During the Great Recession, the Bush Administration, Obama Administration, and the Federal Reserve Bank focused on saving the economy by saving the big banks and investors and the auto industry. Those were the big players who were on the brink of bankruptcy and failure and would in fact cause great harm if they had all been allowed to go belly up.
This time it’s very different. Through the various programs set up for economic relief during the pandemic, certainly big companies got attention.
But as all of us have noticed, it’s the little businesses that are suffering…and unfortunately failing. And that is part of the problem with getting additional relief packages through Congress. To those in Washington a lot of these local businesses are virtually invisible in a number of ways…so their support just doesn’t account for the damage being done.
So yes, GM isn’t at as much risk this time. But the restaurants and bars and small retailers…and all of the suppliers and vendors that sell to them…are getting creamed. And their employees are getting hosed.
And estimates, so far, think 10% of these small businesses have already permanently closed. And that maybe as many as 25% will fail before 2021 is over. But these guys don’t have effective lobbyists in Washington like Boeing does. So they get short shrift and very little actual financial support.
Yes, small businesses churn all of the time. They open and often close and are just as often replaced by a similar entity. So we are rather inured of the occasional business closure.
But now, we are seeing this is in a different light. Bulk businesses are struggling…through no fault of their own. Yes certainly by forced closures…and yes certainly, as others lose their jobs through an even reduced lack of business…from people being frugal with their money or because they want avoid catching the virus.
So we can offer Foxconn billions to come here, but we are afraid to give to small businesses in sufficient amounts to keep the entire economic ecosystem intact.
Future economic discussion in Washington and the state Capitols will have to focus on the microcosm of our local business environment and not play so heavily toward Big Business.
Yeah, fat chance, right?