What’s Recession Mean?

Coming home from work today, I decide to stop off at the store to pick up a bottle of wine for diner. The store is located on a convenient less traveled route home but in what is generally considered a rough area of town. The liquor store was busy and I was  talking with the people around me as is frequently my custom when one of the men in line buying his brew turned to look me up and down a little questioningly.

“You been around long,” he stated in a tone that made me unsure whether he was asking, telling or suggesting I might have been around too long.  I acknowledge that I had.

“What’s this recession mean,” he asked me dead serious.

I had no idea why he asked me that question because the topic in the store had nothing to do with anything close to economics. I guess he figured that I was old enough to have some idea of what most things meant so he would give it a shot.  He was troubled by it and had no other place to go for the answer.  

“Will it be alright?” he followed before I could answer his first question.  

“Yes,” I started to reply, “It will be fine. If you have a job and don’t have a lot of debt you’ll be fine,” I said with a smile trying to be reassuring.


“Good,” he said. “Just wondering,” he added and then left without another word apparently having gotten the answer he needed.

It was a short moment in time but it said a lot. People are starting to get nervous and the news media and the other places they normally turn to for answers are feeding the fire of uncertainty. The news is littered with negative comments about the stock market, higher prices, layoffs and high gas prices. How is someone to know anything more than what this man is beginning to feel?  Many don’t.

The reason for their confusion is that a real recession brings different affects on people based on their economic situation. To a person out of a job and in financial trouble, he isn’t in a recession, he is in a depression. To someone who has a good job, the recession will likely only mean a minor inconvenience. To others who have large savings, a recession will only be blip on the news report they see waiting for dinner. To those that have wealth, a recession will mean a great buying opportunity because the stock market and real estate is on sale at what will later be perceived as bargain basement prices.

The man was right about one thing. I am old enough to have been through several recessions and survived. I suspect we will again. If you don’t know what to do just considering being a little more frugal than you might normally be. Don’t run up your debt and work harder to keep your job because new ones will be more difficult to find. A recession is nothing to worry about and is similar to a stock market pull back. If you don’t have a pull back every so often then one day prices go so high they get strained and snap hard the way a rubber band does when stretched to the limit.  Recessions help keep the snap from being to big and hurting our hand.