What Recovery? Find Yourself a Recoveryless Job

For more than a month, the mainstream media has been yammering about an economic recovery. Chasing phantom “good number” statistics amidst an onslaught of otherwise bad economic and global credit market news, the Wall Street cheering section is desperately seeking some news that the current recession is coming to an end. They talk about “the recovery in progress”–almost a fait accompli. They have been so good at this that they have fooled some investors into putting their sidelined money back into the stock market. What a masterpiece of disingenuous grandstanding. But the sad truth is that there is no genuine recovery in progress. Perhaps there will be a minor economic boost, generated by the huge bailout spending, but the bottom line is that we are in the midst of a major recession. And unlike the recessions in the past 50 years, this one is not based on just market cycles, but rather caused by a systemic failure of the global credit market. So any attempts to re-inflate the bubble with new credit (based on artificially low interest rates and bailout “programs”) are bound to be unsuccessful. This recession cum depression won’t end until malinvestment is driven out of the system, and trust in a fully transparent system of credit that backs genuine, truly marked-to-market tangible assets is restored.

America’s debt bubble that emerged from over-inflated real estate is at the root of the current mess, just as it was in Japan in the 1980s. (In their case, it was commercial real estate, in parts of Tokyo.) The Japanese government has tried similar measures (mostly in the form of massive public works programs and artificially low interest rates) for 25 years, and they still haven’t pulled out of their economic doldrums! But consider that our real estate bubble was much, much bigger, and that unlike Japan, we are a net-debtor nation. (Japan has traditionally been a fiscally-conservative nation of savers.) So how can we expect to do any better at “recovery” than they did?

The Obama administration has two potential courses of action that it can implement–through Treasury Department action, in concert with the Federal Reserve banking cartel’s open market committee–to attempt to emerge from the current mess. Neither of these are appetizing:

1. Continue keep interest rates artificially low. This, however, will create a huge dollar carry trade market that will be the source of laughing derision, internationally. This course of action will eventually destroy the US Dollar as a currency unit.
2. Allow interest rates to rise, but that will likely choke off any economic growth. And regardless of the path chosen, the current administration (like its predecessor) seems committed to profligate spending on umpteen bailouts. These bailouts are funded by “out of thin air” dollars, creating massive budget deficits. In the long run, this dollar creation will prove to be highly inflationary. But there will probably be a time lag, since the effects of the continuing asset deflation is masking the ongoing currency inflation. I anticipate substantial inflation to become evident, circa 2011 and in subsequent years. It could be very nasty, so shelter yourself from it, as I’ve previously suggested in SurvivalBlog.

My suspicion is that the BHO administration will opt for the “weak dollar” route, since that will be the least painful of the two options. The sad news, however, is that ultimately neither option will solve the underlying problem, and hence the US economy is doomed to a deep 10+ year depression. During this period we will witness (and endure) massive unemployment, high crime, dislocation, rioting, repatriation restrictions, and substantially higher taxes. With these in mind, take the steps necessary to protect your family’s safety, and your assets.

The talking heads on the finance and investing shows would have you believe that an economic recovery, or at least a “jobless recovery”, is just around the corner. Do not be deceived. If any of you reading this are still under the deceptive spell of the CNBC rah-rahs and believe that recovery could be underway, then just take a look at this chart of scheduled mortgage interest rate resets, which I’ve previously mentioned in SurvivalBlog. As you can see, the oft-cited peak in subprime mortgage interest rate resets is now behind us, but the peaks in Alt-A, and Option Adjustable (aka “Option ARM”) rate resets are still ahead of us. Thus, in actuality, the worst is not yet over. We are just in a lull between two tsunami waves.

With the exception of a few newcomers, SurvivalBlog readers are already well-informed on the foregoing facts, so I won’t belabor these points. Instead, I’ll move on to some practical issues that will have some benefit to you. Lets talk about jobs, and to be more specific, your job.

