Ripple Effects

Off the beaten path and traveling the back roads of the countryside brings opportunity to cross paths with new people. Recently passing through a small town I struck up conversation with the proprietor of a local service station and I commented on the lumber mill and how fortunate the town was to have industry. My new friend then informed me the mill had just closed, permanently, two weeks before after 100 years in business. Over 1,100 jobs were lost at the mill, but the real tragedy he said “was the ripple effect.” He explained there were house cleaners, landscape companies, automobile service garages, pressure washers, and even the local dry cleaner that depended on the employees of the mill to buy their services.

In conversation another friend shared with me the story of the recession on an aviation business, losing fuel sales due to the cutback of medical transplant flights. Curious, I asked why and learned the typical transplant donor is a male, aged 18-24 who dies in a motorcycle crash. In this recession those young males cannot buy motorcycles due to the credit crisis. Therefore due to the economy there is no credit, no motorcycle purchases, no crashes, no transplants, no flights, and no sales.

Since 2007 the economy has struggled to regain footing, slowed down like a marathon runner in the 18th mile. Restarting the economic engine is more serious than easing credit, encouraging spending, or building confidence. The concept of the “new normal” which mirrors Europe’s economy with high unemployment, social programs to help those in need, and lackluster performance is cheered as a political success. In this recession two very different demographics have suffered catastrophically: low-income minorities on one end and high-income whites on the other. Expecting to find themselves in the most prosperous years of their lives the 40-55 year old group of white males has learned the jobs they once coveted have been shipped off-shore, gone forever. Cities like Detroit are facing 50% unemployment, arguably far from an economic recovery. Regardless of which group is examined though, it is apparent society has been slow to understand this change. If not unemployed, then a blind eye is turned to those who need help with housing, loans, child support, and groceries.

Movies like the “Butterfly Effect” or stories like Ray Bradbury’s “A Sound of Thunder” exemplify the catastrophic possibilities of small changes to once known realities. In 2010 we are experiencing the ripple effects of radical changes to a once vibrant economic system. As of this month more Americans than any time in history receive food stamps, nearly 40 million, real unemployment according to a recent Gallup poll is close to 20%, and the housing market is set to fall again due to the end of government tax incentives. I must agree with the words, “new normal” and assert our success will depend on adaptability, not returning to what we once had.