Open Discussion: What Do You REALLY Think is Happening to the Economy?

I don’t think we’re in a recession: I think we’re in the middle of a permanent adjustment. For that same reason, there isn’t going to be a “recovery.” There’s going to be whatever’s next. I don’t believe the jobs are coming back. Ever. Because everything is actually different now, but most people don’t see it. Talking about jobs as though they were an entitlement is over. The idea that the government can fix anything, no matter what party is in the driver’s seat, is a joke. The days of history when the people in charge were brave, had guts, and stood up for what they believed in are just that: history.

America as we once knew it will never be great again in that “World War II” sort of way.

You might think that sounds depressing. It is, a little. The despicable wormy spinelessness of large organizations is eating itself alive. We don’t know what’s going to happen next. Everything could collapse. Or, within twenty years, we may very well have general artificial intelligence-level computing which will then further spur a massive spike in medical and materials research that just might prolong human life and end much suffering. I think that’s possible, but until (or if) we get there, things are going to be rough for a lot of people. Personally, I feel it’s going to be a close race between collapse and a new resurgence. I’m rooting for resurgence to win.

I feel good about my own prospects, because I run a web-based business and I have knowledge, creativity, and skills that are going to enable me to thrive (and not just merely survive). I’m in this place because I’ve been heading here since 1994. When other folks were losing their jobs, I deliberately (and in full possession of my mental faculties) quit my job. I keep reading stories about people who are starting their own businesses after losing their jobs. I think that’s awesome. The ones who are already internet-savvy are going to be able to pull it off.

But the people who are just now lifting up their eyes? The ones just now getting an inkling of how it’s all really changing forever? That is a tough spot to be in right now.

But it’s still better than not having a clue at all.

What do you think is really going to happen? Discuss…

Filed Under: Blogging

http://twitter.com/hdbbstephen Stephen Smith

Michael, I think that you are right, and I am amazed that it took this long to happen. Funny thing about it, I know that our politics are different, but the power-grab by the current government is going to blow up in their faces and force the re-alignment that you describe above. Things are never going to be the same, for lots of reasons.

Have you seen “The Next 100 Years”? (http://www.stratfor.com/next100years), it has some *very* interesting ideas.

I am rooting for resurgence too, but it is dependent on an increase in marketplace confidence and decrease in governmental limits on freedom and capitalism.
http://www.moneyobedience.com/blog/ ctreit

I agree with you. We are in a major adjustment period. I think we have to realize that the government will not always be able to bail us out. It has become more and more expensive to do so and at some point it will be impossible for the government to bail us out. We have to realize that America was not built on the government stepping in anytime a crisis occurs. America was built on the same things that make you confident in your own future: knowledge, creativity, and skills. We are not owed anything by anybody. We all have to contribute our knowledge, creativity, and skills to make our own lives better and the life of America. I think that is the adjustment we will have to make.
Karen

Oh, God, Michael I don't know. Both myself and my husband work in primarily traditional media, or with clients who prefer traditional media. And as we all know, it's imploding. 20% salary reduction for him, moving more and more into obsolescence for me. On good days, I feel pretty positive that the whole economy will right itself, but I don't think trad media will ever be the same again.

And I don't necessarily think that's a bad thing. I think trad media is very much like the wormy spineless large corps you call out. In fact, loads of arts critics in the past month or two are demanding in their respective outlets that we, the readers, not let them go quietly into the good night. But more and more I believe that they, ultimately, cost themselves their audience. Suddenly their audience had options, and that audience preferred the alternative. (Hmm, I sense a blog post on this)

I started working on my Plan B three years ago, when I saw the writing on the wall for trad media. But I did not expect a full out economic meltdown. So I had to adjust again and my business building is now mainly in the online world. I am just not entirely sure where it will lead me quite yet.

For the economy on the whole, I agree with you. I don't think that we will have a “recovery” that sets everything back to status quo. But I also don't think the loss of the status quo is much to grieve. Even during “prosperity” wages for regular workers were not keeping pace with inflation. And what I find truly staggering is how, in this economy, many large companies laid off workers and then rewarded the executive ranks with outrageous bonuses.

