Calling To 'Open The Economy' Doesn't Help Small Business, It's An Attempt To Screw Small Business

It's not as helpful as you might think it is.

We’ve seen far too many small business fail in the economic upheaval brought on by COVID and the subsequent mismanagement. It’s not fair that people who did nothing wrong are seeing their livelihoods go up in smoke because they can only serve a fraction of patrons. Superficially, the calls from politicians to “reopen the economy” and get rid of public health restrictions sound like a lifeline to help those businesses survive the onslaught that’s already put too many out of business.

But it’s not a lifeline. For those of us who’ve been around the legal profession long enough, it’s recognizable as a targeted effort to screw over small businesses for the sake of entrenched interests with far deeper pockets. And the fact that it’s managing to build steam on social media is a sign of how broken everything is right now.

The problem is, “reopening” is a largely symbolic act. Economic activity is clipped even without restrictions — people who lost their jobs don’t have money, government stimulus has been lackluster, and most people remain rightly concerned about the virus. That all adds up to severely curtailed economic activity. Even areas without restrictions at all have seen noticeable dips in revenue. Small businesses aren’t known for operating with a whole lot of extra financial padding so “opening” while the economy continues to struggle isn’t likely to save these businesses even if it eases the pain.

So what’s the point of aggressive calls from Republican candidates to “reopen” the economy? It’s all about clipping the tether to small businesses and leaving them at the mercy of the economic tides. It’s about robbing small businesses of the argument “we’re short on our bills because of an official lockdown” and opening the gates so the banks can start foreclosing and business interruption insurance to start saying “look, it’s not our fault you weren’t packing them in.” It’s about artificially alleviating the pressure to consider another bailout or unemployment boost. Or to disrupt the overwhelming bias toward protecting landlords over tenant businesses — to the extent that it’s often a better deal to leave a storefront vacant than to have a tenant producing at reduced capacity.

No one seriously monitoring economic activity thinks that dropping public health restrictions will pull these businesses back to profitability. And that’s before you start considering that opening up just lands localities back in nightmare COVID scenarios — like El Paso that’s now reached 100 percent ICU capacity after Texas defiantly refused to take precautions — and triggers another round of restrictions that drag this out further.

Look, the United States shouldn’t have had to lockdown ever. The South Korean experience with COVID-19 demonstrate that a prepared public health apparatus can contain viral outbreaks with minimal interruption if they’re willing to seriously invest in testing, contact tracing, and infusing the economy with heavy and consistent stimulus. But that ship has sailed. Once the U.S. decided it wasn’t going to seriously try and contain the virus — and, no, closing the border with China weeks after it was already pouring in from Europe was not a serious proposal at all — lockdowns became a matter of necessity.

So the next time someone tells you about helping a small business by reopening, demand another round of stimulus instead. Demand legislation clarifying that force majeure carve outs excluding COVID business interruption are against the public interest. Demand an extension of eviction moratoriums or strip landlords of financial benefits for leaving storefronts vacant. Basically ask for anything but telling small businesses to go fend for themselves right now. Because that’s the one request that isn’t going to be enough.

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HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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