No rest for anyone, even when you are told to

There is a nice article in the NYT about how people are coping (or not) with work furloughs. For those of you not familiar with the idea, think of them as mini-layoffs. You get a couple of days of unpaid leave and hopefully the aggregate savings your employer enjoys allows them to keep you on the payroll. I have a friend who works for an agency that is contemplating this measure and I have met others whose companies have gone as far as shutting down for a month as a way of coping with a fall off in business.

The article was most interesting in examing the dynamic with public employess who have not been furloughed in the true sense of the word. Rather they have just had their pay cut. Why? Well it turns out that they have to schedule their furlough days (much like a vacation or personal day) and they are so busy and short staffed that they can't get approval to take the days off. Since the days aren't covered in the normal employment scenario there are no rules to govern their use or lack there of.

In the end it says more about our desire to work (and the role that plays in our self-worth and self-image) than anything else. We all aspire to a life of leisure, but most of us would have a hard time with it even if we could.

Time to hunker down?

A new study out reports that Americans are moving from home to home at a rate not seen in years. In fact the last time this few of us moved around this little it was 1962 and there were far fewer of us then.

It was only a few months ago that we were still treated to a nightly onslaught of programs on TLC about people moving into new houses with a celebratory display of ikea wares. But that was then, this is now. Now, there is no moving up. Now, we are hunkering down.

Of course hunkering down is both a symptom and a cause of greater economic stress. A symptom as people who are worried about their financial future (even if they have jobs) start to hedge their bets by staying put in homes that they might have deemed too small, or in neighborhoods felt to no longer be desirable. That of course is one more factor in the ongoing meltdown in the housing market. Add it to the constrained credit markets and you start to see why even with a growing stock of ever cheaper homes on the market there are fewer shoppers.

But this immobility is also a cause of further stress. As people hunker down, both by not moving or shopping for smaller goods and services, they depress multiple sectors of the economy. To lure shoppers in, merchants and professionals lower their prices. Buyers then start to sense a pattern of sinking prices and realize that by holding off on a purchase a bit longer they will have greater buying power and their money will be worth more. Welcome to the wide world of deflation.

Deflation is, oddly enough, a situation where money becomes worth more. Spain is now in the early stages of what might be a deflationary spiral as prices come down in an attempt to spur business. But with little disposable income, no one is buying. Merchants, suppliers, professionals and factories shed staff, fewer can buy anything at all.

Of course the upside to deflation is that for anyone who has cash in hand it will be a buyers paradise- so hang on to your piggy bank. The US is unlikely to face such a fate however since the Fed has also said that it will issue up to one trillion dollars of debt to cover losses in various financial firms and housing loans. That is in effect printing another trillion dollars, something that in normal times would trigger inflation- where money loses its purchase power. Will the Fed, and the Obama administration be able to hold this balancing act until the bottom strikes and we start to move back up? Time will tell, but there is always the memory of the stagflation 70's to keep us up at night.

Where I get quoted in a real newspaper

I was pulled up to the Costco gas pumps the other day, just filling up the tank on the family car and this woman strides up to me and says, "I see you're a biker, can I ask you some questions". Now, normally there is not a lot of chatting at Costco gas. You pull up, do your thing and move on- more like the men's room than a coffee house. But I had been stopped just the week before by a fellow who wanted to ask me about the bike rack I had (its a hitch rack) so I was less startled than I would be normally.

It turns out she had no interest in my bike rack, rather she is a reporter for the Contra Costa Time and she wanted to ask me for my thoughts on the current state of gas prices. I always feel torn in those moments, because I know that people are not looking for a full blown lecture on the impact of the recession on commodity prices, or why we should as a society be using this moment to retool in ways that make us less dependent on fossil fuels while the costs associated with that change are lower. So, I struggle to create some concise and meaningful comments that would fit into a small piece in the paper.

I must have succeeded because a quick Google News search a few day later kicked up this:

Bay Area gas prices edge down

The quote:

"If we're smart, we'll figure out ways to use less of it (gas) while the price is cheap so we're using less of it when the economy gets running again," said Gordon Gladstone of Berkeley, who said he has been getting around by bicycle more often. "The price of gas went down because people are driving less often, but at some point that will turn around and the piper will have to be paid."

Now, if I could get booked on a cable news show...