RECESSION? WHAT FORTUNE 500 & OTHER BLUE CHIPS CAN DO TO MITIGATE 2

The downward spiral in a recession (downsizing & cutbacks > unemployment > loss-of-purchasing power > cuts-in-production > more unemployment > more loss-of-purchasing-power > and on and on) can be mitigated if the Fortune 500 & Blue Chip corporations (which remain profitable, recession or not) played Big Brother to Small Business Kid Brother by doubling their accounts receivable days (encouraging buyers to purchase) and decreasing by half their accounts payable days (thereby giving much needed relief to their suppliers). In effect, this will increase the velocity of funds in circulation in the economy.

This does not mean to say that profitable companies are to abandon their prudent accounts receivable & accounts payable policies and extend credit indiscriminately, or reward unreliable suppliers with cash payments or shortened accounts payable days. This downward-spiral mitigation strategy only asks profitable companies to favor their valued customers with longer-term credit and reward reliable suppliers with cash-on-delivery payments or shortened accounts payable days.

This will help the economy climb out of the recession and arrest the economic downward spiral more than any fiscal or monetary policy.

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