It is quite legitimate to ask whether all the panic in the
big banks has much to do with us as individual entrepreneurs.
Some populist politicians have suggested that we should all
be concerned with Main Street, meaning the commercial district of each
individual community, and not with Wall Street, the hub of global finance.
However, it is beyond dispute that what happens on Wall
Street will have enormous impact on Main Street, and particularly on the
entrepreneurs who have shops and offices there.
While some entrepreneurs can afford to be more detached than
others, all are vulnerable to a greater or lesser extent:
1 CUSTOMERS will
have less money to spend on our goods and services;
2 CREDIT will be
harder to obtain, loans will not be renewed, overdrafts may be reduced, and bad
debts pursued more aggressively, at least in the short term;
3 TAXES will
increase, to make up for the shortfall as revenues decline, and possibly to pay
4 COMMODITY PRICES
will increase, not only due to scarcity, but because those with money will be
investing in commodities at a time when property and shares are less attractive
places to park any surplus cash;
5 INFLATION is
increasing, and will increase further as governments pump in money to avert
6 ASSET VALUES on
the books must be reduced as property and share prices fall; and
7 REGULATION will
get worse, as politicians use the failures in banking as a pretext to extend
control over business in general.
Worried yet? You should be.