The Norman Transcript

Columns

July 27, 2013

Economic winter won’t last forever

NORMAN — Over the years, I’ve given a lot of speeches across the country and talked with many business owners. In doing so, I get a sense of what people really want to know, which is, “When will things turn around?” or “When will things get back to how they used to be?”

Some businesses are seeing increased traffic and rising sales, but it’s not anywhere near what it used to be. As one business owner recently told me, “Business is good. There’s just not as much of it.” People want to know about interest rates, possible inflation and what is most likely to happen to their customer base.

This is where I start asking questions of my own: What terms are your banks offering for financing? Is your average sale still around 75 percent of what it used to be? Are terms from your suppliers still tight? Are your customers more interested in servicing old items rather than buying new ones? Are your clients fearful?

If you look at long-term economic cycles, you will see that economies go through seasons similar to spring, summer, fall and winter and it happens during an almost 80-year cycle. And just as spring follows winter, winter follows fall. While some may not like winter, including me, winter is necessary because that is when nature rests, recovers, purges out the weak and gets ready to start new in the spring.

This is where economist Joseph Schumpeter’s famous comment about creative destruction comes into play. It is the time where weak or no longer relevant companies die or get acquired. As much as central banks and governments would like to avoid it, you can’t have spring without a winter first.

From an economic cycle standpoint, I believe we are in the winter season, and it’s not over yet. We are simply getting used to the new, lower level of activity. More importantly, many of the business people I talk to are, by virtue of the fact that they are still around, the shakeout winter season winners. They just don’t know it yet.

Text Only | Photo Reprints
Columns
  • Norman Forward builds momentum

    The quiet campaign to build momentum for a citywide public works project is beginning to attract some attention....

    July 20, 2014

  • Tax those trees out of here

    I read your editorial “Pesky red cedars” in the Norman Transcript of Tuesday, July 15, 2014. I have attended two meetings where the problem of the eastern red cedar trees was discussed. Because of the drought conditions in Oklahoma, we ...

    July 20, 2014

  • Make gun safety a health issue

    Quick, are you more likely to die by a bullet or in a car crash? Common sense would seem to suggest the latter. Cars are everywhere. We are an auto-obsessed nation. To be American is to drive — everywhere. Teenagers itch to get behind the ...

    July 20, 2014

  • They just want to be free ... maybe

    Massoud Barzani, president of Iraq’s semiautonomous Kurdistan region, rattled many cages this month when he announced in parliament that the KRG would be moving ahead soon on a referendum on independence from Iraq. If Kurdistan goes ahead ...

    July 20, 2014

  • Congress must accelerate solutions

    Congress has roused itself, at the last minute, and now is scrambling to save the Highway Trust Fund. Better late than never. Better still will be if lawmakers agree to come up with the money to prevent the fund from becoming insolvent. ...

    July 20, 2014

  • The heavy burden of college aid

    Return on investment is a clear measure of what you get for your money. Incredibly, the federal government doesn’t apply that simple concept to the $137 billion a year it spends on college financial aid....

    July 19, 2014

  • James bears weight of Cav’s dreams

    LeBron James has done it all on a basketball court. He’s a great scorer, rugged defender, proven big-play leader and champion. But that might not be enough in Cleveland, where he’ll also need the powers of Merlin the Magician....

    July 17, 2014

  • Steve Boaz.jpg Breathing Rhythm Studio a center for creativity

    Recording engineer Steve Boaz has brought his musical ambitions to fulfillment in a downtown Norman studio.

    July 14, 2014 1 Photo

  • Matt Lauer is so last century

    How about we rename “The Today Show” the “Yesterday Show” since host Matt Lauer asks questions from 1953? Isn’t what Lauer asked GM CEO Mary Barra about whether she’ll do “well” at being simultaneously an executive and a mom about, oh, 30 ...

    July 14, 2014

  • Religion’s role shrinking

    Surveying the response to last month’s Hobby Lobby decision, I was struck by a comment from progressive Massachusetts senator and possible Democratic presidential candidate Elizabeth Warren....

    July 12, 2014