Restaurateur Spring like Arab Spring. Many will go from moderately wealthy to bankrupt and working min-wage jobs in warehouses or as uber drivers, waiting for robots to take those jobs. The restaurant belt today is like the rust belt in the 80s. A political time bomb being primed
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I’m reminded of stories I was reading before this hit, of cab drivers in debt bondage due to paying too much for medallions to loan sharks, just before that collapsed. This is like that wave but way bigger. Expect a wave of economic suicides.https://www.nytimes.com/2019/12/23/nyregion/nyc-taxi-suicides.html …
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There’s not going to be enough money printer go brr money. Many will turn to loan sharks and scammers in a desperate attempt to salvage their life and buy time to last through the recovery. In the process they’ll dig themselves into a bigger hole that will eventually claim them.
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Every life saved now is going to cost a few lives ruined. The human cost of this effort is going to be *very* unevenly distributed. Basically restaurateurs (and the class of businesses they represent) are destroying themselves to save lives, mostly disadvantaged ones.
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The free-riding groups of society are *hoping* that sacrificers will just accept their fates, content to suffer for their enforced altruism. Not gonna happen. They will (correctly) view Covid19 balance sheet as deeply unfair, and demand restitution from relatively unscathed ones.
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At the moment much of the push to reopen the economy is coming from the protected wealthy who merely want their net worth back. The truly economically afflicted class hasn’t even activated yet. When they do, it will get actually ugly.
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This can’t be avoided. For completely arbitrary reasons, no other class can make the sacrifice. They have to be the ones to front the sacrificial wealth here. The best that can be done is to try and socialize their costs 100% later. Easier said than done.
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This is the first battle: restaurants fighting insurance companies over whether shutdowns are covered by business interruption insurance. I suspect this will go to court and be decided in favor of the insurance companies. They have better lawyers.https://chicago.eater.com/2020/4/15/21221492/maillard-tavern-business-interruption-insurance-industry-covid-19-losses …
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What are your thoughts on similar classes of businesses, but with the ability to go online (eg. gyms, education, etc. )?
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Gyms can’t go online. Most people don’t have equipment. They’ll do better since their variable costs are lower and they don’t have inventory losses. Education will be fine K-12 I think. Colleges might be in deep shit. Especially second tier and below.
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