Already we find ourselves living in interesting times of the type from the famous Chinese curse, with the strong possibility that things could get even more interesting. The analogies we use to name things are .. somewhat instructive.
We are all familiar with things that roll. Some of the most basic childrens’ toys feature balls or wheels or cylinders or other smoothed round things capable of rolling. Some of you, from the era back when we got snows worthy of the name, may even be familiar with the “snowballing” type of roll that is often used to describe certain kinds of disasters: you need good heavy pack snow from around the middle of the range of its heaviness; you need a fairly steep hill; and you need a “seed” snowball maybe 9”~14” in diameter to start with at the top. The common theory for these is that they roll downhill, getting larger and larger, until they dissipate the energy on flat level ground or a rising slope, or they smack into some obstacle. Another common one is the runaway Mack truck, or the runaway freight train rolling downhill toward a trestle that’s been washed out.
It was known a few years ago by some, and with some certainty, that our expanding credit bubble was inflating far too rapidly to have any kind of stability, and that a crash phase would follow. For these things the descriptive memes are like the madly-breeding bacteria in a petri dish who, after being given a while new resource base (sugar) breed madly until their growth has exhausted the resource, then their populations crash most spectacularly. Where we conjured credit out of thin air, and where the bacteria were given sugar by the researchers, Spain once plundered whole shiploads of gold from the New World, and it too suffered the same fate. You would think all that gold would make Spain rich, but no, like a person given $50million in lottery winnings, the money actually brought more of a curse than a blessing specifically because it enabled spending patterns dependent on unsustainable earnings. Not only do un-worked-for riches carry a substantial karmic curse, but they enable the same sort of wild & unsustainable growth seen here in recent years, when every fool in the phone book could pick up a McMansion, a pair of matching his & her Hummers, 60” flatscreens for every room, etc, all on zero-down EZ-credit terms. And then when those unsustainable earnings run out (or suffer a little bump in the road) those unsustainable expenditures crash most spectacularly.
We are all familiar with the phrase “rolling blackouts”, the kind that happen on hot summer afternoons when people are home early and when the collective demands of air conditioning usage are stressing the power grid to the max. In one area, something happens to a local grid running flat-out at 100% capacity; when it starts to go under, it borrows power from another local grid that’s also flat-out, and thus starts a chain reaction that takes down much of the regional grid.
What’s interesting now is that we’re evolving types of layoffs faster than we’re evolving the common memes in which to describe them. It’s easy to adapt the “rolling blackout” terminology to “rolling layoffs”, but that doesn’t quite say it right. It would be more accurate to call this “cascading layoffs”, where the effects reach backwards from retail (where customers stopped buying) to distributors to wholesalers to shippers to manufacturers etc.
Four or five years back, it was not widely anticipated just how quickly this stuff would progress; you need a certain amount of steep downslope for any of these rolling things to build up the terrible energies for which they are used as disaster memes. Even Kunstler’s description of the coming credit/housing crash in his 2004 book TLE doesn’t quite touch on the speed and severity of the change phase we’re in.
Beyond just the “cascading layoffs”, we are now seeing “pre-emptive layoffs”, in which companies that are doing fine (for the moment) shed employees well before they feel the economic necessity to do so. (nods to Rummy & Cheney for popularizing pre-emptive illegal invasions)
We are also seeing layoffs in many more sectors of the economy than anyone would have suspected; truck & rail transit volume is down by double-digit percentages year-over-year. (go read up on the Baltic Dry Shipping index if you want a heart attack, or if doom gets you off) Some of the things you would think are safest (teaching, medical work, hospitals, government services like the USPS) are seeing all kinds of thoroughly unexpected layoffs & closures too. The question “What jobs are safest?” has become something of a rhetorical question as we learn for ourselves that there’s no such thing as a safe job.
The one clear thing you can tell from the proliferation of all these new & unexpected types of layoffs, and from the way the more negative elements are evolving into worse shapes (see Europe 1910~1945), is that this sucker is totally out of control at this point.
(sorry this was not a nice lite cheery post featuring fluffy clouds and ponies for everyone! maybe some other time?)
Resources for watching the ongoing mess:
(JR: I’m crossposting this time)