It's not guaranteed that keeping businesses operating would stop them going out of business either. It's possible that a better strategy is to force everyone to shut down and get it over with quickly, so that customers can feel comfortable going out and spending money again.
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.
Businesses were never expected to be able to totally shut down for months at a time. It’s not reasonable to suggest that businesses who can’t handle that have been irresponsible or are less deserving of help.
But I think a lot of businesses really have a problem with the mechanics of just getting their business running again, like the one in the article. This seems fairly straightforward to defend against.
My father is in his late 70s, but he still runs a business employing a few dozen people. He probably can't afford to keep the business afloat while everything is shut down, and he might not have the money or energy to start everything up again in a few months.
He's probably somewhat of an outlier, since most business owners are younger and will have better chances of starting over, but some business won't recover from this.
Probably most small(and medium, and big) businesses can hold on for a month or two at this rate but failure rate is going to approach 100% as time goes on.
Not reasonable, and also not useful. That's probably 90% or 95% of businesses that were not able to pause like that. We're going to want a lot of those businesses.
And the ones that are able, some are by luck or circumstance rather than wise design. Should we reward the luck as well as the design?
"Don't help them" seems like throwing out ten babies with the bathwater.
I'm not sure if that's the forest. Most of this article deals with the simple convenience of a bank, namely deposits for cash intensive businesses.
In the case of the small business, they were talking about a restaurant that had been open for three years. If such a restaurant isn't capable of sustaining itself at that point, it is quite certain a dire cause.
My wife's small store (two owners, no employees) was unable to figure out the PPP paperwork, threw up their hands and said 'screw it' and just got on with figuring out how to reopen. I think the smaller the business, and the more they depended on that business to pay the bills, the less likely they had the time and resources to navigate the paperwork.
I think 6 months of lock downs or stay at home would show a lot of companies are not prepared to not have income. Businesses going out of business aren't coming back, along with the jobs they provided.
> Many of those "non-essential" businesses and the associated supply chains are simply not set up in a way that can be stopped and then successfully restarted months later. If they're shut down for any significant period then they're gone for good.
Honestly, that sounds like hyperbole. You'll have to give examples, and not something like retail or restaurants. Honestly, with a little imagination and expertise (and most importantly the political will to deal with the problem), I think it doable to make the legal changes necessary to pause most business like that with little damage, just as long as the aid is there. For instance, make 2020 something like an intercalary year. IMHO, this stuff only seems impossible if you tie your hands and restrict yourself to a limited number of first-order interventions.
The situation we have now is something like an ER doctor who's too busy playing on his phone to save the life of someone who's been shot, and who then turns around and loudly blames "guns" for that unnecessary death.
Anecdotally I have found businesses are miraculously efficient at things that benefit them (signing up for things, transferring money into banks, making payments) and need “extra time” for anything that is a problem for them in any way (processing “unsubscribe”, issuing refunds, transferring money from banks, cancelling accounts).
I feel like the only solution is a law that simply requires businesses to make it equally easy to do something as it is to undo it (especially for things like being able to “click here” to enroll but “on hold for 45 minutes” to cancel...give me a break). Some states are getting there.
Chains also have the ability to leverage themselves much more than a small business can. We saw a lot of heavily leveraged chains going bankrupt within a month or two of the start of the lockdowns.
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