The good thing about a recession is that it trims down the bad companies, the ones that only survive because of inertia, and spares the good ones, the ones that really deserve to grow.
In fact, several companies have made monopolies, virtual empires, precisely in times of crysis. No crysis = too much worthless competition, too much marketing noise.
Agreed. Recessions are good and a natural part of the business cycle.
It's called a feedback loop. Business tend to grow and get fat in places they can't afford. Recessions come along and then everybody has to take a very careful look at just what jobs and expenses are really needed and what are fluff.
The business cycle is a good and natural thing. I just wish we had more, less severe cycles than fewer, more severe ones.
I really dont think there's anything good about a recession at all. When "bad companies" go down people lose their jobs, the economy takes a hit, social security costs rise and everyone hurts.
I don't really understand what worthless competition is either. "Worthless competition" is surely a contradiction in terms. If they were bad/worthless they wouldn't be competing.
Think about the http://en.wikipedia.org/wiki/Broken_window_fallacy if marketers get fired and become factory workers then the output of goods can increase. If factory workers are fired and become marketers the output of goods decrease. In total it matters what people are doing even if a person cares less about what their job is than the fact they have a job.
When I said 'worthless competition' I surely was thinking about General Motors and its total lack of innovation, compared with korean and japanese car companies.
This is a cute story, but recessions are not self-fulfilling prophecies. When people tighten their belts and adjust to economic reality, the economy as a whole adapts to a recession and prepares to get back out of one.
Interesting wikipedia article. Thanks for sharing. I have only a limited exposure to economics.
From a mostly layperson's perspective, however, in a credit crisis, it makes sense to increase loanable funds, therefore saving may be very good for the economy in the long run.
I really hate over-simplified platitudes. They only comfort the stupid or short-sighted. Kind of like reading a sound-bite on trickle-down economics and applying it to your life.
I see your point... I really liked this story though. What I'm doing right now is building the pre and post-sales engineering/support groups for a hardware-based startup. We're bringing a new and interesting product to market, and several of us are out in the streets everyday saying "Hey! Want to buy a hot dog?". Tradeshows, marketing events, pretty much all the standard stuff. And, like the hot dog man, we're doing very very well with it so far.
Every day, though, I must hear about how the industry we're in and the world in general is cutting back spending, slowing down their purchases and so on. It would be very easy to listen to this news, and scale back our efforts and go off to cower somewhere. If we did this, we'd surely sell much less hotdogs than we do now.
A big part of my job is keeping folks in the sales team motivated, focused and ready to spot hot-dog selling opportunities. This story was deeply parallel to things encountered at our startup every week. It was a bit inspiring to me, and I thought it might also be a bit inspiring to people who are in the same position.
