7 ms·

Except this is the opposite of the actual problem. There's plenty of cash floating around right now: it's why inflation is high. We're finally hitting real supp

by xxpor 5y ago

Except this is the opposite of the actual problem. There's plenty of cash floating around right now: it's why inflation is high. We're finally hitting real supply limits. It's the hottest job market in most people's lifetimes. The fact of the matter is most small businesses are crap businesses. They also abuse their workers in ways big business can't get away with, both illegally and legally. If you work for an employer with <30 employees and they don't provide health insurance, why would you stick around right now?

dijonman2 5y ago
Isn’t most of this due to lockdowns and shifting spending to online?
- formerkrogeremp 5y ago
  It's not that simple, and it never is that simple. Demand destruction in an economy predicated on consumer sentiment and ability to, well, consume ends poorly for us all. I don't see current trends, if they continue, going well for anyone.
  - farinaceous 5y ago
    "The child says: 'Mom won the piece of cake in the cake-lottery, she took a part for herself and made smaller pieces of it, given to me and my silblings.' +++ Commercial: 'We are the leading transport and deal plattform for cake, and the most liked farmer of your region are inviting you to the cake-lottery...' +++ " P-: Yes, there was a comic about... hu (-;
russdpale 5y ago
It's exactly what the problem is. Jobs may be growing because so many were cut due to covid, that doesn't mean it's a healthy economy, because it's not by any stretch. Most created wealth is going to the top 10% of employees.
deleted 5y ago
[deleted]
lifeplusplus 5y ago
I thought this inflation was supply driven??
perfecthjrjth 5y ago
You also need to look at income distribution. It is true that 'plenty of cash is floating around'; however, the distribution of this floating cash matters. Yes, Starbucks baristas, some clerk at a transportation company, etc are making $24 per hour in the bay area; but most of it goes to rent (inflated rent), food (inflated food prices), etc. The people with most money floating around are buying four or five investment properties in Texas or a second home in the bay area or third home in Manteca. Someone has to pay rents for these, and the increased home prices (as a consequence, increased rents) impact how much one has to pay for a meal at some restaurant in the downtown SJ.
eigenrick 5y ago
> The fact of the matter is most small businesses are crap businesses. > They also abuse their workers in ways big business can't get away with, both illegally and legally. Really? You know this to be a fact? It appears that the only thing you know about small business comes from what you read on /r/antiwork The fact of the matter is that 47% of Americans are employed by small businesses. That percentage keeps dropping, not because the owners are assholes, but because mega corporations keep getting larger and more monopolistic. Most small businesses run on razor thin margins because they don't have the economies of scale that the larger corps enjoy. My friend owns a cidery. The cost of his raw materials (juice concentrate and sugar) have gone up over 300% in the last 18 months, thanks to supply chain issues and worker shortages due to Covid. The prices are due to get even worse this year. His total burdened cost for a case of goods has gone up 170%. But he can't just mark his stuff up 170% now can he? He has to settle for a 10% bump in price and hope his distributors don't freak out. BTW, he has 8 employees and pays health insurance. Afaik, he didn't suffer any employee churn during Covid, cause he's not an asshole. In most sectors except for maybe fast food, small businesses have suffered not from employee churn, but from the Covid policies over the last two years combined with ridiculous price increases.
- Tinyyy 5y ago
  That sounds like a crappy business that can benefit from economies of scale.
  - eigenrick 5y ago
    Absolutely. All he needs to do is dig up the 100 million dollars he has buried around his yard so that he can scale to the point that taking a 300% hit on materials doesn't affect him. Or maybe he should spend some of his billions to buy up all of the apple orchards in the region so he can better control his supply chain (and, coincidentally, that of his competitors) Scaling has its limits, unfortunately)
    - redwall_hp 5y ago
      Yeah: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/ https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... The bottom 50% of the US has 2.6% of the wealth. The 50-90% bracket has 27.6%.
stosto88 5y ago
ryandrake 5y ago
People don’t like to hear this but a lot of small businesses (especially restaurants) are barely profitable and basically dead men walking. They can barely make payroll and can’t weather even a month of closure, let alone a pandemic. They are “shitty” businesses not because their owners are shitty or that they are doing shitty things, but simply because they just don’t make enough money consistently to be viable. Warren Buffet said “Only when the tide goes out do you discover who's been swimming naked.” Well, the tide went out in 2020 and we saw which companies were not solvent enough to survive even brief closures. They aren’t bad people but their companies unfortunately were only economically viable in a sustained bull market.
- obviouslynotme 5y ago
  There's a difference between a bear market and having your business shut down by the government.
  - aaaaaaaaata 5y ago
    That's a worthy topic too, but no, the result of the temporary closure is the same — closed is closed, regardless of the reasoning.
- refurb 5y ago
  This is the biggest issue - many small businesses are small margin businesses. Force a shutdown for a month or two and you've wiped out profit for an entire year. Not surprising in the least that after two years of uncertainty, business owners just hung up their hat and decided to do something else.
  - quags 5y ago
    That does ignore the PPP loads available to many small businesses. There was a forced shutdown, you could get funding during some of that shutdown with this and used correctly it did not need to be paid back. We can look back and say what should have been done, if restrictions went on too long but there wasn't a crystal ball - and there certainly were deaths happening due to covid. Business's with razor thin margins that couldn't operate during shutdowns certainly couldn't stay around once PPP went out. As far as cali and any of its excessive fees for business, that is a different story.

