There are many who have commented on this blog who seem to think coronavirus should have little or no impact on them. I have to say that I think they are very wrong. This is an example of the reasons why think that:
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Channel 4 News (@Channel4News) |
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"This is the most frightening disease I've ever encountered in my career." Richard Hatchett, the doctor leading efforts to find a vaccine for coronavirus, says it is much more lethal than normal flu. pic.twitter.com/1tjJ2ed0Hq |
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Click the link in the tweet to see the video: for some reason it will not embed here.
This is why I am thinking about pretty radical economic measures to ensure that as much as the economy - which means real people and their wellbeing - as possible survives this crisis.
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I think people share your concern regarding the magnitude just disagree with your response. For example why penalise landlords specifically? Why can’t landlords who allow for a rent fee period claim that money off the government? That would seem sensible.
I am simply managing cash flow
And landlords have the greatest capacity to withstand the pressure
It’s not penalising anyone by choice
It’s rational decision making
And why should landlords get a handout?
Is socialism just for the already wealthy?
Really?
Why?
I think that one of Dean’s point is that Landlords would not be getting a net handout – what they lose in rent, they get back from the government, so that’s a net zero.
And if you are arguing that Landlords have a greater capacity to withstand the pressure than the government which can issue its own money, well, words fail me. Landlords have greater capacity on average than tenants with many exceptions, for sure, but if looking at who has the greatest capacity then it will be government.
But why should landlords make no loss when literally everyone else will and they have the greatest proportionate asset base to support such a loss?
How about trying a reasoned argument to support your case?
Surely tesco’s have deeper pockets than individual landlords, why not legislate to make them provide free groceries for 3 months? Sky certainly do, why not legislate for free access to sky sports for 3 months? Ditto with the energy providers?
Can you not see any inconsistency in your argument?
Tesco makes less than 5% margin – it could nor survive two weeks on the basis if you’re suggestion
Excluding interest – and I have covered that in my proposal -landlords make about an 80% margin
And now you know why I made my suggestion
Why not try using facts? They help
“Tesco makes less than 5% margin”..and that is a convincing argument!!
For the record, the margin figure is more or less right but its half the calculation… its volume that counts for supermarkets..and they have more capacity to absorb than an individual landlord..of course the Govt can absorb more than anyone if thats the route you want to go down
With the greatest of respect – the margin is everything in supermarkets
And, of course, we could ask the supermarkets to sustain major losses, but if we did the asset that they represent would disappear, very quickly: they would fail.
This is already the risk that they face from the major economic downturn that Coronavirus will create: There will be a massive contraction in consumer spending this year, simply because people will not be going out and will not have the means to incur expenditure. So supermarkets will, already, be at risk come what may as a result of coronavirus. But you now want them to give away product on top of that.
As I have noted, they would probably fail within a few weeks.
Apart from the hundreds of thousands of jobs that would be lost, we would also lose the entire UK food supply chain. So there is no risk threw then (Please understand that I’m joking: I am not sure that you will)
In contrast, Landlords have almost no costs of sale, particularly if they are not bringing in rents or paying mortgages and if repairs cannot take place, which will be the case if there is a coronavirus crisis, because it will be almost impossible to secure anyone to do them. And, whatever you say, they have a massive asset base: lines of credit are readily available. Compared to Tesco or its equivalent they are, then, massively robust, and hardly a single job depends upon them in the period of a crisis.
In other words, I have chosen my target particularly well and particularly fairly given the macro economic crisis that we will face.
Now, very politely, go away and be an idiot elsewhere.
One of my main points was about the capacity to absorb the shock.
You have just argued once again that Landlords have a greater capacity to withstand the pressure than the government which can issue its own currency. This must be a false claim, and its perfectly reasonable to call this out.
In a recession people across all income and wealth groups lose out on aggregate and Landlords with empties will have delays filling them, and the value of their asset goes down ( cf. the 2008-2010 collapse in house prices which seems to have passed you by when arguing that Landlords would suffer no net loss if reimbursed by the government for unpaid rent ).
