Sunday, November 16, 2008

Shadows on the wall.

Trying to gauge the economy is like looking at shadow's on the wall (See Plato's Cave Metaphor below.)

Most information I get is dated, or slanted, or whitewashed, or referring to something else. All I can do is try to glean clues from the dancing shadows.

For the first time, I have another set of data to work with, I'm not completely on my own trying to figure out what's going on. Linda's store is seeing a slight slowdown, but nothing like what Pegasus has gone through.

Meanwhile, there are several comic dealers in big cities who say they are doing very well.

Normally, I might dismiss these claims. (Or just feel jealous of them.) But this time, I see both results as hopeful. I always say, my store doesn't exist in isolation, and therefore if others are doing well, the potential exists for my store to pick up.

But I do think Bend is -- as usual -- in a kind of unique situation, and downtown is unique within Bend.

I noticed this summer, for instance, that a huge percentage of my customers were employed in the 'growth' industry. So I expected a fall off this fall and winter. I didn't expect to lose some long term customers, without so much as a word from them. They just stopped coming in.

Sort of disappointed in them. I expected better, I guess. At least a fair warning that they weren't going be able to pick up all the comics I'd piled up for them.

Overall, there seems to me to be a inexorable logic to the slowdown. Gravity has reasserted itself. Again, this morning, there are reports of only 22 building permits issued, keeping the rolling average at around 25 per month over the last year and a half or so.

Just out of curiosity, I counted the furniture store ads in the yellow pages, (not counting Antique stores) and found about 24 listings. At least 4 of those are gone.

The inexorable logic is that 24 stores furnishing 24 houses (building permits could be a garage extension, or a new deck, but let's pretend) means one house to furnish per month, assuming that people buy in Bend, assuming that they don't buy second hand, assuming that they don't already have their own furniture.

You can use the same inexorable logic on plumbers, electricians, painters, ect. ect.

I've been saying that the last 3 years were an illusion, and my sales figures seem to be confirming that. It's not fun, but it's O.K. since my overhead is no higher than it was 3 years ago but it does require an adjustment.

At least, that's the way I read the shadows.


Plato used the analogy of the cave to illustrate his idea of forms. The analogy goes like this:

Imagine several prisoners who have been chained up in a cave for all of their lives. They have never been outside the cave. They face a wall in the cave and they can never look at the entrance of the cave. Sometimes animals, birds, people, or other objects pass by the entrance of the cave casting a shadow on the wall inside the cave. The prisoners see the shadows on the wall and mistakenly view the shadows as reality.

However, one man breaks free from his chains and runs out of the cave. For the first time, he sees the real world and now knows that it is far beyond the shadows he had been seeing. He sees real birds and animals, not just shadows of birds and animals.

This man is excited about what he sees and he goes back to his fellow prisoners in the cave to tell them about the real world. But to his astonishment, they don’t believe him. In fact, they are angry with him. They say the shadows are reality and that the escaped prisoner is crazy for saying otherwise.



Duncan McGeary said...

Thing is, there's no sense getting too upset or depressed over this. It's part of the business cycle -- yes, even major booms and busts, historically, aren't that uncommon.

I even saw it coming, so was somewhat prepared.

I may obsess over it, but it's because it's a situation to be dealt with, and I always obsess over situations to be dealt with. It's my way.

Also, just curious and bemused by it all. And wishing I'd been smart enough to cut the buying a year sooner.

Duncan McGeary said...

You know, despite all my experience with bubbles, I tried to finesse it -- again.

I've reacted with much more decisiveness this time, however.

I feel for any business that has just started to react. It's hard, I know, especially if you've had several good years under your belt.

You know, a couple of bad months, followed by a good month, followed by a bad month, followed by an average do you read that, how do you react? Most people keep doing what they're doing, cutting in response.

It's a lot like following house prices down. You have to get under it.

And new business? They have nothing to compare it too, which is both a blessing and a curse.

Leitmotiv said...

Yeah, I work for a pizza joint in town. And even at the beginning of this year, things were slowing down. But now that the economy has become the focus I have definitely seen a decrease in sales, and unfortunately my tips, which I live on. It's not looking too good for me.

Most of the employment jobs here are in the service industry and that isn't going to sustain our local economy.

BilboBend said...

Most of the employment jobs here are in the service industry and that isn't going to sustain our local economy.


That's why since the beginning of 'time' those in BEND that 'worked' had two jobs, at two service places, nobody ever survived in BEND with one job.

DEJU-VU old times returning, who would have guessed?

The TWO most cyclic and safe places to work in Bend are food & moving, if your young you can work 'moving' in very good times, in bad times folks fall back to two service jobs. It's unheard of having one job pay the bills.

Then your really lucky to live in Bend on one service job, that way it used to work is you lived in Sisters, Tumalo, or LA-Pines, and if you had two jobs, you could live in Bend.

BilboBend said...

I don't see much difference of the shadows on the wall, or the 'blind men and the elephant'.

I have always suggested "What is Bend", as the 'blind men and the elephant', folks that only read the BULL may only feel a tail and thinks its a snake.

Bloggers who feel the ear may think its a fan.

TV people who feel a leg may think its a tree.

Nobody sees the Elephant of Bend.

People who live in the Cave are just like people who only read the BULL, or only watch TV, or only live on the Blog's.

To see the Elephant you have to be on the street.