by xxpor 5y ago

dijonman2 5y ago

Isn’t most of this due to lockdowns and shifting spending to online?

formerkrogeremp 5y ago
It's not that simple, and it never is that simple. Demand destruction in an economy predicated on consumer sentiment and ability to, well, consume ends poorly for us all. I don't see current trends, if they continue, going well for anyone.
- farinaceous 5y ago
  "The child says: 'Mom won the piece of cake in the cake-lottery, she took a part for herself and made smaller pieces of it, given to me and my silblings.' +++ Commercial: 'We are the leading transport and deal plattform for cake, and the most liked farmer of your region are inviting you to the cake-lottery...' +++ " P-: Yes, there was a comic about... hu (-;

russdpale 5y ago

It's exactly what the problem is. Jobs may be growing because so many were cut due to covid, that doesn't mean it's a healthy economy, because it's not by any stretch. Most created wealth is going to the top 10% of employees.

deleted 5y ago

[deleted]

lifeplusplus 5y ago

I thought this inflation was supply driven??

perfecthjrjth 5y ago

You also need to look at income distribution. It is true that 'plenty of cash is floating around'; however, the distribution of this floating cash matters. Yes, Starbucks baristas, some clerk at a transportation company, etc are making $24 per hour in the bay area; but most of it goes to rent (inflated rent), food (inflated food prices), etc. The people with most money floating around are buying four or five investment properties in Texas or a second home in the bay area or third home in Manteca. Someone has to pay rents for these, and the increased home prices (as a consequence, increased rents) impact how much one has to pay for a meal at some restaurant in the downtown SJ.

eigenrick 5y ago

> The fact of the matter is most small businesses are crap businesses. > They also abuse their workers in ways big business can't get away with, both illegally and legally. Really? You know this to be a fact? It appears that the only thing you know about small business comes from what you read on /r/antiwork The fact of the matter is that 47% of Americans are employed by small businesses. That percentage keeps dropping, not because the owners are assholes, but because mega corporations keep getting larger and more monopolistic. Most small businesses run on razor thin margins because they don't have the economies of scale that the larger corps enjoy. My friend owns a cidery. The cost of his raw materials (juice concentrate and sugar) have gone up over 300% in the last 18 months, thanks to supply chain issues and worker shortages due to Covid. The prices are due to get even worse this year. His total burdened cost for a case of goods has gone up 170%. But he can't just mark his stuff up 170% now can he? He has to settle for a 10% bump in price and hope his distributors don't freak out. BTW, he has 8 employees and pays health insurance. Afaik, he didn't suffer any employee churn during Covid, cause he's not an asshole. In most sectors except for maybe fast food, small businesses have suffered not from employee churn, but from the Covid policies over the last two years combined with ridiculous price increases.

Tinyyy 5y ago
That sounds like a crappy business that can benefit from economies of scale.
- eigenrick 5y ago
  Absolutely. All he needs to do is dig up the 100 million dollars he has buried around his yard so that he can scale to the point that taking a 300% hit on materials doesn't affect him. Or maybe he should spend some of his billions to buy up all of the apple orchards in the region so he can better control his supply chain (and, coincidentally, that of his competitors) Scaling has its limits, unfortunately)
  - redwall_hp 5y ago
    Yeah: https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/table/ https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... The bottom 50% of the US has 2.6% of the wealth. The 50-90% bracket has 27.6%.

stosto88 5y ago

ryandrake 5y ago

People don’t like to hear this but a lot of small businesses (especially restaurants) are barely profitable and basically dead men walking. They can barely make payroll and can’t weather even a month of closure, let alone a pandemic. They are “shitty” businesses not because their owners are shitty or that they are doing shitty things, but simply because they just don’t make enough money consistently to be viable. Warren Buffet said “Only when the tide goes out do you discover who's been swimming naked.” Well, the tide went out in 2020 and we saw which companies were not solvent enough to survive even brief closures. They aren’t bad people but their companies unfortunately were only economically viable in a sustained bull market.

obviouslynotme 5y ago
There's a difference between a bear market and having your business shut down by the government.
- aaaaaaaaata 5y ago
  That's a worthy topic too, but no, the result of the temporary closure is the same — closed is closed, regardless of the reasoning.
refurb 5y ago
This is the biggest issue - many small businesses are small margin businesses. Force a shutdown for a month or two and you've wiped out profit for an entire year. Not surprising in the least that after two years of uncertainty, business owners just hung up their hat and decided to do something else.
- quags 5y ago
  That does ignore the PPP loads available to many small businesses. There was a forced shutdown, you could get funding during some of that shutdown with this and used correctly it did not need to be paid back. We can look back and say what should have been done, if restrictions went on too long but there wasn't a crystal ball - and there certainly were deaths happening due to covid. Business's with razor thin margins that couldn't operate during shutdowns certainly couldn't stay around once PPP went out. As far as cali and any of its excessive fees for business, that is a different story.