Thursday, October 9, 2008

The Second Great Depression

With Yom Kippur over I turned on the news this evening. It was consumed with two things. The American Presidential election was down to number two after the now global economic crisis.

Stock markets the world over continue to crash down. The Bush administration, once the voice of laissez-faire capitalism, is considering following the British example and taking the decidedly socialist step of purchasing parts of private banks, in effect partially nationalizing them, albeit "voluntarily". How voluntary is it if the choice is semi-nationalization or outright failure? We also have the spectacle of a possible national bankruptcy in Iceland. Has a nation ever gone bankrupt before?

All these events are, I think quite accurately, being described as "the worst financial crisis since the great depression" by various talking heads on all the major and not-so-major news media. Normally optimistic economic voices are now saying we're going into a deep recession. Hello? We're already there and I honestly believe this is the start of a second great depression. 2008 and 1929 will often be linked from this point forward.

I think a lot of us are going to have to rethink our lifestyles, our finances, and how to plan for our future. Too many Americans, encouraged by our consumer culture, have lived way beyond their means. A little economic panic may actually have a healthy result if people pay down debts and start saving for a rainy day. It may also make some rethink their political ideology and make a more sane choice in the November election. Those would certainly be silver linings to the proverbial dark clouds.

What about me? What will I do? Believe it our not this may actually be beneficial to my business if I do some clever marketing. OK, I hate marketing. Only chasing people down for monies owed is worse. I truly loathe collections. Yet I honestly believe suddenly being very good at marketing is vital to me.

Let's face it: Linux can save companies money. It can do lots of really serious work well on machines that can't even minimally run a current version of Windows. That's true both for servers and desktops. Linux can allow companies to leverage the existing, aging systems and extend the productive life of hardware they already own. There are no licensing costs either, and for small and medium sized businesses the savings involved can make a huge difference in difficult times. My expertise is Linux. I'm very good at making it turnkey, easy to use, and optimizing for performance. Now I need to be especially good at showing people how using my expertise will save them money, as in many times what they pay me for my services.

It's not just Linux, of course. It's also using Free and Open Source Software (FOSS) to replace proprietary and often costly software. If I can offer alternatives that save licensing costs for multiple products a business needs the savings can add up, perhaps more than enough to make learning a new product and transferring or converting data worthwhile.

Can I do it? I honestly think so. No, it won't be easy. Selling change never is. Asking people to step outside of their comfort zone and dive into new software is difficult at best. Now, though, people may make some tough choices they wouldn't have made in better times when they weren't counting their pennies so closely.

A new website, perhaps a little print advertising, and a few successful engagements to create word of mouth advertising is what I need. It's a challenge but then again, riding out tough times and keeping heads above water is a challenge lots of us will be facing now.


Steven Rosenberg said...

Caitlyn, this is a very timely entry.

Once you find some old hardware and realize that there are two ways to go -- steal Windows or legally install any number of Linux or BSD systems, it's amazing how easy it is to make throwaway machines work for many additional years.

To be honest, I'm not even looking for new gear. My "newest" machine was made in 2002, and with a 1.3 GHz processor and now 1 GB of RAM (I could get along fine with 512 MB), there's nothing I can't do in Linux.

The light bulb moments for me were a) the idea of a distribution having all the apps you'd need right upon installation and b) easy updates of not just the base OS but all the applications, too.

Unknown said...

"Has a nation ever gone bankrupt before?"

Apparently yes. Newfoundland (FKA the Dominion of Newfoundland) before WWII was basically insolvent due to its WWI debt. It reverted back to a British colony in the early 30s (it later became a Canadian province in 1949).


There are a few people in Canada now who suggest Iceland join Canadian Confederation in much the same way (and for the same basic economic reasons) as Newfoundland did.


casterman said...

country going bankcrupt
in which way ?
if it is not paying the financial bonds issued in its own currency .
then you don't need to go very far just 1998 russia did not honor its payment on the PRIN and IAN bonds .
that busted a lot of investor remember LTCM . goldman prop desk......
there are a lot of other cases .
some obvious cases .
like north veitnam gov did not pay their bonds after the us attacked
and some less obvious cases .
the USA defaulted to it's european creditor in the later part of the 1800 .
but you also have all the ones paid in forein currency covered by the brady plan in the early 80's .
now if bancrupcy is also changing the rules of due payements what the goverment stated it would pay in previous laws.
you have tons of cases social security pension reforms medicaid medicare .
now if
gov. bankcrupcy is when it fails to meet standards of law and order and personal protection of it's civilians been physical or social protection . again yes civil unrest is not uncomun . french revolution and any other civil wars . now the standards for goverments is very dependant on time and location .
at last we have inflation were goverment will pay back in monopoly money it's bonds
now which will be the us gov's way .
one thing us had was creativity. we shall see if the current US will use one of the above solution to go bankcrupt of if it will find a way of it's own type .only time will say but for sure giving allmost 1 trillions(the iraq war not counting the implied priceseffets) to oil industry remember that oil was $27 per baril prior to bush election in 2000
and now another trillion to the banks for their obligations the gov can not continue subsidizing all it's economic sector at this pace . gov subsidies works well in closed economy.
the Keynesian multiplier have very limited effet when the economy are open and interconnected .

Caitlyn Martin said...

Casterman: Nothing you have described is a declaration of bankruptcy. Newfoundland *might* be such a case, but defaulting on or delaying payments on bonds doesn't qualify. Wars and revolutions are a whole different thing.

A lot of what you post reads as rambling nonsense to me. It's also misspelled, improperly punctuated, and an almost incomprehensible grammatical mess. Aren't you embarrassed by your writing?

No, the United States won't go bankrupt. Printing more money causes inflation, not bankruptcy, and I don't see a wholesale devaluation of the currency on the horizon either if that's what you mean by "monopoly money".