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DEBTOR NATION

Chapter 1 ♦ AIRMAIL FROM AFTERLIFE

1976

One rainy summer day, I packed my backpack and went to America. I was seventeen. I knew what I was doing: I was escaping from the debacle at home. And I was looking for something. For what exactly, I didn’t know, but I’d go look for it in America. There, the heat burned in my nostrils. Lawns were brown. Cars were big and air-conditioned. Girls went gaga over my accent. Guys thought I was cool. And I fell in love with it all.
          Three years later, I was paying my way through college in Texas when the notion of home, distant and convoluted as it had become, blew up with gratuitous violence. A Boeing had crashed into a mountain in Turkey, killing all 155 people aboard. I heard about it on the radio. But I didn’t connect the dots.
          A few days later, I found a message from the operator in my campus PO Box. Telegram, call Western Union, it said. I called from one of the pay phones. My heart was pounding in my temples, and I had trouble hearing the lady on the other end.
          “I’d read it to you,” she said. “But it’s in German. I think you better come by and get it.”
          “I’m fixing to go to work. Can’t you try to read it to me?”
          “Oh dear.”
          “Is it long?”
          “Two lines.”
          “Can you spell it?”
          “Well, I guess I could. Are you ready?”
          I pulled out a notepad and pen. “Ready,” I said, though I knew that I wasn’t ready, that I’d never be ready for whatever she was about to spell.
          “E-L-T-E-R-N new word,” she said, “A-M new word M-O-N-T-A-G new word M-I-T new word F-L-U-G-Z-E-U-G new word I-N new word D-E-R new word T-U-R-K-E-I—”
          “Stop! Please.” I couldn’t write anymore. Parents on Monday with plane in Turkey.... German sentences, even in abbreviated telegram style, had the main verb at the end, but I didn’t want to hear the main verb, didn’t want to hear it spelled out letter by torturous letter. “Thank you. That’s enough.”
          I’d escaped the debacle at home and had gone as far away as possible. But this wasn’t what I’d had in mind. I stood there in a daze, brain deadlocked, numb, clutching the receiver, drowning in abysmal emotions.
          Then I went to work. It was just a part-time job, but now I needed the money more than ever. Afterward, I drove to the Western Union office and picked up the yellow slip of paper with twelve lines of all-caps alphanumeric gibberish and two lines of readable text. It was from my sister, sent from the town where she was staying with friends. But it didn’t include their phone number. And my brother was on vacation somewhere. So there was no way to reach him either.

Next....

TESTOSTERONE PIT, the novel

Wolf Richter

Chapter 1 ♦ Circle Jerk

It was Saturday, the biggest day of the week, and everyone was working bell to bell, over forty salesmen, though Ferronickel didn’t know exactly how many he had because some hadn’t shown up and might have started selling cars some other place, and because he’d hired a bunch of new guys an hour ago.

“It’s a beautiful day,” he sang in a basso profundo voice as he marched across the showroom in his asymmetric gait. He was the general sales manager at the Ford Superstore. His Tabasco Sauce tie was loosened, his collar unbuttoned. His gut that hung over his belt strained his shirt. He had puffy eyes and was full of mean energy, ready to explode, ready to force things to happen. He blew out the door, came to a halt on the porch that surrounded the showroom on three sides, and lit a cigarette.

Al Millikin, one of his four sales managers and perhaps the best closer in town, was watching Mad Boxer work a customer on the truck lot. Potential deal.

“Why can’t he bring that guy inside and write him up?” Ferronickel said.

“He ought to tell him we got free pussy on the showroom,” Millikin said.

“Don’t give me any ideas for our next live remote.”

“Come to think of it, that would be a hell of a lot more effective than the classical rock-and-roll shit we’ve been doing.”

“For our male customers.”

“We could alternate. Free pussy one day, free Godiva chocolates the next. We’d have both ends of the spectrum covered.”

“You’re a fucking Einstein, Millikin.”

