Return of the artisan

Considering the dismal unemployment data out today, and the even more dismal predictions, we find ourselves at a juncture where there will be a nearly unprecedented number of people out of work. Depending the unemployment figure you are looking at, we are approaching the same number of people that were out of work at the height of the depression in the 1930s (12.5 million today vs. 14 million in 1933--the worst year for unemployment during the depression). 

With so many people out of work, and so few available jobs, we may see the rise of a kind of neo-artisan. During the months that it can take to find work, there are many of us relying on our secondary skills (gardening, cooking, music, art, writing, foreign language ability, etc.) to get by. I would predict that many of the closet artists, writers and musicians would tap into the skill set that was deemed "unprofitable" during the go-go economy of recent years and find ways to make it work for them. In developing these skills, making contacts, gaining confidence and buyers along the way, bankers may find value in throwing pots, insurance adjusters might instead make their dough by baking and former Wall Street Execs could make a respectable living playing the blues. 

Who knows? But I would bet that we will see a flourishing of artisanal entrepreneurs and a proliferation of talent in the months and years to come. So, if you are looking for work, or fulfillment, begin nurturing that hidden talent, and, when you have something that someone else might buy, hang a real and/or virtual sign out and see what happens--you might surprise yourself. 

The photo is of "Joe the potter" at Horseshoe Mountain Pottery ; see also John Sanchez at Sanchez Art Werk and guitarist Brendan Burns for examples of folks who have been putting their talents to work for them for a number of years now and using the internet to their advantage.

Drought in the golden state

Here is another argument for establishing community gardens. 

"The almond orchards are beginning to bloom in California’s Central Valley, the vast swath of fertile, flat land that runs up and down the middle of the state. Bees are pollinating the rows of flowering trees, and the harvest will shape up over the coming months. But for many farmers, one crucial thing is missing from this picture – water.

The US Bureau of Reclamation, which manages water allocation in arid regions, announced last week it will not provide vital irrigation to Central Valley farmers this year because of drought, and the California State Water Project expects to meet only 15 percent of water requests.

“That’s unheard-of,” says Jim Jasper, an almond farmer in Newman, Calif. “We’ve never seen a zero allocation for water.” Many growers here are destroying older and less productive trees to conserve water for other crops.

The University of California estimates that the drought may cause 847,000 acres to go unplanted this year, with income reductions of more than $2 billion and the loss of 70,000 jobs" (Christian Science Monitor 2/26/09).

With climate change, the precipitous fall in all commodity prices, the flight of cheap immigrant labor and the difficulty in securing credit, relying on the agricultural pipeline to continue supplying our supermarket shelves with fresh produce, dairy and grain may be a mistake. It makes sense to begin appropriating community plots now and planning for spring planting. This can do three things immediately: 1) provide local food security, 2) improve local nutrition, and 3) provided your locality successfully bids for federal relief funds, community gardens can create paying jobs. For more information on community gardens see http://www.mrsc.org/Subjects/Parks/comgarden.asp

The end is near...er

The economic crisis ranges in titles from the hilarious "economic shitstorm" to the more somber "global economic readjustment." I like the former because it is descriptive of the havoc the crisis wrecks in individual lives. It captures the anxiety, worry and, ultimately, the sense that what we're experiencing is so profound, nothing will ever be the same again. The latter sounds like an economist's euphemism that obscures more than it describes. And it undoubtedly does just that. "Readjustment" is similar to the more familiar and hated "restructuring." When the unemployed are feeling glib they say "I was restructured" to that they were laid off. That said, I like "readjustment" because, while it is not as colorful, it gets to something deeper: something went wrong with the fundamentals of our (really, the world's) market economy.

Whether you are talking about the stocks that make up you 401k, the value of your home or the grievous errors in judgment that your banker made in the past several years, the issue at stake is the fact that, at some point, the wheels left the pavement. That is, the value of the stock, home or bundled securities simply did not reflect its real market value. Profitless companies were able to sell shares of stock for more value than they really held.  Houses were sold at inflated prices to customers who could not afford them; this was based on the crazy logic that they would forever increase in value. And the bundled securities, or derivative, market was a ponzi scheme based on misinformation (perhaps willful ignorance) and speculation. 

