Recessions in a Nutshell

From greenhouses to economic back-turns, it’s all fodder for writers developing characters or plot points. In book four, there’s reference to specific events occurring with a character during the ‘last’ economic recession, and Dr. Naomi Alexander has her hands full piecing things together. But what is a recession?

A recession happens when there’s a substantial decline in the economic system, lasting for a brief period. With a recession, consumers spend less, many people are unemployed, companies make job cuts, and industrial creation slows considerably. Recessions also tie into housing crises, as individuals (unemployed or accepting a pay cut) are faced with foreclosing their homes. With limited funds dedicated to food and shelter, few are caring about the latest movie, laptop, designer shoe, or techno-gadget.

Check out any of the finance news channels, mags, or reports. One factor indicating a recession: two consecutive quarters of negative growth, as assessed by the country’s GDP or gross domestic product. The GDP measures a country’s overall economic activity: the total value of goods and/or services provided over a year. If little to nothing has been selling or produced for six straight months, the word ‘recession’ enters the discussion.

It’s a Cyclical Thing

Most things are cyclical in nature in some form or another. Trade cycles involve fluctuations in economic activities (employment, output and income, prices, profits, etc.) Recessions, too, are part of the trade cycle, and tend to ‘recede’ after about eighteen months or so.

Productivity and consumerism climb when the economic system recovers, expands, and thrives. When the marketplace goes through a continuous slowdown, the ‘good times’ flow in the opposite direction until finally developing into a recession. And so, the cycle continues with periods of growth, followed by downturns (and then upturns again).

The last U.S. recession was 2007-2009, due to the subprime mortgage crisis. Experts believe another one is upon us as the securities market suffers a continuous roller coaster ride, with days of semi-freefalls. The recent ‘bailout’ and/or stimulus package is an attempt to make matters better. Other planned steps assume to prevent it from worsening, but on the flipside, outside factors may impede those ‘steps.’

Because they’re cyclical, recessions eventually ‘recede,’ so there’s light at the end of the figurative tunnel. The caveat: it’s going to be a good while before seeing economic improvement.

In the Meantime

The current events and US situation is something the American public is watching closely while considering the nation’s future—and those currently in office, administering help, hindrance, or even ‘fuel’ to the country’s ills. The ‘fallout,’ however, remains months away—with a presidential election occurring in its midst. When the dust settles, only then will individuals be able to tell whether or not this individual (new or re-elected) was the right one for the job.

Many of us are not on the high-end of the income-disparity spectrum. And now, in the midst of a recession, tips involving things like paying off debt, diversifying income, and building an emergency fund—when there aren’t any ‘funds’ for this paying-off and diversifying and building—seem pointless. Still, in this age of technology, utilizing any of the free financial management apps may be an eye-opener and help to facilitating cutting costs.

But there is one area where action can be taken to help get through a recession: living more frugally. Hey, we like what we like, but with limited funds being further focused on basic living necessities (food and shelter), the ‘extras’ have to take a hit—if only for a little while. A prime ‘extra’ to zero-in on: leisure/entertainment.

Samples of Quick-n-Dirty Corner Cutting

• For those using disposable facial cleansing cloths, cut those suckers in half. They’ll last longer, resulting in less-frequent spending on them. Every little bit helps.
• Netflix, Hulu, Amazon Prime, etc. Pick one. Yeah, they each offer varying availability of shows and movies, but you also know which one you watch more than the others. Just remember, it’s not forever.
• In line with #2: rent, don’t buy movies. In this digital age, and with ‘Buy Me’ specials running rampant, it’s easy to just click the purchase button instead of renting it. It’s likely, half the time you’ve determined you should’ve rented instead, anyway.

This, of course, all depends on how hard one is being hit by changes in the economy, so they’re just examples.

However, it just may be time to revisit classic entertainment from the ‘olden’ days, like boardgames …  and reading books. So, visit your local library (when they reopen), get/renew your library card, and go on an adventure, finding just the right story to entertain you—and briefly distract you from the nation’s turmoil.

Until the next blog, stay serif and read on (fiction, non-fiction, comics: go for it).