But if you want to believe that house prices are unaffected in recessions, argue away, and I will counter with evidence of when it happened, a recession you yourself have often cited in this debate.
You could argue to reimburse say 8/10ths of the lost rental income if micro managing the economy is your thing.
Go all the people I would compensate landlords would be at the bottom of the list
Suggest why otherwise please, a question I have asked many times?
Dean
In that case should the government not pay everyone who suffers a loss of income due to coronavirus? Why are landlords a special case?
Would be a pretty big payout!!!!
1. Where do they get the money from? The government doesn’t want to admit that there is infact a magic money tree.
2. Government debt/deficit would go through the roof.
Market fundamentalism demands that government should have no money of its own. Good God if it was well known it did the poor would be demanding government buy out 50% of the equity in companies over a certain size to ensure equitable distribution of profits. What on earth would then happen to the few’s right to be inequitably greedy? The poor souls would end up suffering from post traumatic stress disorder wouldn’t they:-
https://www.theguardian.com/business/shortcuts/2020/mar/04/ceo-transformed-company-setting-54k-minimum-wage-dan-price-gravity-payments-took-1m-salary-cut
Hope for the best.
Plan for the worst.
My concern with the economic aspect of coronavirus is that representative democracy, being only representative of corporate and other powerful interests and not really democratic at all, is incapable of providing the help to individuals and communities affected. The groupthink will be to support giant businesses and directly support share prices, give money to banks and, so on. For most of us (I include myself here as someone self-employed) I see little being offered by way of support. There may be a pittance for sick pay for those affected, but if work is cancelled or postponed, what do individual workers do? For sole traders and small businesses this will be catastrophic and the ripples will be enormous. At the individual level it has all been about social duty – be vigilant, self-isolate – without anything in return. The support is not there to “do the right thing” compared to the need to survive – also the “right thing” – in a cruel economic system.
Thank you for this but have you read the responses underneath the clip? Astounding.
The Doctor uses the phrase ‘it has the potential’. The naysayers are way too early with their certainties, and they are not really listening properly. Again. Fear manifesting itself once more.
The most astounding responses were the ones that suggested Hatchett’s warnings can be dismissed because he is an expert and/or because he is a propagandist for the deep state.
Agreed.
The only ‘deep state’ I can see is a deep state of ignorance.
Corona virus does seem to have the potential to be a pandemic, and in general people have to be scared into realising the importance of hygiene so I am not going to criticise any fear-mongering aspect of the media. If we can delay the spread until a vaccine is available, all the better.
As PSR notes, the comments below the Twitter post are quite vociferous in denying the claims – Hatchett I thought was being reasonable in the clip I watched (I didn’t see the whole interview) – they were trying to say it is NOT more lethal than the flu because mortality is about 3%,,, there were enough responses saying flu mortality is a fraction of that (variations in claims of 0.02 – 0.1%) demonstrating a lack of understanding in the naysayers. I don’t think people should panic of course, and that’s where a good response from government comes in, and explanations of how to prevent spreading.
Hatchett did not really describe why he thought this virus is more serious than other recent ones very well (though that might be in the full interview I didn’t watch) – the likes of Ebola are more endemic in nature, it is too efficient at killing so doesn’t get a chance to spread widely. This corona virus is less lethal, so people are healthy enough to spread it for longer (generally that’s why colds and flus are the most successful viruses going) – even though it’s not as easily spread as a cold is (from what I’ve read and heard so far). Worrying that there can be no symptoms for up to two weeks but still spread though (so I’ve heard), which is possibly a major factor in its potential.
Unfortunately I’ve got a bit of a cough at the moment so can’t go out for people glaring at me – it’s a mild chest/sinus infection not a virus, but I’m too scared to go the doctors in case they turf me out! Anyway, some of the old remedies are the best, just takes more effort and a bit longer, so I’ll stick with that, and with the self isolation!