In fact, that is what the "readjustment" is all about: it is a period where values finally begin to reflect reality. Until we can eliminate the very human tendency to speculate and act according to expectations (which can be based on everything from very solid information to wishful thinking to calculated lies), markets will never be just markets. They, like the commodities they trade, will always hold a fetishistic attraction for us: "it's more than just a home/stock/derivative, it's an investment."   

As things get worse (a mantra we've heard a million times now, followed by "before they get better"), they are also getting more real: things are readjusting. Your home is finding a market value for which a loan can be had--the same goes for the stocks in your retirement fund and the bundled securities held by your bank. Of course, this is little consolation if you've lost your job/home/savings. And it is high price to pay for the trillions of little lies and bubble-headed fantasies that have landed us in this mess. Unfortunately, most of us are complicit to some degree in the collective delusion that washed over the industrialized world for the last decade and a half. 

Just as speculation and loose financial practices can inflate value, it goes the other way as well. Expectation of future losses can drive values below the point at which they would normally reside. Time is the only remedy...we've got to wait it out. The best we can hope for is an economic system that, post-readjustment, is characterized by more honesty, transparency and rationality. So, as we press on through this shitstorm together, just remember that, without a doubt, the end is nearer.   

The end of the world as we know it, or cultural renaissance? You decide.

The paradox between the economic disaster of the 1930s-40s and the flowering of cultural achievement in that era has been often commented upon. We get writers like Henry Miller, Ernest Hemingway, Zora Neale Hurston, TS Elliot, ee cummings, Langston Hughes, etc... And artistic movements from documentary realism to expressionism and surrealism. Not to mention the music, this was the golden age of Jazz/swing and the first time marginal genres like folk and country received much wider appreciation. And the same goes for Hollywood and theater in general. How did so much artistic creation rise out of the wide-spread poverty and despair of the first great depression?

There are many answers to that question. For example, there were WPA programs like the Federal Theater Project that funded local theater groups. There was no TV, so people were more likely to get out of their houses in search for entertainment. And 1933 saw the end of prohibition, making night clubs and dance halls possible.  

Beyond the misery produced by such economic downturns, there are other less negative effects as well. When business is slow, or non-existent, people may have more time on their hands. More time to think and create and/or more time to appreciate music, art, theater and writing--the former may also be encouraged by economic imperative, the latter motivated by a desire to escape the confines of their situation. 

Today, our cable TV and the internet are a mixed blessing. These are relatively inexpensive sources of endless entertainment, which can be a good thing when you are too broke to go out. But they are also easy, habit-forming options for unimaginative, and this could wind up being a detriment to the growth of our cultural resources, and a drag on the recovery of the economy as a whole.  But, who knows, perhaps folks will take their economic stimulus (in the form of paycheck tax reductions) and go buy a book, see a theater production or a band--supporting the artistic rebirth of the early millennium, an historical event that our great grandchildren will point to as evidence of our collective cultural sophistication and elan.  

Economic terrorism?

I was half-listening to the news the other day when a concerned security analyst mentioned that not only has the economic crisis risen higher on the priority list of security-minded government agencies and think tanks, it has surpassed terrorism as a threat to our nation. This made sense to me. Poor countries tend to be more unstable and the ensuing social unrest due to the inability of governments to promote prosperity has toppled many a regime in the past. But then the analyst began talking about economic terrorism in relation to countries like China. The idea is that China could do sneaky things like stop buying our government bonds or, worse, start cashing them in. This would in turn destabilize our already stressed economic system and lead to some unspoken cataclysm. 

