Times are tough.

I mean, people are losing their jobs, companies are folding, and despite all the talk about “Stimulus”, down here at ground level things are stagnant at best, and deteriorating at worst.

Paintball is more often than not a microcosm of life and circumstances at the national and international levels. Whether it’s in our little world, or in the world at large, a lot of the issues we’re facing right now are the result of irrational exuberance.

Leading economists estimate that the current recession afflicting the United States actually started during the latter part of 2007, deepened over the course of 2008, and are pretty much hitting rock bottom right here and now. Depending on your political leanings, the current administration or previous administrations are at fault for the current pickle we’re in.

Realistically, the fault lays with us as a people and the industries that serve us. From small start up fields like Wateree Paintball who leveraged big parts of their business then proceeded to open up their business at the wrong time of the year to establish a player base and income stream to mortgage companies who make loans to people who have no business whatsoever buying a $300,000 house. It all boils down to irrational exuberance. Buying a house or running a paintball field isn’t for everyone, and if it were easy, everyone would be doing it!

The resulting failures have widespread affects on both society as a whole and in the paintball world. For every customer that stiffs his paint distributor, that distributor has to sell even more paint to make up for the lost income, and by the time all is said and done, the economic impact of one customer stiffing the distributor is several multiples over the cash value of the one skid he got stiffed on.

This same distributor makes a sponsorship commitment to a pro team for $50-60,000 for the year, and the gamble is that increased paint sales will make up for the outlay in product to the team. For a small distributor, the cost of a customer stiffing him can put a dent in his business. With the margins as thin as they are in the paint world, it’s completely reasonable for a distributor to go out of business if he loses income from a small percentage of his network customers, either by being stiffed or the customer going out of business and filing for bankruptcy. With the larger distributors, the effects are even more apparent, with legal fees compounding the losses into the hundreds of thousands of dollars.

All of this is the product of irrational exuberance, both on the grassroots and industry side. Only a couple of years ago a pro team playing both leagues could (and some did) have an annual budget into the hundreds of thousands of dollars. While sales are skyrocketing, it’s easy to justify these outlays, and with easy credit drawing every Wateree Paintball in the world to their doors, it’s easy to start believing the ride will never end.

But they always do. Just like eventually reality hit the mortgage industry that a guy making $8/hour can’t realistically be expected to pay off his $200,000 mortgage, dropping millions in product and cash into promotional projects and letting every Wateree Paintball out there have E-Z Terms for thousands of dollars in paint and product put everyone in a huge financial pinch that’s going to take years to recover from.

Making a quick buck is an American Tradition, and when the bacon comes big and large, it makes it all the sweeter. But it can’t last. Markets correct themselves, and while natural, the process can be ugly to watch. We’re currently paying the price for the irrational exuberance of the past few years, and there won’t be a Stimulus Package for Paintball. Funny thing is, the fact that there’s no government bailout coming for paintball means that in the long run when all this passes, the resulting survivors will be smarter, leaner, and more rational in their outlook.