The Leading Indicators (9 page)

“Three hours I spent with this couple. I write them for a seventy-thousand-dollar kitchen makeover, including lapis trim and granite backsplash. Would have been my best commission. He says they have to go out for a drink to think about it. Hour later they come back, I don't see them walk in. They sign the deal, exactly the deal I wrote, with another salesman. Didn't ask for me. And this asshole, what does he do for a living? Bonds broker. So he knows about commissions.”

“Sounds like you had a bad day.”

“We needed that commission.”

“There will be other rich twits.” She tried to change his focus by fiddling with his shirt buttons and licking her lips. There was nothing in life that brought Tom more happiness than her tongue.

“The steering pump on the Taurus is shot, the clothes dryer doesn't make hot air,” Tom said, not noticing. “Those right there will knock out a week's pay.”

“Something will happen to change our luck.”

“We were close to being rich. Now I work a sales floor. It's supposed to be hard to climb the economic ladder. But sliding backward isn't supposed to happen.”

“The big companies will start hiring again,” Margo said. “You'll end up in management. Somewhere important, at the kind of company that doesn't even need a name, just initials.”

“It's been months since the last headhunter called.”

Since Tom now had no office, Margo heard him as he sat at the kitchen table, placing calls, asking if companies wanted his résumé, laboring to sound upbeat and confident. He was trying to seem as though he were sorting through a stack of offers. If they know you're actually sitting at a kitchen table, they're not interested. It was excruciating for Margo to hear her husband begging for work.

Tom looked at Margo softly and embraced her, saying, “At least I have a wife who looks better the closer you get.”

“Do you think we have time before Lillian gets back?” Margo asked. Tom shook his head no. They kissed—that was some consolation.

“Don't worry, babe,” she said. “The world screws everybody. The answer to the great cosmic question of why we are here is that we are here to be screwed.” Philosophers and theologians have pondered for centuries why we are here. In recent decades cosmologists have joined the discourse, as indications of the anthropocentric character of the universe increasingly suggest that some form, at least, of life was anticipated. Margo felt that regardless of the value of the fine-structure constant or other sorts of issues debated by physicists, humanity had to exist so the universe could have a victim. If there were no intelligent life, then no one could be miserable, and this outcome was simply impermissible under natural law.

“There must be higher purpose,” Tom said. “Something led me to you.”

They kissed anew, then parted with a start on the sound of a car door slamming loudly outside, though this turned out not to be Lillian.

“I went to meet Caroline's guidance counselor today,” Margo said. “The high school—it's—it's nice.”

“It's not nice?” Obviously that was what she meant.

“I had never been inside a school that needs paint.”

“The SAT averages are okay and the college-attendance rate is okay. Isn't that all that matters?”

“I know it was snobby to send them to private school. But that ensured a good peer group. The new school has a lot of kids from broken families, troubled situations.”

Initially Margo had thought it would be good for the girls to attend a public school where they would meet children of different backgrounds. She hadn't thought through that this meant teens who never studied, whose parents were absent, who came from a milieu of failure and subconsciously assumed failure would be their lot. High-school students learn as much from their families and peer groups as from teachers. Reflecting this, studies show that stability in the home is a better predictor of educational success than IQ, household income, race or any other factor. Her girls were dropped into an environment of children from unstable homes, something the U.S. economy was now producing with the same fervor it once produced Oldsmobiles.

Tom knew Margo's unease about the school was not a reflection on him, but he took it that way regardless. “To get kids into the good public schools, you must be able to afford a place within the boundaries,” he said.

Officially public-school systems are equal to all, but the For Sale sign on the lawn now serves the function segregation once did. The high-quality public schools are open only to those who live within their boundaries—and housing within those boundaries costs more than housing within the boundaries of weak public-school systems. Credit histories and down payments sift who gets into good public schools and who doesn't: and though the current system was not intended to cause racial divisions, it operates as if it were. Margo and Tom had always known that property values had become the new gatekeepers of schools. But they'd been exempt from this problem before. Now they had to deal with it.

“Tom, if the girls aren't admitted to an Ivy or Stanford or Bowdoin, I won't be able to take it.”

“Everything is going to be fine.”

“I want the University of Chicago bumper sticker. That is not pettiness—sending our children on to something better should be one of life's rewards. Put the bumper sticker on a Hyundai, fine. Just give me the University of Chicago bumper sticker.”

“My card was rejected today,” Tom said. There was no good moment to tell her.

Instinctively, Margo was fearful. “What card?”

“The bank card. I stopped at an ATM for cash. Wouldn't give any. I went to another, in case the machine was the problem. The same.”

“Our bank account is empty?”

“Every time I turn around I'm writing a check or handing someone a twenty.”

“
Empty?
”

“Work hard like we have—when you press the button, money is supposed to come out.”

“This must be a mistake,” Margo said. “I'll go to the bank and talk to the manager.” She realized she had not spoken to a bank manager in at least a decade—they did everything electronically. Margo couldn't swear there even still were bank lobbies with well-dressed personnel waiting to receive customers at desks.

“Work and spend, that's the valor of our era,” Tom said, without enough emotion to be disconsolate. “If you get good grades then work hard and swallow your thoughts at the right times, when you push the button, money comes out.” This was the bargain most people of Tom and Margo's generation made, to surrender some larger fulfillment in return for ordering whatever they want in restaurants. Tom paused, then repeated: “When you push the button, money must come out!”

“This is going to be okay, babe.”

“Some checks I wrote are going to bounce.”

“Bounced checks!” Margo shivered; the words made her feel like a swindler. “The girls must not find this out,” she said.

