Prosperity is a time of economic growth and stability, a period in which you have money burning a hole in your pants pocket. Recession, on the other hand is a time of economic stagnation, a period in which you have to tighten your belt. Depression is a time of economic free fall, a period in which you have no belt to tighten. A Great Depression is a period in which your pants fall to your ankles and you moon the guy interviewing you for a job. Or something like that.
Use the “P” word, the “R” word or the “D” word, anyway you look at it, we’ve got ourselves a “GD” bad economy.
The stock markets are down, real estate prices are falling, jobs are not being created fast enough, Standards & Poor’s are downgrading everybody. The only people making money are Somali pirates and that guy on the bike who keeps pilfering the wine bottles from my recycle bin. The only things going up are debt and the makers of Prozac.
The economy is so bad up here someone spotted Shelley Broader, the CEO of Walmart Canada and she was shopping … at Walmart. The Canadian economy is so bad the Tar Sands oil companies had to lay off five of Stephen Harper’s cabinet members. The U.S Stock Exchange is failing so badly, Dick Cheney offered to take his financial advisor hunting.
And everybody’s solution to our lousy economy is to slash and burn, cut back and eliminate. Austerity, severity – we’re a “No Frills” nation in crisis.
Isn’t’ that going the wrong way? How do you build something up by cutting it back?
The recovery of the Great Depression of ’39 was not stimulated by economic reduction; Roosevelt’s New Deal nation work programs put Americans back to work. In 2008 General Motors was all but dead until a massive injection of money brought it back to life. The CN Tower didn’t become the world’s tallest structure based on underground parking.
I don’t think it takes an economist to confirm that cutbacks can only subtract from the whole; infusions add to and help augment an entity.
Let me explain. Little Jimmy operates a weekend lemonade stand on the sidewalk in front of his house.
Jimmy’s parents encouraged the ten-year-old, not-overly-bright kid to start his own business believing that in ten or twenty years Jimmy would have gained enough business experience to … still be operating a lemonade stand. As I said, Jimmy’s not the brainiest bed wetter on the block but hey, American fed chairman Alan Greenspan was supposed to be a financial genius and thanks to him, look where we are today.
This is Jimmy’s second year in grade four, he’s slow to make change and has no concept of debt which means he’ll never be nominated for “Businessman Of The Year” but any day now he could be named finance minister of Greece.
So Jimmy is a one-kid service station selling lemonade in a tough economy. His signboard: “Homemade Lemonade – it’s yellow but not what you think it is!” is not helpful.
So, bad promotion, good location and selling cold drinks on a hot day is still a sound business model. In a time of low disposable income, freeze hikes on allowances and a questionable policy of “Dogs Drink Free,” Jimmy is making a go of it.
Selling on the average 20 glasses of lemonade at 50¢ a glass Jimmy is making about ten bucks a day. Jimmy’s net profit is also ten bucks a day because his parents who supply him with the lemons, water, ice and glasses aren’t real swift on the uptake either. But like our economy, Jimmy’s lemonade stand is flat lining. Twenty bucks a weekend barely covers his online gambling addiction so he needs to expand his business.
In tough times, if Jimmy followed the advice of governments from here to Brussels and back again, he’d be cutting and slashing; less lemons, more water, fake ice cubes and smaller glasses. Will that grow Jimmy’s business? No, of course not. Even old Mrs. Hannigan who uses his lemonade exclusively for her vodka smoothie is going to stop buying from him.
Jimmy must enhance his business, augment his investment and build his company from the curb up. For instance, Jimmy should add a “Free Popcorn!” feature to the stand and pour on enough salt to cause a mild outbreak of high blood pressure among his clientele. And when they’re near dying of thirst, he should sell them “Lemonade Shooters!” It’s the “Same great lemonade but now in nifty little shot glasses. 50¢ a snort.”
Jimmy should start catering to seniors on bus tours by bribing the drivers to stop at his stand and overcharging the old people according to their level of alertness.
Borrowing liberally from his dad’s liquor cabinet, Jimmy should name his stand “The Speakeasy” and sell hard lemonade under the table. In other words, Jimmy should implement all the dirty, rotten conniving tricks the Wall Street banks used to bring the American economy to its knees, yet still hand 100 million dollar bonuses to their executives. And that’s how we too, as a nation can get out of our economic doldrums. Canada needs to find a nice, non-warring and naïve country like say Switzerland and screw them over six ways from Sunday. Hey it’s working for China. And it’ll work for Jimmy too until he’s old enough to become a rogue commodities trader.