Happy Days Aren't Quite Here Again

Don’t look now, but the Dow Jones dropped several hundred points in the last week. It seems to have taken the World Bank to bring everybody back to reality. It just doubled what it projects to be the loss in the economy of the entire planet.
I couldn’t see what was making everyone so optimistic back in May. Houses aren’t selling around here—it’s been about a year since one sold, and there are plenty of “For Sale” signs up. Companies that build auto parts are still teetering on the brink of extinction.
General Motors is wallowing in an increasingly contentious bankruptcy proceeding. Chrysler is back on the road again—but only figuratively. I shopped at J.C.Penney the other night—there was one girl to run a four register check out stand. I was tempted to ask if the company expected her to use all four limbs to run the registers at the same time.
There was no need. There were very few customers. There were far fewer clerks on the floor to help find things. My wife and I were recalling the days when men and boys clothes hung on racks by sizes. You knew if you needed a 34 to walk the rack until you came to the section so labeled.
All the brands were there—all the 30s, 32s, 34s, 36s and so on. Life was fair simply even for the least self-sufficient customer. Now it’s all by brand. To see all the 36s, you have to wade through brand rack after brand rack, and you’ll probably miss some.
“Why?” I asked my wife. She’s worked retail so her answer made sense. When they had lots of clerks on the floor to help, they reorganized by brand. Now the clerks are gone—laid off, not hired—and they haven’t bothered to switch back.
An acquaintance of mine had to take a few weeks off for a fairly major surgery. He says it jokingly, but he’s not entirely convincing with his humor—he hopes his company will still be there when he’s ready to go back to work. I can sense he’s rushing the post op schedule without too much regard for his health. This is not a good time to let the boss notice he can do without you.
I drove past what used to be a fairly major shopping area near here the other day. Store front after store front was empty. Enthusiastic—shall we say “optimistic”—investors drove our local gas prices above $3.00 a couple of weeks ago. Now they’re down to $2.61.
Apparently our demand for fuel is not expected to be insatiable any time soon. Airlines are piling on fees—charging for meals, working on figuring out ways to make carryon luggage expensive, and charging as much as $50 for a second bag on international routes.
Consultants hold seminars for airline executives to suggest new sources of fees—a better idea, they feel, than raising fares in a time of shrinking household budgets.
Hotels have gotten into the fee business in a big way. An extra charge if there’s a safe in the room, use it or not. A charge if there’s a pool or an exercise room on the premises. Should you visit the pool and take a towel back to the room with you, that can be an extra five bucks. How much are you willing to pay to go online? And so forth.
Cotton growers down south are switching to food crops because people are buying fewer clothes and there’s less demand. It used to be a no brainer to rent a minivan while traveling—the idea has gotten so popular (fewer flyers?) that it will now cost you $700 a week.
It seems to me, as I take my daily walk, that fewer home air conditioners are in use this year than other years. More windows are open even on warm evenings. The other day there were several garage sales in the new development near me.
One lady was selling formula she got from WIC—which her baby apparently didn’t need. WIC? That’s “Women, Infants and Children” for people with low incomes. This is in a neighborhood of brand new homes, all of which sold for well over $150,000 in the past five years.
As Detroit shuts down, the University of Michigan hiked next year’s tuition 5%. The State, long dependent on auto plants and workers for its revenues, simply has no more money for education. I actually feel sorry for Governor Jennifer Granholm.
She came to the state house in 2003, a Harvard educated lawyer, Democratic after a long Republican administration that cut lots of taxes—does she sound familiar? Like, maybe, another Harvard educated lawyer who took office after a Republican … ?
As she took office, Detroit started its nosedive. The “rainy day” funds were spent. Michigan was (and is) a one industry state—cars. The roof just fell in on her. There simply hasn’t been any good news throughout her two terms. (She only won her second term by blasting her Republican opponent, and Amway partner, for his corporate tax avoidance tactics—and for supposedly sending thousands of jobs to China.)
She’s advocated diversification—based very much on the engineering capabilities of the University of Michigan. But even there the specialization is auto design. Like a skier caught in an avalanche, this attractive (former beauty queen), smart, politically astute governor hasn’t been able to get any traction.
Her approval ratings are past the toilet, in the sewer. She’s no more to blame than the weather man is for a tornado. She just happened to be standing there when the lightning hit. The only good luck she faces may be term limits. She can’t run again so she won’t take the whipping at the poles.
Thumb through “Newsweek”. There are SO FEW ads. What’s paying the bills?
“BusinessWeek” is pretty thin too. Last week, it had an article pointing out that the toxic assets weighing down our banks last winter haven’t gone away. They are kind of buried in the books. But they are still there, festering. They could, the magazine says, lead to the same kind of crisis that killed Lehman Brothers last fall. And more bank bailouts?
Maybe the investors stopped to look at reality.