The Cleansing Effect of Recessions
In the past, when I’ve tried to schedule our window cleaners they have always been able to come within two days. Despite the still-slow economy, the first available appointment this time is not for three weeks.
“Why?” I ask. The owner says that during the worst of the recession his firm had enough clients to survive, but barely; smaller, less efficient companies died off. Now that demand for cleaning has increased, his own customers are coming back; and the customers of the now-defunct companies are hiring him too, so he’s swamped with business. Recessions kill off inefficient firms; but at least in this case, those that survive come out stronger than before. (I can’t resist noting that some macroeconomists have referred to this phenomenon as “the cleansing effect of recessions,” especially apropos in this case!)