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Bailout bill passes, financial crisis continues, Part II
On the topic of the how, even with the bailout bill (sorry, the rescue package), all of our problems won't be solved overnight, I offer a story I wrote for Time.com today. It starts:
To understand how the credit crunch is hitting American business — and, in turn, you — look no further than The Dog Shop, a pet supplies and grooming store in Washington, D.C. This holiday season, owner Jane Huelle will only stock four varieties of Christmas-cookie dog treats, instead of the usual six. That's because a month and a half ago she got a letter from her credit card company saying her line of credit was being docked by thousands of dollars.
You can read the full thing here.
Barbara!
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This holiday season, owner Jane Huelle will only stock four varieties of Christmas-cookie dog treats, instead of the usual six.
I really thought you weren't serious about a dog store stocking two less varieties of Christmas-cookie dog treats as a sign of impending doom. If that's the best you can come up with, then I say keep looking. If I was the bank, I'd be reducing my exposure to a specialty dog shop as well. Considering that in a recession, people may be reducing their spending on things like getting their pet groomed or Christmas-cookie dog treats.
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I'm not sure what you mean by "best." I was going for tangible. An illustration of how even if you don't own a house, even if you don't need a car loan or a student loan, even if you're in a booming profession like nursing and there's little risk of losing your job, this is going to wind up affecting the texture of your life. I don't know if we need six varieties of Christmas-cookie dog treats, but, as a society, that's what we've gotten used to. Just because a change is quiet doesn't mean it's not indicative of something significant.
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Just because a change is quiet doesn't mean it's not indicative of something significant.
We were just sold a $700B bailout bill because the credit crunch was going to make it so payroll couldn't be met, not 6 varieties cookie dog treats being bought. We were told that without it, we're going to have the next Great Depression. I didn't believe it, considering the sources but the general public was convinced. There was scant evidence of a credit crunch affecting any solvent business besides banks, and stories like this don't qualify as evidence. GM had troubles getting a loan, but they are losing billions per year. Who would be dumb enough to loan a failing business money?
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Barbara, I actually made the comment on Justin's posting above, but I think your story here really does show what happens when Main Street lacks the credit facilities to conduct everyday business. It's more than just not having six varieties of dog treats; it's the manufacturer making the ones left out that have to start cutting back on production and people.
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@Curmudgeon: Exactly. And as I point out later in the piece with some survey data, it seems a lot of companies are on the cusp of making those decisions.
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