The other half of the equation. Why do we market?
We market in order to sell things.
Right now, the economy is not doing so great. Why is that?
People aren’t buying things as much as they usually would.
There are exactly two possible reasons for this:
- They don’t have money.
- They are hanging onto their money.
If you read newspapers or watch TV news, you’d think it is all about #1. Which you can’t do much about. That’s the News for you. Always focus on bad things you can’t do anything about.
Well it isn’t, and you can.
LET’S HAVE A SPENDING SPREE
Sure, a lot of people are out of work.
A lot of them are getting those or other jobs back, too, and meanwhile collecting pretty good unemployment benefits, sometimes more than they were making while working.
More to the point, most people still have their jobs. It is just people being cautious, hanging onto their money more than they usually would.
This is not mysterious. It is not open to question. Talk to people. It’s obvious. And, data is verifying that is the case.
For two months we’ve been in a condition of great uncertainty. The greatest uncertainty since World War II. Greater than the real estate crash of 2008. Greater than the tech crash of 2000. You could argue that the imminent threat of nuclear war in the early 60’s was a greater uncertainty, but it wasn’t particularly economic in its effects. It just scared the living daylights out of everybody.
WHAT WE DON’T KNOW
Faced with uncertainty, people get cautious. Are we going into a depression? Is this going to be 1929 all over again (the Great Depression)? Better not spend money on anything we absolutely don’t have to, if we aren’t sure where the next dollar is coming from!
Turns out all those predictions of doom are exaggerated.
As Mark Twain said, when his obituary was published prematurely, “the reports of my death are greatly exaggerated.”
Well, the reports of the economy’s death are greatly exaggerated.
The purveyors of gloom and doom are still peddling the idea the economy will take years to recover. Well let’s call a spade a spade. The people saying those things are not disinterested, objective “experts.” They are doing it to make a buck for themselves or others, to make a name for themselves or to curry favor with powerful and wealthy people.
How about some facts?
Disney World re-opened the other day and was immediately sold out.
Baseball and other major sports are busy making plans to come back soon.
Parks and beaches, reopening, are packed with people (maintaining social distancing of course).
Bikers are out in volume on every local trail.
Restaurants are reopening and getting maxed out with their current limitations of occupancy.
My God, you can even get a haircut or have your nails done!
WE’RE TIRED OF DOING THIS
Americans are, in the main, cheerful, optimistic, fun loving people. Hunkering down in fear in their homes is not our natural state. Doing it for a while doesn’t make us accept it as “just the way things are.” It makes us eager to get back to our usual activities.
Barbecue, and boat, and party, and bike, and visit. Go to Church for God’s sake!
Sure, we want to follow the rules and stay safe. But the rationales for continuing many restrictions are wearing thin in the minds of many people, the scientists included.
How about some actual numbers? Here in Pinellas County, there have a total cumulative count of under 1000 cases. With a population of 1 million people, you have about 1 chance in a 1000 of having contracted COVID-19.
The number of new cases, daily, continues to downtrend, despite the Phase I loosening of restrictions in most of the state. The number of deaths daily has severely declined to a fraction of what it was at its peak.
So guess what. People are going back to normal, as much as possible, and as fast as they are comfortable with it. Sure, there will continue to be a lot of online shopping and other changes.
My main point is that going back to normal means spending money normally as well.
There are plenty of signs of that happening.
It is true that the savings rate has sky-rocketed (that is the evidence that this isn’t about a scarcity of money). Long history shows people don’t, in such a situation, continue to pile up the dough in bank accounts earning 1% interest.
At some point, they head out for Disney World.
So what’s the bottom line?
There’s a gigantic pent up sales potential out there.
PEOPLE WANT TO SPEND MONEY ON THINGS.
If you are a small business owner, help them get what they want.