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.

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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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