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Purses Tighten, Small Business Suffers, Families Budget

August 10, 2008

Small companies … are struggling to survive in the midst of a poor economy exacerbated by higher prices for everything from food to gas. Already, some plan to close up shop.

Dr. Daraius Irani, director of applied economics for the Regional Economic Studies Institute at Towson University, said he doesn’t expect this to be the end of the slide.
“They’re competing for an ever-decreasing share of the household income expenditures,” he said.

As prices climb an the economy slumps, people shop less.

No surprise there. But the way consumers choose to reduce their spending does not affect all businesses equally.

The hardest-hit retailers in an economic downturn are sellers of durable goods, said Randy Cray, director of the Central Wisconsin Economic Research Bureau at the University of Wisconsin-Stevens Point, because items in that category generally are the things people can put off buying.

… small business owners bear the brunt of an economic downturn without having much they can do about it.

“They do not have ultimate flexibility with regard to changing whatever it is that they’re doing,” Cray said. “They can watch their cost side as much as they can, keep their costs down so they can maintain their margins. But the best medicine for the small business in central Wisconsin would be for the overall economy to improve. … Unfortunately, they don’t have a whole lot of control over that sort of thing.”

See how necessary our trip to the store is before we fire up the old Chevy (or Toyota) … make sure the list you take is complete.  Make sure every family member is polled before you commit that tank of gasTry to make every trip multi-functional … don’t forget pet food and prescriptions.  Teenagers will be socially impacted by new spending disciplines, so you might need to conference them in to your game plan.  With the support of your kids, you may be able to weather the hard times facing the entire country.  Don’t underestimate the creative suggestions your children come up with. Making your family a team will be the first step for survival in this depressing economy. That’s the up-side of this economic disaster.  Becoming a family team … like the old days.

The down side is the emotional energy it takes to keep up.  The emotional energy … that’s the Energy Crisis least addressed.  This is the psychological toll many Americans are paying.  Reality is a hard taskmaster.  Freedom as we know it is no longer determined by spending … America has linked freedom to spending for too long.  Americans must re-define what freedom really is.  Our Declaration of Independence defined freedom as “Life, Liberty and the Pursuit of Happiness”.  Maybe Americans must rethink “Pursuit of Happiness”.   In our consumer oriented society, happiness is buying, whether you need it or not.  This concept has just hit the wall.  It is time to add common sense to this equation, happiness is your relationship with your fellow travelers on this planet.  Have Americans lost their ability to relate to their families, neighbors, countrymen and fellow earthlings?  Maybe there is a positive twist to the depressing condition we find ourselves in … We are forced to re-define our relationship with the planet we occupy.

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