Are Economic Predictions Taking The Wrong Direction?

I know I am repeating myself here, but how can any self-respecting analyst look at the damage that has been done to the financial system and the economy during the past two years and not think it is going to be a very long time before we see anything resembling normalcy?

How can they ignore the fact that economic history is clear about one thing: the aftermath of bursting credit bubbles and financial crises like the ones we have experienced have been painful and protracted affairs?

More important, perhaps, how can they read reports like the following from Washington Post staff writer Paul Schwartzman, entitled For Many Americans, Nowhere to Go but Down,” and not realize that talk we are on the road to recovery is a ridiculous fantasy?

MIDDLEBURY, Ind. — He sinks into the couch, foot jiggling, his gaze traveling from his wife to the television to the darkness outside, broken now and then by the distant glow of passing headlights.

His mind settles into another round of “What if?”

As in: What if we don’t have cash to buy milk, eggs, bread or diapers? What if our unemployment benefits run out? What if we never find jobs?

And then Scott Nichols thinks of the words he doesn’t want to say, what for him, a 39-year-old husband and father of two, is the option he has hoped to avoid since being laid off nine months earlier.

They already took free food from a church pantry, cardboard boxes filled with Corn Flakes and bologna and saltines, his wife, Kelly, walking in, head down, while he stayed in the car, ashen. They pawned his wedding ring, sold part of her Silver Eagle coin collection and had help from the Salvation Army paying their electric bill.

Now another cliff approaches: the loss of the home they rent.

“Looks like we’ll have to go to your mom’s,” Scott Nichols says to Kelly, 33, who is in a beige recliner, staring ahead.

Moving to her mother’s would mean returning to the rundown industrial town where they grew up, a place that makes him feel dirty, inside and out. They would sleep in her basement jammed with forgotten furniture, a few steps from a pair of cat litter boxes and below three narrow windows blocked by insulation.

Twenty months after it began, what has the American recession come to?

There are signs that the bottom has been reached. The stock market is on its way back up. Retail sales are improving. The overall sense of desperation, so widespread at the beginning of the year, has eased.

Every day come new reports suggesting some improvement.

But underneath all of the reports is this living room.

“Okay,” Kelly says.

The people who have just agreed that they are out of options sit in silence, wondering the way out.

“It needs to be paid,” she insists. The $40 installment on their Kmart layaway plan is nearly a week late.

“That doesn’t leave a whole lot of money,” he says. If they pay the $40, they will have $31 for themselves, their 2-year-old daughter and his 17-year-old son until their next unemployment checks arrive in five days.

“This is why we have no money,” she says, irritated, fatigued.

These are the conversations that pervade Scott and Kelly Nichols’s days.

How did they get here? How did their every other exchange evolve into a riddle that includes the refrain “How much?” followed by “How much do we have left?” How did their horizon become a basement in southern Michigan?

Nearly four years ago, in search of better pay, Scott Nichols took his older brother’s advice and followed him to where he had moved years before: northern Indiana and the flatlands of Elkhart County, the country’s largest manufacturer of recreational vehicles.

“The RV Capital of the World,” as Elkhart’s leaders say.

Scott got a job on a paint crew at an RV plant, and by the end of 2007 his income had climbed to $53,000, more than he had ever earned. After work he was the man at the bar with the thick roll of bills, the man he had always wanted to be, buying round after round for himself and his friends. The man with “the full pocket,” as he liked to say. He took his son on a fishing trip. He took his family out to eat and told them to order whatever they wanted.

Then gas prices soared, the economy unraveled and demand for RVs plummeted. Over the course of a year, Elkhart County’s unemployment rate rose from less than 5 percent to more than 18 percent. Thousands of workers lost their jobs, the casualties including Scott, and Kelly, who worked in accounts payable at another RV company. The crisis in Elkhart drew the attention of President Obama, who traveled there within weeks of taking office. Obama plans another trip to the county on Wednesday to further focus on the economy.

When he lost his job, Scott had no savings, his primary objective always having been to earn enough to cover the rent, eat an occasional steak, feed and clothe their children, ride his dirt bike, fish, golf, play poker, buy lottery tickets, and drink Bud Light.

For two decades, a robust U.S. economy had allowed Scott a paycheck-to-paycheck life, one in which he was always confident that the next payday was ahead. Lose one job, and soon enough there was another. He flipped burgers at a diner. He was an apprentice at an auto body shop. He drove a delivery truck, was a gofer for an elevator mechanic, mopped floors at a burrito plant, worked as a forge operator, and sanded and buffed and painted truck caps and RVs.

But this time, as weeks stretched into months, Scott found himself not only with no job opportunities but also with nowhere to turn for help. His parents, a retired machinist and truck-stop waitress, still live in the same cramped mobile home in which he grew up. His brother, the one who persuaded him to move to Indiana, has been behind on his own bills since his RV company cut his hours. And Kelly’s mother, a retired public school teacher, can offer only her basement.

