The Downturn

Report from the Upper East Side

The mood in the neighborhood  is definitely down.  My favorite sandwich shop started closing up for two hours in the afternoon since business was so slow.  Entire blocks of stores now have “for rent” signs in the window.   It’s especially sad when you know the people who’ve closed up shop, many of whom have been in the neighborhood for a decade or more.

My friend who owns the shop  has worked like a dog to make a go of it.  He came here from Mexico, and worked his way up from a dishwasher, to a short-order cook, and eventually had enough to open his sandwich shop.  It took every penny of savings.  He’s been in the neighborhood now for ten years, and has worked every day of the week, an average of 16 hour days.  Yet he’s always believed in the dream, that this was the land of opportunity.  That if you were prepared to work hard, you could get ahead.  Now, for the first time, he’s puzzled by what’s going on.  He asks the same question that everyone asks – how long can something like this go on.

I tell him that nothing like this has been seen since the 30’s.  But that’s not reassuring.  Nobody knows how long it will take for a turnaround.

The sign on the luxury housing across the avenue started as a small placard, apartments available.  Now it’s a large banner.

It seems as if every other day someone is packing up and leaving this building.   It’s a small building with 20 units.  At this point, I think there are four empty apartments.  No one wants to pay these types of prices anymore to live here.  I’m here for many years so my rent is still somewhat reasonable – but for a new person it’s at least twice as much.  The people who’ve moved have gone to Queens for the most part.  Woodside and Astoria.

And I realize that we are living through historic times now.  No – not the great depression – but it sure feels like it’s headed in that direction.

My own money – what there is of it – is in Citibank – which is now run by the government.  I think the stock price is about a buck-fifty.  Just amazing.  It’s like the opposite of the internet bubble that I rode when I was in the programming business.  In those days – every IPO that came out was a money-maker.   Utter crap would shoot up like gold although nobody knew exactly what the hell it was.

Now the psychology is that nothing is worth buying.  And people who used to stand in line to get breakfast at the sandwich shop, make their own breakfast to save money.

My guess is that this downturn hurts the rich more than the poor.  It’s not much of a fall for people who’ve been living paycheck to paycheck.  You don’t see laborers jumping out of windows during a depression.  But if you’re wealthy – it is indeed a long fall to the bottom.  I wonder how long it will take for Hollywood to turn out movies that acknowledge these times.  Maybe a re-make of Sullivan’s Travels (not that anyone could do better than the original).  Screwball comedies were born out of the great depression (Bringing up Baby, My Man Godfried etc., The Lady Eve).  Movies that often made fun of the rich, or took a rich person and put them into a poor mileu.  And of course the great hollywood musicals.  The original escapist entertainment.

So if history does repeat itself – and I expect it will take Hollywood a while to catch up with the times – there will be a slew of movies along the lines of  Trading Places.  The musical version may already have hit it with those dancing high-school movies.

And who knows – maybe there’ll be another WPA type of program that hires artists.  It could happen.

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Dave

My name is Dave Beckerman. I am a photographer and programmer working in New York City.

11 thoughts on “The Downturn”

  1. While its bad I don’t see this becoming a depression. The stimulus package will help but it is going to be a slow process.
    What we had was the financial servicesindustry allowed to rum wild under the guise of less regulation ahd teh Regan view that “government is not teh solution but the problem.” The problem is that you can’t let these financial types who only consider the bottom line, profit go unregulated. They are smart and come up with one con or scam after another to make money very skillfully making sure that it is just legal enough so that they get away with it.
    Just today in the NY Times Business section are stories about mortgages that are in foreclosure not being forclosed by the judge because the bank that says they own the loan can’t prove it. They made money selling the loan and using it an collateral for securities but did not file the correct paperwork to prove they own the loan. So too bad Mr. Bank.
    We had a total melt down in business ethics and that is the most serious problem. The MBAs come out of school with no ethics training. They go from job to job and deal to deal. Unless me as the attorney points up a problem the stuff just goes on and on.
    I think with President Obama we are in for a lot of re-making of business and a lot of regulation. The Republicans are going to fight this tooth and nail but their stay out of it philosopy caused it.

  2. “It’s going to be a slow process…”

    In fact, there is no exact definition of a depression though how long a recession lasts, and how deep it goes is one factor. Many of the things you mention are also part of a depression… Here’s a quote from wiki. I’ve put a few of the items from that definition in italics as they have already happened.

    In economics, a depression is a sustained, long downturn in one or more economies. It is more severe than a recession, which is seen as a normal downturn in the business cycle.

    Considered a rare but extreme form of recession, a depression is characterized by abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amounts of trade and commerce, as well as highly volatile relative currency value fluctuations, mostly devaluations. Price deflation or hyperinflation are also common elements of a depression.

