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Economic Resilience #2. Expect Contraction

In our Oct 2010 session about the economy here in Los Angeles, we discussed “Conservation of cash.” In other words: in these times of economic contraction, make the most of the U.S. dollars you do have.  In that session we talked about budgets and getting by on less.  So often in American culture when money gets tight we focus on increasing the inflow: how can we get more cash?  But there is another side to the equation: decreasing outflow.

Think about a bathroom sink: water comes in through the faucet and leaves through the drain.  If the water is flowing in faster than it is draining out, you’ll have an accumulation of water in the basin.  If the level in the basin (the cash in our checking accounts) proves inadequate, we have been well-schooled to adjust the faucet end of things:  “Earn $1000 a week at home!”  “Take advantage of this credit card offer!”  American capitalism carefully avoids mentioning that we have a lot of choice about how much flows out the drain.

Constantly be looking for ways to trim expenses.  Trim monthly fees and contractual obligations such as cell phone plans.  Decrease utility bills, eliminate car leases, eliminate lawn service (grow veggies!).  Embrace Reuse and Repurposing as an economic strategy, not just an environmental gotta-do.  Understand why your great-grandmother saved bits of string.

Seek out (and create) free activities within your community.  Some of life’s most precious and joyful experiences can be had for free.  Share expenses with others (see #5 in this series).

If you are carrying debt, do everything you can to eliminate it and don’t incur more.   Understand that the basic concept of borrowing presumes that the future will be more plentiful than what we have now.  Borrowing is taking a bit of cash flow from that more plentiful future and using it now.  But in times of economic contraction, the basic concept is turned upside down:  our future will not be more plentiful.  Thus any borrowing at this point in history is taking a bit from leaner times and consuming it in more plentiful ones – that’s foolishness!

Write down what you spend – all of it.  We tend to spend less when we have to be accountable and see it in writing.  Changing your spending habits requires discipline.  In recent years as a culture, we haven’t had to exercise much self-discipline.  But that short-lived free-for-all is now ending.

In our Oct 2010 session in Los Angeles, we considered these questions: 

  • What might you do to become more “conservative” in your spending, perhaps because the newspaper says we’re in hard times?  These items we labeled as slight austerity measures.
  • How you might change your spending if you heard we were entering a five-year Depression, or if your family breadwinner(s) lost his/her job?  These are moderate austerity measures.
  • What spending patterns might you embrace if there were no foreseeable source of cash?  These are severe austerity measures, the kind our grandparents became quite accustomed to living with during the Depression of the 1930s.

If we plan for contraction, then the reality of its appearance won’t take us by surprise.  It won’t throw us, or put us in a bind.  We’ll be ready for it, and we’ll be much more able to take it as it comes.

Conservation of cash

(or, making the most of the US$ you do have):

Cash-free ways of getting your basic needs met:

  • Participate in a LETSystem or Time Banking system (USE it, not just “belong”)
  • Share with friends, neighbors, relatives

Purchases, gifts:

  • First, ask yourself “Do I really need and want this? Can I get by without it?” ... unshopping
  • Buy only the tools needed for self-sufficiency, for cash-free operations
  • “Keep-it” buying = things to be cherished, taken care of, and used to the very limits of their utility
  • Choose things that are functional, mechanical/power-free, durable, well-made, and can be repaired
  • As sources, don’t overlook Freecycle, Craig’s list, Goodwill, and local Time Banks/LETSystem
  • Just say NO to advertising.  Turn off the TV and filter all media sources, to save your time, to reduce “buy-buy-buy” temptation, and to become happier!

Food:

  • Self-sufficiency – what can you raise in the space where you live? 
  • It can be done, even in an apartment or a rental. ... The Edible Container Garden by Michael Guerra
  • Get really creative, with mushrooms, sprouts and more ... Fresh Food from Small Spaces by RJ Ruppenthal and Microgreens by Ionna Hill
  • Barter – what can you swap or exchange for?  Here in L.A. we’re developing harvest exchange programs.  Exchanging home-produced food is an age-old community survival technique.
  • Local – support local farmers, because in an age of declining transportation capabilities we need our local farmers to stay in business. ... farmer’s markets, CSAs
  • Learn to cook – garden-to-table style recipes, rather than “open a can” or “open the freezer” recipes
  • Learn to preserve food as well. Preserving Food without Freezing or Canning, by The Gardeners and Farmers of Centre Terre Vivante.  Root Cellaring, by Mike Bubel.
  • Adjust your family’s diet and your palate to what is available from these sources

Rethink Waste:

  • One man’s trash is another man’s treasure.  Contribute things on Freecycle and through your local time banks/LETS
  • Sharing: We really don’t each have to own all our own things (despite what media and advertising tell you).  Use libraries, use local sharing networks ... The Sharing Solution by Janelle Orsi and Emily Doskow
  • Ask yourself “Could I borrow it, rent it, or buy it secondhand?” ... practice Unshopping
  • Reuse junk mail envelopes; use the backs of sheets of paper.  Remember the old Depression stories about saving bits of string, and listen to the wisdom within.
  • Food and yard waste can easily become “garden gold,” far better and more vitally alive than any purchased fertilizer.  Worm bins work even in apartments or rentals.
  • “Bucketing” means saving the water from warming up the shower.  This is potable water.  It can be used for many purposes including (but not limited to) housecleaning and watering food plants.
  • Learn how to repair, mend, fix, glue, and repurpose things.  Broken stuff can become raw materials for new creations.
  • Transportation:  combine trips, go with a friend, take the bus, ride a bicycle.

