The New Economic Indicator: Brake Pads

Lewis Schiff over at had a recent conversation with Jack Stack, the father of “open book management” and the chief executive behind SRC Holdings, the industrial conglomerate based in Springfield, Missouri.

I asked Jack if he was able to tell, from his sales volume, whether the economy was headed up or down?

“Up,” he responds.

“How can you be so sure?” I say.

“Brake pads. We’re selling lots of brake pads for trucks. When trucks are wearing down brake pads faster, it means the trucks are being driven more. More trucks on the road means more goods being sold.”

Who knew?

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