A Recoveryless Job

Even if you are currently employed somewhere in a “safe and secure” job, keep in mind that there are no absolutes. You could have a small town civil service jo, for example at a water treatment plant. But what if the city or county that you work for goes bankrupt? You could be laid off in a heartbeat. The phrase “under new management” often means firing you, and hiring the nephew or old pal of the new boss. The fictional character Sarah Conner said it best: “No one is ever safe.” So hedge your bets.

I recommend that you develop a second stream of income through self-employment. Typically this can be found in a moonlighting service job, or a home-based mail order business.

I’ve often encouraged even my rural consulting clients to develop a second income stream. Why is this important? “Living off the land”-style self sufficiently is an admirable and commendable goal. But even if you are living truly “debt free”, you will still have property taxes to pay. That means that you will need a recession/depression proof revenue stream in the event that you lose your primary job.

Successful home-based businesses usually center around unfilled needs. Find something that your neighbors buy or rent, or service that they “hire” on a regular basis that currently requires a 40+ mile drive “to town”. Those are your potential niches.

A successful recession-proof home-based business is likely to be one where the demand for your goods and services is consistent, even in a weak economy. These include septic tank pumping, home security/locksmithing, care for the very young and the very old, and escapist diversions such as DVD movie rentals. (It is noteworthy that the movie industry was was one of the few sectors of the economy that prospered in the 1930s.)

One market segment that prospered in the Great Depression of the 1930s was repair businesses. Obviously, in hard economic times, people try to make do with what they have. So repair businesses are a natural. If it is some small appliance that you could repair that could be mailed from and back to the customer, so much the better. (That way you could have a nationwide business, rather than just a local one.) This might include: DVD player repair, laptop computer repair, and so forth.

Its a Dirty Job, But Someone Has to Do It
If you want to work for someone else and have that be recession-proof, then consider the dirty jobs. These are some of the least likely to suffer a layoff. In Japan, these are called the “”Three-K” jobs: kitsui (“hard”), kitanai (“dirty”) and kiken (“dangerous”). If you are willing to take on any of the Three K jobs, do cheerful and hard work, and have exemplary attendance, then you will likely have a job that will carry you all the way through a deep recession or even a depression. If times get truly Schumeresque and you get laid off, then please be willing to “think outside the box”, and consider taking a Three K job. Some of these are low level city and county payroll jobs. And by low level, I mean things like sanitation worker, animal control officer, sewer technician, solid waste transfer station worker, highway maintenance worker, and so forth.

Think about it: A steady job beats no job. Don’t let your family starve, or end up homeless. There is no shame in accepting good old-fashioned hard work. If you take a job that brings in only one half of your existing income, consider that you’ll actually come out ahead of any of your contemporaries that are laid off more than half of each year. Further, you will have uninterrupted benefits, such as health insurance, that they will also lack. A menial and low-paying job is better than no job.

Some suggested employment possibilities:

1.) Mining and manufacturing processes that because of shipping expenses cannot be practicably be moved offshore. Coal mining is a good example.

2.) Service industry jobs that are essential and non-discretionary. Let me reduce this to a few key examples, so that you’ll know what to avoid:

3.) Retail sales (face to face, or mail order) of crucial items.

4.) Retail sales (face to face, or mail order) of comfort items. In the midst of an economic depression, people will crave escape. Movie DVDs are a good example.

5.) Military service. Most people don’t think of the armed forces as service industries, but that is essentially what they are, on a national scale. In the military you are sort of a security guard for the real Mall of America. Or think of it as a lead delivery service. My father was an Air Force instructor pilot, back in the days of T-33s. He summed up his service when he told me: “I was a glorified bus driver, burning up lots of Uncle Sam’s jet fuel. I did a great job of defending miles and miles of cactus.” Thirty years later, I served as an Army Intelligence officer. It was great fun at the time, but in essence, I was just a detective–or more precisely the manager of detectives–that worked for one of the world’s biggest detective agencies.

6.) Repair work.

Be Flexible and Proactive

The coming years will be difficult ones, globally. If you are risk of a layoff, then hedge your bets by developing a second stream of income, now. And if you are laid off, do not hesitate. Do whatever it takes to find steady work, even if means moving, or taking a lower-paying job. Don’t just wallow in self-pity and draw unemployment insurance. be proactive and do something!