There is a serious disconnect going on in our society. And that makes me very nervous.
http://twitter.com/betsywuebker betsywuebker

Hi Michael – I agree with most, if not all, of your observations. I've been saying for a couple of years now that this is a reset of magnificent proportions. I also believe that government fixes will at best have very little effect (as we seem to be seeing) and more likely are worsening/prolonging unacceptable conditions. The people who believe that the government exists to provide economic protections for them or groups of “others” are the ultimate losers in this game. The winners, as you point out, are those who take steps to insure themselves against this lack of control via entrepreneurship and self-determination. The fact is that opportunities are still abundant – they just aren't employment-based scenarios. I'd say if all your eggs are in your employer's basket, you are in a very unsafe place. Further, if your family economics are based upon being employed, you'd do well to hedge that employment with side ventures. If you've got more than one earner in your household, both of you should realize that dependence on your employers is the least secure option you could choose for your current and future livelihood. All of this will seem very difficult for some, not so much for others. It doesn't matter if it's hard to work beyond regular hours on your “plan B.” It's necessary. The cool thing is there is a heckuva lot of choice when it comes to “plan B.” Some will start businesses; some will grow and raise their food; some will reclaim the inner city as a new frontier; some will forge ahead with commercial reforms. And some will just sit there and expect others to do all that.

These arguments remind me of Sam Kinnison's famous rant about people starving in the drought-stricken desert: “There's no food there! Go where the food is!”

To quibble just a bit with your point about America's greatness, Americans have always been able to muster and do the necessary thing. It's why we attained our standing as a superpower, with all the attendant responsibilities and expectations of ourselves and from other nations. Perhaps you're right that this is not so any longer, but I can't agree with you. I just don't think some of us have been pushed enough to get out of our cushy doldrums and get to work. And sometimes I wonder just what it's going to take. History is somewhat frightening in that respect if you try and apply it to what's going on in the world today.

Thanks for a great, provocative piece of your thoughts and the opportunity to express ours.
gacconsultants

Hi Michael,

I agree with you wholeheartedly. Going back is not an option. A new system is in the making, not only for the U.S., but the world as a whole. Technology will take us places most can't even imagine in the not so distant future. Those that hope things will go back the way they were will be disappointed. Those that embrace the change that is upon us, recognize the opportunities that it provides and position themselves accordingly have the whole world at their fingertips and unlimited opportunities to participate in shaping what that future looks like. Yes, this is scary on one hand, but exciting on the other – and this one thing is for certain; things will never be the same again.
http://www.zadling.com/ Zadling

I'm going to have to agree with you. The whole problem with our country is that we don't make stuff anymore. Our country can't keep borrowing money from China and then having all of its consumers send that same money back to China in order to buy cheap Chinese goods. At least the job losses are coming to a halt. I wonder when we'll see actual job growth. The market wanted it this month, but all the data is saying that we're still losing jobs, but at a slower pace.
http://www.theskooloflife.com/ Srinivas Rao

Michael,

You should be teaching at business schools across America, but I'm guessing running Remarkablogger is more profitable and conducive to a healthy lifestyle . As somebody who has just gone through 8 months of unemployment hell, I would have to agree. I have friends who are still in business school and seems that the economy is really not changing. I have other friends who graduated with me a year ago who still sit around submitting resumes all day. They don't seem to get that the old way of doing things is no longer going to work.

I actually have a day job. I;m really blessed and grateful for it. But, I've never stopped working on side projects. These side projects which all started during 8 months of unemployment are what actually pay my rent. The greatest thing to come out of a bad economy is entreprenerurial ventures launching by the dozens. Even Barack Obama said in the state of union that new jobs would be created by small businesses. The way I see it you have two options. Be the person who starts one of those small businesses and start building your foundation or sit around and wait in hopes that one of those small business will hire you. The other option I guess is to flush resumes down the toilet until they end up on a hiring manger's desk. (I believe we call that submitting resumes online). The good thing about permanent change is that we are being forced to make money by actually creating value.
Dave Cavanaugh

You're discussing a topic that, I'd wager, is becoming more common than not — at least for those who are willing to imagine the “unimaginable”. Which is the simple realization that what was will never be again. Unfortunately, I frequently encounter people who long for the past and cling to the notion that this recession is just another challenge that America will overcome and be stronger for the experience. I disagree completely.