At the kitchen table, Scott opens the newspaper.

“Movie Extras Needed Now — 45 bucks to register, earn $100 to $300 a day,” he says, reading aloud.

A company needs “employees to assemble products at home, $500 weekly, no experience necessary.”

Another is looking for people to “earn $3,800 a week working from home, selling information packs.”

“Here’s that one we got burned on,” he says.

Part-Time Inside Phone Sales. Data Entry From Home. Bodyguards Wanted.

He folds the paper and tosses it across the table.

* * *

” ‘Bee Movie?’ ” asks Hailey, the 2-year-old, climbing into Scott’s lap. He loves his children. He tries to be a good father. He dotes on them.

“I don’t want to watch the ‘Bee Movie’ right now,” he says, rubbing his eyes. He pours cough medicine into a spoon and takes it to her. “I know it doesn’t taste good,” he says.

Five weeks before they will have to move unless they find jobs, every day is a slow-motion version of the one before, the soundtrack a mix of sighs and yawns, whatever is on TV, Hailey’s laughter, Hailey’s crying, Hailey’s whining, discussions about which bills to pay, and infrequent, inconsequential chatter.

“That new Camaro is freakin’ ugly.”

“Didn’t see it.”

“It’s right across from the library. How could you miss it?”

They always sit in the same spots, as they do today, a Wednesday, Kelly in the recliner, tattered at the edges. Scott is on his end of the couch, clutching a jug of Pepsi that he refills when it empties.

A photograph from their wedding day sits on a wooden shelf in the corner, “Kelly and Scott, July 10, 2004″ in script on the frame. Her smile is wide, her dress bright white. He’s in a black tux, grinning, his hair a buzz cut, his goatee neat, the mustache pencil thin.

Now, sitting on the couch, 11 months after being laid off, his hair is thick and uncombed, and his mustache full. He has gained 40 pounds since his last day on the job. He needs a refill on his antidepressant but doesn’t want to spend money to see a doctor.

“C’mon, Karma,” he says to the dog, a docile Labrador and Rottweiler mix. “Let’s go get the garbage can. Quick trip. Like the wind.”

Scott walks to the end of the driveway, 87 paces, from where he pushes the bin back to the house, a gray mobile home with a finished basement and a garage on three flat acres. He falls back onto the couch, glancing up at a framed print of three wolves, then at Kelly, then at Hailey. His toes wiggle inside his white socks. He yawns.

In the months since his layoff, he has walked into this place or that place looking for work, unannounced visits that resulted in nothing. He went to a factory that makes ambulances. Nothing. To another that sells truck caps. Nothing. Another that produces tops for aerosol cans. Nothing. He heard about an RV plant that might be hiring, but decided he needs more information before he’ll get in his car anymore. He refuses to waste gas chasing rumors.

Driving anywhere alone is an expense that needs justification. Driving anywhere as a family is nearly impossible, because their two-door Cougar is too cramped and too sagging to accommodate their collective weight. Their second car, an old sport-utility vehicle, is stranded in a mechanic’s back yard, needing repairs that Scott says he can’t afford. So they stay home, which is another way to avoid spending money.

There is time to think: about the laundry he needs to wash. Or maybe he’ll save it until tomorrow so he has something to do. He imagines the taunting he’s sure he’ll hear from his other brother — the brother who has remained in Michigan — if he moves back there and into the basement: “So you thought you were gonna go down there and make a ton of money . . . ”

He thinks about his son, Cody, with his C’s and D’s and no direction or ambition. What will Cody do in a year when he graduates from high school? He thinks about taking classes to learn how to use a computer, aware that a new skill could help him find a job. The idea infuriates him. He has a blue folder filled with certificates: “Scott Nichols has satisfactorily completed the Advanced Auto Body Course.” And: Scott Nichols “has completed 460 hours of training in auto glass installation.” And: “Scott Nichols successfully completed 1,020 hours of training in auto painting.”

Why should he have to start all over?

“Did you eat all the doughnuts?” Kelly asks.

“What do you think I was eating last night?” he answers.

She studies Hailey, who is on the floor, gaping at the TV.

“She’s kind of sedentary,” she says.

“Why?”

“I don’t know.”

“Why?”

“I don’t know.”

Scott smiles. “Why?”

She rolls her eyes. “I’m going to smack you.”

For dinner, they eat breakfast — pancakes and sausages, which is what Scott had scheduled for this night when he mapped out a month’s worth of meals to save money. The handwritten menu hangs on the refrigerator. Another night was soup and sandwiches. Another night was Chicken Helper and cottage cheese. Another night was leftovers. This night, Cody washes the dishes, his shoulder-length brown hair concealing his face as he leans over the sink.

“Homework?” Scott asks.

“No.”

“Imagine that. If I get another call from school.”

“You won’t.”

“What’d you do, tell them I don’t have a phone?”

