A reader writes:
It's only a pinprick in the vast world, but my personal recession and unemployed status hit home today when I realized I can't buy your window book, which I'd been anticipating.
Put me down for one, later.
Let's see how low we can get the price down to first, eh?
A reader writes:
It dawns on me that my unemployment/underemployment situation very much represents the current state of things and very much represents a lot U.S. policy sins coming home to roost, and depressing job growth.
First I lost my operations management job at a company that was losing clients and had to pare down to a bare bones staff to stay alive. I understand they're now hiring up again; however, they're how hiring mostly undocumented workers, so they can pay lowest wages, avoid taxes, and not give benefits. They're saying they "have to" just to survive.
Where I'm currently working as a desktop publisher, a company where I used to be a manager, I'm getting paid only a fraction of what I was, have no benefits and am called a "contractor" though even by state law here in Georgia, I'm obviously not. Once again, because the company doesn't want to pay benefits and taxes.
The ultimate irony here is that I actually report to a manager based in India, that now has the management job I used to have.
A reader writes:
My father is a Thoroughbred breeder in Virginia. For pure breeding operations such as his, the cash flow works as follows: mare is bred early in the year, foal is born early the next year. Stud fee is due once foal stands and nurses, in most cases. The following September, the yearling is sold at auction. This year, between 50% and 75% of yearlings sold for less than the stud fee paid. As a result, breeders do not have the cash on hand to pay the stud fees for mares that are now in foal. Mares are being put down so that the foal cannot stand and nurse, and the stud fee is then not due. Just to clarify, my dad has not and will not be putting down any mares, but anecdotally, it is happening.
A reader writes:
Several years ago I began doing very well. My friend and I started our own law firm. I bought a large house, too large a house, and paid far too much for it; but things were good and I wanted to give my kids a backyard room to run around in. So my girlfriend, kids and I moved from our downtown rental apartment to the suburbs. My law partner and I took on a case against a bank that grew into a huge case. The bank hired a large, aggressive law firm to grind us down but we kept winning, picking up more and more clients and winning important rulings that pointed to what appeared to be an inevitable win if we could withstand the cost and time, which rose to several hundred thousand dollars out of our pockets and many hours spent not working on other cases. We started leaning on our credit cards pretty hard.
Then we got a call from our adversary; the bank had filed for bankruptcy protection. It was devastating; our multi-million dollar case was now worth next to nothing.
We managed to eventually pay the firm’s bills and always managed to keep our employees paid and insured, but that meant that we would often go without any pay ourselves for months at a stretch. My formerly good credit plummeted and I got behind on my mortgage and credit cards. The bank I was paying my mortgage to had already gone under itself. I was utterly miserable; my girlfriend wanted to help but she didn’t make enough to make a real difference and we decided to keep her credit strong rather than put both of us in a hole. So I just stopped. I didn’t pay my mortgage and waited to be foreclosed. I tried, but there was no way to sell the house in this market. I saved what money I was able to pay other bills that had been piling up and to prepare to move. Eventually the bank filed a foreclosure. We told the bank to take the house which took them almost seven months to do.
What came from it turned out to be liberating. I got rid of or refrained from everything that I didn’t need or that cost a lot. I am now somewhat happy for the first time in a long while. My girlfriend had hated where we lived and it was a much longer commute for both of us. My kids didn’t really use the backyard. We moved back downtown into a small but very nice apartment, at a quarter the cost. The building is a very social place; I had barely known my previous neighbors. I am now an eight block walk to my office so even gas is barely an expense any more; and my girlfriend and I had forgotten how much we enjoy living downtown generally. I can sleep better with the stress lowered; the kids even claim they sleep better because the sound of the cars and the general hum of the city. Now I am trying to slowly build up my credit. I spend a lot less than I used to because I don’t buy things I don’t absolutely need and will never extend myself again.
