As there are more and more sign that a recession is around the corner, I had to get different perspective through different countries and medias to get a better understanding at what could happen in the next few years. At the time where globalisation has become questionnable since the covid crisis and now the Ukrainian crisis, are we looking at big changes ?
The party is over
The employment market
I admit it was kind of enjoyable, the enchanted period after covid with a slight boom in recruitment and the fact that employees where for the first time in a while, questioning the meaning of work life balance, is soon to be over.
Without falling into conspiracy theory, I would say that this market where you could hope for a raise or switch jobs when you want was not meant to last. The capital will remain in power and the capital don’t like to lose on the employment market.
Unaware investors in the wild wild west
As stock market is going down, as crypto market is vomiting its guts, millions of unfortunately not enough aware beginner investors are paying a heavy loss. I feel sad to see hopeless comments on twitter of people asking for refunds of their loss. I would never have imagined how badly informed most of the twitter crypto community have been the last year. With influencers, and even movie stars telling people to go all in and never mentioning the ultra high volatility of this market.
The inflation, mostly caused by after covid restarting, and war in Europe
As ugly as it is, Russia is right when they declare that EU governments made the choice to make their citizens pay a big price for the economic sanctions. Sure we will still figure out how to get enough ressources to answers how basic energy needs but at a cost.
I was reading an interesting articles about French mayors having to figure out how to pay for the extra 700% cost of their cities electricity bills. Sure the French citizens don’t see yet the full impact of these cost because French government is forcing the French electricity group EDF to take the loss. French tax payers will in the end be forced to save the company from drowning but still it’s much easier to explain to your people and pretend you did not see it coming and that it was better than raising the bills, I guess.
What’s positive about recession ?
Environment impact, decreased carbon emissions
Don’t panic, at least there can be brightness into recession. I found an article of science mentioning that the Great Recession of the 2007-2013 years in the US saw a great impact on the U.S. carbon emissions. A decreased consumption of goods and services and the use of natural gas /renewable sources of energy such as solar and wind power has has a clear impact on the environment.
As people look for more efficient cost savings, the planet is happy. I guess that brings us back to the idea that capitalism might not be fully compatible with the environmental goals humanity tried to follow during the The Paris Agreement on climate change. It get me wondering if then recession would not be a good thing ?
The impact of recession on the real estate market
I’m not rich, and the only thing I have seen the past 10 years at least is that my ability to one day be able to afford a house, even with a credit is getting a bit more out of reach every other day. I even begin to have doubts about my ability to afford my rent in big European capitals. I am not a specialist in this market but recently a French newspapers said that the low interest rates buyers enjoyed the last few years easily made prices in Paris 15% higher than the market is.
The painful side of recession
The breaking point for tenants
Yes it’s gonna hurt, as rates are getting higher now, landlords will face higher fees, and will make sure to impact it as much as possible on the rent, if they are investors.
Today, I am facing this situation on the Polish market, my landlord has seen it’s payments increasing by 40% since last year, and wants to make a deal to increase my rent of 20% as a friendly gesture. Between the fact that my bills have also increased of 40%, will tenants be able for long to take it ? I will but because I had a great deal.
But let’s be honest most people won’t and will start to not pay anymore.
A bit of economical theory thinking aparté
It just reminds me of this big subject in France, the government is refusing to raise the minimum legal salary called ‘SMIC’. Their point of view is that if you raise this, this will only make inflation worst. Ok, I see it, companies will raise their prices in order to raise the salaries, and the raise will be seen at a larger scale.
For Macron’s government, there has always been a big belief into Trickle-down economics (, the concept is that big tax cuts on companies and the Capital (let’s say the rich) will have a positive impact and the poor because they will end up benefiting from the growth this will (might) trigger.
So it’s ok to give to the rich, but not to the poor, only the rich getting more will make in the end the poor richer, but the poor richer will never make the rich richer ? I am just trying to theorise Trickle-Up economics.
(Please note that it’s probably late and too warm (yes there is a weather alert this weekend on EU about extreme heat) , and maybe I am just writing non sense theories.)
Can we really make the poor pay for the bad choices of the capital and the power ? How is this okay today to have people working full time in big cities in EU and struggling more and more to afford even a rent ? Where did it go really wrong ?
A Revolution might come, and we’ll see how 2nd tour of French Assembly will turn out tomorrow ?
I am usually seeing myself as a liberal, but I admit I have been questioning in deep the system, seeing my country and my fellow French getting every day a bit more into trouble.
A good sign of how bad the situation is, is that first of all, you have every year more poor people in France. The second fact, is that the last few national elections, the extreme right has never been this close to reach the presidency.
The third sign, is that the extreme left has made possible an agreement across the left, and they are well placed to have a larger than ever group at the assembly tomorrow.
Have you heard of a political leader called Jean Luc Mélenchon ? Well he is the chief of a political extreme left group in France called LFI (which literally translate as “The rebellious/ unsubmissive France”. Well this guy is dangerous, that’s all. But with how bad the tension within France are, a government of extremes might appear as an okey-ish alternative for French.
That’s life, and don’t worry, be happy
Well again, don’t panic. As a Chinese proverb says “The future is brighter”. If that makes you feel confortable, think that this next recession will have a positive environment on the optimization of the use of global ressources.
Yes, elites won’t make as many billions as during the covid crisis, yes they will try to make the poorest pays and make sure to lose as less as possible.
But karma is a b*tch and the future will be brighter.
Don’t forget to check my best rated chocolate cake recipe on the Lifestyle page. 😊
It might be the lamest conclusion of any articles I have written, but as the song would say :
You might want to sing it note for note
Don’t worry, be happy
In every life we have some trouble
But when you worry you make it double
Don’t worry, be happy
Don’t worry, be happy now
The landlord say your rent is late
He may have to litigate
Don’t worry, be happy