Housing:

  • Whenever you are able, pay down your mortgage.  Refinance to reduce your payment and reduce your monthly US$ cash requirements.  Realize that our current norm of buying property mostly via credit is a relatively new practice; prior to the Depression of the 1930s, people bought their homes outright with cash, or paid 50% down on a 5 year mortgage.
  • Whether you rent or own, consider sharing housing with others.  Living alone, solo families, and “independence” are concepts that arose at the same time as humanity’s energy affluence.  Most of human existence, people lived in close quarters with extended families and community.  Why?  They did it for survival.

Health care:

  • Learn.  Take it back from The System.  Many techniques for taking care of our health are free for the learning.  Investigate the public library, buy used books, share books with friends, and accumulate knowledge within your community (idea: Resilience Library)
  • By polling your local community members, you’ll discover who has knowledge, experience in herbalism, accupressure, homeopathy, reiki, and other sustainable modalities.  Here in L.A. we held a Wisdom Circle where people shared with each other what they knew about garden-to-medicine herbs – our “backyard medicine chest.”
  • Keep things in perspective.  In The Healing Arts: Exploring the Medical Ways of the World, Ted Kaptchuk and Michael Croucher refer to allopathic/Western medicine as “the politically dominant medical system.”  Realize that it was to grab market share during the Industrial Revolution that allopathic medicine began usurping “science” to denigrate other forms of healing.  In other countries they still have the wisdom to understand the value in traditional modalities.  (What is sustainable medicine?  See "Healing Without Harm ," by Joel Kreisberg, DC and "Eight ways that modern medicine is oil dependent," by Paul Roth)
  • Healthier eating (homegrown fruits and veggies, seasonal eating) and productive exercise (urban agriculture, cleaning out the chicken coop, hauling water, etc) will go a lot further toward promoting true health than pills, weight-loss gimmicks, and “health” clubs.
  • As you experiment with different health modalities you may find you can make do with less prescription meds – you might be able to wean yourself off many of them.  Say “no thank you” to new meds whenever they are optional.
  • Women, educate yourself about your fertility.  Toni Weschler, Taking Charge of your Fertility.  Susun Weed, Herbal for the Childbearing Years.  Susun Weed, Menopausal years: The Wise Woman Way.

Community:

  • Make these things “the way we do things” within your circle of friends.
  • Help your teens and kids find similar supportive circles of peers.  If you can’t find them, you community is crying out for Transition programming for teens.  See the “Engaging Young People” pattern and Transition Tales links.
  • One Transition initiative offered a program that they called their “Recession Relief” project.  Brilliant!  When you stop to think about it, much of our DIY Transition approach simultaneously provides a solid answer to downturn-driven cash flow problems.  At Transition Los Angeles, we didn’t add new projects to create a “Recession Relief” project – we simply flew a webpage that compiled links to our appropriate existing offerings. 

How do you do all this and still conduct a “normal” life?

That’s exactly the point:  You don’t.  At some time within the next few months or years, circumstances will be such that you will relinquish the feeble attempts to hang onto that gluttonous consumption, compete-with-the-Jones’s (or “keep the kids competitive” with the Jones’s kids), go-go-go life rhythm.  You’ll begin to get real. 

Remember, green-casting a five-planets-worth-of-consumption life isn’t enough to prepare for the crises ahead.  Peak oil + climate change + economic contraction demand that we make truly radical change.

The five-planets-worth-of-consumption world labels many of the suggestions on this list as “alternative.”  That is a derogatory term; it implies that there is normal, and then there is alternative.  Change your language and hold these changes in their proper light:  These are forward-thinking, cutting-edge, the patterns and habits of the new future.

More resources:

  • Megan Quinn Bachman writes about what she calls “lifestyle leaders”
  • Read stories from the 1930s, or talk to those who lived through those times.  The survivors are in their 80s now, so the Depression represented their early childhood years. Many of them recall the simplicity and togetherness of Depression-era events with great fondness.

This post is an excerpt from a longer paper, "Economic Resilience," which is being posted online in serial form.  Part I explains the problems, because we have to understand what we are working with in order to begin to solve it.  Part II critiques what several economic theorists see as possible routes forward for the “big picture” economy.  But the central question of this document is what we can do at the grassroots level.  Part III (approximately 70% of the document) offers a panorama of ideas for building local economic resilience. Links to the full document can be found here.

Joanne Poyourow is the initiator who brought the ideas of the international Transition movement to many areas of Los Angeles.  She is actively involved in the Transition Los Angeles city hub.  She was a CPA in public practice for more than 13 years and holds a degree in Business Economics from the University of California at Santa Barbara.

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