by Chris Bodenner
A reader writes:
My "recession" started in 2001 when the tech bubble burst. It was tough finding work, so I went back to school, figuring I would temp while finishing my BA. I am now registered with five temp agencies and willing to take just about anything that comes along. They all know I am skilled, reliable and honest – something that seems to be in short supply in the temp world. But I am at the mercy of employers, who can ask to have me moved for any reason. Two different recruiters have told me that not only are potential employees seeking very specific skill sets, they are also specific about education now. It's no longer good enough to type quickly and accurately and know several software packages to work in an office environment. I now have to have a degree in a specific field, even if the job is data entry for three weeks to get an office caught up.
by Chris Bodenner
A reader writes:
My partner and I started our own architecture firm in Miami about five years ago, after many years of working at other large local firms. During the last ten years we were involved in designing many of the condominium high rise projects that fueled the latest construction “boom”. For a couple of years, until 2007 – Miami resembled Hong Kong or Shanghai- the pace of new construction was insane. Our firm ended up growing to sixteen people at the height of the craziness- we had four towers at one time, over two million units in one year. We were published in many of the local magazines and newspapers. We won numerous design awards, and life was very good. It was not just us- everyone seemed to be doing really well.
Needless to day, those days are over and we are living through what is the worse slow down in our industry that anyone can remember. Even the “old timers” are shocked at how bad it has gotten.
Our newer projects have almost all stopped or been put on “indefinite” hold. What we hear from the developers and other clients is that money is frozen, banks are not financing. This may actually be a good thing for the City of Miami and other places, as a lot of bad buildings got built too quickly and in some cases, very poorly. But it is killing our profession and anyone connected to real estate or development.
Every couple of months we had to reluctantly let go of our employees. We were down to two last month, now it looks like even those will need to go as we have run out of work. The rest of the firms are doing just as badly. One of the larger firms are down from 150 to 20 people, most of the smaller ones are down to the principals and one or two others. Very little administrative people are left, everyone is trying to cut, cut, cut and survive. Most firms are closed Fridays or reduced their hours by 20%. Many, many offices stand empty. No one is paying health benefits, or 401 K plans. We can’t even afford our taxes and will have to as for a payment plan.
We are hanging on by a thread. We moved our office from the downtown office. We cut our space by over half. We try to go on and stay positive but it has been a grueling two years. We owe money to just about everyone, and have gotten into quite a bit of debt as every month we bill less and less and get paid late, if ever. It is not like we can go and quit to get another job. There are no other jobs to be had. We haven’t been this broke since college. It is really, really scary. And we hear the same thing, almost every day, from every single one of our architect friends.
We have in recent months (before August- which is always dead) started to see a few, tenuous “green shoots”- luxury single residential projects seem to be doing OK. That is about it. The very, very rich that do not need financing are doing just fine. We hear stories from these clients of the amazing deals that they are making. One bought a 93 foot yacht at a fraction of the price from some unlucky soul who needed cash fast. Another got a brand new BMW for $40,000 less than list because the dealer was desperate.
We are holding on and do our best to survive and we pray to God that this recession ends soon.
A reader writes:
Just lost my job as a proofreader at a graphic arts studio after almost 5 years. I should be feeling bad, but I am not. While I lost a few hundred dollars a week in the process, the ability to see my friends and family kind of negates working in a negative environment. Unemployment benefits have given myself the time to look for a more self satisfying occupation, along with being a human again. I complained so much while working there, but I don't have that feeling anymore. The past is the past and I am ready to move forward. Life's just too short.
A reader writes:
I am a self employed environmental risk manager who depends on the trading of commercial and industrial real estate, so suffice it to say that my business has been nearly destroyed.
My focus over the past three months has been visiting clients of all cloth in an effort to stay in touch and learn how different segments are coping with extreme market conditions. What I have found gives me some hope that this economy will eventually emerge stronger.
Most conversations begin with some lamentations about the cliff that we have gone off, but always move towards discussing what steps they are taking to be more competitive and what new areas can be explored. It seems as though everyone I have met have been engaging in serious brainstorming for new innovations. Staff meetings have taken on a new imperative and no longer represent an hour long discussion with no results.
