EconoMix

People are no longer buying things they don’t need. And that is apparently bad news for the world.

I have always been awed, and perplexed, by the working of the great Economic brains of the world. How they always seem to know what will happen after it has happened. And how, mostly either through a Rate Cut, or Rate Increase, they can solve the most internecine problems plaguing our world.

But how does it work? In order to not further tax the already busy brains of the Economists who are probably working out how they already knew about the impact of the Corona pandemic, and to decide whether it should be a Rate Cut this time or a Rate Increase, I decided to work it out for myself.

Let us take the example of the travel industry, one of the industries often cited as an example of being deeply impacted. As we are not travelling, they must be going through a torrid time. Airlines and hotels must be losing money because travellers, the people who would be paying them for their services, are not paying them. In short, because travellers are not coughing up money, airlines and hotels are getting poorer.

If they are getting poorer because travellers are not spending money, then travellers, who are not spending the money they would normally have, much be getting richer.

Makes sense?

Some of these travellers getting richer could be the people who run small businesses. Like restaurants. In Japan.

But people who run small businesses like restaurants are losing money because they have to shut down, and customers cannot come to them and buy their services. In other words, they are getting poorer.

If they are becoming poorer because customers are not coming and buying their services, then the customers who would have come to them must be getting richer because they are not spending that money.

Some of these customers getting richer could be makers of protective face masks. In Kenya.

Makers of protective masks are making money because there is huge demand for these masks. They just cannot make them fast enough. Hence, they are getting richer.

People buying these masks are becoming poorer as they now have to pay for an item that was not budgeted in their original scheme of things.

Some of these people becoming poorer could be employees of a software company. In Mexico.

On account of uncertain business outlook, the software company that employs them has offered a choice of retrenchment or pay cuts to employees. Hence employees are becoming poorer still.

If there are fewer employees and they are being paid lesser, and are becoming poorer as a result, then the employer, because it is spending less money, must be getting richer.

At the same time, the software company getting richer is seeing its carefully built business crumbling. The investment in creating a sales pipeline seems to be wasted as clients are unwilling to place new orders and even cancelling existing ones. If orders are not coming through and existing ones are being cancelled, it will gradually become poorer.

As clients of this software company are not paying money for new orders and saving money on placed orders, they must be getting richer.

Some of these clients getting richer could be mid-size garment manufacturing units. In India.

Mid-size, or any size, garment manufacturing units are seeing a steep decline in orders and are losing money because of that. Not only are they not getting orders, they have to keep paying salaries which is what the government has mandated. As is the business of governments in free markets to do. Mandate. Hence, they are becoming poorer twice as fast.

If they are becoming poorer because customers are not placing fresh orders and buying their garments, then the customers who are not placing fresh orders must be getting richer because they are not spending that money.

Some of these clients cancelling orders and getting richer could be retail clothing stores in Europe.

Retail clothing stores are losing money because footfalls have totally dried up on account of the lockdown and people are restricting purchases to essential items. Hence clothing stores are getting poorer.

Customers who are restricting purchases to essential items are paying lesser for clothing items and hence getting richer by saving money they would otherwise have spent on clothing.

Some of these customers getting richer could be people working for online platforms that facilitate video meetings and interaction over the Internet. In Canada.

They have been offered overtime pay and bonuses because their employer’s business is booming. Hence they are getting richer still.

Their employers, the businesses that own and run these online platforms, must be getting poorer as they are paying more to employees than was budgeted.

Online platforms that facilitate video interaction over the Internet getting poorer are experiencing a surge in demand and cannot seem to be expanding fast enough to keep up with it. Their revenues have seen a spike and they are getting richer.

People buying these services are becoming poorer as they now have to pay for an item that was not budgeted in their original scheme of things.

Some of these people getting poorer could be farmers growing food for the teeming millions. In Brazil.

Farmers are continuing to grow and sell food as people need to eat. They are neither getting richer nor poorer as people continue to buy food and eat. If anything, they could be getting marginally richer as the focus on buying and consuming food is now much higher than just a few weeks back.

People buying and consuming food would be getting neither richer nor poorer as they continue to buy and consume food like they have always done. If anything, they could be getting marginally richer as the more expensive eating-out options are not available at the moment. Not only that, they could experience an unforeseen improvement in health as the home-made food being consumed these days might be healthier.

Some of these customers getting neither richer nor poorer could be employees of a large corporation that operates an airline. Because there is no demand for travel, the airline has sacked a large number of staff. Without jobs, these staff members are getting poorer.

The airline that employs them must be getting richer as it no longer is paying what it had expected to pay in the form of salaries.

But we already learnt at the start that the airline is getting poorer because nobody is travelling and their capacity lies unutilised.

Clear? As mud? Or, using an Indianism, ‘as a jalebi?’

Are we getting richer and poorer at the same time? Or, are we getting neither richer nor poorer at the same time?

And I haven’t even begun to decide whether it will be a Rate Cut or a Rate Increase this time.

