As most people with any lick of understanding of how the economic world works, at least in its present incarnation, understands that the rich, the really rich, are little affected by the downs of the economic cycles.
There are several reasons for this, one amongst which is mentality quite separate from the middle and lower classes. Many in the modern lower 95% of any modern society are dominated primarily by two strains of though: a duty to pay off any debts taken upon their shoulders and a live for today and face tomorrow when it comes mentality. Both of these are sure to always lead to disaster in a long enough time scale and even more so in the present post COVID economic collapse.
First, the mentality of the "duty to pay off debts". Believe me, the rich do not share your ignorant mental state, ignorant because it ignores the business construct of any such interest laden debt, that of mutual risk. Sure they foster that mental state on the lower 95% to make sure the poorer classes will spend their last penny in savings to pay off what will more than likely be confiscated anyways. They teach you that default and bankruptcy should be cringed at, as some how below real people of character. However, they themselves have no such qualms, never had and never will. Just look at how many times the president of the United States, Mr. Trump, has filed bankruptcy, as a millionaire and billionaire.
In truth, their approach is the correct one. When one takes out a loan, one is entering into a mutual risk agreement with the creditor. The creditor knows there is a risk that the creditie will not pay off the loan and the creditor sets the loan rates accordingly. The creditie knows that there is a chance that he will not be able to pay off the credit and will loose the object of that credit and should, though most absolutely do not, set his priorities on payments (and thus the overall value of the credit) accordingly. At all times a cost vs benefit analysis should be done by the creditie, at all times during the credit pay off period. If it becomes a bad investment, and a house or car is just that, an investment, not your property or your "home" but a cold blooded investment up until the point it is 100% paid off, the creditie should be ready to cut his losses and return the keys to the creditor. This is especially true when the creditie looses their soul source of income.
Bankruptcy and default not a slur words and the rich have never had a second thought of utilizing the tools set before them to reinvent themselves and safe guard their wealth.
Secondly, is the mentality of living for today. Most of the rich have plans and plans within plans. Those that work take on contracts with contingency plans, the golden parachutes of modern speak. They are always looking for better opportunities and will jump ship as needed. They do not hold loyalty to their companies as those companies do not hold loyalty back to them. This is especially true the lower one goes on the employee grade. Modern corporations will not think twice about down sizing or reducing paid staff as needed to dictated by economic prudence. The bigger the corporation the more this is the truth, with a few exceptions, primarily in smaller, talent dependent companies, such as consultancies, who are only as good as their talent and must be ready to plus up on a very short notice.
Of course, this was not always so. Under the more socialist models, it was disallowed and in some countries such as France, it is still very difficult, but in any Neo-liberal economic model, labour is a resource, as my MBA B-School professors taught us, a view I never agreed with, but that is irrelevant as 99% did.
The Rich are always on the look out, following trends, switching and reinventing themselves, their industries and their locations as need be.
However, as is the problem with all Neo-liberal economies, the super accumulation of wealth, whether its flaunted or kept behind tall walls, in the hands of a very small subset of society, has been on a relentless drive. In most Neo-liberal societies wealth and property ownership by the top 5% is often between 60-80% of that nation's total wealth. With that comes a power over politics unmatched in by any other segment and perpetuates the wealth accumulation.. As a matter of fact, if one takes away the description of the supposed form of government and compares wealth distribution in the Neo-liberal "democracies" with that of most Middle Eastern dictatorships, such as the Saudis or Kuwaitis, one will find more commonalities then discrepancies. With wealth comes real power.
Now we reach the post Covid reality, which is very quickly coming upon the majority of the world. Prior to now, in the global lock down, much was written about this and even more ignored. The majority of the lower 95% preferred to believe in the myths of the V shaped rebound: "just you wait, as soon as the doors open, it will be back to work and just like before". Like before was already broken and slowly sinking, now the corks are out of the barrels and water has poured in.
The reality is that many businesses aimed at the middle class and poor are gone. The cost of credit to open new ones and for the lower 95's purchasing are skyrocketing. Social distancing laws are a force multiplier on price. Additionally, with mass unemployment will come a massive downward push on most salaries, even as meager savings are destroyed on survival.
Lets take commercial flying for example. With airliners required to seat passengers in every other seat, this will lower occupancy in large planes by 30% and in small commuter planes by up to 60%. Associations of commercial airliners and experts have already predicted an average cost of increase in tickets of 40%. This will put commercial flying out of the reach of the majority of Neo-liberal societies suffering from downward pressures on wages and lack of credit to fuel spending. Equally so for small and many medium sized businesses.
The average office manager will think twice before sending an employee to a conference or training. Sure, online trainings will take up some of the slack, but they are rarely of the same caliber or bring in the same revenue for the hosting company. Again, downward spiral of a negative feed back loop.
As fewer and fewer economy classes passengers will be available, ticket prices will inadvertently rise, making them yet more inaccessible, until the primary target will be the cost immune rich. I have flown on business class only flights, those do exist and they will start to expand, pushing out the unaffordable economy class flights. More and more, we will return to an era where only the rich flew and had that mobility.
A similar process will start to take place in many other industries: restaurants, live entertainment, vacationing, housing, upper education, insurance and medicine and so forth.
Additionally, as all of this is happening, already often bankrupt local governments are finding tax income streams collapsing while outlays are exploding. Like it or not, they will have to raise taxes, further destroying their economies, or force austerity, further destroying their economies or like several American cities have already done: file bankruptcy and quit the game.
The present landscape and its socioeconomic trends are moving much of the Neo-liberal world into a full tilt dystopia, something more akin to Latin American realities: a tiny upper crust that owns 80% of everything, a service/managerial educated 20% who owns the remaining 20% and 79% in total grinding poverty, debt slaved to the top 1%. A bright happy future this is not.
