A lesson on recession

By glblguy

One of the hobbies I have is playing the 5-string Banjo. My favorite Banjo manufacturer is Deering Banjo Company. They are hand made in Spring Vally California, are very fairly priced considering their quality and they have a very unique sound that I really enjoy and can recognize almost immediately. Deering occasionally will send me an email announcing some new banjo or banjo related product they have come out with. I always read them and look forward to their announcements.

I received one such email from them late last week, quickly opened it up so see what new banjo model I could drool over (the one I really want is $2,699.00). To my surprise, it wasn’t an announcement at all, nor was it an insider story about Deering, but a story not related to banjos at all, but a story about finance and our current economy. I thought I’d share it with you:

The hotdog story

Once there was a man who owned a hot dog stand that he ran by the side of the road. For years he treated his customers right, sold good quality hot dogs to lots of people who stopped by to purchase from him. He even made enough money to send his son to college. He wanted his son to be an educated man and successful in the world. So his son went away to college and several years later he returned with his diploma in hand. The man was very pleased to have an educated son who could help him in his business.

The next day his son heard him placing his order for hot dogs and commented that he was surprised that he would order so many hot dogs, “Hadn’t he heard that there is a recession going on?” The man thought about this and concluded that his son had a college education and must know what he was talking about so he cut back his order for hot dogs. People continued to stop at the hot dog stand, but by rush hour the man had run out of hot dogs. He had to turn customers away. After a few times of stopping by and finding the man out of hot dogs his regular customers stopped coming by. As this continued for a while and less and less people stopped to buy hot dogs, the man’s income dropped to the point that he could not pay his bills and he went out of business.

From all this the man concluded “His son must be right, there is a recession going on!

They say perception is reality and I believe it. Right now the media and many people, including our politicians, want us to believe we are in a serious recession. Everyone is talking about it right? I must be true right? Are you going to start ordering less hotdogs?


6 Responses (including trackbacks) to “A lesson on recession”

  1. Kristen Says:

    I’m not an economist, so I can’t say if there really is a recession, but I work for a non-profit credit counseling agency. What I can say is that we are seeing more people than ever before, and many of the people coming to us are more in debt than ever before. And it’s not all people who were simply irresponsible. Many of our clients lost their jobs or were sick and had medical bills. Now the increasing cost of everything else is pushing them over the edge.

  2. hickss Says:

    I am no economist either but a recession is defined by 2 consecutive quarters of negative econimic growth. I don’t believe we have had 1 quarter of such growth yet. Is the economy growing at a much slower pace than the rapid expansion that we have had over the last few years. Yes. But the doom and gloom that you see and hear all day every day will make anyone that is not “in tune” to believe that we are in a recession. What do you need to do in times like these if you lose your job or have medical expenses….the same thing that you should be doing from the start and that is living below your means and not accumalating more debt. Far to often that person that is layed off will continue to live the same lifestyle they did before. I have seen it personally as my brother just went through this and was layed off for nearly 5 months but never sat down and adjusted his lifestyle. In fact his theory was that you can’t have a budget if you don’t have an income.

  3. Justin Says:

    Huh?

    Is the man an idiot? On the first day of running out, you just order more the next day and apologise to the people that missed out the day before.

    This sounds to me more of a lesson in not trusting that college is the answer to everything as well as a lesson in avoiding the self-fulfilling prophecies of recession.

  4. Elizabeth Says:

    This story sounds tailor-made for a company that manufacturers a “luxury” item in order to drum up some busines during a slow-down period. It’s also a jab at the “elitist” educated population — a lifetime of good, old common sense and hard work taken down by the ideological yet unrealistic educated elite. Pure propaganda.

  5. RDS Says:

    I think that there is an element of “don’t stop buying our banjos because of all this doom and gloom about the economy” propaganda in this story. But I think that the overall message is sound. What I get from it is that you should be responsible with your finances, do right by your customer/employer, and use common sense. Don’t let the talking heads convince you to do something that doesn’t make sense for you given your financial situation. Make a financial plan, adjust it as necessary to suit your needs, and stick to it. And buy quality banjos.

    RDS
    http://financialvalues.blogspot.com/

  6. The Debt Helper Says:

    Great story, and it just goes to show that you shouldn’t always believe what others tell you nor what you see on the news. I think that to some extent the media is to blame for out current climate because they have talked us into recession.

Leave a Reply

css.php