Recession watch: We've lost some competitors... and it hurts
Filed under: Debt, Entrepreneurship, Tax, Career, Wealth, Recession, Bankruptcy
This post is part of a series about real-life signs we're in a recession. Normally, the loss of competitors in your field of business could possibly be considered a good thing, giving a boost of orders and income to your own business or employer. In today's economic climate however, the loss of competitors gives me cause for concern. Even as we struggle to accommodate growth in our facility, I'm worried by the downfall of some of our wood products compatriots. I know I've written that it doesn't pay to cry over lost manufacturing jobs, but that doesn't mean we should be without compassion either.
The National Federation of Independent Businesses (NFIB) reports for March that its Small Business Optimism Index is at its lowest point since the second quarter of 1980. Businesses are complaining that increased selling prices are not keeping up with overhead inflationary pressures. Nearly one-quarter of the NFIB survey respondents indicated that they raised employee compensation by a margin which is outstripping profitability increases. I believe that therein lies the downfall of my company's fallen competitors.
One of the biggest concerns I have with these job losses is that they tend not to be felt outside their own regions. We as a country lose a hundred good jobs here or there every day, in a hundred unnamed places. But it doesn't make the headlines because it doesn't sell advertising space. Government statistics never paint the whole picture either. The government bean counters expect that we're too dull to understand that the loss of a well-paid machinist is not mitigated by the addition of yet another undocumented food service worker. They only give you the bottom line numbers, painted with a broad and blurry stroke of the brush.
So, my employer's loss of competitors has a core which tastes quite bitter. As I work my long hours I sometimes pause to think; Was that competitor we lost as much a buyer of my goods as it was a rival? Could my employer be the next to go under, or my neighbor's, or yours? Please say a quiet prayer for the unemployed among us, then get back to work. That is, if you still have it.
Reader Comments (Page 1 of 1)
4-30-2008 @ 2:29AM
rika said...
AMEN. I'm a "new to the econ world" student and have a professor who is die-hard classical economist. It's very difficult to accept what this professor teaches in light of the current economic situation. Were I a religious person, I'd light a few candles and say a few prayers to boot.
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6-21-2008 @ 8:29PM
David W. said...
You are so correct! One would think that a business school professor would have a more "pratical", "realistic", and/or "progressive" approach in dealing with the CURRENT economic recession/depression the U.S. is experiencing. Stick to your guns. You are NOT alone in your thinking! Best wishes to you for a successful future.
5-08-2008 @ 11:16AM
Charles Heiny said...
I believe this whole problem started years ago when our government decided to operate on a credit basis instead of a budget. Now our government is borrowing money from any country that will lend it. Like China or the United Kingdom. They have to do this because they've borrowed TILL BROKE from every agency they can. Our SOCIAL SECURITY fund for example. Yes, I believe we're in recession. I think We may fall like Russia did if our Government don't wake up to the fact that GREED is a killer in a situation like this. What have We done??, and how do We rectify it?? Or is it already too late?
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5-09-2008 @ 6:15PM
edwdr said...
Yes we are in a RECESSION and here are the steps to get us out of the hole.
1. Forget the idea of global economy and forget trying to compete with third world country for $5 a day.
2. Stop out sourcing jobs. Bring production back. Stop giving countries most favorite trading status which allows them to bring cheap goods in.
3. Stop outsourcing government jobs. Look what contractors did to us in Iraqi. Look how much government would save if they did the work themselves domestically and overseas.
4. Allow only American truckers to deliver goods in US, Not Mexican truckers from Mexico deliver goods in US.
5. Control the price of oil.
6. Rent controls for small businesses.
7. Get rid of corruption in Wall Street, US governemnt, locan and national governments.
8. Don't believe smaller governemnt is better. There're replaced by contractors which mean same or bigger government except you pay more services.
9. Stop the skyrocketing prices of houses. There's no reason by houses had to increase that much.
10. Regulate bank, mortgage companies and realters more closely. They all are to blame for this housing mess due to their greediness and slimmy tactics. Historically housing prices go up 6% annually, not 25% to 50% annually.
11. Realize we don't have many friends around the workd. They just want our money. If they want our money, they will have to earn it. It's called tough love. It works all the time.
12. Stop all the illegal immagration and social services to illegals. Stop trying to use them for political pawns.
13. Change the laws that automatically grants illegals legal status if they born a child in USA. The whole thing was illegal in the first place, so what part if illegal they don't understand.
14. A world leader i.e USA is no world leader if it imports everything and exports very little.
15. Eliminate trade deficit completely. This can be done only if we position ourselves as producers not users.
16. Limit how much CEO of companies make. Its ridiculas to see the company going out of business and laying off workers, yet the CEO is stilll making millions annually and the retirement packages are absurb.
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5-08-2008 @ 4:48PM
Robert said...
OK, great. Now that you've rehashed many published "ideas," how do you propose to accomplish this? Or do you just like to see your words in print!!??
5-09-2008 @ 11:26PM
BillBill said...
First point: The 14th amendment of our Constitution guarantees the citizenship of all born here. To paraphrase a bit, "All persons born...in the United States...are citizens thereof...." What is it about the word 'All" that you don't understand? Want that changed, you say? Study and find out what that would entail.
