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business newsWhy Should I Care: Recession
Like shooting finance in a barrel.
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Your sedentary, taquito-eating ways have been the fashion in your stuffy apartment for almost 7 months. A serious threat to your health, certainly, but the more pressing issue is that trip to the beach at the end of the month.
You need to get into fighting shape - and fast.
Just lik you you got fat and lazy, years of economic prosperity expanded the soft underbelly of the nation’s economy.
Think of a recession as the economy going on a diet.
Periodic slowdowns are a necessary evil, weeding out firms or products we probably didn’t need in the first place. Recessions force the country to slim down, cut the fat and become a well-oiled machine.
The Sharper Image, purveyor of such essential items as high-speed nose-hair clippers and ultrasonic rodent deterrents, filed for bankruptcy protection in February. Bennigan’s (the restaurant chain) and Mervyns (the department store) went bust in July. Mattress Discounters declared bankruptcy not 2 weeks into September.
All these stores have something in common: The country will get along just fine without them. In fact, fewer places to spend money on things we don’t really need is precisely what an economy needs during a downturn.
Even retailers that aren’t dead on arrival close stores during slowdowns. According to the New York Times, Foot Locker (FL), Ann Taylor (ANN) and Zales (ZLC) will each close over 100 stores this year.
It makes good sense: Faced with the prospect of fewer dollars sloshing around in the pockets of potential customers, businesses cut back, make tough choices, even roll a few heads. They put expansion plans on hold and freeze new hiring, staying lean and liquid to ride out the tough times.
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