It was 1929. Twelve million people were out of work; 12,000 people became unemployed every day; 20,000 companies had gone bankrupt; 1,616 banks went bankrupt and 23,000 people committed suicide in one year.
We're not seeing a lot of people jumping out the window on the 6 o'clock news every night this year, but the feeling of mass panic is certainly out there, as evidenced by mass selling of stocks in the days following S&P's downgrade of the U.S. credit rating.
The economic news that we read every day is not particularly exciting, and if you live in California where I live, with unemployment topping 12 percent still, you can't help but know people who have been hit hard by economic issues. That said, and while construction is still quite sluggish in much of the country, and the U.S. is hit by incomparable political gridlock — similar to the gridlock I see on the freeways most days as I drive to my office — and several European countries aren't far away from defaulting on their debts, the resurgence of optimism we felt during the first quarter of 2011 might be a distant memory.
Still, if you look at the quarterly reports from most construction equipment manufacturers and national rental companies that are publicly owned, things are a lot better than they were a year ago. While a lot of people are selling off their stocks — and I will never pretend to be a stock-market analyst — my gut feeling is this is not a time to panic, much less jump out the window.
The economic issues are dire and the problems out there in the rental marketplace might be daunting, especially when the country's inability to fix its economy and deal with the debt challenge is so disheartening. But those of you who are still involved in the rental industry just came through one of the most challenging recessions in history, probably the toughest in our lifetime, and you're still here to tell about it. You've been through a lot and survived, so I trust you'll get through this one.
This debt crisis isn't going away just because they arrived at a deal in Washington and I expect economic and political volatility, as well as some dramatic stock-market fluctuations, will probably be the order of the day for a while, so you might as well get used to it.
One of the keys to survival for many that I talked to these past few years was the refusal to panic. When the phones weren't ringing, when the phones weren't being answered on the other end, when customers had no work, you found a way to readjust your business and adapt to changing times. Don't expect dramatic boom times. Keep a strong balance sheet, keep practicing those business essentials that got you there and don't stop looking for ways to operate more efficiently. And while there is more acquisition activity than there has been for a while, for most of you a buyer dangling more money than you ever dreamed of is probably not likely to break down your door looking to buy your company.
It's a crazy thought but when I've read about or seen movie images about panicked business executives or brokers jumping out the window and plunging to their deaths from the high stories of buildings, I sometimes imagined that while on their way down something occurred to them to change their mind. Maybe a solution to a problem or the thought of a loved one came to them and they changed their mind thinking, “No, I don't want to die.”
I don't think too many of you are contemplating such a thing, but, as a metaphor, I repeat my message of not panicking. Look for the fundamentals that are working and keep building on them. Adjust and change and don't give up.