I'd argue that the many critical components of industry and society have collapsed and / or reveal serious fissures. It's a paradigm game changer. Only those individuals who embrace this radical change and have the creativity, determination, and courage will carve out a (sane) place for themselves. You will have to completely rewire the way you approach your work and more importantly, your life.

Government is not the answer. Big business is not the answer. You are the answer. It's up to the individual to remake themselves and adapt to this “brave new world”.

Once you accept this responsibility, it all becomes rather exciting (although damn scary at times). A decade ago, I walked away from a high-paying, high-pressure, and highly unsatisfactory career in a very traditional industry (try 1bn printing press manufacturer) after two corporate bankruptcies and unremitting internal decay.

Today is a much better day and future looks brighter and brighter. I've adapted and embraced the digital age (reluctantly, I'm still a closet Luddite) and have carved out a decent niche helping small business owners take full advantage of the web. At the same time I'm developing a business that is very personal and hugely rewarding — sea kayaking instruction, guiding, and adventure travel writing. I'm blending all these skills and interests into a real career; a career that will last a lifetime.

Ironically, I'm grateful for this seismic change. If it wasn't for the collapse of so many traditional industries and safe havens, I'd never taken on such a risky, but oh so fulfilling life change. From the smoldering ruins of old, rise the glory of the new and bold — that's where I hang my hat today and I wouldn't have it any other way.
http://nathanhangen.com/blog Nathan Hangen

I agree with you, but here's what is interesting…I've never been better, but people still look at my business like it's some sort of anomaly…they're just waiting for me to fall back down to “reality.”

Sad really.
http://theboldlife.com/ Tess The Bold Life

I think most of your points are well taken on one level however and this is a big however…we will get no where without less greed, less lies, and more compassion for each other everywhere in the world. If this doesn't happen we'll only have the same old thing happening in a new way. We need change in all areas not just business.
http://cuberules.com Scot Herrick

Michael,

I think the economy is in a much bigger structural change than most people realize and you are right to point this out.

I disagree with those that say government can’t help; it can and has this recession by preventing a worse meltdown and by continually extending unemployment benefits when there hasn’t been obstruction. Plus many other items (the Affordable Healthcare Act, long term, will help a great deal on many different fronts). No one should rely on government and I don’t think most people do. But government has a role just as corporations have a role.

Of course, all of that is tactics and you are not talking tactics.

The deal is this: no matter how much people talk about going into business for themselves or supplementing their income through other streams or whatever else, the truth of the matter is that the vast majority of people will work in corporations in full-time jobs and have no time nor energy to do anything else.

The challenge, I think, is how to protect your income working in these corporations. And do so while maintaining your personal values.

The first step is this: get rid of all these beliefs that if you have a job in a company that the company will look out for your interests. It won’t. Companies hire you to do work to meet their goals, not yours. And, in my opinion, that’s OK.

Companies have already shown that when it doesn’t value your work, you’ll be gone. What hasn’t happened is the reverse: we are not confident enough in our abilities to say this company I’m contributing my skills to is no longer good for me. I am not entitled to a job, but I am entitled to a good corporate experience while on the job.

Once you get the perspective that corporations really don’t care about your interests in your head, you can actually address the fact that jobs are not an entitlement, they are not permanent, and you, as an individual, need to manage your career like never before. Otherwise, you’ll just be a victim.

Of course, that takes a lot of courage, self-examination, letting go, and facing fears. Are most people ready to do that?
http://armchairdesigns.com/ Bradley

I have always worked (and still do) in an area of service and support for engineers and architects. It is dead or dying (at least in the US). This latest lapse in the economy wasn't what killed it either. That may have just been the final nail in the coffin. It is much easier and cheaper to outsource what I have done for the past 10 years.

