Bill Watt has never played so much golf before. This Wall Street banker, laid off last fall after 25 years in the profession, savors his forced free time with very little guilt. "It's true that it's a crisis, but for the moment, he's savoring it as much as possible," his wife, Monica, notes with irony. Apart from the rounds of golf in which he goes on to compete, for the first time, Bill is also discovering the daily burden his three children's education represents. A breathing space for family and sport that is welcome after years during which the priorities were work and money.

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Alain Dubuc | An Era Comes to an End    â€¢

    The most severe American recession in 70 years is victimizing millions, especially the hundreds of thousands of new unemployed every month and the millions of families expelled from their homes. In its violence, the crisis sounds a brutal wake-up call for a country that was living beyond its means. However, this return to earth is also the source of profound opportunities and changes in society. While Bush ordered Americans to go shopping to support the economy after September 11, Barack Obama deems that "we have lived through a period where, too often, short term gains were given priority over long-term prosperity, where people saw no further than the next quarter." Just 100 days young, a new Obama-epoch America is taking shape, constrained by the economic storm, but also marked by political will. Generalized speculation finished, less frenzied consumption, more ecological transportation. Less work, but more free time. Less money and profits, but a greater concern for social issues. The transition is underway towards what observers call the "new normal": a new normality that will be born from the ashes of the crisis.

    "The Era of Bling Is Over."

    Some are taking advantage of this pivotal moment to change their lives. Paul (his name changed at his request), laid off from the Hong Kong and Shanghai Banking Company along with 36 percent of its work force in November, had the good fortunate to anticipate it. After his bank job, like many Americans, he worked as a waiter evenings and weekends to pay off the $80,000.00 of debt he had accumulated on his six credit cards. Today, he makes do with the $2,256.00 a month the state of New Jersey pays in unemployment benefits for up to a year and does housekeeping or small errands for the elderly. "I live very modestly. Before, I went to restaurants at noon and in the evening. Now, I clip discount coupons; I've eliminated leisure activities from my budget; I choose free recreation activities, such as some museums or walks in Central Park. I use my car a lot less. I realize I don't need so many things." At 33, Paul is seriously considering returning to live in the Tennessee of his youth, to resume his studies and become an accountant. "When I lost my job, I asked myself a lot of questions about my career: Was what I had been doing the last eleven years really what I wanted to do the rest of my life?"

    The mainstay of the American economy (70 percent of GNP), consumption is flagging. Retail sales fell 9.4 percent in March from the previous year. And 61 percent of Americans plan to spend less than before, even when prosperity returns. "We shall never return to what we experienced before," confirms Paco Underhill, president of the New York consulting firm, Envirosell, which specializes in retail trade. Apart from households struck directly by the crisis, which don't consume any more, and the general tendency to monitor expenses, "most of us have understood that the Bling Era is over and that compulsive consumption amounts to bad manners," Paco Underhill recently asserted on NPR. "We continue to eat, drink, give gifts, maintain our homes and our cars, but we're doing it with more and more judgment," the expert continues. "Consumption is in the process of going the same route as ecology: everyone feels directly involved personally."

    In consequence, the remodeling of the commercial landscape is underway. Last year alone, 148,000 stores on American territory closed their doors. Several big established chains went bankrupt, including Linens 'n Things (home products) and Circuit City (electronics). General Growth, proprietor of 200 malls in the country, has also just declared bankruptcy. Other forms of consumption are being substituted for traditional retail: bargains, which are taking off on Internet ad sites such as Craigslist, barter, in complete revival, even self-sufficiency. Here and there, one sees chicken coops and vegetable gardens appearing, even in certain neighborhoods of New York.

    The permanent one-upmanship in spending is over. Buying a bigger house every two years is no longer possible; neither is it deemed necessary. No more the two ovens in the kitchen - one for the roast, one for the cake - nor the separate shower and bathtub in the bathroom, nor the three-car garage ... "After the brainwashing to make them believe that the ultimate goal in life was to own a house in the suburbs at the cost of colossal debt they would spend the rest of their lives paying off, people are reviewing their priorities, now that the value of those houses has collapsed. We're seeing new ways of living emerge, less monetized, as in poor countries, less dependent on banking, finance, credit," predicts Dmitry Orlov, member of a current of thought that forecasts the decline of the American empire. This Russian-born engineer, who lives on a boat in Boston, compares the present American crisis to the collapse of the Soviet economy in the 1990s, in his book, "Reinventing Collapse."

