My other concern is that the market will now drive towards a bias for “depersonalised” business models and products — that investors will favour ‘pandemic-proof’ investments. That’s because we all know what’s going to happen — for decades to come we will be bombarded with scare stories in media and social media of the ‘next pandemic’. Every new disease which emerges will suddenly have much greater media traction and with that will come anxiety and, ultimately, market volatility. Quite simply, why would capital ever flow back towards things that bring people together physically when the whisper of a new virus in the Far East can shatter any semblance certainty overnight ?

All I see is people nowadays talking about how we should have locked down faster — so the precedent is there — wherever a disease rears its head in any notable form, that question of “is a lockdown coming?” will loom like a spectre over business. So business will gravitate towards things that pandemics affect less. Yes, innovation and invention as you suggest — but innovations and inventions that will make the world ever less personal.

Depersonalisation and remote service provision is likely to be a lasting legacy of the pandemic. I can agree that it is not my preference but it is an acceleration of a trend, not something that has been solely caused by Covid 19.

Yes, governments will invest more heavily in public health and virology and we will be on a higher alert for the coming decades. Will there be negatives to this? Absolutely. But there will be positives in medical research and science and hopefully a greater focus on the underlying social factors and conditions beyond the west that facilitate the emergence of novel viruses.

Our government is on notice around fairness in the economy. Feb 2020 was their last warning around the real electoral consequences of allowing continued marginalisation and alienation for an ever larger chunk of the working populace. Covid increases the pressure on FFG, but the basic objective will be the same. By the middle of 2024 they will need to have demonstrated real substantive progress on housing affordability and availability. If they fail in this endeavour, a SF government will sweep to power with a mandate for the most fundamental changes to property, wealth and social provision in the history of the state. I don't fear this, I welcome the possibility of much needed change.

The strong political motivations in play for FFG make me confident that every effort will be made to generate as strong an economic recovery as possible. Austerity is not on the cards unless there is no other option.

At the broadest level, your point is largely a philosophical one: 'how should people be forced to live their lives and earn their living?' Automation and digitisation has been bubbling away under the surface ready to erupt and upend society as we know it. A new deal has been required for some time. Yes, Covid has accelerated this and wrecked immediate havoc on people that may otherwise have avoided it for another decade or so. But make no mistake, this reckoning had been coming. What has been required for some time is a frank conversation on how "progress" creates winners and losers and what there is to be done about it. If the post covid landscape forces society to properly discuss and address these points I welcome it.

Graham wrote: »

I genuinely have absolutely no idea what you're talking about with latent job and lifestyle snobbery?

I certainly don't think myself superior to anyone in retail or hospitality. Half my business is retail based so you're barking up the wrong tree completely STC.

Fair - was not directed personally, but had quoted your reply I realise, point stands about naivety re recovery.

Not necessarily superiority though but more of a general lack of awareness of how all those on PUP generally contributed to society, granted they may not inflate tax coffers as much as some but there is a perception that we can manage to bounce back just fine with a quarter of the working population’s consumer confidence destroyed.

Stormyteacup wrote: »

Fair - was not directed personally, but had quoted your reply I realise, point stands about naivety re recovery.

Not necessarily superiority though but more of a general lack of awareness of how all those on PUP generally contributed to society, granted they may not inflate tax coffers as much as some but there is a perception that we can manage to bounce back just fine with a quarter of the working population’s consumer confidence destroyed.

A significant chunk of that 25% will be off unemployment towards the end of this year. Will consumer confidence within this cohort be "destroyed"? I appreciate that's a subjective take, but I'd strongly disagree with it. I foresee a sense of national and global jubilation approaching Christmas 2021. If you believe in the vaccines you believe in that, even though we're a million miles away from it today.

Bit cynical wrote: »

One positive thing that lockdown will bring will be the end of the Eurozone though the transition back to national currencies will be highly traumatic for some countries.

Aha, that's quite the prediction. If anything covid has forced the eurozone to act more as a unit than it ever has before.

ingo1984 wrote: »

In real wage terms, we're actually worse off now than we were in 2008 after the financial crisis.

Yes and until today I had never encountered anyone trying to downplay the stagflation of the last ten years entirely or claiming we were in a boom.

Pro-restrictionists are taking 'Government=Good' boosterism to new places.

LuckyLloyd wrote: »

A significant chunk of that 25% will be off unemployment towards the end of this year. Will consumer confidence within this cohort be "destroyed"? I appreciate that's a subjective take, but I'd strongly disagree with it. I foresee a sense of national and global jubilation approaching Christmas 2021. If you believe in the vaccines you believe in that, even though we're a million miles away from it today.

Yes hopefully jubilation with vaccine rollout - not so optimistic about disposable income spending habits by a not-insignificant portion of the working population returning soon enough in the future to facilitate a speedy recovery. Habits will have changed long-term in light of the precarious financial positions many never thought they would find themselves in.

Graham wrote: »

Many businesses were open to some extent for a large part of the summer.

Christmas was just a stupid move that I would have thought clarified why opening up too soon is a bad idea.

Imo, that's that we opened the wrong things too early. If we let hospitality stay closed, do you think the spike of cases would have been as bad ? If it wouldn't have been, then maybe the others like construction, hairdressers etc could have stayed open

LuckyLloyd wrote: »

Your posts are never not extraordinary.

Lol. Thank you.

Before covid we were once again close to full employment and had been on a consistent downwards trend for the entire decade. You can see an illustrative chart here:

https://www.macrotrends.net/countries/IRL/ireland/unemployment-rate

"Stagflation"

In the absence of high unemployment, with effectively zero inflation and consistent growth what in the name of jaysus are your posts referencing in an Irish context?

In an Irish context I'm referring to the deflationary effect on wages combined with asset inflation.

It is true we do not have rising prices and rising unemployment in the traditional sense. However we have hidden rising costs as wages do not keep up with assets, such as housing and education.

The result is that people get poorer as the cost of living rises. This was already a problem in 2008-2020, its going to get worse now as debt servicing eats up more and more potential economic activity. Personal debt stops individuals from starting businesses. Public debt turns the country into a tax farm.

Generally we're going to be going back to February 2020 economic conditions, only worsened. This isn't "doom" but it isn't great either. All previous problems like the housing crisis will be harder to solve. Constricting supply by shutting down construction won't have helped either.

They may be growth and re-employment but don't expect a big boom. A gradual slow bleed in the standard of living is the most likely outcome imo.