Tuesday, February 1, 2011

The Recession

I have a friend. Let's call her "Francesca" to preserve her privacy. This year I watched Francesca struggle to find work. She searched for months without luck. After a while she was unable to pay important bills like her car payment and utilities. She was only able to continue paying her rent due to family and friends that were sending her money. It was scary to watch. Like she was slowly falling off a cliff and there was nothing she could do to stop it. Towards the end she thought she was going to have to live in her car. It was a bad time for her. Finally, she found a job, and now she is catching up and getting back on her feet. Watching her struggle to find work really made the news hit home. We are in a recession.

Luckily, I have never had trouble finding work. Perhaps that is due to the fact that I have very low standards for myself when it comes to jobs that I will take. I am not beneath doing retail at the mall, temping in an office, waiting tables, cleaning houses. I have unique skills that I can market independent of a company such as sewing, teaching voice lessons, organizing people's homes, singing in a band. Also, I am a trained actress, and I have had great luck finding work in theatre and television. Plus, it hasn't hurt me that I am still young-ish, my figure is still at least "average", and some would say I'm kind of pretty. I have been blessed to always have work. Granted, I'm not out there looking for a CEO job, or some specialized skill job like a doctor or an attorney, but perhaps in this recession, that has worked to my advantage.

A few years ago I read the book Rich Dad, Poor Dad by Robert Kiyosaki. Before I go into this, let me say that the Rich Dad, Poor Dad organization promotes a get-rich-quick scheme. Just know that, in case you were thinking about reading the book or going to any of their "free" seminars. That being said, I learned a lot about economics from the book and I would still recommend reading it. The story is that the author's father was poor, and his friend's dad was rich. His friend's dad became a mentor to him in his journey towards becoming a successful entrepreneur. The main thing I took from this book was the fact that, in general, it's the bosses that get rich, not the peons. It's the people that take that risk of starting a business that get the greater reward in the end. Of course, there was a lot more to it besides that, but this idea really stuck out to me. He also brought up the question, why does that business owner owe a job to his workers? They have the same opportunity to go out there and start their own company. That's how a capitalist system works. It's something I had never considered before.

Of course, one wants to be a moral person, a fair employer. I would bet that most of the world's CEOs want to do right by their employees. However, in reality we are all self-serving. That is our human nature and that is why democracy works. We all vote for the person who will serve our interests the best. Then, whoever is voted into office (theoretically) represents the interests of the majority. The fact is, that if a company is not making enough money, the employer cannot afford to retain so many employees. It's not personal, it's a mathematical fact. And that's why my friend Francesca was out of work.

I was inspired to write about this today when I read this cartoon. A professor at my old university had posted it on Facebook. I don't watch the news really ever. I get most of my information about the world from NPR on my commute to and from work, so I didn't know what the reference to Frances Fox Piven was. I looked it up and found this article, which is shocking in itself. Then I linked from there to the article in reference by Ms. Piven.

I must say, I had mixed feelings as I read her article. I am a Democrat. I think President Obama is the best president ever. I am in favor of socialized health care. However, I think I have a touch of entrepreneurial spirit within my soul, and hearing unemployed workers whine brings a few thoughts to the front of my brain. Number one, why does our government owe you a job? Why does any other hard working business owner owe you a job? They worked hard to get where they are, and just because their path was profitable and yours was not does not mean that they owe you a job. Why don't you create a job for yourself instead of depending on someone else to do it? And, in a sense, I guess that is a Republican way of thinking, which makes me feel strange inside to say because most things about the Republican party rub me the wrong way.

I guess, if the government is creating an atmosphere that is unfriendly to businesses and business owners, that is a problem, because, in a sense, then the government is preventing the success of it's own people. But our country has a deficit to pay off, and that is going to hurt, no matter what. If you had a credit card to pay off, your life would suck a little more while you gave up fun things in order to pay off your balance. So, how do we solve this problem? How do we pay off our deficit and not put our money-makers out of business? We can't sacrifice to pay off our debts and not expect life to suck at least a little. But, it gets so jumbled when it's on such a large scale. These characters of The Government and Big Business and Unemployed Workers take on sort of vaudevillian roles in the stories the news tells us.

