Alpesh Patel’s Political Sketchbook: When We Get Out Of This

Alpesh Patel Tuesday 17th March 2020 13:49 EDT

Each year some 9 million people die of hunger. They will this year too. So far Covid-19 has taken the lives of 0.0001 percent of the world population. Or 7000 people worldwide year to date. Imagine if the world governments had the political will to spend the trillions they are spending to save the lives of another 7000 people and do what they do for this to end the 8million guaranteed to die of hunger, let alone other diseases.

The problem with the financial markets is they are not the real economy with real people and real jobs. When I had my show on Bloomberg and we went through a couple of crashes we were mindful that real people will be losing real jobs. There are those who cannot and so have not saved. Others chose not to.

You may have read reports of how the worlds wealthiest have lost trillions. Actually, market crashes always result in transfer of wealth from the many poor to the few rich - just faster than usual.

At this time it should be British Airways shareholders - diffused - who should feel the pain not employees. Shareholders are capitalists. It is capital that should pain. But instead management will sack workers. Cash flow is a limit operating boundary condition of any business but just as banks were forced after 2008 to ensure they had ample reserves we know now to ensure all businesses of any scale should have too. They don’t because dividends from earnings are paid to capitalist shareholders not kept in reserves. This needs to change as it was for banks.

Once again banks will be loaded with money and management will make massive profits paid to their senior managers and dividends.

If you have an extended family of friends and relatives you are especially rich at this time. Those who have sought self isolation for years as their idil realise I hope even more so we are connected.

It is heartening we as a fragile species even in increased isolation brought on long before this new threat, we help those we can, when we can, in whatever way we can. That part of human nature is a constant.

Instead of the Central Bankers from US, UK and others meeting privately to coordinate interest rate cuts, G7 political leaders should be coordinated on one screen on TV to reassure the public. The former will see us sell financial assets as we know the Central Banks are creating panic and running out of ammunition. The latter actually helps - builds confidence.

Secondly, Government should buy shares for cash in large employers needing a bailout eg British Airway BUT on an offer to existing shareholders who if they do not pay up, get diluted away. The State will get its money back and save jobs. Rather pay for shares and save a business than pay for benefits for those made redundant.

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Alpesh Patel

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