Oftentimes, one will hear somebody equate the economy to a “zero sum game”. For those unfamiliar with the term, a “zero sum” anything basically means in order to gain, someone else must lose.
Think of a cake or a pizza: say you plan to divide it into eight equal pieces, but you actually mis-cut the first piece and it’s a little bigger… oops. Not only do you have big piece, but now another piece (or several, perhaps) *must* be smaller than originally planned to make up for it. Zero sum – someone wins with a bigger piece (hopefully me), and someone gets cheated (not me.)
Some people like to say the economy is a zero sum game (probably because Gordon Gekko said stocks were in “Wall Street”). Someone wins, so someone else must lose. But that’s really not true – economics are far too complex to have a simple “sum” – the overall cake simply changes too fast to have a definite value.
But you know, I can see why sometimes people think the economy is a zero sum game. Because while I was at the gym, I thought about exercise equipment and the economy (actually, I thought about financing exercise equipment, but that’s beside the point.)
See, I noticed the gym has been getting more crowded than usual in the past few months. Now, why would that be? Maybe because the gym I go is the most competitively priced gym in town. In fact, it’s so competitively priced that it almost makes more sense to just get a gym membership than buy a piece of exercise equipment for your home. Plus, it’s a fairly cheap “activity” – for less than 15 bucks a month, one has access to all the equipment every day, massage chairs, tanning, etc. So in a bad economy, my small observation told me more people are going to the lesser priced gyms. Which means more are probably opening up.
The next day, I go to my office, and look at the data for the last few months – sure enough, financing gym equipment is slightly up. Equipment financing as a whole is down a little (like everything else), but certain sectors (like gym equipment financing) are holding steady, or even seeing a slight uptick.
Something goes down, another goes up. Interesting.
Maybe I should drink more water on the treadmill???