If this were a small village of 20 people perhaps things would be clearer. We would all do our part in our little community to keep everyone fed and clothed. Then, one day lets say we decide it would be a good idea to have a water well so that we don't have to carry water from the stream into the village. Ok, so we all contribute a little money (taxes) and get a well built. This makes our lives much easier. Everybody loves the well. Now, however, we have to maintain the well. This will require each of us to pay a small amount every year (taxes) in order to keep it running. No problem! We're all glad to pay, because we are glad to have the easily accessible clean water.

Now, let's say we all decide we want electricity in our village. It's going to cost more money than we have in our pockets to get it installed, so we borrow some money from the village next door. We agree to make payments to them (in taxes) until it's all paid off. Now, let's say that our whole village earns their money from wheat crops, and there's a bad storm that ruins 50% of our harvest. We can't afford to feed our families, and there's not enough money to pay for well maintenance and the electrical payments to the village next door. What would our little village do in that scenario? It's an important thing to examine, because that's the state that our great country is in. We owe the countries next door lots of money and we haven't had the economic success that we were hoping for. Our government is us. We are our government. It's not like "They" aren't serving us well. "WE" aren't serving us well. This is our country and sometimes things just happen that we're not prepared for.

It is hard when people don't have jobs. There are all kinds of complicated social injustices I think we would all like to solve. But this one, the economy, is so complex. I can't give you a job if I don't have enough sales to pay you from. Our government can't provide services when it doesn't earn enough in taxes to pay for those services. If this was our little village of 20 people I think we'd go without a little bit more, and maybe create some new forms of revenue that are more appropriate for the climate. Maybe we'd start raising sheep for wool or chickens for their eggs. In a real family, or in a small community like that, you just get creative and adapt as the problems are thrown at you. On a larger scale, that's what we're going to have to do, too. I hope it's that simple. I hope there aren't corrupt politicians out there trying to take advantage of the helpless, or evil villian CEOs twisting their moustaches and plotting the country's demise. I hope there aren't. I really, really hope there aren't. And maybe if we hope hard enough we'll all make it out of this alive.

3 comments:

  1. love this article and your thoughts... good stuff for thinking on the way home. Thanks!

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  2. Whether one person, or a whole nation, finds that they don't have enough money, only two solutions exist: (1) spend less, or (2) earn more.

    (2), of course, can be executed morally or immorally.

    (1) usually forces a person to lower their standards of what constitutes a good living.

    Nationally speaking, the recession (or Second Depression, as it will probably come to be known) can only end in two general ways: by belt-tightening or entrepreneurship that benefits the lower classes.

    National belt-tightening seems unfeasible. If it takes a single, average-income American ten years to pay back a student loan, or thirty years to pay off a mortgage, how long will it take us collectively to pay off the national debt by reducing our "discretionary" spending to almost zero?

    On an individual level, paying off debt in a reasonable amount of time, always means forsaking luxuries. What are the collective luxuries that we're willing to let go?

    The US spend more money than any other country annually on its military. Slashing our military budget would actually be meaningful to our economy. How likely is that to happen, though?

    Yet, the cuts must either come, or there has to be a renewal of American industry (that, again -- and I stress this -- benefits those MOST affected by the recession). If the industry only benefits those LEAST affected by the recession, the recession will not end.

    ...That is, the recession would not totally end -- nor could it end morally.

    Possibly, a few multi-billionaries COULD wipe out American debt if they paid their workers almost nothing or nothing at all. For that to happen, the billionaires would have to charitably donate the majority of their income -- which would, of course, require them to feel philanthropically honor-bound to do so.

    But that's ridiculous. I'm imagining a world of slavery concurrent with far-seeing, compassionate slave-owners.

    A terrific exercise is to imagine a society with the same economic problems we have now, except -- to begin with -- pretend that this society is frozen in a moment of time without any organizational structures whatsoever. Now, imagine that you're a part of this society, except that you don't know HOW you're a part of it. You could be a debt-slave, you could be a CEO. Then decide upon governmental and social structures that you will make you the most comfortable in this new society, NOT knowing what position you will occupy in it.

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  3. Rich - Thanks!

    Matthew - Boy, you are a thinker, aren't you? An industry that will financially benefit the lower classes. That's an interesting thing to ponder. And exploring many different perspectives our society is important. We could learn what will work by examining different parties' motivations. I think those are some very useful things to spend some time journal-ing about.

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