By now most people probably know someone who has lost his or her job. Since the layoff wave caught me in April, about a quarter of the families my wife and I know have adults similarly out of work.
Here’s a Thought Exercise: Imagine what this feels like to the typical person who has lost their job:
Just yesterday it was a big party and all things seemed possible, with pundits referring to the economy as "Goldilocks." You didn’t prepare for hard times you didn’t expect, and whether you’re married or not you know that the bills grew to occupy your household’s entire discretionary income. Now the bills loom large as the severance or unemployment checks are ending and "Help Wanted" ads seems to specify every talent or skill but the ones you possess.
You consider yourself bright enough, but all the crap you see on TV makes no sense at all. You take some solace in the endless statements from Powerful People that "no one could have foreseen the crisis," but that doesn’t pay the mortgage.
The house across the street from you has sported a "For Sale" sign for a year. Two down the block are empty; are they in foreclosure or did the previous occupants just walk away? You don’t know what this means about the value of your own home, but sense that it can’t be good.
If you’re lucky, you’re married and your spouse’s job looks secure. You recall that your job also looked secure a year ago.
Above all, since you didn’t see this coming and you don’t understand why it occurred or what anyone claims to be doing about it, you have no idea how long it will last. It gets worse when politicians and pundits endlessly announce that the economy is in recovery. Each month that passes without a job interview or job offer seems like another flagstone has been added to the load pressing down on you.
It’s starting to feel personal.
The life you had planned is shimmering into mist right before your eyes. Will you lose the house? Will your kids go to college? Will your spouse get fed up with you and kick you out? Nobody likes a jobless bum.
You wonder what you did to deserve this?
I remember this helpless dread from personal experience 1982 through 1987. Fortunately I learned a lot in the past twenty years and this time I saw it coming. While I couldn’t predict events with the certainty needed to make millions in stock speculation, I did recognize that my job was a short-term situation so every month of employment was another month of eliminating debt and building savings.
I concluded from intensive study that for most of a century growing optimism led to trust in a debt pyramid so large that its shadow simultaneously falls on every part of the globe. Asset values are pyramided on top of one another where the price of each asset is supported by debt at multiple orders of magnitude, each strand of this web depending upon nothing but creditor confidence that the debtor can make good on the debt. This is reflected in the world’s fiat monetary systems but is much larger than just un-backed paper money.
Each time the growth of this vicious cycle took a breather (called a recession) the "fix" was to amplify the credit creation machine. Each time the pause was "fixed," people concluded that there was no risk to speculation, so speculation became the world’s greatest occupation.
Logic told us that at some point this game had to end. Experience tells us that it continued far beyond the limits of our imagination. Who could have foreseen the mass delusions that accompanied the final gasping rallies two years ago, delusions that now rise from the dead as we enjoy the eye of the economic storm?
Now we face epochal changes in the way we live. Entire occupational fields are going the way of buggy whip manufacturers or Britain’s Weaver’s Guilds. Ominously, people are now locked into occupational straightjackets by the college degree system and a regulatory mania for requiring licenses, registrations, and certifications for every job but dog catcher (I stand corrected; dog catchers, too, must generally be licensed).
Colluding with professional organizations zealous to create compensation-raising scarcity in their fields, regulators heaped demands for ever higher degrees and other formal education, raising the individual investment in terms of percentage-of-lifetime and money. This created thick walls surrounding many occupations, walls meant to keep competitors for wages out, but just as effectively confining those within when times change.
If this wasn’t enough of a problem for a job-seeker, potential employers are loath to hire someone for substantially less than their previous wage, believing that the new employee would jump ship as soon as opportunity permits.
Ironically, this renders experienced people earning the most in their previous employment the least likely to find re-employment. If those high-wage earners used their pay to fund a lavish lifestyle rather than to endow a massive emergency fund, this doubles the irony as they face a proportionately larger financial catastrophe with a job loss.
Now more than ever, previously well-paid and well-educated people face the most difficult prospects.
Unfortunately, a populace ignorant of economic fundamentals is fertile ground for charlatans and their news media megaphones promoting "hair of the dog that bit you" policy fixes. A decline into the Greater Depression is made nearly certain by this intersection of ignorance and con-artistry as people maintain their infantile worship of their political masters.
I prepared for a long period when there would be little demand for my skills as a static economy stumbled from one idiotic "political solution" to another, just as in the 1930s. I never expected to enjoy it, but now I mostly wonder about those who were and remain blindsided by this. Their condition is tragic in every way, especially since it is the very coercion-saturated political system they worship that is compounding their predicament.
August 14, 2009