Doing Well in Recession? An Alternative List

Recession is here. Almost depression is here. I am using the definition - when your neighbour loses his job, it's recession; when you lose yours, it's depression. I am almost there. So, currently, the world is a fairly bleak place. Devoid of hope first time since Pandora opened her box, almost. We see a fun cycle everywhere: every time a report is published, every time we look at the reality, our heart sinks and share market crashes; then we let it pass, crawl back in hope and let share market rise again. Then, it crashes again.

So, Britain now has record number of bankruptcies. Chrysler has closed its factories and have finally gone into Chapter 11. GM will go, possibly, in a couple of months. Car production in Britain has dropped by 51%. Unemployment in the United States is in double digit percentage, so it is in Britain and rest of Europe. My bank helpfully informed me that the interest rate on my savings account has been reduced from 0.5% to 0%. so, doom and gloom everywhere!

The point of this post is that it isn't everywhere really. There are industries/ sectors which are doing well. And, this tells a lot about human nature really. So, I shall try a 'Doing Well in Recession' list here.

1. Alcoholic Drinks Business. Quite obviously, people drink more alcohol when they are depressed, which makes them even more depressed, which makes them drink even more. Call it the first rule of depression, if you like. One can see the summary of this report here which predicts that the industry will escape the effects of recession at least in the short run. This isn't new, as one can also read about this industry in the previous recession in 2000/2001. Unfortunately, though, the alcoholic drinks sale does not automatically mean that pubs and bars will do well. Probably not, as I could find a report on the Canadian industry, issued as recently as 23rd April 2009, which talks about a 5% jump in Alcohol sales, but predicts that most of it will be consumed at home.

I obviously had a reverse theory - call it Coffee Shop theory of Economic Development - where I thought that usually when a country develops economically, coffee shops open and more people go there. I have no statistical data here, but this was from my experience in post-liberalization India and from reading about the coffee shops in London in the early years of industrial revolution. If that rings a bell, one would think of swings of the people's drinking habits are related to economic boom and bust, though unfortunately, we do not have a 'model' yet to use to predict the onset of a depression or recovery.

2. Occult and Astrology. I just read an article in Time about the boom time for Astrology and all things that relate us to Ghosts and Gods and stars etc. I know it is true, as people I know suddenly started consulting astrologers. I heard an 'accurate' astrological prediction made to a friend recently - things will get better in two years - but when I mused that it seemed straight out of Financial Times, my friend was upset. What I said was surely insensitive, because I did not factor in the acute need of faith at times like this.

3. Movies. So it seems. Businessweek reports that movie attendance is up. The movie industry is set to do well this year. We have historical evidence here, where the tough times in the 80s produced all-time great movie franchises. The talk is, indeed, that Hollywood is recession-proof, as you see in this video.

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I must admit that there are dissenting opinions this time. A good preview of what recession may mean to various entertainment industry sectors is here. TIME also reached similar conclusions on the issue. The bloggers are projecting that this recession is going to be different for Hollywood, as its recession proof days are coming to an end. There is surely a bit of belt tightening, but that may be related to availability of credit and investment money, than the market. And, this is not just Hollywood - such sentiments prevail in the Independent movie industry too: tighter budgets and less number of releases, though there is no signs of demand falling.

4. Education: We see a shift away from Private schooling in Britain, as families can not afford expensive school fees. However, there is an opposite trend in adult education where more people are going back to school to reskill themselves. I know that the trainee intake has doubled in many work-based training organizations. So many people are actually taking these work-based programmes that the British government had to close doors on new trainee intakes.

I have seen a huge expansion of Private education capacity in India, especially in terms of business schools. I think that this is a huge bubble, and business schools will fail - I have already seen Business For Sale for a group of educational institutes [on]. However, it seems that education as a sector will escape recession.

This isn't supposed to be an exhaustive list, so I shall stop here. I could go on adding religion, socialism, military recruitment, popularity of government jobs to this list, but hopefully this already gives the sense I wanted to give - even when everything is down, we cling to certain things. This was last of the God's gift to Pandora - HOPE - that refuses to go away.


Bony Yousuf said…
dude u almost made me nervous.. great article, gotta say...

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Anonymous said…
i'm new... hope to post around more oftentimes!

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