The end of the year has arrived—thank goodness! No doubt about it, 2009 was a challenging year, and 2010 will be as well. But thankfully, the fear that the world economy would come crashing down—a common notion just a year ago—did not come to fruition.
I graduated high school in 1973 during a recession. I remember well the dark days of the ‘80s (“Will the last person leaving Peoria turn off the lights?”), and rode through one downturn in the early ‘90s and another earlier this decade. When the financial bubble burst toward the end of last year, it was a frightening time for everyone. We “hunkered down,” took a deep breath and tried to ride out the storm.
As all businesses were forced to do, we took a hard look in the mirror and made some adjustments. We looked at day-to-day operations and the future direction of the company. We talked with bankers, vendors, customers and staff. Expenses were checked and kept to a minimum. Price adjustments were negotiated, both as a vendor and as a customer. At the end of the year, we not only survived, but thrived in many ways.
Technically speaking, “The Great Recession,” as it is being called, has ended, and the recovery has begun. But according to a Small Business Research Board poll, 76 percent of small business owners and managers said their businesses have not benefited from the recovery. The stock market is up, but jobs are not, and unemployment is expected to continue to worsen in the coming months. So practically speaking, for many of us, the hard times are not really over.
This has been no ordinary recession. The changes it has exposed are structural, not cyclical—it’s doubtful that things will ever go back to business as usual. In the end, this “new normal” to which we are adapting is a good thing, if it means we are moving toward long-term sustainability in both our business models and our personal finances. In all honesty, we probably needed the reality check.
As if to confirm that, a string of recent polls have revealed that, despite the tough times, Americans are happier now than they were a year ago. Over the last two decades, it seems that the “supersizing” of the American Dream, as it was dubbed in a recent issue of Time magazine, had led to unrealistic expectations. Many people have admitted to feeling a kind of relief at the voluntary downsizing of the past year.
But there is a lot of change—and with it, uncertainty—still to come. At the moment, the fate of a massive bill to reform healthcare—which accounts for more than 15 percent of the entire U.S. economy—remains unknown. The outcomes of legislation to overhaul financial regulations and fight climate change, among other unfinished business, are uncertain. At the state level, the financial situation is grim. If the changes of the last year and a half have been dizzying, the roller coaster has hardly come to a halt. But after all that we’ve been through, we’re more than ready for it.
Best wishes for a healthy and happy New Year. iBi