Second point: This generalized list of complaints has existed in one form or the other for decades most have been dismissed on their lack of merit, for being overly simplistic and virtually impossible to accomplish or had adverse unintended cosequences, and finally, some are flat out illegal.
Can something be done to address some of these obvious problems? Of course but it will require business and governmental leadership willing to make unpopular and difficult decisions to give up short term fixes and profits and aim for long term solutions and profitability. Not many CEOs and politicians are willing take such a risk.
Finally, your effectiveness as a credible source of criticism would be enhanced by the use of the Spell Check function of your computer or by using a plain old dictionary.
5-08-2008 @ 1:40PM
M said...
Yes we are in a RECESSION and here are the steps to get us out of the hole.
1. Forget the idea of global economy and forget trying to compete with third world country for $5 a day.
This is utter nonsense, more "free trade is bad" crap from the socialist democrats.
2. Stop out sourcing jobs. Bring production back. Stop giving countries most favorite trading status which allows them to bring cheap goods in.
Once again, see above. A fundamental misunderstanding of economics.
3. Stop outsourcing government jobs. Look what contractors did to us in Iraqi. Look how much government would save if they did the work themselves domestically and overseas.
I see your agenda now. The damn government CAN'T and NEVER will be able to run anything themselves. They give work to the contractors because they won't or can't do it.
4. Allow only American truckers to deliver goods in US, Not Mexican truckers from Mexico deliver goods in US.
At least we agree on this.
5. Control the price of oil.
Ok Jimmy Cater, were you alive in the late 70's? The companies will pass the price on to us genius. Price controls and over regulation ARE what the soviet union did (communism, ever heard of it?)
6. Rent controls for small businesses.
Subsidize them? How about lowering capital gains taxes.
7. Get rid of corruption in Wall Street, US governemnt, locan and national governments.
By doing what? You are saying, give the government more power to uncorrupt itself? That makes sense....
8. Don't believe smaller governemnt is better. There're replaced by contractors which mean same or bigger government except you pay more services.
Smaller government, lower taxes (accross the board), private property, and other things you libs want to take away were what this country was FOUNDED on. That's bull about paying more services, do you even understand government contracts? There are limits on labor rates and profit margins (depending if the contract is Fixed Price/Cost Plus/T&M etc) and they are VERY strictly enforced. Just because a contract is worth 300 million doesn't mean the contractor is making 10%, most of the time it's more like 1% or less, and sometimes break-even.
9. Stop the skyrocketing prices of houses. There's no reason by houses had to increase that much.
Tell that to all the idiot house flippers and the government pushing the stupid ARM and Interest only loans, it wasn't the lenders.....
10. Regulate bank, mortgage companies and realters more closely. They all are to blame for this housing mess due to their greediness and slimmy tactics. Historically housing prices go up 6% annually, not 25% to 50% annually.
Sure, their tactics sure are "slimmy." The government forced banks to give people loans who wouldn't qualify them in a million years in the name of "fairness," thus we have the problems we do. Political Correctness will be the death of this nation if we don't do something about it.
11. Realize we don't have many friends around the workd. They just want our money. If they want our money, they will have to earn it. It's called tough love. It works all the time.
12. Stop all the illegal immagration and social services to illegals. Stop trying to use them for political pawns.
13. Change the laws that automatically grants illegals legal status if they born a child in USA. The whole thing was illegal in the first place, so what part if illegal they don't understand.
14. A world leader i.e USA is no world leader if it imports everything and exports very little.
15. Eliminate trade deficit completely. This can be done only if we position ourselves as producers not users.
16. Limit how much CEO of companies make. Its ridiculas to see the company going out of business and laying off workers, yet the CEO is stilll making millions annually and the retirement packages are absurb.
Reply
5-18-2008 @ 10:54AM
Luvcreole said...
Ummmm, the Government did NOT push these ticking time bomb of house loans to people out of some political correctness tactic to let any and everybody buy a house. Don't you dare believe that Rush Limbaugh derived excuse to buy off the so-called consevatives in this mess. In case you've forgotten, this nation was headed for a recession after the Internet IPO Stock Bubble burst in 1999-2000. Clinton's last year. Gas prices had also gone up an average of .60 a gallon too. Headed for the upper 1's for the first time ever. Why? Because as a certain little man from Texas with big ears TREID to warn everybody about both Dems and Repubs. You let them pass NAFTA, GATT, and the WTO and you'll hear this giant sucking sound of jobs leaving this country.
He got the basic idea dead on right, it was hidden by all the phony tech jobs, produced by all of these phony IPO's, for 22 year old millionaires who didn't have anything concrete but an idea. Hadn't earned a dime of their own, and Americans as gulible as we are, were interested in trying to find the next Microsoft stock so we could retire rich. Never did we care to actually investigate the stocks we bought or flipped. Daytrading.
