Coronavirus, money, and the coming economic nightmare

By Wahaaj

Could students of today be bailing out the big business of tomorrow?

It is now becoming clear that low paying giant companies such as Amazon and Walmart will benefit from the collapse of small businesses. Biggest companies will get the biggest handouts, as in 2008, but the already strangled high street shops and small family businesses could tumble, making monopolies more likely.

Someone has to pay for the bail out money. There is no such thing as a free lunch and even printing helicopter money results in inflation. Make no mistake, the students of today will lose out.

During the third week of March, the world economy began to see a plunge, and I, like most people took no notice of this as saddened and fearful we were about the current spreading of the virus and the mass amount of deaths that were shown by various news channels. In the midst of all this, global financial markets came down in a heap, collapsing for the first time in twelve years since September 2008 - firstly, the price of shares in major corporations plunged. The value of the dollar suddenly increased against other currencies, devastating the developing world - countries pay for debt and oil in dollars. Let's not forget this eventually will lead to a crash in debt ridden nations such as Mexico and Pakistan. But this crisis will affect all countries, I recall at one point 26 trillion dollars had been eroded from the value of global equity markets, causing a huge loss for family investments in shares and on the collective pools of savings held by pension and insurance funds.

For the first time since WWII, production around the world will decrease. Already in the USA in the past three weeks seventeen million people have lost their jobs and in the UK furloughed staff are wondering if their jobs will ever be replaced? For us students there is a period of uncertainty that even makes the 2019 gig economy look attractive. What sort of employment will be available to graduates in a few years time? Someone has to pay for the bail out money. There is no such thing as a free lunch and even printing helicopter money results in inflation. Make no mistake, the students of today will lose out.

Whilst the global economy is facing extinction, there is some light at the end of the tunnel as the coronavirus has prompted sectors such as food retail to streamline their services and struggling big names such as Morrisons have seen sales increase both instore and online. The problem of media scaremongering created are panic buying across the world - and especially where I live in the UK – this means that already the situation is bad for countries and the amount of food people are taking is not aligned by the amount of food being produced. At time of writing there is a shortage of self-raising flour but thankfully people have stopped hoarding toilet paper!  Some governments have acted on this and have decided to help the food industry and world economy by having people purchase a certain amount of food.

Popular opinion presented to us has been that governments all over the world had to make difficult decisions between saving lives or saving the economy. Whilst this is true, it did not go deep enough to look at fault-lines exposed by the COVID-19 scare. Many people in the world, from America to Bangladesh have absolutely no savings and are currently at the mercy of unscrupulous landlords and private healthcare. People are dying of ill health and of poverty. This hasn't provoked governments to do the right thing by putting essential services in public ownership. COVID-19 has shown that even a catastrophe will not push leaders to a more permanent compassionate economics after lockdown has ended. This is more so in former colonialised countries where there is no safety net all. 

At times like these you realise how powerful the media is - they need to stop panicking people about the pandemic and ensure they are delivering valid facts. Media barons of today own business and also have a stake in government so they all have their own vested interests. This has meant that media has failed to inform their nations of what is happening to the world economy at large. People on 80 percent of their salary with access to water, food, entertainment and free healthcare in England for example need to empathise with the dying thousands who have no voice and no source of income. What we need is an integrated approach, one that ties everyone together. Only by working out a solution that will benefit everyone in the world can we say that we will be successful. Together we will beat the virus!