Business and Trickle Down Liquidation

Danielle DiMartino Booth spent nine years at the Federal Reserve Bank of Dallas where she served as Advisor to President Richard W. Fisher throughout the financial crisis until his retirement in March 2015. Her work at the Fed focused on financial stability and the efficacy of unconventional monetary policy.

Small Businesses Bear the Brunt of Pandemic Fallout

In this episode of The Barron Report, host Paul Barron sits down with Danielle DiMartino Booth, the chief executive officer and chief strategist for Quill Intelligence. Barron and DiMartino Booth explore finance trends and the future of small businesses.

Episode Highlights:

DiMartino Booth describes the dire situation most restaurants around the country are facing.

Why are restaurant businesses struggling so much more than other types of businesses?

Are future coronavirus-related government bills likely to help small restaurant businesses?

DiMartino Booth explains how her book relates to the current coronavirus crisis.

With many people and businesses being forced to leave certain areas, will commercial real estate be available to others to purchase at a cheaper price?

DiMartino Booth details the coming storm of foreclosures and evictions for consumer real estate.

For smaller restaurants, is this the time to double down on your business ventures and seize any opportunities, or should restauranteurs be more cautious?

How do you expect the government to respond to rising unemployment or a second wave of coronavirus?

Three Key Points:

The primary goal of the Paycheck Protection Program was to cover the cost of retaining employees. For restaurants, however, this effectively means that they are being paid to keep employees on the payroll who cannot work by law—restaurants are having to operate at 25 percent or 50 percent capacity, and many still cannot offer indoor dining.

Restaurants need additional leeway to benefit from any congressional legislation for small business. When a large company liquidates, a significant number of employees are taken away from the company’s surrounding community. For restaurants, this means a huge chunk of market potential is lost—they have lost all of the patronage they need to survive.

Commercial real estate has largely been left alone in regards to the federal governments bailout efforts. Investors are eyeing these properties and waiting to jump on the right bargain. There is still, however, the potential for overpaying for property in this uncertain time.