This is a full-on depression, folks, and it’s only just begun. MSNBC et. al. are still in total denial, using words like recession while documenting the implosion of brands such as Mervyn’s (clothes), Best Buy, Starbucks and so on — but the reality is that this is not a recession any more than the October 1929 crash was a minor correction in the stock market.
International businesses are toppling. Next tier to go will be the national ones. Regional businesses might do well, and local companies are probably most apt to weather the depression. This isn’t really because of any sort of international-tension issue (though that might contribute); it’s just because it costs so damn much to ship things worldwide, or even from one US coast to the other.
Also, the local businesses are more apt to understand customer service, and work within that paradigm — because they and their customers all share the same ZIP code. Those sorts of things matter.
Here’s an example. I recently learned that AT&T is selling unlimited text messaging for $20 a month, with unlimited internet access via smartphone for an additional $30. My local carrier offers a similar package, but for $15 on the text and $20 on the data. That’s a local savings of 30% over the international conglomerate, with equivalent coverage nationwide.
They’re also a bit more flexible about things such as billing. In October and November, unbeknownst to me, I used 200% of the airtime I was enrolled for,1 which led to a genuinely startling bill. This came to light at the same time that I was upgrading to a smartphone (the deal package gave them away at $80; MSRP was around $400). Their customer service folks essentially laughed with me about it and said, basically, that they knew I was good for it and could pay it down in chunks — no specified amount or time frame — without serious issues.
Try getting that from a company that hires people in other nations to handle customer calls.
The point is that an international economy can work, and does work, if the local economies are stable. But a local economy that runs on McDonald’s, Starbucks and box stores is inherently unstable; it’s not really a local economy at all. It’s more of a hegemony that will collapse as soon as the power brokers leave the venue. Which is more or less precisely what we’re seeing today. Larger cities, with the most presence of international or national-scale business pseudopods, seem to be getting hit the hardest, while smaller towns — which are more apt to have locally-owned and smaller-scaled businesses — seem to be faring better.2
There is a lesson here. Of course, it won’t be learned by either the national media (for obvious reasons) or any of the entities currently begging for bailouts.
1. I was talking to my girlfriend-to-be, who was at the time just a friend. We had a hell of a good new year’s eve. (First kiss, etc.) I’m still kind of awash in endorphins.
2. Which is to say, the smaller towns got their economies artificially inflated less by the recent boom, and so are suffering less in the implosion; however, strictly speaking, the smaller areas appeared more economically depressed a few years ago, and are essentially no better off now than they were. They’re just more steady.
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