Our State Before New Normal

Lockdowns are slowly being lifted in the United States and in the wider developed world. However, the monetary flow is still unnatural. Government programs were launched into overdrive and the natural business interactions where changed. This has created a distorted environment. Firms have seen sales destroyed or increased beyond normal levels. Estimates have been thrown into the bin as the future is made even harder to plan for. Small business has been decimated with corporations taking full advantage of government actions and their ability to fund massive changes. After Covid new norms are being pushed for the consumer and the consumer themselves has been changed by the actions over the crisis. Some may wish to view this as a new normal but in reality, this is the consequences of government actions in response to Covid19. If a new normal is created it will be after we have dealt with this new environment.

Despite what the media initially reported. Big business outside of the tourism sector has done well. Small business was challenged with a full on assault. The normal advantages of being able to change quickly fell apart when the changes required a large amount of capital and different skills. Many of the big firms had managed to build an online presence that they exploited with the lockdowns. Governments passed numerous rules throughout the lockdowns that small business owners had to deal with. Large firms however got special deals and could have legal branches of the company work out what was going on. Small business has emerged weaker. Big business in contrast leaves with a renewed focus and with their digital presence much more built up. It goes without saying that technology companies have also done quite well. In the business world, the situation has only cemented corporations staying power.

Covid19 has seen a large amount of local business collapse. Despite some locations managing to keep their local business this trend is notable. Online however what is local is changing. Perhaps a local business has a page online but the locals don’t view it as similar to themselves. Online cultures and groups increasingly view each other as peers and more similar than anyone close to them physically. The internet creates a digital local that is different from the physical one. Covid19 increased the strength of the digital local as people were prevented from interacting with the physical. Corporations view this as a threat as they have managed to win out against the physical local business. Due to the large nature of corporations, they are unable to become a part of the digital local for the moment. How long this lasts depends on the efforts to make brands feel like individuals. Efforts in social media management is an attempt of corporations to enter new locals like they have dominated the physical local.

Pending inflation is one of the largest concerns that have been identified from the massive response to Covid19. The scale of the creation of money is stunning. For the moment it has been absorbed by the asset markets. This can be most obviously seen in the stockmarket with its massive rise. Yet it has also reached the housing and gold markets.  Some have claimed that it will stay in those markets. Yet this misses the point of these investments. People want to be able to get something from investments. Very few people buy a stock just to hold stock, they want a benefit or reward. Most of the time they will “cashout” that investment to purchase products. When this happens the inflated price will start to be felt on consumer goods. This is when the hidden inflation will be able to be measured and felt by the average person. For the time being it is hidden however, it appears it is only a matter of time. A looming economic bomb sits over the recovery.