You can keep tabs on its evolution here. Note the relatively high rate of total recoveries – https://www.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6.
Of course it’s still early days so who knows how it will pan out. The highly infectious nature of the virus will inevitably cause economic mayhem, which is what you are addressing. But, in terms of human mortality, the biggest cause of death in the US (for example) is heart disease. ‘One person dies every 37 seconds in the United States from cardiovascular disease’ – https://www.cdc.gov/heartdisease/facts.htm, which must also have a significant negative economic impact, while simultaneously enriching BigPharma shareholders beyond their wildest dreams. And each year there are approx. 1.4 million avoidable road fatalities – with some 40,000 in the USA alone. Etc. etc.
I’m not contradicting sound & practical recommendations re COVID-19. Just offering basic statistical comparisons. Make of them what you will. In the meantime – keep washing your hands, which is good advice anyhow during the ‘flu’ season.
Be well 🙂
The likelihood is the U.K. death rate might double
That is a pretty staggering statistic
This will be the biggest cause of death, albeit only for a while
Some useful data on mortality rates here: https://www.worldometers.info/coronavirus/coronavirus-death-rate/
The economic impact is ALREADY disastrous
Travel, tourism and leisure are all in free-fall, Tourism alone it is 10% of global GDP, and 100% of many peoples income
Car sales in China dropped 80%, in Jan/Feb,
OPEC is working on the basis of 10% reduction in oil consumption i.e. 10% LOWER global GDP
Global Just-in-time supply chains are all broken, it will take months for them to return to normal ONCE the virus crisis is passed.
The trade impact is ALREADY disastrous
China and India have stopped exporting key pharmaceuticals
Germany has stopped exporting some medical equipment
i.e the Global trade consensus has been abandoned
I predict that the hardship about to be suffered by third world manufacturing cities and economies dependent on tourism will result in major civil unrest, which will further impact world GDP.
Gosh I hope I’m wrong!
I can’t see these changing for at least 6 months
I worry that the world will go into a global depression state like the 1930s, and our policy makers will be bereft of ideas of how to reboot global trade.
I wonder, if China had let the virus rip, would the economic impact would have been less?
Out of interest, does anyone know how the Chinese government has been supporting their citizens through the economic impacts?
Does China have a Private Landlord/tenant sector or most rents state owned? Is there a sizeable private home ownership/mortgage sector and if so is it funded through public or private banks? Have rents/ mortgages been put on hold?
Is there a widespread programme of food distribution to those thousands of people who are in isolation? Is the food free?
I suspect Richard knows that his rent free period proposal has literally no chance of seeing the light of day – and that would almost certainly be the case even if we had elected a Corbyn government. It’s just not going to happen.
Richard is just throwing these ideas out to grab attention – and by God it’s worked.
What’s really amusing about this is that you seem wholly unaware of the fact I rather publicly made clear my opinion that Corbyn was not my cup of tea in June 2016: what you say reveals a great deal about you but says absolutely nothing about me
Rob Hutchinson says –
Richard is just throwing these ideas out to grab attention — and by God it’s worked.
Really? Attention? And what attention has it attracted? Because if the attention to which you refer is that of a handful of angry, wilfully ignorant landlords who have responded with such charming comments as wishing death upon the blogger, then I struggle to see what the benefit of that attention is.
One more time for the hard of thinking…
If people can’t work because of this virus, a lot of them won’t get paid. If they don’t get paid, they can’t pay their rent. Rather than turfing them out of their homes in response, the suggestion is that rents are written off for 3 months (or for however long it reasonably takes to ride out the pandemic).
If Landlords can’t collect rents, they can’t pay their mortgages on their properties. Rather than have the banks repossess those properties, the suggestion is a deferral of loan repayments for a similar period of time.
So far, it’s the banks that are taking the hit in the short term only…
If landlords really can’t afford to eat because of a 3 month rent loss, then they can either a) raise money against the value of their properties (which will retain their market value better than they would have done had there been a glut of repossessed properties on the market), or b) would be eligible for hardship payments from the government.
