Time for Trickle Up
Urgent. Time for trickle up, not trickle down
From chaos comes opportunity. Things are about to change and someone is going to benefit from all the turmoil we’re living through. The question is who? This week, as small businesses and the self-employed around the world shut down, the world will be forced to focus for the first time on saving real businesses and real people rather than protecting the banks. How we decide to support small businesses and individuals, and who benefits, will define us.
It’s really quite straight forward. Either banks and financiers will come out on top as governments bail out big businesses and banks. Governments will try to entice banks to loan more money to small businesses and consumers — and these businesses and consumers will go further into debt. Or governments can get this money to the people directly so that they can pay their bills and eat. This would keep the entire ecosystem going as, let’s not forget, consumer spending is responsible for 70% of the economy — and small businesses and people wouldn’t come out of this further in debt to the .1%.
In the past few weeks, Option 1 kicked off. Some countries decided to cut interest rate cuts and the US has already printed trillions of dollars, just like in 2008. Not just did this solve nothing and the markets tanked, but the real problem hadn’t even really begun to be discussed yet. The problem of almost everything shutting down for a month or two and the incredible strain this will put on people and the economy. Some countries are changing sick leave policies and offering tax holidays to companies and the self-employed. All necessary, but not enough. People need cash now.
The far faster, cheaper and easier option to administer would be to get money into the hands of people directly so that people can pay their bills now. If businesses need to cut staff or hours or close temporarily, they can without putting staff out on the street — and the staff of their suppliers. And, as people have money, there will still be customers with some money. This will take the strain off people and businesses that have to shut or have reduced revenue. They can survive — and neither the business nor the people end up further in debt.
The simple way to do this is UI (Universal Income) right now.
PS Let’s not bail out the airlines. This is a good chance to do a complete rethink on transport costs and subsidies.
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