So yeah, I think you are right. This isn't a recession so much as an adjustment. I look at the area I live in and think about what it used to be and what it is now. We used to be a mainly manufacturing area. Now, it is almost all gone, and there are just so many service jobs to go around.

On the bright side, I have been planning my escape from 8-5 for a while now. So maybe this is the push I needed to get the gears turning faster.
michelenicholls

It's not just the USA, folks! It's the whole world, and you're quite right, neither governments nor big business will have the way forward. Back in the early 70s I read a great book called 'Small is Beautiful' by E.F.Schumacher – he saw this coming, and that the only sustainable way forward is small scale and self-empowered. If you want to see this in action, it's happening in your own backyard – we had an amazing documentary on TV here in the UK a few weeks back, about the regeneration that's happening in the devastated areas of Detroit, after your motor industry started to implode. It's truly inspiring and filled me with hope.
ahughes3

I was going to say that this is no different to the last recession we had back in the 90s when, again we saw a permanent adjustment. Out went the fatty, hierarchy loaded structures and in came the lean mean profit machines that we know today. I think the idea of a job for life disappeared around that same time. I think dedicated car parking spaces and management dining rooms all became outdated. I think it's a bit different in this case though. I personally believe that the politicians miscommunicated pressures in the banking system which then became a plague of poor guidance and scaremongering. Next thing you know the scale of the fear and panic is sending businesses down the tubes, some over a century old too. Largely because of poor leadership. At least the recession in the 90s was a genuine downturn.
Leon Noone

G'day Michael,
Frankly, I haven”t the faintest idea what's happening in the Australian economy, let alone in yours. And I'm not sure that it matters all that much anyway.
But i've learned a few things. They may sound a bit curmudgeonly, but here goes
*learn about marketing. Selling's important but sound marketing is the coping stone of successful business
*”nothing is so important as the proper execution of the fundamentals.” I forget who said that but it's a gem
*science is wonderful; scientists are human
*21st.Century direct marketing, whether online or offline, is old fashioned mail order in
fancy dress
*be very suspicious of predictions made by economists, especially those about economics and the economy
*There are few really hopeless employees but lots and lots of lousy systems
*If you're not sure whether to ” 'ave a go” and change careers, imagine yourself in 25 years asking yourself “I wonder what would've happened if…..”
And above all else……….

Make sure you have fun.

Regards

Leon
http://www.homewiththekids.com/blog/ Stephanie – Home with the Kids

I have to agree. That's about what I was thinking when the government started talking about all those bailouts. Waste of money. Sure it's more painful for the economy to make the switch on its own, but I think it would become stronger for it.

I joke a lot about my husband working in California's one growth industry – the unemployment office. They're plenty busy there.

I'm just glad to have a business where I can be at home. It doesn't always earn what I want it to, but it's mine. I get to rely on my own skills and motivation to earn what I can.

Nathan Hangen, I get the same reaction. Took years to convince my inlaws that I really could earn money from home, even when I told them what I was earning. They still worry that it's not reliable enough, but it's sure better than the alternative so far as I'm concerned.
stevekeeler

In a say way your observations are correct, traditional jobs are not coming back. Our desire to be the leader in ideas, construction and production has gone. We've become a service society, without the skilled workers and industrial risk takers that could manufacture tangible “widgets” from idea to finished product. This winter I was in Detroit, and it is sad to see a place that once was the center of American ingenuity and design, now slowly wither and decay to nothing…Our quest for the American Dream has been replaced by “Mass” consumption of cheaper and more. Built in Obsolescence, products made “inferior” by any standard…it's kinda unreal that the future is so different from our past. Instead of being Leaders we've allowed others to take over. Instead of aiming for the stars, we've given up on those lofty dreams. In place of allowing each man and woman a chance to move up, we've chosen to make all equal, we have bought in to the idea that “fairness” is a right, winners and losers are the same. T-ball games end in ties every player has to score, students get passing grades because their “ideas” are creative, moral values are only frowned upon and not lived upon. Our leaders expect more from us and less from themselves. You only wave to your neighbor, rarely do you sit and talk. The great information society we crave only paints us more into a Red or Blue state…the divide we have now comes from what brand or social cause we align to. The change in our future will be difficult, but hopefully we can find the strength to carry on or at least outsource it to someone that can carry our water…
http://fishingjustbcause.com/ Amanda