    Generally, periods labeled depressions are marked by a substantial and sustained shortfall of the ability to purchase goods relative to the amount that could be produced using current resources and technology (potential output).

    Though there is no widely accepted definition for an economic depression, according to an article in The Economist, there are two rules of thumb found widely on the internet. One is a decline in real GDP exceeding 10%, and the other is a recession lasting 3 or more years.

  3. Today is different because we have an activist federal government, FDIC insurance so if a bank runs into trouble there is insurance up to $250,000 on accounts. The problem is lack of confidence by consumers in the economy. Unti people feel better it will be a long road. The only good about this is that we have a democratic president and congress with the chance to enact prohrams, i.e. green projects, health insurance that in the past could never get passed. All this will improve the economy.

  4. Hi Dave,

    I have to agree with Craig.

    Something I also believe firmly in is we have to stop listening to the doomsayers in the press and take a vacation from them.

    I was listening to a cable news channel while working some images and I heard, “The GDP fall was the worst in 26 years.” Immediately followed by the comment “does this reinforce the fact we are in a depression?” Then by “lets go to our experts to discuss if this is the worst fall ever.” Laughingly each following expert and a greater financial doomsday explanation.” But remember it wasn’t the worst ever, it was the worst fall in 26 years. In fact the GDP fell 6.4% in 1982. Were we in a depression then?

    A area newspaper ran the headline one day, “ONE IN FOUR AFRAID for their jobs!!!” Okay 25% were Afraid for their jobs, upon further reading 65% were not afraid at all! I guess that wouldn’t have made a good headline.

    Bad news sells, the doomsayers get audiences and therefore make money by being doomsayers. This includes the cable news networks which really are businesses, have a bottom line, and have to show a profit. Lets not be so naive when listening to them.

    Yes the times are bad, but we do not have to fall into the ego centric position that this is the worst ever and run around(in circles) panicking. What we all need to adopt is a philosophy of “realistic optimism!”

  5. Mister Alimony in the 5th at Aqueduct is going off at 10-1. I withdrew all my retirement savings and bet him to win.

  6. “doomsayers get audiences and therefore make money by being doomsayers.”

    Every guest or employee of any network, cable or not, makes money by prognosticating doom? Fascinating! How do they make all that money, or are they being somehow coerced into prognosticating doom by the networks themselves?

    I guess you don’t trust dentists either because they make money from cavities.

    “ONE IN FOUR AFRAID for their jobs!!!” Okay 25% were Afraid for their jobs, upon further reading 65% were not afraid at all!”

    You must have been a math major! 🙂

    If you don’t think that the biggest, fastest economic decline in decades in the USA as well as the rest of the world isn’t valid news, or that it isn’t relevant that a large minority of people are woried about their futures, then feel free to disregard the news for the next year. You’re in Ontario, Patrick, and the economy there is cratering just as it is elsewhere. The province has a $13 billion deficit which is expected to grow as much as 50% within 18 months. And it isn’t TV talkig heads saying the economy is in bad and worsening shape — the Canadian Manufacturers & Exporters (CME) is predicting dire economic news as well:

    http://www.msnbc.msn.com/id/29431491/

  7. Mister Alimony was leading in the stretch and suffered a massive heart attack and died. Oh well. Tomorrow after the storm the Sanitation Department will be hiring snow shovelers.

  8. Thank you Patrick.
    Today I realized that CNN is re-playing its stories on the economy. Listening to Suzie Orman is bad enough once, but several times a day. People are feeding on it. One of the other news shows said it will continue to go this way until tehre is some sign by the federal government of improvement.

  9. The same thing happened, in reverse during the heady days of the internet boom. Instead of tragic stories repeated over-and-over, the stories were about how people were making a killing in the market.

    In other words, I think the 24 hour cable news cycle is like sticking your head in a big echo chamber. As a general rule, they will opt for the big fear story, but when something amazingly good happens (the plane in the east river) they’ll play that over and over also.

    My own feeling is that this downturn is real and is already historic. But we all look at the glass as half-empty or half-full, and I am by nature pessimistic. I ignore it for the most part because there’s simply nothing I can do about it one way or the other. But nobody can say how bad it is or will be. Let’s talk about it again in a few years.

    To change the subject a bit — how come that Canon 5D II is still out-of-stock at the major camera stores? I’ve never seen that before either with a Canon release.

  10. Don’t know about Canon but Nikon has discontinued the D 80 and D 200 and stores are going crazy trying to get them and sell at loe prices.

  11. Ah, the WPA. I had the pleasure of curating a show some years ago and we used images from the Works Project Administration. The Library of Congress allowed us to flip freely through the files and files of the work of Ben Shahn, Dorothea Lange, Walker Evans, et al, and it was an amazing site to behold. If you’re going to D.C., plan a trip to the LOC, it’s a national treasure.

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