Government estimates released last week show that the economy shrank by only 1% in the three months that ended in June a much smaller decline than the 6.4% plunge in the previous quarter. I know whoever thought that we'd be excited about a negative number? But this really is good news, and most agree that the worst is behind us. Of course, we need for this recovery to be supported by sustained consumer spending.
As I was reading this good news, I thought about the most enlightening conversation that I had with a taxi driver in Washington, DC, last week. This gentleman certainly had a lot of wisdom and experience when it comes to the economy and what really makes it tick. Simple but true words.
I was leaving the Department of Treasury and heading over to the Ronald Regan building. As soon as I slid into the taxi, the man said in a booming voice, "Good afternoon! How are you doing young man?" Well, I was of course surprised that he would be calling me "young," but I quickly replied, "I am doing well, thanks, but am running late. How long will it take you to get me to the Ronald Regan building at 1300 Pennsylvania Avenue?" I noticed that he was a big man, well- dressed and maybe even older then me. I also felt the warmth of the man in his bigger then life smile and in his eyes that gave insight into a life of hard work, but also one of satisfaction and harmony with the world. I looked to his taxi medallion to try to see his name, but it was covered with pictures of three cute young children. I guess his name was "Grandpa."
He then went on a conversational path that made really good sense, and even more so as I write this today. Grandpa cheerfully proclaimed, "I am glad that you are running late because that means you are busy, and busy is good." About 10 minutes later, we were stopped at a red light and he turned around and looked at me and said, "You know, it's good that you are busy and that others are busy, because this means I stay busy and if we are all busy, then we will end the problems with this economic mess."
I was hooked now and decided to probe his mind further on this "economic mess." Grandpa told me that a few months ago, his taxi business was really slow; in fact, it was the slowest he had ever seen in 32 years of driving a DC taxi. "But now, things are getting back to normal." He went on to explain: This means more people are spending money and when more people spend money, then more folks have money to spend in general. This spending gives people more jobs, which allows businessmen like me to spend the money and time to be in Washington to take his taxi in order to go about creating more jobs. When I use his taxi, he then has more money to spend, and so the economy gets stronger and better for us all.
At this point, I was thinking, Wow, Grandpa really gets it! I wish he could go worldwide on all the cable channels and explain this to those naysayers who are forever wringing their hands and hiding in bunkers, just waiting for the next sharp-toed economic shoe to drop on their heads.
I appreciated Grandpa's wisdom and candor, and I told him so. He then said, "Well, of course I get it, young man. I have a lot of time with this job to think about things and I get to talk to a lot of people, and I should hope that you will tell all your friends and business people you deal with that they need to spend money to get us out of this mess!"
See Grandpa rightly understands that the recession is over and the recovery is underway, and that this recovery is riding on the backs of consumers. Of course, the Great Comeback is not going to happen overnight, but we are moving in a positive direction, which needs to be reflected in our business strategies and actions.
If you'd like to learn more about handling the Great Comeback and how to develop a plan, listen to this freshly-minted Global Supply Chain podcast. I talk about the timing of economic recovery and the realities that your industry and your company will face in the coming months.
I am fully on board with Grandpa: Let's fuel this taxi up and head toward recovery, growth, and prosperity.