I think I better leave it to the Economists.

But all is not lost. At least I have been able to establish that, like the oceans of the world, we are all connected. You wouldn’t have known that, would you?

Going Viral

It was Gol-Maal on Saturday. The original Hindi comedy about imagined twins, of early eighties vintage, with Amol Palekar in the lead.

On Sunday it was Article 15, about the reality of equality versus the utopian hope enshrined in the Indian Constitution.

Yesterday it was Highwaymen, a tepid, predictable period film with Kevin Costner and Woody Harrelson tracking down Bonnie and Clyde.

Today’s movie is still to be decided. I expect a lot of decisions regarding movies will need to be taken over the next few days.

No football on TV. No cricket. No tennis. No nothing. At least nothing live.

A lot of people clapped at 5 PM on Sunday, as asked by the PM, as a token of appreciation for the medical people, working with integrity and at great personal risk, in these troubled times. I did not. Tokenism is not for me. I appreciate medical people at all times. Don’t need to clap at 5 PM to show my appreciation. I also appreciate the armed forces. Despite random people insisting we need to show appreciation for the armed forces, and that one would be unpatriotic if one did not forward a random WhatsApp message supporting them. And the police force. And the cleaners. And all sincere, honest, hard-working people trying to make a difference to the world we live in.

The people who did not clap are likely to be name-called by the people who did. Like unpatriotic. And asked to migrate to a neighbouring country. In my humble opinion, that is the nature of herd mentality. But, to be fair, the people who clapped are also likely to be name-called by the people who did not clap. Like sheeple.

One got to see pictures of many leaders, business leaders especially, clapping as asked by the PM. On LinkedIn. On Twitter. What good is clapping at the request of the PM unless you can get someone to take a picture and post it in places where there is some possibility that the PM or his minders will notice. Along with a patriotic, motivational message. In other words, a message that appreciates the PM’s vision and leadership. My neighbours who clapped are fools. I don’t think they took any pictures when they were clapping. Nor did they put up patriotic, motivational messages on LinkedIn and Twitter. I wonder how the PM, or the CM, or even the DM (District Magistrate) will know they clapped. But I will leave them to solve their problems. I have to focus on mine.

In my defence, I was misled. Or unled. How was I to know that the request from the PM to make sound at 5pm had a “very hidden scientific message” that I saw only too late. “Sound waves if created all over the country at a fixed common time will surely disrupt the travel of virus & repel them not to enter our vicinity. This is the reason why sound & noise is made at the dawn & sunset in the temples, in the old Churches in olden times and the holy Aazaan by the Muslims. Without the sunlight the virus & bacteria and all evil Spirits become more active. Hence this stand to create an aura of sound waves to shoo away all the negative forces entering and to save our country and the whole world.”  What would I not do to shoo away negative forces. Or weaken and starve evil spirits, and virus and bacteria, with sunlight. Since it was a scientific message, it had to be hidden. And since it was hidden, I could not see it.

As if that wasn’t responsibility enough for the spread of the Covid-19 virus, I also broke the chain. The one that required an uninterrupted chain of 10000008 people chanting the Mrityumjayamantra to be formed. If you must know, even people in Canada are chanting Mrityumjayamantra. Maybe one or two people, maybe in an entirely different context, but people in Canada nevertheless, which the person sending out this missive certainly would have known. And hence so must you.

When all this is over, and mankind looks back on this chapter in our evolution, and our struggle with Covid-19, I think I will be held responsible. Not only no clapping, but breaking the chain too. What was I thinking? I wonder if there will be second, or, in this case, third, chances.

By now we know that it affects the Chinese but not the French or Germans. We know it affects people living in hot climates but not those living in cold ones. We also know that It affects children and young adults but not the elderly. And it affects white-skinned people but not dark-skinned ones. Also, it affects people living in the Northern hemisphere only, and that too people speaking Spanish but not those who speak Mandarin or Russian. Most importantly, it affects the poor but not the rich. More specific to the Indian context, it impacts Jats and Rajputs, but not Kayasths and Brahmins.

Of course, we know nothing of the sort. If we do know something, it is that Covid-19 does not discriminate by nationality, language, religion, caste, or any other difference that humans like to highlight from time to time as a justification to maim and kill others for. If ever there was a doubt that human beings are a common race, hopefully the spread of Covid-19 dispels it.

This too, then, shall pass, is my belief. Of course, there will be Hell to pay. The old order will changeth, yielding place to the new. Some ways of life will undergo a drastic change. Many industries will be severely impacted. As will some sincere, honest, hard-working people, for no personal fault of theirs.

It seems President Trump was right. About the environment. We make too much of a fuss about it. Let us go about our assigned task of messing with it while we can. After all, nature will eventually reclaim its spaces, as people seem to be saying with Covid-19. Witness the once again beautiful sunsets across the Arabian Sea, or the once more breathable air in Delhi. Perhaps we have not crossed the point of no return. Yet.

It seems we had forgotten what it meant to go viral the old fashioned way…