IANAE–I am not an economist.
We are in a recession.
OK, I’m not 100% on that. However, it doesn’t make any difference. We’re acting like we’re in one. That’s all that matters.
I have been through these before. They suck really bad. A lot of good people are about to get hurt.
Helaine and I looked at a house on-the-market while we were in Palm Springs. It’s still for sale. They’re asking 70% of the original price. That’s what you see in a recession.
People will feel guilty about conspicuous consumption and cut back. Those employees who serve the consumers will be hurt. Foxwoods casino laid off about 100 middle managers today.
A recession, unfortunately, feeds upon itself. Cutbacks affect sales which cause more cutbacks and on-and-on. Entering your first recession, it looks like there’s no way out. There is.
As the number of businesses shrink the remaining players find themselves doing better. The recession ends as those businesses restock and rehire.
This time, we have other underlying problems. Much of the American economy, built over the last sixty years, has moved away. We don’t make things here. I grew up at a time when workers in retail or manufacturing could own a home. No more. That will slow recovery or make the actual recession deeper.
Many businesses are at a crossroads. Broadcasting, my field for nearly 40 years, is increasingly being marginalized by small players taking tiny fractions of our audience. It’s like being eaten by fleas, or so goes the old saying. It’s worse in print media and autos and banking and airlines¹. There are whole sectors of our economy that seem to have no long term prospects.
This recession will be deeper, but we’ll come out of it. I picture an American economy more along the lines of the European economy. Our days of being the World’s engine of economic growth are over. We will probably pull back our global military reach and step down as the World’s superpower.
We have been defeated by technology and techniques we developed. Sad.
¹ – About the airlines. Except for Southwest, you have turned us into packages moving through your system. For years you touted your exemplary service. We allowed you to be deregulated with the implied promise that wouldn’t change. Then you pooped on us. Your loyal employees have been hung-out-to-dry by putting them in contact with us after you’d changed all the rules. I have no sympathy for your plight.
Someone just passed a memo to me, no more than an hour old, from the publisher of the Hartford Courant to his staff. News pages will go from 273 to 206 per week. Subscribers will only be getting 75% of what they get now in quantity. The newsroom will go from 232 to 175. The reduction there is also to 75% of current levels. There will be voluntary buyouts and forced layoffs.