Alternative approaches To keep them in check, governments should look to support workers instead of ineffi- cient companies. In other words, welfare should be directed towards the people that are the core of the economy. Instead of providing furlough schemes to keep workers chained to their employers, governments can focus on offering a considerably larger unemployment benefits scheme. This could range from increasing job mobility to in- troducing stimulus packages in the form of universal basic incomes, negative income tax or expanded unemployment insurance. Governments should also cut down the rollover of state-backed loans, and in- stead, encourage firms to be more self-re- liant through increased interest rates. By now it has been made clear the pandemic is a far cry from being a temporary obsta- cle but rather a setback with long term effects on income, employment, welfare, and market confidence. Consequently, it is no longer justified to indiscriminately keep all businesses afloat and instead we should let the nature of a free market run its course. Furthermore, zombie firms should be dealt with swiftly. With Japan’s “lost decade” in the 1990s as an example, we can see the consequences of dragging on the lifes- pans of zombie firms. It led to a long period of stagnant growth and required greater efforts to solve. Governments should ensure zombie firms fail efficiently so that they can either be recapitalized or their assets and staff redeployed. Bankruptcy courts play a key role in swiftly sorting the zombie firms into those that should be revived or Put an end to their misery Most would agree that government aid was vital to reducing the economic impact of the pandemic. It was imperative to sustain businesses and livelihoods of many amid travel restrictions and lockdowns. Though the method of allocation of resources is debatable. Some argue that zombie firms should be let go in the name of dynamism especially during a recession, and instead this should be an opportunity for newer businesses to realize new unmet needs during such unforeseen circumstances. We should let nature run its course and let creative destruction playout. In any case, zombies are costly to keep alive regardless of circumstances, and with Japan as an example, the one clear takeaway is we should end their misery, however great the short-term costs are. The longer we drag it out, the more reliant zom- bies become and harder it is for legislators to enact upon painful but necessary solutions. 51
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