Well, let me try to find some good news about the recession. Some good that will come out of it as painful as it’s going to be.
The best news will be when we hear the end of the bad news, which is another way to saying once we have hit the bottom. But for now, I offer these ideas to help us feel better about the pain - no pain, no gain - and if we must have the pain, then we should be able to find some gain.
1) It will remind us of how valuable our families are
Recessions have a way of bring families closer together. For example, as the economy increases the divorce rate increases with it as people have more money to fight over, and as the money dries up so does the divorce rate. First at foremost that is good news for children. Too many children today are living without the constant influence of both parents. Second, most of the foundation of education and moral teachings are based on a strong family unit. The stronger the family unit, the more likely that parents are involved in the education of their children and it teaching them the difference between right and wrong.
Also, extended families will need each other as many families may end up living under one roof as jobs are harder to find and stable income makes it harder for every family to afford their own home. After the government failed to provide new jobs for everyone, depending on each other for financial support will become the next option. This will only help support new family based businesses, which will probably start springing up all over the place by the end of 2009.
2) It will remind us of how good we have it in America
Most of the 6.5 billion other people in the world can only dream of living the way we do in America. Yet, few of us think about that very often much of America has fallen for the politicians rhetoric telling us we are ‘victims’ and deserve more. More jobs, more houses, more credit cards, more rights, more protection and a guaranteed retirement.
The global economy has flattening the world, as noted by Thomas Friedman’s book, “The World Is Flat”. What that means is that the entire world in competing for jobs and nobody deserves anything anymore. On top of that, the politicians can’t do much about it because our economy in driven by the global economy. Many of the forces that control the global economy are out of their reach as central bankers and foreign governments are behind the wheel – especially because we are primarily a debtor nation.
The reality is that we live better then we should in America and we should enjoy every day that we have in this rich and powerful nation – while it lasts.
3) It will give us the opportunity to unify around a common cause
Since WWII, our nation has had little to unite around and fight for a common cause. I thought the fight against terrorism would have given us a common cause, but in many ways it has drove a wedge between us as many didn’t like the actions of our president. Yet, the next president has plans for his own wars and the previous president also had his wars. So, it really doesn’t matter who the president is, they all end up fighting a war somewhere.
The global economic is a global problem, but it’s also a national problem and I hope America unites to fight against it before the world unites against us. The world may one day realize that they don’t need the America consumer anymore. They can consumer their own goods. If they come to that conclusion, the dollar will sink and the world will focus on rebuilding the economy without America. Now that would give us something to rally around.
Just look at how Obama talks about how we have to come together as a nation to attach this financial crisis because it has become a national security issue in his weekly address.
4) It will help rebuild the manufacturing industry, after the dollar sinks
After the dollar sinks, which is inevitable based on our nation’s current deficits that are already beyond paying back, we will be able to finally start rebuilding our manufacturing industry. When the dollar drops in value against other currencies of the world, then our products become cheaper to the rest of the world. There will be a revival of the great American manufacturing industry.
Of course, everything we import will also cost 10x as much and our consumer spending habits will need to drastically change, but that may have already happen before the dollar sinks.
5) It will reward saving money and lead to a higher savings rate
After inflation comes roaring back towards the end of 2009, the government will realize that they are out to time and out of options. They will be forced to stop inflation, which could take years just to stop it from increasing and reverse the trend. They will be forced to increase interest rates, pull bake the money supply and cut every government program that you can imaging.
This will reward savers once again as it did many years ago, when we last had high interest rates. Of course, inflation will also be taking a large bite out of your interest earnings, but hopefully the margin will still result in a positive cash flow. I can’t wait for the day when it will once again be rewarding to put money in a good old fashion savings account.
6) It will education us about why we shouldn’t go into debt
American’s have been living off debt for so long, that many of us don’t know any other way to live. When I asked a friend of mine, “Why he is borrowing money to buy a car”, he said, “that is the only way to buy a car”. My friend was unfamiliar will the idea of savings money until you have enough to purchase a car without a loan. A deep recession will bring this concept back to life and this is going to quickly become the new only way to purchase a vehicle. Perhaps the next generation will say, “What is a loan and why would you want put yourself in that kind of risk?”
If you really take a look at it, consumer lending doesn’t even make sense.
Why should anyone purchase consumer (and offer disposable and/or depreciating) goods with a loan? The very concept of purchasing goods that you cannot afford with money that you hope to make sometime in the future is putting your future at risk. Your debt collectors will hunt you down to collect your future earnings until you pay what you own plus interest and fees. They don’t care if you didn’t earn as much as you thought you would or if you’re unemployed or if we are in a recession.
The only benefit of debt is when it’s used to purchase equipment or assets that will increase your revenue or profits. But this type of loan is called a business loans – not a consumer loan. No other nation is the world has been given the amount of consumer credit that the US consumer has been given and I suspect it won’t happen again as creditors are learning from their mistakes.
7) It will education the next generation about the value of hard work
Hard work is severely underappreciated in America today. I started working when I was 14 years old and have been working ever since. Today, many teenagers are yet to have a job and when they do, they move from job to job looking for a job that is less work.
The parents are a large part of the problem because they help train their children the way they are. But it’s not just their fault because they believe the lies about how we are ‘victims’ and how we deserve jobs an education and a retirement that the politicians use to get elected.
This recession is going to push parents into doing what they should have done a long time ago. Kick their teenager out of the house unless they get a job and make themselves useful.
8) It will create an opportunity to revive our faith in God
The truth is that God is the only safety and the only security we have in this life. He is the only thing that is not changing and his kingdom is the only kingdom with will stand forever. America has forgotten how we got here. We as a nation have taken out faith off of God and put it on the things and systems of the world – which are now crumpling around us.
The book of Hebrews 12:25-29 describes how God will shake everything that can be shaken before his kingdom is re-established on earth.
“Yet once more I will shake not only the earth but also the heaven. “
"Therefore let us be grateful for receiving a kingdom that cannot be shaken, and thus let us offer to God acceptable worship, with reverence and awe; for our God is a consuming fire."
The culture today does not have reverence or awe of God. But the shaking that has begun with this global recession will correct our mistake and we will once again have respect for God almighty.
9) It will rid us of our stuff that gets in our way of what really matters in life
In the scramble to cut costs and get out of debt, we will be shedding stuff faster than ever before. This is a time to de-clutter and get back to the basics. The toys of yesterday are headed for the garbage. This will only mean a new market for the entertainment industry. People will be looking for new ways to be entertained at much lower costs. In the depression age, board games became popular.
After the stuff is removed, many will focus on renewing their relationships with friends and family.
10) It will create tremendous opportunities for new businesses
The best time to start a new business is when there is a large disruption of an industry. The reason is because large organizations cannot quickly adjust to the change and therefore, a window of opportunity in open for a new business to create a business model before the large organizations can react. Sometime the large organizations will try to block anyone from the new opportunity by using their leverage with patents or political connections, but this time it will be hard for large organizations to defend their markets.
Recessions tend to create drastic changes in consumer behaviors, which creates gapping windows of opportunity in several industries. This recession will create a flurry of new business activity for years to come as unemployed workers go after these opportunities and large businesses struggle to make adjustments.