Tuesday, March 11, 2008

The R-Word Chronicles, Vol. 2


For those of a certain generation, recession was formative. So its coming now isn’t so much a cause for alarm as a reminder to stay calm. We have the inner resources to persist through tough times.

I’m originally from Detroit, a city that sometime in the 1970s entered what has turned out to be more or less a permanent recession. I like to think of that decade as the “Great Recession” (albeit with legal booze). For me, the 1970s was the decade of high school and college, with all the usual anxieties that attend those phases of life. It was also a decade book-ended by the deaths of my mother and father. For our country, it was the decade of stagflation, an abandoned war of attrition, a political scandal that toppled a president, an energy crunch precipitated by geopolitical nastiness, a nuclear meltdown, a mass-suicide doomsday cult, and an embassy hostage crisis that toppled yet another president.

Toward the end of the 1970s, between my junior and senior years in college, I had an internship at an urban coalition in Detroit. The group, New Detroit Inc., was formed after the riots of the late 60s to rebuild the city’s torn economic, political, and social fabric through engagement with neighborhood organizations and with business and government. That summer, I was a policy analyst--my first analyst job (I was an economics major, by the way). In addition to representing the coalition at community meetings throughout the city, I had a research project. My job was to estimate the likely financial impact on Detroit, in foregone federal entitlement dollars, from an undercount in the upcoming 1980 census. If I recall correctly, I took 6-7 weeks to produce a defensible estimate: $50 million lost to Detroit if the city’s residents were undercounted at the expected rate of (I forgot what that rate was).

But for me, the real take-away from that summer was a firmer sense that Detroit was in for a very long structural decline. It wasn’t so much that the city’s population would be undercounted. It was more a matter of the city being far too overpopulated for its ever shakier economic base. Southeastern Michigan’s automobile-centric manufacturing employment base had peaked in 1955, three years before I was born, and had not been replaced by any other industries that could absorb the great number of unskilled and semi-skilled citizens who seemed to be waiting, biding their time, until some new great wave of industrial salvation restored them to some semblance of unearned, under-educated middle-classedness. Then and now, people just tend to stay put in Detroit, in ever more decrepit jobs, houses, and neighborhoods. There was and is precious little new business formation. The labor unions long ago became a reactionary force, an obstacle preventing Detroit’s antiquated industrial base from morphing with the times.

When any recession approaches, I ask myself to what extent it’s a cycle that will soon reverse itself, and to what extent it masks a deeper-seated structural change in the economy. Fortunately, the US economy bounced back nicely from the stubborn recession of the late 70s and early 80s: I’ve spent most of my adult life and career in a growth economy, in a different metro area (Washington DC) from where I grew up, and in a different industry (IT) from what I imagined in college. I thought I’d end up an economist with some Rust Belt manufacturing firm, enlisted in some ongoing defensive effort to fend off “Japan Inc.” or whatever other, more dynamic, more adaptable economic challenger threatened my employer’s livelihood. I expected to live my work life on the defensive, like the auto industry troglodytes (and their offspring) all around me in my salad days. (For the record, my father was a salesperson with mainframe computing pioneer Sperry Univac, though he personally sold electromechanical filing systems, office furniture, microfiche machines, and other non-computing products).

All I know, from all my experience, is that no one and nothing is truly “recession-proof.” A big part of the 1970s was observing my father’s 20-year career with Sperry come to an end, not due directly to any recessionary layoffs or what have you, but due mostly to Sperry continuing to lose ground to IBM and others in the mainframe computer biz. For my father, who was a great salesman (if his numbers tell the story, and they should), the 1970s was a structural breakpoint for his bread-and-butter. They couldn’t sustain their 1950s-1960s heyday. Come the 1980s, they merged with Burroughs, which begot Unisys, which saw a hasty retreat from computing hardware and software altogether, becoming the professional services firm they are today. Without a doubt, a similar structural shift will carry some of the 1990s’ former software juggernauts into the next era, while others will disappear as going concerns (or brands, which amounts to the same thing--lose your former identity, lose your footprint in cultural memory).

Nothing’s recession-proof, but, if we keep calm, we’ll find the inner resources--much of it purely spiritual--to persist as going concerns through cyclical and structural shake-outs. A recession is as much a collective spiritual funk as an officially certified downturn in leading economic indicators. Just as, earlier in this post, I strung together a litany of semi-coincidental nasty events that are forever stained into my recollection of the recessionary 70s, we can each summon up a peeve list of crap-happening-now, and link it to whatever recession may or may not take hold shortly.

But what’s the damn point. Just stay calm. If you’ve spent your entire career in the IT world, you’ve been building up immunity to cyclic and structural shakeouts, which happen with such fervent regularity, in “Internet time,” that they don’t spook us. Unlike the auto workers and their kids who always pinned their futures on the certainty that there would be a cushy unionized job awaiting them “on the line at Wixom,” we hold no such illusions.

We’ve spent our lives morphing, and holding on, awaiting the next shift, and the one after that too, prepared for whatever may come. Keeping spirits intact.