The Great Reset: Economic Reset, part 1

The following is part of a book review series about The Great Reset by Klaus Schwab and Thierry Mallerett.

“Must the economy die so that it could be resurrected in robust good health? Yes.” This is from page 38 of The Great Reset by Klaus Schwab and Thierry Mallerett. This is a Quote from Simon Schama describing what was done during previous pandemics, but it is used as an argument for the reaction by Governments around the globe. There are arguments made on both sides of the fence for lockdowns or keeping economies open and I have to say that the arguments for lockdowns are poor overall.

On page 44 we read “Once people began to worry about the pandemic, they effectively started to shut down the economy, even before the government had officially asked them to do so.” Anyone who was paying attention for the last year knows this didn’t happen. I, personally, went out and stocked up on food and supplies not knowing what was going to happen over the coming weeks. The shelves in supermarkets were bare. People could not buy toilet paper on-line. Stores closed their doors and we thought that everyone was going to die. I knew it was better to spend the money I had on something I knew I would need in the future rather than save it for when things reopened. Since then, people have started saving money, not because of the lockdown but not knowing if they are going to lose their employment because of government policies, not the virus. At the time of the initial lockdown the average American had less than $1000 in savings and could not afford a $500 expense if it came their way. The only time Americans saved money was when the stores were closed due to lockdowns and that was only if they were the people who could work from home and keep a paycheck coming in. Even then, sales on Amazon and other on-line outlets skyrockets to Christmas sales numbers funneling money away from small businesses and straight to major corporations. This argument on human reaction regarding the fear of the virus is false.

Regarding lockdowns. On page 45 we see a line “when you do it right, nothing happens.” As we know now, nobody did it right. The states with the most sever lockdown orders had the largest spikes in cases and death. New York, Michigan, and Washington state shut down major parts of their economy but continued certain operations for the sake of tax revenue. You could not go to church, but you could go to the lock liquor store and buy a bottle of gin with a pack of smokes. You could go to Lowe’s and buy lumber, but you weren’t allowed to buy house paint or flooring. With our current culture the ability to do an appropriate lockdown was impossible. Most homes do not have enough food to feed the occupants for more than a week. Savings are non-existent and even if people had the money to buy food for several weeks the local grocery store is designed to have food for the public it serves for a week at a time. A proper lockdown was never feasible, the virus was never going away.

When referring to returning to normal the book quotes leading experts on the subject “It is likely to be before the first quarter of 2021 at the earliest.” As of 2-7-2021 the US economy isn’t close to recovering with people in the service industry still unemployed, thousands of small businesses closed permanently due to the mismanagement of the pandemic, and a failed roll out of a vaccine by the Biden administration. Under president trump there were 200,000 more vaccines given per month than the current administration who came into system already in process and more companies producing the vaccine than before.

The fear for the economy now is that with people saving money, American households have 33% more savings than before the pandemic and in the EU its 19% higher, they will not spend it once the economy is fully open hindering the growth back to normal. It’s not the virus that caused these people to hold on to their money, its fear of paying their bills when the government decides they are not essential and can no longer work. In the US we received two checks during the entire span of the pandemic. Neither would be enough to pay the bills that piled up while someone was out of work for forced to shut down. Small business loans were only for paying employees to keep them on the payroll and prevent them from collecting unemployment. Many businesses shut down knowing that their employees would collect more while on unemployment and the loan did not help the cost of keeping the business afloat like paying the owner, rent, power and water bills, property taxes, resources, or any loans that might be outstanding. Small businesses overall had no help from the federal government. During the last month, with businesses still shut down and people still unemployed, state governments are starting to demand payments back from people originally deemed qualifying for unemployment benefits due to Covid-19. Whatever saving these people might have will be eaten by a bureaucratic system that is looking to cut its losses while mishandling a situation making it more painful for the public.

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