So, all that pointless commotion of corporate profit lying, cheating, and manipulation as well as Daytrading gambling hid the sound of China sucking away our manufacturing jobs. India sucking away our true tech jobs. Our callcenter jobs. Clinton barely got out of office in time to not get saddled with it, and the blame was shifted solely onto Republicans. A half truth since both parties supported the very trade treaties that did the damage. Bush and Greenspan, knowing we had no real Blue collar manufacturing or textile base to support a true recovery, did the only thing possible. Drop already historically low interest rates even further to ratchet up the lending market for houses. Then, in order to clear enough headroom to get some kind of healthy cash flow, the lending requirements were relaxed, and the mathematicians came up with all kinds of crazy loan schemes to get around debt to income ratio level in place.
That would let people whose incomes were now too low to buy houses to buy not only a house, but houses way beyond their means with artificially low payments. For awhile. What the stupid greedy bankers probably hoped for was when these interest only loans finally blew up, and the poor gullible consumers had to give up a relatively new house, they thought it would be a controlled forclosure rate, allowing them to seize the house and resell it again in a hot market. Maybe even make a profit off of it because of stupidly fast rising prices.
Which the poor greedy public saw as a one way ticket to getting wealth, never for a moment thinking about the poor people buying their overly inflated home and how they could afford to keep it. I know I know, it's now HIS problem. WRONG!!!
Because as you're now finding out, that mortgage you were willing to let him take out to get your massive unfair profit on may have just originated from your 401K or state pension fund, as those managers were looking for "big" returns for your money and retirement! You don't think the truly wealthy bankers put their own personal money into this do you?
Even if they did, as Bear Sterns has proven, the Government knows who provides the millions in campaign cash to keep both parites going..and the common man out of politics. They were "taken care" of at tax payer expense, and the execs promptly cashed out their stock after the government assisted buyout plan of $10 a share to J.P. Morgan. And Bush's Fed Officials played "dumb" in not knowing the details of the deal they brokered that allowed this to happen.
If people don't realize what this nation's been always about, but spun to hide ever since you were in elementary school...and every generation all the way back to 1776, tell you what. Shay's Rebellion. Google It until you find an essay on it..not the typical "It wasn't noteworthy of anything except pointing to the need of Federalizing the netional government. Yeah..right. H Ross Perot was right. Ron Paul IS right. The bible..1 Samuel Chapter 8:6 to 8:17 is right. Even for the mighty U.S. You had better wake up Americans and stop thinking the only corrupt governments are in some Third World nation. Don't let our political system keep you so distracted chasing after the shell game partisan politics they set you up with. At the end of the day, the parties slap each other on the back and say: "Good job, we really had these suckers eating out of our hand again, didn't we! Ha Ha!"
5-16-2008 @ 1:28AM
mlfree1 said...
You guys crack me up. Your either rehashing old, bad ideas, or talking trash about the people who rehash the old, bad ideas. For too long now, we have manipulated (well, not you and I, but the government and the fed, I guess) interest rates to prop up the economy instead of letting it follow its normal cycle of ups and downs. OK, not we have reached a point where the dollar is so worthless compared to other currencies, even the Chinese are selling greenbacks. The recession is no big deal. It will run its course and most of us will survive.
Don't blame Nixon for taking us off the gold standard. Don't blame Clinton for whatever he did that makes you people angry. Right now, we need sound financial leadership, and, unfortunately, because the same people who are giving financial leadership are the ones leading us in other areas, we are sorely lacking. Yes, that is a slam against Bush. Also McCain. And Obama. And Hillary. We need leadership and I don't see a lot of it.
You should consider, this is the first real economic downturn we have seen since the early 1990s. There are people getting ready to go to college who have never had to tighten their belts for any reason. For that reason, this is a good thing. It will make us stronger.
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5-17-2008 @ 5:15PM
American Party said...
My wife and I hope we enter a depression, not just this little road-bump of a recession. Why?
Both of our houses are paid for.
Our cars, boats and other toys are paid for.
We have no credit card debt. WE HAVE NO DEBT!
We have a considerable amount of money in the bank, and are set of very large inheritances.
Frankly, we can live this out and do so comfortably. A deep and long lasting depression will cause pain for most, but some will stand to benefit from it greatly.
We hope to the those who benefit.
Flame on, you poor, under-educated, over-leveraged losers!
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5-18-2008 @ 10:54AM
Luvcreole said...
Uhhhh, maybe you don't fully understand the nature of THIS downturn. I'll put it simply as this. WE DON'T HAVE ENOUGH OF AN ECONOMY TO RUN THE U.S. AT THIS SIZE IN POPULATION, GOVERNMENT AT ALL LEVELS, AND EVEN PHYSICAL GEOGRAPHIC SIZE. WE GAVE TOO MUCH AWAY. Too much wealth concentrated in too few hands, and the U.S. is borrowing and printing the money to keep up the financial sector in order to prevent a full scale worldwide crash. We are bankrupt by every means financially. Only our Fed can print money out of thin air to "pay" for it's obligations...causing the plummetting dollar, and rising inflation. We can't work ourselves out of this. A crash will happen...what YOU should be concerned with is what kind of WORLD ORDER will rise out of the dust of this one's demise. Check Revelation in the bible, cause it's comin' buddy. Thank's to American greed and arrogance.
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