Deflation in the Scuba Market

[scubafanatic]

Lots of interesting discussion here about economics (thank God none of us is a real economist!) but I think, frankly, that the larger picture is not appreciated by most people. I have done a bit of travelling as a consultant over the last ten years: I have seen the empty factories in New England, and the bustling new industrial parks in India.

The fact is that affluent countries have shipped their production, technology, and jobs to other, poorer countries. There are hundreds of millions of people in China and India and many other countries who are happy to work for a tiny fraction of that paid to workers elsewhere, and their employers are not overly burdened by regulations or restraints. Those countries are benefitting, but the American middle class is shrinking. Businesses that depend on the middle class - most notably those, like scuba businesses, that are discretionary - are also shrinking.

IMO, we are not, as the public has been led to believe, in a "recession": We are in the midst of a global shift in the way labor is utilized. The young people in Peoria are now competing for jobs, not with each other, but with young people in Bangalore. I hate to have to say it, but I see no going back.

And what's worse, this economic shift in power was camouflaged until recently by the real estate/credit 'bubble' where the decline in wages was masked by the paper appreciation of home prices, which Americans tapped into like a giant ATM, sucking out home equity to maintain a standard of living that was otherwise unsustainable...and now that that particular form of ecomonic stimulus is over, what will Americans do for an encore ?

 

[timegan]

And what's worse, this economic shift in power was camouflaged until recently by the real estate/credit 'bubble' where the decline in wages was masked by the paper appreciation of home prices, which Americans tapped into like a giant ATM, sucking out home equity to maintain a standard of living that was otherwise unsustainable...and now that that particular form of ecomonic stimulus is over, what will Americans do for an encore ?

Well thats easy ):... Whats the Grand Canyon worth these days? How about Mt. Rushmore mounted on a huge casino in _______ Man....we all got lots ta sell.

 

[Mike Boswell]

And what's worse, this economic shift in power was camouflaged until recently by the real estate/credit 'bubble' where the decline in wages was masked by the paper appreciation of home prices, which Americans tapped into like a giant ATM, sucking out home equity to maintain a standard of living that was otherwise unsustainable...and now that that particular form of ecomonic stimulus is over, what will Americans do for an encore ?

Yes, and the tech bubble before that. The fact is that job and earnings prospects in the US have been on a downward track for decades.

Businessmen and elite decision makers felt that they were largely immune from the effects of this, and they rationalized that Americans would be retrained for higher-level jobs, but neither of these things is true. Even legal work is now being outsourced: http://www.nytimes.com/2010/08/05/business/global/05legal.html?_r=1&src=me&ref=general

With lower employment and lower earnings, an expensive recreational activity like scuba just HAS to be one of the first casualties. My guess is that the numbers of young people who have the time and money to pursue scuba will continue to decline for the forseeable future.