Sunday, April 26, 2020

No sympathy from me for under capitalized businesses

As Grampa always used to tell all of us, 'you need to save some money for a rainy day.'  Well, as usual, Grampa was right: it's raining cats and dogs right now, and those that saved that money for that rainy day are doing OK.

I am somewhat surprised, however, at just how many businesses there are out there that can't endure a bad month or two in a row without going bankrupt.  There's a ton of these under capitalized folk that have been living paycheck to paycheck for, well, decades.  Yes, our own elected government officials have screwed up the economy to hell and back by mandating shutting down commerce so that old folks don't die.  

Then again, we have been ensuring that all of our old folks live in the lap of luxury since the Great Depression era and good old Uncle FDR who ensured that there was a goodly amount of our nation's wealth was transferred to old people, this has been going on for almost a century or so now.

But as for the younger generation who can't rub two nickels together during hard times, this will generate very little sympathy from me.  Going bankrupt because you can't pay your employees or rent for a month, that is just not the way that our fore bearers suggested it be done.  

It seems that restaurants are the bulk of these failures, and in general terms this has always been the case.  They say that 90% of all restaurant start-ups fail for whatever reason: bad food, poor service, shoddy equipment and environs, if people don't enjoy what you are providing, you are toast.  As it should be.

Our federal government is now shoveling out helicopter money to all of these under capitalized businesses by the trillions of dollars; now I (a tax payer) am on the hook for bad business models, and I am not happy about any of this.  The employees?  Unemployment benefits are available, also at my (the taxpayer) expense, which is reasonable under the circumstances since the government is the reason that they are unemployed in the first place.  

Of course, that is a topic for another day.

Moral of the story?  Always listen to Grampa.  Unless he is talking about that huge fish he caught back in the day, don't bother listening to any of that, it's all hogwash.  Other than that, Grampa knows what he's talking about.