There are several reasons for this, one amongst which is mentality quite separate from the middle and lower classes. Many in the modern lower 95% of any modern society are dominated primarily by two strains of though: a duty to pay off any debts taken upon their shoulders and a live for today and face tomorrow when it comes mentality. Both of these are sure to always lead to disaster in a long enough time scale and even more so in the present post COVID economic collapse.
First, the mentality of the "duty to pay off debts". Believe me, the rich do not share your ignorant mental state, ignorant because it ignores the business construct of any such interest laden debt, that of mutual risk. Sure they foster that mental state on the lower 95% to make sure the poorer classes will spend their last penny in savings to pay off what will more than likely be confiscated anyways. They teach you that default and bankruptcy should be cringed at, as some how below real people of character. However, they themselves have no such qualms, never had and never will. Just look at how many times the president of the United States, Mr. Trump, has filed bankruptcy, as a millionaire and billionaire.
In truth, their approach is the correct one. When one takes out a loan, one is entering into a mutual risk agreement with the creditor. The creditor knows there is a risk that the creditie will not pay off the loan and the creditor sets the loan rates accordingly. The creditie knows that there is a chance that he will not be able to pay off the credit and will loose the object of that credit and should, though most absolutely do not, set his priorities on payments (and thus the overall value of the credit) accordingly. At all times a cost vs benefit analysis should be done by the creditie, at all times during the credit pay off period. If it becomes a bad investment, and a house or car is just that, an investment, not your property or your "home" but a cold blooded investment up until the point it is 100% paid off, the creditie should be ready to cut his losses and return the keys to the creditor. This is especially true when the creditie looses their soul source of income.
Bankruptcy and default not a slur words and the rich have never had a second thought of utilizing the tools set before them to reinvent themselves and safe guard their wealth.
Secondly, is the mentality of living for today. Most of the rich have plans and plans within plans. Those that work take on contracts with contingency plans, the golden parachutes of modern speak. They are always looking for better opportunities and will jump ship as needed. They do not hold loyalty to their companies as those companies do not hold loyalty back to them. This is especially true the lower one goes on the employee grade. Modern corporations will not think twice about down sizing or reducing paid staff as needed to dictated by economic prudence. The bigger the corporation the more this is the truth, with a few exceptions, primarily in smaller, talent dependent companies, such as consultancies, who are only as good as their talent and must be ready to plus up on a very short notice.
Of course, this was not always so. Under the more socialist models, it was disallowed and in some countries such as France, it is still very difficult, but in any Neo-liberal economic model, labour is a resource, as my MBA B-School professors taught us, a view I never agreed with, but that is irrelevant as 99% did.
The Rich are always on the look out, following trends, switching and reinventing themselves, their industries and their locations as need be.
However, as is the problem with all Neo-liberal economies, the super accumulation of wealth, whether its flaunted or kept behind tall walls, in the hands of a very small subset of society, has been on a relentless drive. In most Neo-liberal societies wealth and property ownership by the top 5% is often between 60-80% of that nation's total wealth. With that comes a power over politics unmatched in by any other segment and perpetuates the wealth accumulation.. As a matter of fact, if one takes away the description of the supposed form of government and compares wealth distribution in the Neo-liberal "democracies" with that of most Middle Eastern dictatorships, such as the Saudis or Kuwaitis, one will find more commonalities then discrepancies. With wealth comes real power.
Now we reach the post Covid reality, which is very quickly coming upon the majority of the world. Prior to now, in the global lock down, much was written about this and even more ignored. The majority of the lower 95% preferred to believe in the myths of the V shaped rebound: "just you wait, as soon as the doors open, it will be back to work and just like before". Like before was already broken and slowly sinking, now the corks are out of the barrels and water has poured in.
The reality is that many businesses aimed at the middle class and poor are gone. The cost of credit to open new ones and for the lower 95's purchasing are skyrocketing. Social distancing laws are a force multiplier on price. Additionally, with mass unemployment will come a massive downward push on most salaries, even as meager savings are destroyed on survival.
Lets take commercial flying for example. With airliners required to seat passengers in every other seat, this will lower occupancy in large planes by 30% and in small commuter planes by up to 60%. Associations of commercial airliners and experts have already predicted an average cost of increase in tickets of 40%. This will put commercial flying out of the reach of the majority of Neo-liberal societies suffering from downward pressures on wages and lack of credit to fuel spending. Equally so for small and many medium sized businesses.
The average office manager will think twice before sending an employee to a conference or training. Sure, online trainings will take up some of the slack, but they are rarely of the same caliber or bring in the same revenue for the hosting company. Again, downward spiral of a negative feed back loop.
As fewer and fewer economy classes passengers will be available, ticket prices will inadvertently rise, making them yet more inaccessible, until the primary target will be the cost immune rich. I have flown on business class only flights, those do exist and they will start to expand, pushing out the unaffordable economy class flights. More and more, we will return to an era where only the rich flew and had that mobility.
A similar process will start to take place in many other industries: restaurants, live entertainment, vacationing, housing, upper education, insurance and medicine and so forth.
Additionally, as all of this is happening, already often bankrupt local governments are finding tax income streams collapsing while outlays are exploding. Like it or not, they will have to raise taxes, further destroying their economies, or force austerity, further destroying their economies or like several American cities have already done: file bankruptcy and quit the game.
The present landscape and its socioeconomic trends are moving much of the Neo-liberal world into a full tilt dystopia, something more akin to Latin American realities: a tiny upper crust that owns 80% of everything, a service/managerial educated 20% who owns the remaining 20% and 79% in total grinding poverty, debt slaved to the top 1%. A bright happy future this is not.
Комментариев нет:
Отправить комментарий