Slow economic times are good for business.

Feel free to re-read that sentence and let it sink in, then I will explain why.

A (temporarily) struggling economy is capitalism's way of "balancing the scales" so to speak; ridding this country of greedy executives, companies that have made far too many poor decisions, and those that forgot profits are not necessarily what brings about long-term success.

The beauty of capitalism is that customers are the boss. They choose who wins. Companies that trade in their loyalty to customers for stockholder value end up paying the price eventually. For many companies, this is their time, and rightfully so.

I don't care what business you are in — failure is a choice companies make when they stop putting customers' best interests first. And I can prove it. Take 2 industries that are struggling a great deal in 2008, the mortgage industry and the airline industry. Housing and energy are sure to be of grave concern in the upcoming election.

The housing industry slump is quite simply the result of subprime lending (see in Wikipedia). Big banks began selling mortgages to people that quite frankly could not afford them. They knowingly approved loans for people that would not be able to pay, and attached a much higher interest rate to the mortgage because of the risk involved. Banks screwed their customers, but most importantly found a way to increase profits. It was a winning plan until people could no longer afford to pay their mortgages.

Companies like Countrywide were so highly leveraged in subprime mortgages that they simply ran out of money. Screwing their customers practically crushed their business, or at least forced them to be bailed out by another big bank.

Subprime lending is a choice, and not all mortgage companies thought it was the right thing to do. Take Hudson City Bancorp, for example. This 140-year-old New Jersey company chose not to write subprime mortgages and their shares have gone up 50% in the last year. Or how about ING Direct? They made the same call, only lent money to those that could afford to re-pay it, and in approving over 100,000 mortgages have only had 15 foreclosures to date. (more in this article)

These two companies made decisions that were best for their customers, and have thrived during a tough time in their industry.

We are all aware that the country's biggest airlines have lost their focus over the last several years. Company executives have been so busy bloating their capacity (more carriers, more planes, more routes) that they forgot about customers. When fuel prices rose, the big 6 airlines lost roughly $6 billion in the 2nd quarter of 2008.

Is fuel really the problem? Or has it simply magnified everything else that is broken about these companies? Again this is why slow economic times are good for business. It is time to weed out companies that have forgotten about their customers in exchange for companies with better values.

Despite rising fuel costs, leaving customers in the cold was a choice made by most airlines. Southwest Airlines did not make that choice, and consequently earned their 69th consecutive profitable quarter this year (to the tune of $121 million). While other airlines got fat, Southwest started hedging fuel in preparation for a storm. They are committed to customers with policies like free baggage checks, and are now rewarded by carrying more passengers than any US airline.

By no means are economic times like this enjoyable. However, they are necessary to keep our capitalistic society in check. Love your customers and you too can win BIG in a slow economy.