Sunday, February 1, 2009

I'm the Dude - I have a PhD in Making Ends Meet!

I thought that this recession that we are in all over the world is so severe, that I should add some thoughts to the mix. They say that necessity is the mother of invention, meaning perhaps that we should become more inventive in order to survive.

Another expression we might be hearing in some quarters is "the algebra of need." This is a neat phrase, intended to tie the pure mathematics of survival in with the global issue of need and the know-how to make ends meet when everything is scarce. This phrase was first coined by William Burroughs in his sixties novel "The Naked Lunch."

Here's the kicker - it is so far-reaching that everyone takes a bite. So how do we survive?

First, everyone needs a job. How is that going to be achieved? Well, we need to get away from the climate which is negating our ability to expand. This is easier said than done. We need to pump a cash injection into all the areas of our life where we are seeing things getting cut back. Some areas will no doubt die and will never come back. People will lose their jobs and homes, and it will be a long drawn-out struggle to get back to work after that.

Second, the optimism that was so much a part of America seems to have taken a dive too. Eveywhere you look there is something going on which is extremely distasteful. Crime is up (although I have to say that the Los Angeles violent crimes are down, partly due to the fact that gangs are getting rounded up...) In an economy like this, it is no wonder that people are resorting to criminal means to stay solvent... But that is not really the focus of what I want to talk about. I think we have to look at the things we should be grateful for. If you still have a job, great! You should be really grateful. It is getting harder and harder to secure any job. Someone told me that they had overheard a person trying to get a job at the popular grocery store, Trader Joe's: "Sorry!" the clerk was telling him, "you are behind 1,000  lawyers and 5,500 bankers who all applied for work here last month." Someone once told me that Trader Joe's pays particularly well!

Another story I heard was that someone who had been working for a very well-known and prestigious company had been escorted to the door after 30 years of service. A disgraceful end to a perfect work record. Someone else was woken by the phone at six am from her company, telling her that she needn't report for work that day. Another firm moved out of their premises and changed the locks over the weekend. Workers arriving on Monday were unable to access the building where they had worked for a number of years, after bidding each other goodbye and wishing each other a nice weekend. In perfectly respectable companies employees have been told that they must take a mandatory two weeks unpaid vacation, after which they must return to work with a salary reduced by 6% to 10%.

The long and short of it is that there are now fewer jobs and many more qualified people to fill them. This is not good for the employee or person looking for work... In California where I live, 10% of people are out of work and claiming unemployment benefit, and the State is wondering how they will be able to continue to pay benefit to these people. So this now means that people, who if they felt that it was hard to get a job before, will find it ten times harder now, just to get an ordinary job. People working will need to be particularly careful not to do anything to jeopardize their position, since employers have every excuse to lay people off now.

Other than that, we are seeing the economy go mad. In the grocery stores, packages are being redesigned to cleverly disguise their size and capacity. (Next time you look at a can of beans, see if the bottom of the can has been designed with a great big concave base to it, like a big chunk has been bitten out of it. You won't see this unless you turn it upside down.)

Other packaging has been reduced in proportionate size, but looks exactly the same. The only way to see the difference is by holding it up with an original size package (conveniently pulled from the shelves by judicious merchants, not wishing for any trouble.) This size reduction is apparently because market-researchers understand that the public are more worried about rising prices than anything else.

So the price stays the same, but the quantity you get for it is reduced. However, you can't really do this with fruit and vegetables! I am wondering if they have any plans to manufacture donuts with hollow insides or wider inner rings? Will a "Veinte" at Starbucks take on the form currently used by a "Grande?" Of course we are going to see this everywhere, since the manufacturing industry has had to take the initial hit on the economy, in front of everyone else... Gone are the days when a slight blip on the economy's radar meant that a small business owner had to survive on a bank loan, rather than actual liquidity. Now they are not loaning anyone anything.

The other visible signs we see are in the high street. Stores which used to be there are gone. Restaurants, chain stores we have known and loved for tens of years are all disappearing. Who is doing well? I know the Waltons won't be losing any sleep!

Indeed, there are companies out there who are doing extremely well now and announcing record profits and earnings. Other, more household names, have had the worst fourth quarter on record. In the UK, household names like Woolworths have closed, never to return. I think there has been a landmark change in the way that people are now using their money to purchase things. 

One thing is certain. If we are able to survive this recession, we will be able to survive anything they want to throw at us in the future.