Herman School of Business
Recession Ends When The Bank Sends...
In an email service this morning a reporter was asking for thoughts on when we will know the recession is over. Considering that the government didn’t announce the recession until we were already in it for over a year, how will we know it is over?
My response was this: when the banks start sending out credit cards again we will know the recession is over.
Take a look at your own situation. Go back to 2007, throw out 2008. Look at your tax return and see how much take-home pay you really had. Then spin through the year and see what you bought. Those trips out to eat, the sweet vacation you took to an exotic place, the upgrade on your perfectly working cell phone because the new one was cooler. And then your closet swelled with new duds…take a look in your closet and I bet that favorite blouse or shirt is laying on the floor, next to those hot shoes you had to have and haven’t worn in months.
Think about why you were able to spend like a drunken monkey in a banana store. Swipe and go! Who needs cash or who can possibly relate to cash…as long as that card slides through, you hold your breath for a second, and then the machine starts to buzz and the paper pops up as the word “approved” flashes on the screen. YIPPEE, the card worked.
It used to be embarrassing when the clerk said, “I am sorry, but your card was declined.” You almost shout, I was afraid of that…here try one of these. In other words no alarms went off telling you maybe you couldn’t afford the purchase, you were just wondering which bank would still back your stupidity and send through that word “approved.”
Maybe I am in the minority when I say I am glad we crashed. Now maybe we can have some fiscal sanity. Try going one month without using a credit card. Now, in some cases I know you must use that form of money to make a purchase so I will let you slide on airplane tickets on line or hotel uses and rental cars. I mean when you are face-to-face with a clerk and they say “that will be twenty four dollars please” and you whip out cash…not plastic. We have previously discussed that a Debit Card is a cash purchase, not a credit purchase.
The recession will be over when we learn to live on our cash purchases along with a very reasonable amount of credit. By then banks will tempt us again because they want high interest rates from people who shouldn’t be allowed to walk around with plastic.
- Posted: 26 January 2009
- Comments: 0
- Category: Business success
add a comment