There are several obfuscations going on in this line of discussion. First, through a kind of willful ignorance that borders on the criminal,  regulatory agencies in the United States government let the dogs run wild on Wall Street and in the banks for years. If there is a culprit in the current crisis, an underwriter of the current global social and economic chaos, if you will, it is the US. It seems kind of, well, predictable, that in the middle of a mess of our own creation, government officials would start fishing for a new, immediate, less tired, distraction for people to get worked up over. Second, the exact definition of economic terrorism is left open. Some say that an economic terrorist must be a non-state actor bent on wrecking havoc on our economy. Others use the term to indicate states that might use economic means to weaken our position in the world. In using the first definition, I give you Lehman, Abermoff, Stanford. In using the second, may I present the Clinton and Bush administrations. Finally, as this meltdown is really a problem with an economic philosophy that has prevailed in many countries, especially over the last twenty years, it would be more than a little ironic to begin fingering so-called communist nations like China. If there is such an animal as economic terrorism, the US would do well to adopt a more humble posture.   

When to invest?

Conventional wisdom says, "Buy low, sell high," and I have been content to do just that. As the stock market has slid repeatedly since fall of 2008, I have thought that, despite everything, I have time and the market will turn around before I am ready to cash out. So, a few weeks ago as the DOW hovered around 8500, I upped my 401K contribution. Buy cheap! But lately I have started to look my ignorance in the face. Sure, it's nice to buy low, but what happens to stocks that I own when businesses go bust? What happens to stocks that I own when they change status from blue chip to penny stocks? Or, more darkly, what happens to my nest egg if the whole thing implodes? Considering my misgivings about our collective return to the roaring 90s or the go-go 2000s, is there any wisdom in investing at all? 

Don't get me wrong, I am not one of the buy-gold-now! types, and generally speaking I am confident that after we have bled the system of its poison (bad debt, toxic mortgages, etc.) things will turn around. My hope is that the turmoil of the next few years will be, if not a positive experience (especially taken individually), for our collective betterment. We need to slow down and find value in the myriad things that cannot be purchased--I believe that our survival depends on this. That said, I am a frugal fellow and the idea of tossing my hard-earned shekels down a rat-hole makes me queasy. So, any ideas? Continue to invest? Stop investing in stocks and buy wines (actually a bad investment for me, I like wine too much) or spend my investment dollars on all manner of immediate gratification?      

Great Depression 2.0: time to get organized!

Freemarketeers are as obsolete as my old Commodore 64 (RIP). The "free" market, based as it is on speculation, exploitation and private ownership, cannot operate when the future is bleak, jobs are being lost by the millions, homes are falling into foreclosure and cars are being repossessed at historic rates (1.5 million cars and trucks in 2008, up 12% from 2007). From an social and economic standpoint, 2008 was a train wreck. To top off the dismal performance of the stock market, skyrocketing foreclosure rates and unemployment figures, it turns out that retail sales were down in December--double their projected fall to 2.7%. Retailers call the day after Thanksgiving "Black Friday" because this is the symbolic start of the holiday shopping season and the time of year when retailer first start to see profits (out of the red and into the black). With sales down 2.7% in December, it can be expected that many retailers would not have seen a profit in 2008--and with the credit markets still frozen, we should expect to see more stores closing up in the ensuing months. This leads to even more job cuts and the spiral downward continues. What is to be done?

1) Volunteerism: the more goods and services people are willing to donate to community projects, the better we'll be able to stave off the deleterious social and economic effects of the current crisis. People are already needed to staff food drives, soup kitchens and community shelters--the demand for dedicated individuals will only grow as the economy sinks.

2) Cooperative ownership of businesses: A business venture may be more feasible during economic turmoil if the rewards and risks more evenly spread across the business. This provides incentives for higher productivity in times of plenty and can entail greater job security in times of scarcity.

3) Community organizing: Government won't be able to assess or address the varied existential needs that will arise in the months to come in a timely enough manner. Communities need to organize and implement solutions to their problems. During times of economic uncertainty these issues will invariably include: unemployment, shortfalls in health care, poverty, homelessness, mental health issues, municipal transit, availability of nutritious food, crime and corruption in government... Community groups can form a bridge between a slow and possibly inadequate governmental response and eventual economic recovery.

4) Local initiatives to vie for government largess. If local government fails to address local needs, then community organizations can float initiatives for funding through other channels (state, federal, private, or through religious organizations).

Needs are only going to increase, as will the pressures of social disintegration--communities can and should take charge of these issues now. Check out http://www.volunteermatch.org/ to find organizations in your area to join. If you don't have any that meet your concern, organize one!