    Sustainable development, an incongruous notion during the Bush years, is in the process of imposing itself on Americans. A headhunter with Korn Ferry International, near San Francisco, Wes Richards had such a realization thanks to his 14- and 16-year-old children. On their return from a trip to Europe, the teenagers convinced their parents to replace their two Mercedes with a hybrid, a Smart car and scooter. "With the Prius, I fill up every two weeks, a third as often as before," Wes delights. "It's not just a question of savings. I feel more intelligent than before for having made these changes. In the same way, we're thinking about it before we jump on an airplane to meet a client. We prefer to conduct discussions through Skype videoconferencing. We've installed low-consumption light bulbs at the office." A symbol of this change in era: General Motors' announcement that it will abandon the Hummer SUV, the car for the years of display and of the Iraq war. It's also the moment when Obama has announced a study to evaluate ten high-speed train lines.

    33.2 Hours of Work Per Week

    Another effect of the crisis: Americans, in spite of themselves, are discovering free time. Obviously, that's the case for the unemployed. But, in a new phenomenon, in order to avoid lay-offs, some companies and local governments have resorted to partial unemployment by putting their troops on forced leave one day a week or per month. Suddenly, the average weekly work time in the United States has fallen to 33.2 hours - the lowest it's been since 1964. For Heather Boushey, an economist at the Center for American Progress, that's an opportunity to grab. "It changes family relationships, with a re-balancing of household tasks between the members of a household who are learning to depend on one another more as they are confronted with a reduction in income," this former Congressional adviser in Washington observes. "There's an opportunity here to use work hours as an adjustment tool. But I don't think people here are ready for a debate about a permanent reduction in work hours."

    Will Americans finally discover that money does not buy happiness? In any event, they've learned that lesson at their own expense insofar as it concerns the money obtained at usurious rates (up to 30 percent) for the benefit of Wall Street institutions. The era when people reimbursed interest only on their real estate loans for years because they counted on making a bundle at resale is over for good and for sure. The era of Madoff dream-level returns, also. So now, people prefer to better live out their day-to-day lives than to bet on a hypothetical future paradise.

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    Translation: Truthout French language editor Leslie Thatcher.

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An Era Comes to an End

Wednesday 29 April 2009

by: Alain Dubuc  |  Visit article original @ La Presse

    Well then, one of these profound changes is in the process of occurring right before our eyes, with the painful restructuring of two of the three American automotive giants, General Motors and Chrysler. There are bankruptcies, transformations, mergers, acquisitions, even between and among giants, all the time. Nonetheless, what's happening at GM and Chrysler may legitimately be described as historic.

    Because these two companies' hangovers will contribute to effecting the United States' position in the world. Because the restructurings will be significant enough to change consumer behavior and environmental policy. Also, because the rescue plans change the rules of the game of capitalism.

    First of all, one should not neglect the immense symbolic charge of these events. For almost a century, the automobile industry has incarnated American economic power and the most evocative expression of the American way of life.

    Consequently, the failure of the automobile greats has an impact that goes well beyond the industry itself. It's also a collective failure that illustrates a certain weakening of American power in the world - all the more so as the other automobile-producing countries, such as Germany and Japan, have not experienced the same problems. The fact that Chrysler's survival rests on the intervention of an Italian company, Fiat, only shakes up the idea of American supremacy the more.

    Moreover, if GM and Chrysler have reached this pass, it is largely due to bad management and bad choices, notably to the inability to produce the vehicles consumers want and need. The restructurings will, by definition, force the companies to rethink their strategies.

    However, since the American government weighs heavily in the companies' decision-making process and the Obama administration has made green technologies one of the central elements of its economic recovery policies, that will create unique conditions for attacking one of the key elements in greenhouse gas reduction policy - the production of less energy-intensive vehicles - with vigor.

    Finally, the very rescue process itself foretells a shift in the boundary between the government and the market economy. The American and Canadian governments have extended billions to prevent the great auto companies from collapse. But their intervention has broadly exceeded financial support.

    GM's restructuring, far deeper than its management wanted, with the abandonment of the Pontiac brand, the disappearance of half its dealers, tens of thousands of layoffs, has been straight-out imposed and masterminded by the Obama Administration. It's the White House also that's been pushing Chrysler into Fiat's arms. And if the plan to transform these governmental loans into shares is brought to fruition, the American government will control the company.

    This sort of takeover, rather common in Québec, constitutes a quasi-revolution in the United States. Of course, we're talking about exceptional measures justified by the crisis situation. But such shifts in power are rarely one-off. When the government is engaged, the process of disengagement is likely to be slow. We are probably witnessing a swing of the pendulum in which the government will be more present, more interventionist, as we also see in the financial sector. No doubt this marks the end of the laisser-faire period that contributed to this crisis.

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    Translation: Truthout French language editor Leslie Thatcher.