Reginald Pierce, another sales manager, a big guy with a shortish Afro, was jumpy and his eyes darted about. He fretted about Whacker Packer, Hackman Jones, JoAnn Delouche, and several other salesmen who’d formed a dope ring by the plate-glass window. If left alone, they’d make up rumors, complain about dealership coffee, and infect each other with morale problems. He singled out a young guy.

“Freddie T, are you going to participate in a circle jerk?” he growled. They called him Freddie T because of his unpronounceable Greek last name. “Or are you going to sell something?”

It startled them; they’d forgotten all about selling. And they drifted apart.

Lou Massago gesticulated on the phone in one of the closing booths. He wore a white button-down shirt, a red and blue tie, slacks, and ostrich-skin boots. A scar curved upward from the right corner of his mouth, giving him a lopsided grin even when he was serious. His eyes were set close together and peered out from under his bushy eyebrows with ferocious intensity. But he had a soft voice when he wanted to, and now he wanted to because he was talking to a customer about a 15-passenger van that had come out of the rental fleet. There were ten of them. They were scratched and dented and had too many miles on them, and they were overpriced, and no one could sell them, but he was king of sales, and if he could sell them, it would prove he could sell anything.

He hated working the phone. He needed his customers in front of him, needed to stare into the whites of their eyes. But no one had sold any of those vans yet, and to prove he was king of sales and could sell anything, he’d decided to sell them all. Besides, the Saturday rush hadn’t begun yet, and calling old customers was more productive than standing around waiting for something to happen.

Next....

Thursday

Oct272011

The Inexplicable American Consumer Strikes Again

Thursday, October 27, 2011 at 3:59PM

The recent consumer confidence indices, after a pickup in the spring, have collapsed to levels not seen in years and in some cases in decades. Yet the inexplicable American consumer, the toughest and most indefatigable creature out there that no one has yet been able to beat down, struck again. Consumer spending increased at an annual rate of 2.4% during the third quarter, though the mood, as measured by the confidence indices, has become outright morose.

The Bloomberg Consumer Comfort Index dropped to -51.1. By comparison, it averaged -46.2 so far in 2011, -45.7 in 2010, and -47.9 in 2009. The shocker was this number: 95% of the people surveyed had a negative opinion about the economy, the worst reading since April 2009, and just 1% away from the worst reading since the index began in 1985.

The Conference Board's Consumer Confidence Index plummeted to 39.8, the lowest level since March 2009, at the trough of the great recession. The Present Situation Index fell to 26.3 from 33.3, its sixth consecutive monthly decline.

"Consumer confidence is now back to levels last seen during the 2008-2009 recession ... as pessimism about the current economic environment continues to grow," said Lynn Franco, Director of The Conference Board Consumer Research Center, on October 25 when the Confidence Board released its numbers.

Mid October, it was the Thomson Reuters/University of Michigan's preliminary index that headed south. Its sub-index for consumer expectations six months from now, which gauges future consumer spending, dropped to 47, the lowest since May 1980.

The reasons are obvious. The Fed is winning its 12-year war on real wages. Its mechanism: create inflation that exceeds nominal wage increases. The numbers are ugly. According to today's GDP report, real disposable personal income—income adjusted for inflation and taxes—decreased by 1.7% in the third quarter (BEA). Since their peak in 1999, real wages have dropped 9%. Median household income—a function of wages and unemployment—has fallen 9.8% between December 2007 and June 2011 (Sentier Research). For many people, the situation is even worse due to the skyrocketing costs of healthcare and higher education, which are eating up an ever greater part of the declining family budget (for more: A Dysfunctional System That Bankrupts A Generation). And Unemployment remains a fiasco by any measure: U-6, the broadest measure the Bureau of Labor Statistics offers, and the one that most closely resembles reality, hovers at 16.5%.

And yet the inexplicable American consumer went ... to the mall. And to the doctor—of the $10.8 trillion in consumer spending (seasonally adjusted annual rate), $1.76 trillion went to healthcare, about half of which was paid for by government. And healthcare has been on a tear, up 6% over the same period last year.