In every building in every city in the country, there are groups of individuals who are committed to finding news ways of conducting business and new ways to succeed. Below the surface out there, much dynamic thinking is being done and one would have to think that this will eventually pay dividends for businesses small and large.
A lot of great discussion generated from this post. A reader writes:
Yes, strong military presence helps San Antonio, but the city is proving a magnet for foreign investors. The new Toyota plant was a huge boon to local commerce. The city is embracing Mexican investment much as California welcomed Asian commerce in the 70s and 80s. It's a real win-win for everyone. South-central Wisconsin, though, has struggled for years. Long before GM, the area had been plagued with plant closures. Local farmers have also found it hard to compete with corporate agribusiness.
Another writes:
It is a common error – even among natives – to assume agriculture and energy are the main drivers of the Texas economy. While energy is still important, ag is not (as you can see in this chart). After a major energy bust in the late 80's, the state has diversified a lot, particularly in technology, finance, etc.
I personally do not know all the reasons why we are weathering the recession a bit better than other states, but at least part of it is that Texas is a low-tax, low-service state. While this is not good for some of our livability indicators (poverty rates, etc.), it does mean that when the economy goes south we have a lot fewer government commitments to cut back on. And of course, places like California appear to have gone completely crazy in spending over the past decade; it's not hard to appear a paragon of fiscal sanity compared to the goings-on in Sacramento.
Another:
Your correspondent was incorrect to say, "Texas years ago enacted strict laws governing exotic and aggressive mortgages (e.g. no IO loans, no 10% down, maybe no liar loans either)." I own two houses and put 5% down on the first on, 10% down on the second (all within the last 4 years). I agree with the thrust of the post – I haven't felt the recession too severely here in Austin, aside from the lighter commuting traffic – but I don't think we can thank Texas banking laws for that.
Another:
I have to agree with your readers about Texas. I sometimes find myself reading news about the economy with the same detached curiosity as I would a coup in a foreign country.
What it all boils down to is the diversity within the state. We have a large immigrant and native population. We have an ecology that ranges from deserts to forests to prairies to coastal towns. With regard to industry, we have a strong presence in agriculture, energy, finance, technology, medicine, manufacturing, and transportation. We have solid communities that span between bohemian liberal and evangelical conservative.
The state has throughout recent years weathered the oil bust, the S&L crisis, and the dotcom bust – and came out the other side of each as strong as ever. We do have our fair shar of problems, but they're mostly self-inflicted. Texas really does have it's own economy, and while the recession is certainly having an effect, we're doing quite well in the grand scheme of things.
It's not a bad place to live. Though it's hotter than hell in the summer…
A reader writes:
Your reader comparing Beloit and San Antonio is leaving one major component out of the comparison: military spending. San Antonio is home to four large bases (Brooks, Sam Houston, Lackland, and Randolph) while Beloit has… a National Guard armory.
Another writes
Texas years ago enacted strict laws governing exotic and aggressive mortgages (e.g. no IO loans, no 10% down, maybe no liar loans either). As a result, there was no housing-price boom and subsequent bust in Texas. If it were simply the immigrant reason assumed by your reader, California would hardly be bankrupt.
Another:
I, too, am a college student from Texas who attends school out of state, and I can corroborate your reader's story. I go to school in Los Angeles, where the recession seems to be absolutely crippling the city. Traffic has almost disappeared and a ton of homes near USC are in foreclosure. Right before heading home for the summer, I drove by a line that stretched for a block and a half. Those people were waiting for hours outside to interview for a single job at a restaurant as a waiter.
By contrast, I came home this summer to San Angelo, TX, where nobody acts like a recession is happening. Construction on new houses is still ongoing at roughly the same pace it has been for the past 5 years. In fact, all of West Texas has been left relatively untouched by the recession. Lubbock, for example, has 2% unemployment. Even Houston, Dallas, and Austin haven't been hit nearly as hard as the rest of the nation.
My theory is that the Texas economy – primarily based on energy and agriculture – is fundamentally different than other states. Thus, the economy in the Lone Star State is, at its core, mainly responsive to rainfall and commodity prices.
The Dish 