Is there anything about the above which you can’t understand? I mean, there probably is. I could literally draw a picture to explain – and it’d be the simplest flowchart in the history of flowcharts. It would clearly show that there would be a short term impact on the income of some landlords. but I fear that even a simplistic illustration of this suggestion would fail to penetrate the mental blocks the respondents to this blog have put up. There’s a febrile atmosphere where defence of privilege and maintenance of comfort zones appear to have trumped common sense and compassion. It’s not pretty.
I’m usually quite restrained and polite when I comment on this blog, but so far the responses to this proposal have been made longest and loudest by landlords who, (and let’s be as fair to them as possible) appear to be a rabid bunch of extreme fucking idiots.
I know this isn’t Spanish Flu, or Ebola, or AIDS… and there’s a fairly small death rate… but people have died and more will die before it’s over. people with absolutely NOTHING will lose income as they can’t work. Business – actual, productive businesses – will go under as a result of workers and customers are out of the game due to illness/isolation.
WE ARE ALL GOING TO HAVE TO SURRENDER SOME OF OUR COMFORT.
In the case of landlords, that means the aforementioned short-term drop in income. If you are one of those landlords who still can’t grasp that this is the only hit from this proposal… and more importantly that this proposal IS FOR YOUR OWN GOOD (see previous about lost tenants/repossessed properties and so on)… if you REALLY can’t see that, then you are either a wilfully ignorant twat who’s sense of privilege is so overwhelming as to completely engulf your reason, or you are lacking utterly in compassion as well as suffering a deficit of reason. As a wiser man than me once said – “Common sense… the least common of all the senses”
Self interested, self important, grasping, childish, sociopathic, staggeringly fucking stupid buffoons. Thank Christ they are the minority.
Don’t be that guy, Rob.
Richard.
If the government bails out the banks again in the event of meltdown, do you think that they should then be nationalised?
If the banking sector was then just one player, would there be a need for central bank reserves and a “clearing” system?
Money creation would then be in the control of Government/State/Treasury. Lending would then be under State controll and government could then decide which sectors to priorities. Any profit/interest payments would then end up in the public purse rather than the Cayman Islands
In 2008 I suggested the banking infrastructure – the clearance system and even the accounts – be nationalised, bout licenced for use to the private sector rather like the rail companies
I.e. banks would operate on a platform that could survive their own failure
I think there is merit in exploring that further – separate the risk taking and infrastructure elements in other words
Before making such bold pronouncements, wouldn’t it be worthwhile actually understanding the issue you are commenting on?
‘clearance’ system?!
ROFL
I do understand
You clearly understood as well
Such terminology as short form for the bank payments infrastructure is perfectly acceptable
But you exactly understood it…
Why would you invent a different, longer word to describe a regulatory regime that already has an official, widely understood term?
Why would you use two internet identities when one would do?
Wow….ypu’re persistent aren’t you?
Is this how you conduct all of your life?
Politely, please go away:L you’re not adding to debate
Why wouldn’t you admit when you don’t fully understand what you’re talking about?
(Rather than pretend you deliberately ‘shortened’ industry-standard terminology?)
And then censor anyone who dares to point out your error?
Because trolls really are not welcome here – and that is all you are
Martin Couples 2.46pm.
Apologies.
Rather than clearing system, would you rather, I used “multilateral net settlement”?
I was under the impression (possibly wrongly), that “clearing” was given to the term, where, back in the day, banks would swap back each others bank notes. This was before they were prevented from printing their own money in 1844.
Can I come back into the conversation now please?
(I think Richard new what I meant)
In Italy, the death rate from known cases of coronavirus is now at 5%.
Either the previous 1% death rate is too low or there are 5 times as many people there with the virus than have been identified. (36,000)
I’m guessing the latter, which means that containment is going to be very difficult Indeed. If not impossible.
And it’s heading out way.
I think it’s the latter
Containment is no longer possible, I suspect