Steel plants are closing. The housing market is awash in foreclosures. Some people have been out of work so long they have exhausted their unemployment benefits.
So why has Howard L. Shenson moved to bigger office quarters? For that matter, why are Carlyle and Ronald Michelman contending with their biggest rush of business since the Depression? Why is Graham Shepard selling so many swimming pools? How has Allen Barr managed to double his income?
They are the often-unseen winners in the recession, the consultants, bankruptcy lawyers and top-of-the-line merchants who have found a way to earn money in a time of economic despair. Like the crew cleaning up the stadium after the home team has lost, they don't like the fact that others are suffering, but don't think that should keep them from making a living.
"This is a fantastic country; you can make money in this country," said Shenson, whose consulting business brought in a million dollars last year. He says independent consultants throughout the country are doing well. "If you have the interest and the capability, you can do it."
Key to many of their successes are the curious anomalies of the latest recession -- declining inflation along with high interest rates, record unemployment along with record stock prices -- which leave handholds for many to grab onto.
Middle-income Americans with secure jobs, if they needn't suffer high interest rates in order to buy a house, have profited from the lull in inflation. Resourceful elderly people with good retirement plans have seen the interest on their investments blossom just as their supermarket bills have reached a welcome plateau.
But in some niches of the economy, many of them here in the entrepreneurial West, Americans are not just staying whole but doing a good business besides.
In San Jose, Royal Pools Inc. owner Graham Shepard said sales of his $30,000 pools with attached spas remain very strong. The people who buy them are not bothered by high interest rates -- "They pay cash, or they write off the interest on taxes," Shepard said.
Michael Huss, who sells Mercedes Benz automobiles in Pasadena, said the market for the $20,000 to $35,000 car has remained healthy throughout the recession. "The people who have that kind of money are going to spend it anyway," he said.
Shenson, 38, just fell into the business that has now become so prosperous. He had been teaching business management at California State University at Northridge, and was building a career as a marketing consultant on the side, when people began to ask him how they could become consultants.
Shenson held a few seminars, started a newsletter and now runs a business, including mail-order tapes and books, that serves essentially as a consulting firm for would-be consultants. His business' income increased 15 percent in the last year.
The country now has an estimated 140,000 full-time consultants, Shenson said, covering every field from efficient housekeeping to nuclear physics.In recessions, he said, "Companies are getting rid of a lot of full-time employes, but there are still jobs that have to be done, so they turn to consultants."
Businesses ask consultants for advice on how to be more efficient and save money. Then, when the recession appears to be ending and businesses want to gear up for expansion, they turn again to consultants.
For the few companies that experience a sudden glut of business during a recession, there is another bonus -- a bumper crop of high-quality job applicants.
When the new B1 bomber contract allowed Rockwell International Corp. here to start hiring again last year, 30,000 to 40,000 applications flowed in. At one point, job-seekers were lined up for more than a block from the company headquarters at 7 a.m.
"It's the kind of deluge you like to have," said Earl Blount, Rockwell's regional director of communications. Personnel executives found the 5,000 workers they hired were significantly more talented and experienced than their usual run of new hires in good economic times, and included several former Rockwell employes with experience in the B1's early development.
The company has even been able to accelerate production schedules, Blount added, because the business slump has allowed it to get critical materials like titanium much more quickly than expected.
At the small law firm of Michelman & Michelman in downtown Los Angeles, the lights have been remaining on late into the night the last several months. Ronald Michelman, 36, and his father Carlyle, 71, are bankruptcy attorneys.
"Sometimes we work from 9 a.m. to 11 p.m.," the younger Michelman said. "What you have to do is work as hard as you can, try to help as many people as you can, working constantly."
The senior Michelman has not seen such business since 1932, when he first began practicing law in Detroit. With the current "torrent of cases," Ronald Michelman said, not all attorneys appear to be well-prepared: "We see a platoon of bankruptcy attorneys suddenly advertising themselves and we've never heard of them before."
Michelman said he has heard bankruptcy attorneys referred to as "scavengers on the economy," but his clients appear to appreciate the service and consumers seem to have few qualms about filing for bankruptcy when their credit card debts overwhelm them.
In the 1930s, Michelman's father has pointed out, "people were reluctant to file for bankruptcy. There was a stigma against filing then. But there isn't anymore."
The normal fee for handling a consumer bankruptcy is about $450. The Michelmans' volume of cases has grown 35 percent in the last year, and the deluge has yet to end. Michelman has added two more members to his staff. His clients also seem to show little hesitation about straying again into dangerous financial waters. "The question 95 percent of them ask is, 'Can I get credit again?' "
If the careless suffer most in a recession, the careful often make out well. One retired couple who were interviewed in Foster City, Calif., and asked that their names not be used, said their investments have brought healthy dividends during the high-interest period. Their Social Security and teacher pension plans and his Air Force Reserve retirement have made up the difference.
Their teacher pensions provide very low cost-of-living raises, so the drop in inflation has been to their benefit. They have made use of cut-rate air fares to Hawaii, a frequent destination in their favorite recreation -- travel. They also like to tour scenic parts of California in their camper, so stabilized gasoline prices have helped.
As the ill-prepared suffer in a bad economy, the successes of the farsighted and the fortunate seem all the greater. Allen Barr, who directs the Statewide Publication Service here, has been conducting foreclosure sales for 20 years, but he only began to make large amounts of money when the local real estate market collapsed and "creative financing" and huge interest payments forced many homeowners into default.
"It was a matter of being at the right place at the right time," he said.
Barr plans to remodel his own home once he finds time in his suddenly busy schedule. To say he has doubled his income, he said, "is putting it mildly."
Barr said he recognizes the tragedy of much of what is going on. "I don't take pleasure in seeing anybody lose his home," he said, "but this is a job that has to be done."