Back to the mall. The worse things get, it seems, the more consumers pull out their credit cards—confirmed by the savings rate which dropped to 4.1% from 5.1% in the second quarter. The effect of shopping as a drug against the funk of daily life has been well established, though its impact on the mood of the shopper has proven to be ephemeral. Now the drug has worn off, and as the confidence indices show, consumers feel worse than before, worse than in years. That can only mean that they will return to the mall to shop till they drop.

Or they will cave. Though the miraculous powers of the inexplicable American consumer should never be underestimated, some uncomfortable indicators have been accumulating. Among them, my favorite:

“It is hard to imagine a very robust holiday season compared to last year,” Blake Jorgensen, Chief Financial Officer of Levi Strauss warned earlier in October. He was griping that his price increases of $5 to $15 per pair of jeans didn't sit well with consumers. (Duh, did you think the American consumer is stupid? Disclosure: the only jeans I've ever bought were Levi's, but I'm going to wear mine down to rags before I pay fifty bucks for a new pair. Hint, Mr. Jorgensen: I'd be willing to buy two for the price of one right now, or none for a couple of years. Do the math and think about it.)

On the other end of the big American mall, during bailout mania, the Fed handed out trillions of dollars in secret. But now... The GAO Audit of the Fed Doesn't Quite Call It 'Corruption'

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Reader Comments (4)

Inexplicable? When billionaires kleptocrats have taken all wealth, houses, jobs, pensions, hopes, out of USA, for enriching the 1% billionaires speculators to multi-billionaires, then no money remains for the 99% consumers!
Hope a new president, nether Democrat nor Republican, will steal the billions to all multi-billionaires not creating millions new jobs, and bring the laws back as they where before the plutocrats kleptocrats took the commands!

October 28, 2011 |

Jean-Francois Morf

Food prices are up 6.8%, energy up 28.2%. Savings accounts yield 0%, the stock market is barely above the levels of 2000. Personal incomes are flat. The only reason the consumer is spending is because for the consumer to save means they are losing value. What does not get spent today is eaten up by Helicopter Ben's monetary policy. Tis better to spend now than not have anything to spend later.

October 28, 2011 |

Jerry Berggren

An interesting post, and Jerry has a point there - in my own case for instance I cannot afford to gamble with what little financial resources I have on hand, and I'm of an age where I can't let shit sit for twenty years in the hope that it will be worth more when I really need it.
There really is no place to put a little money you can't afford to lose where it will keep pace with inflation, so I've been investing spare change in widgets that reduce my bills - a solar array that pumps my water and powers a few other things, tools and equipment with which I can now fix damn near anything for myself and others - that kind of thing. Happily I live in a remote setting that permits those kinds of options, and my background is such that I have the skills to pursue them.
Folks living in suburbia, with few "practical" skills, are in a different and much trickier situation of course.

I'm also on the leading edge of the baby-boom demographic, so I'm not surprised to see health care "consumerism" bumping up - that will continue I think, and begin to accelerate quite markedly in the next decade or so.
In general though, I'm as bemused by the tenacity and sheer durability of the American consumer as anyone - it's really something, especially given the polling on the various manifestations of "confidence" in the economic directions, which are in the basement and descending further. What on earth are they running out to buy so resolutely?
Maybe folks are stocking up on beans and rice? Y'know, like good Mormons are supposed to do? ;)
That's an idea, come to think of it - none of that stuff is going to fall in price anytime in the rest of my lifetime, that's for sure.

Yeah, Helicopter Ben, and the continued sluicing of money to the culprits. This is where, if I continue the comment further, I begin to use words that Wolf may prefer not appear on his blog, so best to quit right here.
:)

October 28, 2011 |

gunnison

Thanks for your comments.

Gunnison, you hit the nail on the head. And you're right, the descriptors we'd like to use for Helicopter Ben and his cronies (he actually is just a figurehead) are better reserved for private conversation. I still don't know what world the people at the Fed live in. But it's not the world I live in.

Jerry - I like your flair. And I smell irony. On the other hand, spending everything you've ever earned is exactly what the Fed wants you to do. Which is reason enough NOT to do it.

October 28, 2011 |

Wolf

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