Archive for the ‘Hard times’ Category

Wed 3 Dec 2008 8:20 am   //   Posted in: Hard times, Media

Don’t panic

It seems December 2008 will be a month of layoffs, cutbacks and shutdowns in many industries. This sucks.

Hard times demand good information. Unfortunately, a downturn cultivates misinformation like a petri dish grows mold. There are two reasons for this. First, a tiny spark of panic will ignite a total breakdown of common sense. Desperate for direction, people will believe almost anything. (Aside: Now would be a great time to start a cult.) And second, the people who actually know what’s going on will get very quiet. Wouldn’t you? For the next few months, you’ll hear a lot of false reports in the news (or more likely, on blogs), and no voice of authority will speak up to knock them down.

My job is going to get harder, and so is that of every business journalist. Be careful about what you believe in the next few months as we all try to find our way out of this mess.

Thu 9 Oct 2008 8:42 am   //   Posted in: Hard times


Friends have asked me what I’m doing about my 401K fund, given the recent performance of the stock market. I obviously have no qualifications to give people financial advice, but here’s my answer: I’m doing nothing differently. I’m going to keep contributing a few percent every paycheck and direct most of it to stock investments. For somebody like me (who won’t retire for another 35 or 40 years), there’s no sense in getting stressed about the markets. After all, there are only two possible scenarios:

1. Stocks will go back up. Even if it takes 20 years, it’s going to work in our favor in the long run.

2. Stocks will never go back up. The American economy reached its peak in 2007 and it’s all downhill from here. Soon we’ll be withdrawing dollars from the bank and burning them as a source of warmth.

In either scenario, you’re not going to benefit by fiddling with your 401K investments right now. The best and worst thing about 401Ks (vs. pensions) is that the individual employee controls his or her own retirement fund. We all knew there were risks to this system when we bought into it. Now we have to have the discipline and patience to let the system work for us. Stay the course. Ignore Jim Cramer.

Tue 7 Oct 2008 8:16 am   //   Posted in: Hard times

The myth of Main Street

It’s become popular among politicians and TV journalists to ask when the economic pain on Wall Street will be felt on “Main Street.” Take a drink every time you hear somebody say “Main Street” during the debate tonight.

I have a problem with this metaphor. For most ordinary folks, if there even is a “Main Street” in their town, it was totally decimated by Wal-Mart in the 1990s. Main Streets are vestiges from a time before interstates, when dense towns formed organically around crossroads, harbors and train stations. No more. New developments in the suburbs are built without any kind of central business district. If you still have a downtown, it’s probably not a place you hang out. There’s a good bet it’s limping along with a few struggling offices and maybe a weird old barber shop.

The way people live now, home is a cul-de-sac. Business is conducted in a shopping center or an office park a 15-minute drive away on a six-lane divided highway. Mailboxes Etc. or FedEx Kinkos has replaced the Post Office, Amazon or Barnes & Noble has replaced the book store, Safeway or Kroger has replaced most other food shops. Nobody walks anywhere.

So perhaps your town has no soul. But there’s a good unintended consequence to all this. When all your local businesses are part of national chains, they can ride out a few years of a bad economy. Home Depot, Costco and McDonald’s are going to be fine.

So if not Main Street, where will economic trouble cause the most pain in small towns and cities? I think school districts. Schools are localized. They rely largely on local property taxes, bond issues and mutual fund investments for income. We’ve let the businesses in our towns grow huge, national and powerful, but left our public schools in a precarious situation.

Tue 30 Sep 2008 8:01 am   //   Posted in: Hard times


Mon 29 Sep 2008 5:57 pm   //   Posted in: Hard times, Right now


Here are the “trending topics” on Twitter at this moment:

  • DOW
  • Bailout
  • Wall Street
  • Republicans
  • Congress
  • Black Monday
  • Bush
  • Wachovia
  • GOP
  • Dems

Mon 29 Sep 2008 4:26 pm   //   Posted in: Failure, Hard times

Blame real estate

“I used to live next door to a Russian √©migr√©. One day he asked me to explain something that puzzled him about his new country. ‘This place seems very rich,’ he said, ‘but I never see anyone making anything. How does the country earn its money?’ The answer, these days, is that we make a living by selling each other houses.”

Paul Krugman in The New York Times, August 12, 2005.

Fri 26 Sep 2008 6:39 am   //   Posted in: Failure, Hard times, It's a trap!, TV commericals

Did this TV commercial sink the economy?

(Direct link.)

Mon 15 Sep 2008 7:17 am   //   Posted in: Hard times, It's a trap!

Sell! Sell! Sell!

So this is what they’ve been doing with our 401(k) money. Raise your hand if you regret ticking the “moderately aggressive” box.

Tue 24 Jun 2008 10:03 pm   //   Posted in: Hard times

This system you sold me isn’t working

My 401(k), planned quite carefully to grow over the long term, is down 6.1 percent for the year. Anybody beating that?

Fri 20 Jun 2008 7:37 pm   //   Posted in: Food & drink, Hard times

Even Rafiqi’s food cart is raising prices

Sign at Rafiqi's food cart on Broadway