The silver lining in the economic crisis, says Joel Kotkin, is that it will foster a New Localism. Excerpt:
Forced into belt-tightening, Americans are likely to strengthen our family and community ties and to center our lives more closely on the places where we live.This trend toward what I call "the new localism" has been underway for some years, driven by changing demographics, new technologies and rising energy prices. But the economic downturn will probably accelerate it as individuals and corporations look not to the global stage but closer to home, concentrating and congregating on the Main Streets where we choose to live - in the suburbs, in urban neighborhoods or in small towns.
Well, that would certainly be great news from a Crunchy Con perspective. But Matt Frost cautions that this kind of thinking is naive. Excerpt:
Hoping that austerity will force us into solving our social problems seems incongruous with what I know of Kotkin and his work, and it's a lousy mistake for anyone to make. A world of fewer jobs and higher prices will mean longer commutes, a frayed social contract, and tired grandparents. If we arrange our families and our living spaces poorly when affluence gives us choices, we are unlikely to suddenly flourish when those decisions are forced upon us. Hard times won't compel Americans into becoming their better selves, and if we are heading into some bleak days, it's best that we all understand that in advance.
I'm torn about this. I want Kotkin's vision to be true, and I can see economic necessity forcing these kinds of changes on American society. Americans may not become "their better selves" by choice, but because they have no choice. But I fear that what we're likely to see will look more like Frost's bleak vision. The truth is probably somewhere in the center: we'll make a transition that looks something like what Kotkin envisions, but it won't be smooth, and there will be a lot of pain.
What do you think?
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Our Pyrrho-friend @ 2:41 PM writes:
"the complete devastation of the retail sector and the hundreds of small banks that are going to go under when their construction lending portfolios explode. (This crisis should start hitting early next year.)"
I wouldn't go so far as to say "complete" devastation of retail. The Wal-Marts, Aldis and discount retailers are going to have few worries; people still have to eat, wear clothes and buy cat food. The highest-end stores are going to do equally well, since the rich, like the poor, are with us always. It's the chains in the middle that are going to get slaughtered. (Bath, Bed and Beyond stockholders, take note !)
McDonald's, BK and Wendy's-type chains are going to be all right. People will still want to go out every so often, to take their minds off the economy (or the Obama Administration's antics) if nothing else, and they're going to take the kids to Mickey D's.
There are going to be all sorts of people getting into the do-it-yourself routine; home-repair store stocks are going to go like maniacs. Same thing with car-repair chains, people are going to go three sides 'round the barn to keep their junkers on the road.
Autos are going to get killed; overcapacity and tight credit standards are going to see to that. DO NOT buy major auto-company stocks, whatever you do. GM is going to try to merge with Chrysler (that's no news, I realize), but neither of them is in any kind of decent financial shape, and GM is bringing an excessive amount of long-term retiree health-care costs to the table.
About the banks: anyone with any significant cash in a bank is going to want to pay SERIOUS attention to what those banks have in the way of loans. There are quite a few outfits out there that are not infested with toxic loans, and a little homework can help you figure out which ones they are. It takes a little work on your part, but it can be done. The concept used to be called "common prudence". Re-make its better acquaintance.
Now is NOT the time to get panicky, guys. Now is the time to pay some attention to the debt load, squirrel some cash aside and figure out how the old popcorn popper works. 15 years from now, when SocSec takes 30 % in taxes and they're rounding up all the businessmen and putting them in IRS internment camps ? THAT's the time to sit up and scream. Panicking now is unwise. Not to mention a waste of a good panic.
(Please note: I am no investment advisor, nor do I play one on TV. Anyone who takes my advice on stocks or retirement planning probably deserves what they get.)
Your servant,
Lord Karth
>>> but the only localism really left is family... I don't know if it would occur to people to try to establish mutually beneficial relationships with people they don't know all that well because they don't know if they can trust them.
Now, see, I would never try to establish relationships like that with my family (immediate family excluded) because I KNOW I can't trust them. That's with all sarcasm off. And I can hardly be the only one in this boat. That's why I have a skeptical view of the rosy Depression where we'll all move back in with our crazy families and be happy holding hands.
LK --
You're right. I shouldn't have used "complete". But the overcapacity in the retail sector is huge. The amount of abandoned retail space we'll be seeing in the coming months and years is going to look like "devastation" to most peope.
Rent the movie "King of the Hill." Family life in the Great Depression wasn't so rosy.
While I get both points of view and I concede that it probably won't go all one way or another, I was provided a very real time example this week of how people still do respond to the opportunity to adjust on a local level to a clear need once defined. Complacency all but disappeared and strangers from all over stepped up big time when a local need presented itself and word got out about the need to fund and support a local clothing charity that was being overrun by demand for it's services. On a grander scale, after ten years of anonymity in commerce on the web, I see people choosing to do business once again with people they know and trust even at a slight premium in price rather than sending their money out into the ether and risk getting shorted. In the end, we still do need each other. Tough times make that clear. Visit www.clothesforkids.org to read up on how strangers help out when the call for help is local.
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