Cody disappears into his room to play Xbox. The TV is still on, the “King of Queens” fading into “Family Guy,” “Two and a Half Men,” “The New Old Christine,” “Gary Unmarried,” and “Seinfeld.” As the sky turns black, no one switches on the lights. Kelly and Scott are in their usual places, the living room consumed by the blue glow of the television and an unceasing laugh track.

* * *

Monday is the day Scott dresses and leaves the house with a purpose that reminds him of the way he felt when he went to work. Only now he’s off to collect their unemployment benefits, electronically delivered to their bank accounts by the state of Indiana: $268 for Kelly, $390 for him.

“Payday,” he says, driving to an ATM.

He withdraws $700, which he tucks into a front pocket of his jeans. He buys a Pepsi, four packs of Marlboro Lights and $20 in gas. He pays the electric bill, buys brake pads and a $66 money order for the kids’ health insurance, and hoses down the Cougar at a car wash. At the bank, he deposits $500 toward rent.

“Five, 10, 12 dollars,” he says, counting his remaining cash.

He has $100 more coming, his reward for winning the NASCAR betting pool at his bar, a dark, smoky joint called the Winners Circle. He walks in just before noon, hoping to find someone, anyone, who might know something about a job. The place is almost empty. The bartender, gray-haired, gravelly-voiced Valerie, delivers his winnings and a $2 draft. He rarely drinks at home or in front of his kids. He never drank at work. But sometimes he drinks here, beer after beer after beer.

“I don’t want to end up in a bell tower with a high-powered rifle,” he likes to say. “I need to let loose in some way. I’m not going to give up everything.”

At 1:10 p.m. he orders his fourth Bud. At 1:44 he orders a fifth, then a sixth. His cellphone rings. He knows it’s Kelly before he answers. There’s that question again: How much does he have left?

“We’re still fine,” he says. “Promise! No I’m not! . . . I’ve only had six. . . . I’m good. . . . This is it.”

He downs a seventh beer, then an eighth at 3:04. He drives home slowly. The last thing he needs is a cop pulling him over. He passes Coachmen RV on his left, a plant where he applied for a job six weeks earlier. He passes Evergreen on the right, another RV maker, the sign at the entrance to the long driveway announcing, “Not accepting any applications.”

In the kitchen, Scott gives Kelly the rest of the money in his pocket, $70, which needs to last until next week’s unemployment money arrives. He hands Hailey his loose change for her piggy bank before falling into a chair and losing himself in a game of solitaire.

* * *

“Mmm.”

Kelly is the one out of the house now, closing her eyes as she sits in a Subway, savoring a foot-long sandwich.

Her thoughts shift to a phone conversation she had that morning with their landlord, when she gave notice that she and Scott would be moving out in a month unless they found work. The prospect of leaving Elkhart makes her think about the place she wishes they were going, a house that exists in her imagination.

“A Victorian,” she says. “Four bedrooms, two-and-a-half baths, a family room, a living room, a sunroom, what I would call a sewing room, a kitchen, a dining room and a wraparound porch. That’s what drew me to it, the wraparound.”

She takes another bite and wanders around the first floor.

“The family room was going to be where I kept my plants,” she says. “It was going to be soft green. . . . And the sunroom, that was going to be yellow and it was going to have golden wicker to decorate it. . . . And then upstairs, the master bedroom was going to be mostly white with some blue. . . . And the master bath was going to be purple and white and I was going to have a stained-glass window.”

She’s ashamed that she and Scott have no money. She’s embarrassed that they can’t find jobs. She didn’t grow up this way. In high school, she had a 3.9 grade-point average. She keeps a few old papers in a box, a teacher’s “A — Well Written” scrawled on one, “Very Good!” on another. She got a scholarship to a community college, then lost it after she started partying and stopped going to class. She held a series of forgettable jobs at forgettable places: a bank, a photo lab, a Burger King. She went back to school, finished her two-year degree and continued to work at forgettable places.

She thinks about her mother, a divorcée, raising two daughters on her own and taking them on trips to New York and Washington, D.C., and Europe. She and Scott have never taken a family vacation. They were together for eight years before getting married, mainly because Kelly wanted to save up for a catered wedding reception. Scott would have been happy flying to Vegas and mixing in some gambling. He doesn’t need a tux. Or a Victorian.

“And the first bedroom was going to be Hailey’s bedroom,” she says. “Soft green with a big Oriental rug with a big rose in the middle. And a big canopy bed. . . . ”

She takes a last bite of her sandwich.

“I know it’ll never happen,” she says. “But you can still dream. Wish. Imagine.”

She wipes her mouth with a napkin.

“If I made $60,000 and Scott made $60,000, we could probably do it in three or four years.”

Her voice trails off.

“Someday.”

She tosses her trash in the garbage. The tour is over.

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Comment by Gabryelle

2009-08-05 13:46:00

How do we get in touch with people like that? I want to help but there is no address or phone number to reach out.
ANyone has any ideas??

Reply to this comment