“We are going to bounce back quickly, it’s a great time to invest in the stock market,” said by some folks at Colin’s Coffee and on TV.
So let me get this straight; every single outdoor music festival in America is shut down. Forget the Stones and Bonnaroo, that means that EVERY single show, bratwurst festival, every music in the park series - in all 50 states - isn’t happening. So every person who rigs the stage, runs sound, roadies or performs on that stage isn’t getting paid. Or the booking agents either for that matter. With no events happening, there is no reason to advertise on radio or anywhere. The beer companies have already slashed their promo budgets to next for nothing.
Also, every single minor league ballpark in the country is closed. Every person from the beer vendors to the players are making zero dollars. Every small-town bar and restaurant that depended on the baseball crowd is just scraping by, if at all. And the MLB is playing only 60 games without fans as well. Those parks are surrounded by huge hotels and restaurants that will be sitting empty for the foreseeable future. I should know, every year our family would hit multiple cities to visit ballparks and spend the night. None of that is happening this year. How expensive is just the air conditioning for a giant, mostly-empty hotel? A movie theater? Dave and Busters? Owen and I were at that giant new bar across from Wrigley Field in Chicago just last year. A brand new building. It had to cost a fortune. Three stories of bar space and games. With no baseball, It’s mostly empty now. Forget AC. How much is rent across the street from Wrigley? What happens there?
Speaking of restaurants, many are doomed, but even the ones thriving have cut staff more than half as they do not require a large wait staff while pivoting to a carryout model. Bartenders and servers are the cash engine behind any successful city neighborhood and that cash isn’t flowing anymore. And don’t think “reopening” makes a difference. The nerds have crunched the numbers and determined that a state that is “open” doesn’t get any economic benefit over a state with restrictions. Sure, more idiots pile into a bar to super-spread the disease (hurting business even more), but the money spent is the same. People just spend it differently (Amazon, Netflix, DrinksToGo). Habits have changed and they aren't changing back anytime soon.
And I cannot imagine the carnage in commercial real estate and office space. Just where I live, six places have already shuttered and we are still fat on the PPP and unemployment benefits. The government gravy train is running on borrowed coal, and that coal is dwindling by the day. Our country was swimming in record-breaking debt the year BEFORE the pandemic happened so don’t expect the banks to step in and save the day either. Loans for a new brick and mortar store to take the place of the one that closed? HAAAAAAA. Tell me another.
So what happens when the gravy trains runs out?
Okay, this is a bit of a downer and I’m no financial advisor. I’m just some rock n roller who slings coffee for chump change But standing here at street level there is one nagging question I cannot get past:
Either all the stuff I listed above contributed to a growing economy, or none of it ever mattered at all. Which is it? We are going to find out in about three months.
Colin Gawel founded Pencilstorm and wrote this at Colin’s Coffee.