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The countercyclical asset, a continuing series
Mr. McFarland, a third-generation cobbler, is riding a shoe-repair boom. Since mid-November, he has been juggling roughly 275 repair jobs a week -- about 50% more than usual. "I'm so busy right now it's unbelievable," he says.
Retail sales for shoes are down 3.2%.
Loyal MR reader Michael Tofias suggests that perhaps The Snuggie is a countercyclical asset as well.
Posted by Tyler Cowen on February 2, 2009 at 08:19 AM in Current Affairs | Permalink
Comments
Yup. And here in Spain a domestic appliance repairer says he is about 50% busier than usual. The world is marching in step even if we have holes in our shoes.
Posted by: D iversity at Feb 2, 2009 8:49:14 AM
Haven't you seen the ads! Buying the Snuggie can save you tons on your energy bill by stopping errant dollar signs from rising out of your thermostat and can save you from the discomfort of restrictive blankets. Soon, all will be wearing Snuggies, and they shall take over the world!
Posted by: Andrew Chesley at Feb 2, 2009 9:47:28 AM
Let me give you an example a cyclical asset: Tax cheaters. As shown by Tim Geithner and Tom Dashle and who knows how many other politicians, in booming times it's hard to fill tax forms properly. Maybe you can credit Obama with popping this bubble.
Posted by: E. Barandiaran at Feb 2, 2009 10:14:07 AM
Excellent comment.
Making this information available is like promoting private anti-crisis measures for the ordinary citizen.
Posted by: Lisardo Bolaños at Feb 2, 2009 10:15:15 AM
Let me give you an example a cyclical asset: Tax cheaters. As shown by Tim Geithner and Tom Dashle and who knows how many other politicians, in booming times it's hard to fill tax forms properly. Maybe you can credit Obama with popping this bubble.
Posted by: E. Barandiaran at Feb 2, 2009 10:16:07 AM
Personally I am waiting for the small electronics repair shop to make a comeback. Not one within 50 miles of where I live in N Cal. Diversity confirms my faith that this is a growing business opportunity for now at least.
Posted by: martin at Feb 2, 2009 10:17:26 AM
Personally I am waiting for the small electronics repair shop to make a comeback. Not one within 50 miles of where I live in N Cal. Diversity confirms my faith that this is a growing business opportunity for now at least.
Posted by: martin at Feb 2, 2009 10:17:56 AM
Wonderful example that I can narrate in the class room-yet one doubt-cobblers operate in which sector of the US economy?Organised or informal? Does there exists an informal sector in the US? So there is no vertical upward occupational mobility among American cobblers ever since Great Depression?
Posted by: GVV at Feb 2, 2009 11:04:34 AM
Wonderful example that I can narrate in the class room-yet one doubt-cobblers operate in which sector of the US economy?Organised or informal? Does there exists an informal sector in the US? So there is no vertical upward occupational mobility among American cobblers ever since Great Depression?
Posted by: GVV at Feb 2, 2009 11:17:57 AM
Ordinary blankets can slip and slide!
Posted by: josh at Feb 2, 2009 11:50:17 AM
Snuggle is showing up everywhere lately- collegehumor via AS the other day,
http://andrewsullivan.theatlantic.com/the_daily_dish/2009/01/available-in-bl.html
Posted by: Jim at Feb 2, 2009 12:26:19 PM
My wife is a small business broker, and she tried to sell a cobbler practice that was netting $100K+/year - on the books - for only about 45 hours work per week. She learned a fair amount about that business and it's pretty much the way you'd expect: each cobbler is a separate, independent business person who operates in a fairly large area, with mostly higher-end customers getting their Ferragamos and expensive hiking boots fixed.
She got little buyer interest, presumably due to the fact that it seemed somewhat obscure at the time and as a "buy yourself a job" business, there appeared to be little upside. Also - and somewhat surprisingly - it was a business that required good communication skills so it didn't appeal to English-challenged immigrants, who make up the bulk of small business buyers in our area.
Now, that same cobbler is doing about double the business he was doing, and is talking about hiring apprentices, despite the costs involved with training them.
As for GVV's question, there is definitely a huge informal sector in the US - pretty much any small business that touches cash somehow manages to not report most of it as income.
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Posted by: Onder at Sep 26, 2009 3:55:23 AM
I am surprised about the shoes I have to say.
I am familiar with counter-cyclical assets or rather movement against market or economic cycle, just not sure why the shoemaker is making higher profits.
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