“The rich bounce checks all the time,” Tom said. “They're too big to fail. Us—we are just the right size to fail.”

“‘Fail'? What do you mean, fail?” Margo had never heard Tom speak so pessimistically.

“One way or the other this ends with the family back on top and the girls having everything again,” he said, trying to sound assured. “One way or the other. I've already laid everything out.”

“What do you mean, ‘ends'?”

 

Chapter 6

March 2009

Dow Jones Index: 6,700.

U.S. motor vehicle production: 5.7 million.

Unemployment: 9 percent.

B
ecause management and labor refused to speak to each other, the city convention center needed facilitators—or Facilitators, as their duty descriptions read. The capital letter was the main perk of the job.

Labor costs were dragging the center down: union carpenters and helpers who set up and then struck the floor exhibits and breakout rooms received the same wage whether they worked or sat, and for every worker actually present there was a no-show ghost employee drawing wages partly rebated to a local crime boss. The labor contracts were all political, with twice as much money siphoned off by featherbedding and kickbacks as was invested in actual convention-center activity. Management was no rose either. The convention center had an executive suite where dozens of senior-grade managers received lavish salaries for doing nothing—if they arrived in the morning at all, since the politically connected ones skipped work for days or weeks at a time without anything being said. Those senior-grade managers who deigned to report rarely emerged from the executive area. Instead they passed orders to the Facilitators, generally by text message to avoid personal interaction or the faintest appearance of effort.

Tom, now a Facilitator, had to take a deep breath each time he approached a steward. Twenty carpenters and their helpers could be sitting all morning idle and the steward would say that moving a table was completely impossible.

The exhibitors who paid the center's exorbitant fees were forbidden to speak to labor and were never able to find anyone in management, so they dealt almost entirely with Facilitators, who could speak to stewards, though never to workers. And no matter what the request was, from the stewards the answer always was no.

Labor floated along demanding overtime and filing grievances, oblivious to the center's poor reputation and declining bookings. Management floated along doing nothing of value other than stroking the right contacts at City Hall. Caught between the two, Facilitators were supposed to make the convention center function. To free up more money for featherbedding and bribes, the year before, the career Facilitators—the institutional memory, the people who actually knew what they were doing—had been laid off. Rather, been “excessed,” as their disclaimer-covered dismissal notices said. Now Facilitators were hired as temp employees with no benefits or rights, as well as no experience or knowledge. This was another factor in the center's decline. But no one in the executive suite or union leadership cared about that in the slightest, as long as there was public money to steal from.

All told, it was a pretty modern American situation. Just add borrowing!

The city council knew about how bad the situation was at the convention center, but rather than act—any plan of action would have entailed crossing an interest group—tried to postpone the day of reckoning by selling municipal bonds against future revenues. This allowed the convention center to fall further and further into debt, but also kept up the flow of patronage jobs and kickbacks. So many revenue bonds were in circulation that the city had, in effect, sold the convention center's potential income several times over. All that mattered to investors was the bond yield, which could be covered by selling additional bonds—a Ponzi arrangement not unlike Washington selling more Treasury bills to cover deficits caused by runaway spending. The convention-center bonds were tax-exempt, which was appealing to investors while hurting the civic tax base. Shifting fiscal harm into the future in return for a cookie jar today was the political magic formula of the moment. City council members knew they'd be retired, with handsome bank accounts, by the time the bills for this funny business came due. Besides, why not follow the example set by the nation's capital? A mere city government could only gaze in admiration at the scale of stealing and squandering in Washington.

There was a purity of purpose to the union. Its leaders single-mindedly pursued a vision of putting any firm or government agency their local worked for into receivership, at which point the union members would be fortunate to find jobs that paid a third of the wage they currently complained so much about. The convention-center executives, for their parts, were amateurs compared to Fortune 500 executives. Convention center executives were mismanaging tens of millions—Fortune 500 executives mismanaged billions.

Restoration Hardware “furloughed” Tom—at least it didn't “excess” him—saying he would be called back as soon as sales picked up when the Great Recession ended. At least retail would always require people. When manufacturing picked up again, most workers would never be called back, since automation was causing manufacturing productivity to rise fast. An auto plant built today needs a tenth the workforce of a plant of the same capacity built in the 1950s, and makes better cars that are safer and last longer. Unless you propose to ban advances in technology and engineering—and its unclear how that might be accomplished, even if you were so inclined—the next generation of auto plants and other factories will need even fewer workers.

Some economists thought that what seemed to the political and media elite like a 2008 financial freeze that caused rising unemployment was actually two unrelated events in progress simultaneously. The 2008 financial freeze was real enough, but the unemployment rise would have happened regardless, because automation technology was the primary influence. Six million American manufacturing jobs had been lost since 1980. But factory jobs weren't fleeing to China, as pundits and antiglobalists claimed: China lost 28 million manufacturing jobs in the same period, even with go-go growth. And American manufacturing was not in decline, as the editorial pages kept saying: U.S. manufacturing output hit records, even for steel, throughout the first decade of the twenty-first century. It's just that ever more stuff was produced by ever fewer workers. Globally the picture was the same. Soon there wouldn't be any nation on Earth, including in Asia, with a jobs base anchored in manufacturing.

The political world was oblivious to this, and kept throwing borrowed money at subsidized manufacturing that generates a small number of extremely expensive jobs that technology soon wipes out anyway. Freeing the human family from factory labor is, long-term, an advance, just as was freeing the human family from subsistence agriculture. Short-term, this transition was making a mess of Western economies, and all the political class could think of was to use the situation as a rationalization for handing more favors to campaign donors.