No Recession Here

The media has hyped the global recession so much that one might easily become depressed and lose hope.  I keep reading about closed businesses and worker layoffs.  Clearly the millions of unemployed cannot be taken lightly.  The personal misery and daily fear they experience are real and not to be taken lightly.

While I have not had a raise in years and have seen my compensation plummet, I still have a good paying job for which I am grateful.  However, we have always lived BELOW our means and still manage to save money while paying for my daughter’s college tuition at a private school.  We are not big spenders, but do spend money  and buy things as we need them.  It was on a recent shopping trip with my wife where I first started looking for real signs of the recession, and bargains for those with cash.

We found retailers offering big savings offering me tangible signs of the recession.  We purchased some clothing for the family at big discounts.  My favorite store was Kohl’s which gives you cash rebates you can use to buy merchandise.  They also have customized their cash registers to print the savings on each receipt and trained their cashiers to read aloud the savings for all to hear.  Then, you get your cash rebate coupon.  Ever the skeptic, I quickly saw a expiration date.  I was determined to use the Kohl’s cash before the expiration, but we didn’t need anything.   Nonetheless, after speaking with a friend about their fun in making homemade ice cream, I decided to use my Kohl’s cash to buy one.  Still unsure if there was another catch, I went to the registers and sure enough, got the cash value of the coupon taken off the purchase price and essentially got an ice cream maker for 45% of its cost.  I cannot imagine how they made money on my family.  The original items we purchased were on sale and we shopped carefully to get the best value.  We made sure to fully use the Kohl’s cash on a subsequent purchase.  Either their gross margins are well over 50%, or we received value at their expense.  To me, that’s the recession working in my benefit.  Yet, in other shopping experiences I saw the opposite.

After monthly business meetings my partner and I always stopped by a local restaurant for a light dinner before heading home.  This allowed the traffic to pass and afforded us time to talk about the meetings.  Unfortunately, the last time we went there it was closed.  We later learned that business was so far off they could not keep the place running and so simply closed.  This is a nice place, pricey but not expensive.  A real fixture in the community and has been around for many years.  That was sad to see.  Here the recession’s cold hand of economics was hurting the business owner and its loyal customers.  Perhaps while we cut back a little on eating out, we had a disproportionate effect on their business.  Many people cutting back a little had a massive impact in the aggregate on this business and their livelihood.

Assuming that the recession was pressuring every business I expected similar discounts when we recently were in need of a new central air conditioner.  Between energy efficiency credits and slow sales (I thought) a real value was sure to follow.  After several attempts to get a contractor to call us back we had two agree to give us quotes.  Both were high in my opinion and neither could complete the job in less than several weeks as they were “fully booked.”  No recession there.  Thankfully the weather has broken and we have time to decide what to do, but I was very surprised that so little discounting was available, and the backlog of work the contractors have.  Of course I am writing this in August.

Next I took my used car to a mechanic for repairs.  I won’t lie, this is not a 2000 Toyota Corolla.  It is a 1977 MG MGB convertible and is a weekend car, not my primary vehicle.  It was an inexpensive luxury paid for with cash.  The imported car care shop that knew how to fix MGs (a defunct British car manufacturer) was backed up and could not get me in when I needed the repair.  So, the next shop I found did have an opening sooner and I went to them.  They must have thought they found a “sucker” because they hit me with all sorts of “necessary repairs” and so I did not use them.  Finally after learning about an MG expert on the internet, I took my car there.  He too, was backed up a few weeks but I did not care at this point and left the car with him while we went on vacation. Only a few minor repairs were needed and I appreciated this shop’s honestly.  The repairs were reasonably priced, but still I was surprised at the wait.  Apparently used car repair shops, especially foreign car repair shops, have enough business.

Clearly, my experience is not statistically significant, but  I do think it illustrates some sub-currents in the overall economic sea.  So if you are looking for the recession, you will see it in restaurants, and retailers, but not so much in HVAC contractors and used car repair shops.  Maybe this relative strength in auto repair and consumer HVAC is a sign that the worst of the economy is behind us.  Let’s hope so.

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