I think people think the gov't is going to help, but imho I think they are keeping it this way for a bigger purpose. I see them shutting down certain home based businesses, putting limits on the fishing market, making it impossible to buy a home in some states. It's a bit laughable that people actually still trust the gov't and think they are going to solve this mess. They created it, for a larger purpose!
richardgreene

I think you're spot on and we're going to keep on declining. There seems to be some type of social entropy built into civilizations that causes them to grow, flourish and then die. When the stock market tanked in 1929 the depression didn't officially start until 4 years later in 1933. We are only about 20 months into this current depression and we just haven't figured it out yet.
Adrian

I agree with some of this but feel that a few facts might be worthwhile. Between 1988 and 2004 the US Census Bureau tells us that the proportion of employees in 500+ size organisations grew from 45.5% to 49.1% of paid employees! Take that you spineless large organisations…. erm… or rather thrive against our collective intuition… Now the more recent data (and there may be more recent updates still, I only did a quick check) tell us that from 2001 to 2004 this ratio DID shrink from 50.1% to the 49.1% mentioned earlier. Now this is important but not necessarily revolutionary. I'm sure the most recent stats would tell us that through the recession, this has moved further (as it did in 1993) but we have to remember that truly structural shifts in economies typically take a looong time to unfold which I think we all recognise – witness the decline of the British empire. Some might say it peaked in the 18th / 19th Century but it is still relatively strong as a global economy (albeit heading in one direction relative to the competition…). New technology may accelerate some of these effects but I think, IMHO, all of this will be a long time coming. I am also beginning to think the “anti-job” movement is looking slightly overdone. It provides for “confirmation bias” to the overall post in many of the comments here – remember the 32% of people employed by organisations of between 20-500 people in the US are employed by entrepreneurs who need people to do stuff – but can fully appreciate why some find self-employment the easiest route to self-determination. Really enjoy the thought-provoking posts. Keep 'em coming!
http://evengrounds.com/blog Julius

I agree that we now shouldn't see jobs as an entitlement. It really boils down to ourselves and how we would find our own way to have a source of income despite of what is happening in the economy.
popupbooster

A big change is happening: Asia (China) is taking over from US.
Go West is happening again.
The world power is shifting to another continent.
http://www.skirtingboards.com/ Skirting Boards

The markets have to balance themselves out from time to time, the main factor is whether you are poised to take advantage of that market or not. If you are in any doubt, study the companies actions who came out on top!
Ron

Don't feel too safe because you have a web based business. Remember that we are all in this together. If I don't have an income I don't buy your products. Multiply that by massive unemployment, and, well, you get the picture…
- remarkablogger
  
  I wouldn't say it's a matter of feeling safe. In fact, my whole point is
  that there is no safety, and so taking matters into your own hands is
  preferable to leaving them in someone else's hands.
  
  There are ALWAYS people with money. There is never any less money in the
  world: it's all still there. Our “job” is to get folks to enjoy diverting
  some of it our way via the web.
Ron

Don't feel too safe because you have a web based business. Remember that we are all in this together. If I don't have an income I don't buy your products. Multiply that by massive unemployment, and, well, you get the picture…
remarkablogger

I wouldn't say it's a matter of feeling safe. In fact, my whole point is
that there is no safety, and so taking matters into your own hands is
preferable to leaving them in someone else's hands.

There are ALWAYS people with money. There is never any less money in the
world: it's all still there. Our “job” is to get folks to enjoy diverting
some of it our way via the web.
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