Tuesday, March 17, 2009

The great recession II

My post on "the great recession" prompted this response from reader Jay:
The recession is maybe not visible in restaurants or hotels or at the airport because we still have to eat and sleep somewhere. But if you look at profits of almost every business that doesn't deal with social services you'd see the terrible decrease. The sales drop daily and there is nothing you can do about it. So maybe it's not visible in the streets when walking around but if you dig in, you see the damage this recession did to the economy.
Take care, Jay
Jay, first off thanks for the feedback. However, let me disagree and also correct a possible misconception. First off, while people do need to eat and sleep, that doesn't explain what I saw. We all need to eat, but that doesn't mean we need to dine on filet mignon at every meal. In the same vein you don't need to sip overpriced margaritas and dine out at the San Antonio Riverwalk just to quell one's hunger pangs. One can just as easily fill their gullet by hitting the supermarket.

Similarly, while you need to sleep, you don't need to take a vacation (which is why a number of people travel) and those that do could just as easily sleep at the Motel 6 instead of the semi-sold out La Quinta that I referenced in my earlier post (which was about $40 cheaper and located half a mile away).

Here is a scene from a mall in San Antonio yesterday:


Again, this is just a Monday afternoon outside of a strip of clothing stores.

The point to all of this is not that the recession is a myth or that unemployment isn't occurring. It is simply that amidst all the doom and gloom that perhaps some perspective is needed.

Coincidentally last night I had dinner with my grandparents and jokingly asked them if the current environment -- pointing to all of the surrounding tables, mostly full of patrons -- at the Tex-Mex place we were at reminded them of the Great Depression. They didn't find my comment terribly amusing and scoffed at the suggestion, with my grandfather proceeding to explain how during the Great Depression that his mother would explain before every meal why they were eating that particular dish, that the ingredients were on sale and that financial considerations dictated that she use them.

Looking around I just don't think we are very close to that point. At all.

Oh, and I am finally back in D.C. My flight to Memphis was completely sold-out while the flight to BWI was at about 75-80% capacity -- the first non-sold out flight I have been on out of the last four.

Update: Apparently my anecdotes about air travel are being borne out in the statistics.

1 comment:

Real Estate Vancouver said...

Hi Colin, thank you for your long reply. I guess you're quite right, media has made a huge deal about this recession. But still a lot of recent polls show that businesses such as McDonalds or seed and fertilizer distributors are actually profiting more than usual these days, which shows that people are trying to be cheap and save money. Maybe people go eat at more expansive restaurants because they used to be even more expansive before and now they feel like they can afford it, but I'm not an expert on restaurant meal prices and I don't know if they change at all so i might be wrong. Anyways, thanks for another interesting article, hope to read more of your writing.

Jay