Saturday, January 26, 2008

On the marketplace beat

As talk of recession becomes more and more dominant in the public discourse, I find myself challenged to balance my views of the long-time human practice of predicting impending doom with the fact that yes, bad things do happen. The depression happened. Recessions happen. People lose jobs and houses. I could lose either or both. We all could. Things could get really messy around here.

While putting on my shoes to head out to work this morning, the image of the famous photo at left, Dorothea Lange's Migrant Mother (1936), flashed through my mind. The woman in the photo is Florence Owens Thompson (who later said she wished Lange had not taken her photo reportedly because Lange did not give her any compensation, did not send her a copy of the photo, and did not take her name or ask her anything about her story, etc.). She was thirty-two years old when this image was taken. That is, very close to the age I am now.

In many ways, my family is among the especially financially vulnerable right now. This possible recession has been precipitated by a housing crisis rip tide that we were swept into. We are carrying a rent and a mortgage at the moment as we live over 3000 miles from the home we own, a home which we have been desperately trying to sell for over a half year now. We've had to talk about foreclosure, though fortunately we do believe that we can avoid it.

The home we are renting is heated by oil. Before we knew what it would cost to heat this home, we spent $800 on oil in a matter of twenty days. We live in a rather cold climate.

In terms of income, I support my four-person family on a low middle class salary, with plans for my dw G to supplement this with her working class earnings. My job is not among the particularly secure. Our savings were wiped away in our move. We are already living beyond our means, despite the fact that we have no other debt besides our mortgage and home equity (which we took out to prepare to sell our home before the market took the dive that it did, and which also has actually and ironically been paying our mortgage) and that we are conservative spenders living a pretty simple life. It wouldn't take much to correct this, to get our budget back on track, if only the housing market could make it out of this slump. It is the housing that is killing us.

Predictions of the immediate financial future of this country and the world seem to vary wildly. One interviewee on NPR (Marketplace, I believe), who had proper qualifications, claimed that based on the patterns of previous recessions, we can safely bet that if we go into an actual recession, we are going to come out of this much more quickly and much more safely than folks are predicting. Many others are recommending that folks batten down the hatches. They are taking a moderate stance. They are explaining that this, like all recessions, are a natural correction/pendulum swing in the marketplace and that things will get pretty bad for a while but that we should all ride this out with some sense of patience and calm because at some point, we are going to come out of this. I've heard multiple people in this camp say, "Just start storing some nuts for the winter."

On the other end of the scale, there are a few who are predicting a devastating and long-lasting financial turn for the worst. A buddy of mine online, who apparently successfully predicted the "housing market boom" that occurred over the last couple of years, is suggesting that we all prepare for this to become not only a full blown recession, but for the recession to develop into a depression worse than "The Great Depression." The reason? Our whole economy is built around having cheap energy, and we are depleting fossil fuels at a breathtaking speed. Of particular concern, OIL. Batten down the hatches is an understatement for her recommendations. Think Y2K.

Here are the links she recommended:

She basically is suggesting that we all prepare to be as independent of the economy (built on finite fossil fuels) as we can get. Stockpile food while you build a garden that you can use to feed your family. Harvest rainwater. Find ways to cook without cooking fuel. Move close to the places you need to go. Find ways to light your home without electricity and stockpile candles. Get a wood stove and secure wood sources. Consider moving to a climate without extreme hot and cold.

(more of Florence Owens Thompson from Dorothea Lange)

These are good earth-saving if not money-saving, and thus, potentially family-saving suggestions. However, if she's right, I fear my family is doomed. Not only did I just move over 3000 miles from a place of moderate, survivable temperatures to a place with extreme cold in the winter and extreme heat in the summer, but I also have not the slightest green thumb nor do-it-yourself ability. And since I've just moved to a rental home, I don't have the power to insulate, start a garden, install a wood burning stove, replace windows, nor do anything else to improve our chances of survival, at least not without permission from the landlord. And it is probably not in my best interests to invest in this rental home where I have a short-term lease, unless I end up signing for a longer lease or am committed to buying it down the road.

Of course, as another online buddy pointed out, the most extreme end of this side of the spectrum lands smack dab in conspiracy theory: And someone else aptly concluded that as humans, we tend to predict the apocalyptic in these types of scenarios. She's right. People have been predicting the end of civilization since the beginning of civilization. People have seen reason to have no hope for at least as long as history has been recorded in writing. Consider for example, this quote, which I've seen attributed to Hesiod of 8th century B.C.

"I see no hope for the future of our people if they are dependent on frivolous youth of today, for certainly all youth are reckless beyond words... When I was young, we were taught to be discreet and respectful of elders, but the present youth are exceedingly wise [disrespectful] and impatient of restraint" - Hesiod, 8th century B.C.

Perhaps we not only tend toward the apocalyptic, but also the apocryphal.

So yes, bad things can and do happen, and I will try to be disciplined enough in the next month or two to indeed batten down the hatches here. There is much I can't control, but I can at least start with these :
  • Pay off some large bills that have gone unpaid for far too on my credit score
  • Get a renter in the home we own
  • Re-evaluate our monthly budget and cancel any services we no longer use, etc.

At the same time, fretting over a recession is just going to contribute to the emotional response that seems to be dooming the stock market right now. While I find it an interesting intellectual exercise to consider how folks would respond to a depression in these modern times of ours when we are used to living longer, for instance (a post for another day, perhaps), I don't find it particularly calming to my own already high stress level to predict what may come to be known as apocalyptic and apocryphal stories. I'm visualizing instead, a stable future...for my family, the United States, and the world.


sf said...

THIS would make a cool sermon SM. When are you giving one again?

Masasa said...

Interesting idea, about developing this into a sermon topic. You're right, it could definitely be formed into that shape.

I don't have any sermons scheduled right now, but I hope soon so I can continue to exercise those muscles. If it goes too long between sermons, they are much harder to write.

About this post, I want to check in with those folks whose ideas I referenced. They may prefer I name them so they are properly credited for their ideas, and I did take the suggestions about what we should do to emancipate ourselves from the financial market directly from her, so I may yet place quotations around that list (though I condensed them, etc.). Thought it worth mentioning. I didn't originally mention those three folks in part because I was using those ideas more as an illustration of the spectrum than as a reference to any particular notion. I'm interested to hear if they have any comments about the post as well.

sf said...

Forward the link to them and see what they have to say?

Masasa said...

Done. Oh, by the way, sorry if that comment was hard to read...I think I was getting low.