Living through a structural adjustment

By Fester:

I am incensed about the lack of federal bridge financing for the Big-3 automakers.  I think this is horrendous policy on its merits, and I actually support President Bush's and Secretary Paulson's efforts to use TARP to go around the Republican Senate minority's myopia, but this is also a question of justice and fairness that strikes a strong chord in my personal background.  I've lived through 'structural readjustments' as a child and it crystallized a decent chunk of my initial political outlook. 

I grew up in Lowell, a former mill town, in Massachusetts. The city was one of the birth places of the company town/mega-concentrations of factories in the American Industrial Revolution.  But by the 1960s, most of the mills had closed and moved to the Carolinas or Georgia. As a child there was one mill that was still producing specialty fabrics near the radio station where my aunt worked, and then a few dozen derelict hulks lining the rivers and canals.  Boott Mills had slowly started to redevelop as a business incubator and multi-use office and light industrial space; Massachusetts Mills had a few lofts in it, and Merrimack Manufacturing had one kick-ass exhibit on the Industrial Revolution from the National Parks Service. Redevelopment and re-use of the old mills has skyrocketed in the past fifteen years, but they have transformed from being a hub of manufacturing to being cool artistic loft spaces for people who can not afford to buy in Boston. 

My family had strong roots in the city. One branch of the family tree settled in Lowell after the Irish Potato Famine and other limbs had been there since the 1920s.  They were small businessmen, local politicians, dog catchers and dog biters, school teachers and ditch diggers on both sides of my family.  The family tree initially focused on the local Lowell market, and thus the global market, but as the mills declined, Lowell declined as it further integrated and synchronized with the Greater Boston economy. 

My dad was a union electrician who worked within the Boston city region.  He retired/shifted careers this year. But construction work is an extraordinarily pro-cyclical industry.  When times are good, they are very good with plenty of overtime, minimal waits in between jobs/assignments, good benefits.  When times are mediocre, things are okay as overtime is cut, unemployment stretches for a while, and Christmas became a bit leaner, and my jeans had a few more non-fashionable holes.  And when times are bad in the general economy, they are horrendous in the construction economy as business and residential capital expenditures are cut at a much faster rate than the general economy.

The Boston city region experienced the 'Massachusetts Miracle' in the 80s; lots of new construction, lots of new infrastructure and lots of work.  Massachusetts overbuilt and starting in 1988/89, construction came to a screeching halt in the Boston city region.  And we as a family got hit hard starting in the early 90s. 

We were being structurally adjusted and we could do nothing about it.  Both of my parents worked whatever jobs were possible, including several cross-country job searches and construction gigs a couple of time zones away, and the decision to buy canned corn (which I liked better as it was sweeter) rather than the cheaper frozen corn was a painful decision.    Both of my parents went back to school for more education. The three oldest kids, including myself, started working and finding our own spending money with paper routes and soccer refereeing.  We went into debt and strained our social networks as we mostly held on, but it hurt.  And it kept on hurting for years as there was a several year stretch where the union was lucky if it could place a few hundred man years worth of work when its membership was several thousand electricians and their families. 

About halfway through this stretch came the 1992 Presidential campaign.  One candidate said that there was no recession and it was merely localized and needed pain.  Another had a bunch of charts, funny ears and said that the deficit was the source of all evil.  Another acknowledged the pain in the economy and recognized its centrality. 

I was only 12 at the time, but I sure as hell knew that there was a recession.  I knew that my family was in pain.  I knew that we were playing by the rules and doing the best that we could.  And that despite this, we were still getting hit in the stomach with a baseball bat on a weekly basis.  

We got structurally adjusted as the previous periods of increased and speculative economic activity was not backed by underlying demand and present value of cash flows.  Surplus labor to the requirements was downsized and shifted to the marginally attached labor pool and to more socially productive and economically viable uses. 

Yeah, I can write and read that language, but we got screwed in a sudden shock through minimal fault of our own as the family reacted rationally to the economic incentives of the 80s.  Sudden shocks instead of gradual wind-downs are way more painful and if the sudden shock can be avoided and options increased, we should do so even if it is slightly less efficient. 

So if I am a bit more vehement, and a bit less analytical, when I write about the US economy and the autoworkers right now it is because one of my formative life experiences was the joy of going through a callous 'structural adjustment'/economic nuke.  

Comments

[kirkrrt]

I know that story.

My father was in agricultural construction in the 70s and the first half 80s. Those were two very different decades.

By the time the bank closed his company my county had seen several farmers commit suicide and several more walk away. Main street lost one implement dealer, cafes, the clothing store, the bakery, and the Five-&-Dime.

I ended up walking away from college because the family could no longer pay what the finacial aid forms said we should.

The scary thing is that this week I saw my first "Estate and Home Auction" sign in my neighborhood. I haven't been to one of those sales in over 20 years.

For those of you who don't know what I am talking about. All of the contents of the home and garage get sorted into groups and placed around the house. The auctioneer sells them off saving the cars then the home itself for last. I am thinking of going over this afternoon just to see how that thing plays out in the suburbs.