The False Floor Economy: When will it fall through?

These are strange times. We know that things are not the same as they used to be. Our lives are being governed by a set of rules that seem to be changeable at political whim. We see the rising numbers of redundancies reaching out from our TV screens and know from conversations that many businesses are already struggling and looking ahead hopefully whilst suspecting that they will go bust.

Yet life continues and even seems to be returning to something like normality before the Lockdown began. The drive thrus are open. We have a choice when it comes to going out to shop or buying online. To listen to the media, it is as though Covid-19 has done all the damage to the economy that it possibly can.

Underlying all of this, economically at least, there is something very deep and very dark going on. UK GDP fell by 20.4% in April alone. High-profile business restructures like that of British Airways have pre-emptively begun and the Bank of England has today announced that it will pump £100 Billion into the Economy.

The people whose job it is to watch for the distant elephants as they cross the horizon are already extremely hard at work.

Somehow however, there is a shared feeling like this is all happening to somebody somewhere else. As if any of the pointers, red flags or warning bells that are telling us that the shit is about to really hit the fan are just another media headline that has been cooked up by story tellers for the benefit of someone else.

It feels this way simply because we are walking together through the existence of false floor economy. One that was created by the Government’s Lockdown alleviation measures such as the Job Retention Scheme and the ‘Furlough Money’ that has been fire hosed at any company or business that employs staff and has qualified itself for a Scheme.

There are potentially millions of people who are today employed within jobs that no longer exist. Employers are keeping them on the books for as long as it is not costing them their own money to do so.

As the Government money dries up or is reduced to a level where continuing to live the lie no longer makes sense, this whole situation will change.

The difference between where the economy is and where it appears to be is significant. As things stand, there continues to be a common belief that things will simply return to how they had previously pre-lockdown been. The media and political commentators who should know better have made it worse by reporting the queues outside shops as non-essential retailers reopened on Monday as being illustrative of the British Economy recovering and the Country getting back to work.

At best, what we have seen this week is the effect of little more than a bubble or overhang from the pre-Covid time that will continue to exist until the impact of the massive recession that we are now sleepwalking into has impacted a critical mass of people that will be enough to push the media to begin reporting in a very different way.

The key ignition points will be when the need for employers to contribute to the existing levels of Furlough Money comes into force at the beginning of August and then when the Schemes have ended in October, when the full six months of this artificial reality that Politicians have created come to their end.

This false floor economy will soon become a trap door for everyone. Not just the people who have already been made redundant or the incredibly significant number of business owners and company directors who have not been catered for by the Chancellor’s various initiatives. Policies made by a Government in fear of everything other than the consequences of what they were doing for everyone else. They never helped in the way they should, and their only real success has been to hide the arrival of what is going to be a very painful reality for all of us in plain sight.

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