Jody's story: indulgence vs. reality

Last week, we introduced you to Jody Mace, whose passion for finding bargains in Charlotte - and her Web site chronicling that passion - became more personal when her husband lost his job in the banking industry.

We've been bringing you stories like Jody's from around Charlotte, voices that speak to how the recession affects all of us. We want to hear your stories of struggles and successes, too.

Jody has promised to check in regularly with deals - and sometimes the tales behind them. Today she offers another perspective on good bargains: When might they not be so good?

Says Jody:

Like many addictions, mine started with one indulgence. My indulgence was a pasta making attachment for a KitchenAid Mixer at Goodwill for $2.99. Although the chances of me making homemade pasta are about the same as me repairing the electrical system on the space shuttle, let me point out that this item sells on Amazon.com for $65.60. Discounted.

Even if I never make any spaghetti, the deal was irresistible. I could sell it on eBay. I didn't (it sits in a kitchen cabinet) but I could.

But it's not just the bargain; it's the karma too. Every item I buy second-hand is one that doesn't end up in a landfill. That's why I'm guilty of a little self-righteousness at Goodwill.

Soon I found more deals I couldn't pass up. The leather recliner for only $20. So what if there was a little tear in the arm and it was prone to reclining violently at a terrifying angle for no apparent reason? A fully loaded picnic basket (never used it), then a barbecue grill set (did use this.)

My obsession was contagious. Before long my husband, Stan, was with me at the Goodwill, examining a pair of wooden shoes. Both were for left feet. One was slightly larger than the other.

"What are the chances," he asked, "that there's a Dutch person who has two left feet of different sizes?"

We didn't buy them, but we couldn't resist the blood pressure cuff, the cologne bottle in the shape of Abe Lincoln, the moose costume for our dog, and the small marble statue of the Sphynx.

Soon Goodwill wasn't enough. We graduated to the Habitat for Humanity ReStore, where they sell really big things, like doors and kitchen cabinets. We were finishing our basement, so we had the perfect excuse.

Anyone who visited our house got the same routine from me.

"Do you see that light fixture? ReStore. The Foosball table? Yup. That, too. Yes, the bathroom fixtures too. Yes, even the toilet. (Pause) What's wrong with that?"

I regularly receive emails from the ReStore, so I know when the good stuff comes in. Like the restaurant booth. Anderson's Restaurant, a Charlotte landmark, had closed and Habitat was auctioning off all its furniture, including about nine booths, each one with the light fixture for the wall and a laminated menu.

They didn't have to tell me twice. As the auction closed I was among a small group of people cagily circling the booths, ready to scribble down a higher offer should anyone outbid us.

Bringing home a genuine restaurant booth was the high point of my bargain-hunting career.

Then came the theater seats. Flying high from my booth win, I had to have them. They were from an auditorium and folded up just like the seats in movie theaters. I thought we could arrange a bunch in front of the big-screen TV and create a home theater room in the basement. It all made perfect sense.

Except that we bought eleven of them. And we didn't have room for them. And they had to be bolted to the floor. And they were extremely heavy. And we didn’t even have a big-screen TV.

When we first stored them in the garage, we honestly believed we'd eventually find a use for them. But what? As time passed, the theater seats became a symbol of our shared obsession, our excess. There wasn't even room in the garage for our car. I asked around but nobody wanted eleven used theater seats. I was pretty sure the ReStore didn't want them back, and my conscience prevented me from putting them on the curb to end up in a landfill. So they remained in the garage.

If those theater seats, sitting folded between the vacuum cleaner ($10) and the upholstered storage bench ($20) weren't enough to open my eyes, the recession suddenly forced the issue. My husband lost his job. My freelance assignments slowed down.

I don't have the indulgence anymore of buying something just because it's a good bargain. If I can't use it, and I can't get rid of it, then no matter what the price tag says, the cost is too high.

I'm getting good at resisting temptation. I didn't buy the Eggstractor (as seen on TV), the ice cream machine, or the slide projector. I passed on the hip waders and the manual typewriter.

Sometimes it takes an intervention - in our case, a drop in income - to force a change. This is what it feels like, I tell myself, to conquer an addiction.

Then the phone rings. It's Stan and he's at the Goodwill. "There's this gazebo…"

On journalism's big day - a reminder of big struggles

Newspapers around the country - including this one - got a little quieter about 3 p.m. yesterday as staffers clicked on Web sites and waited on the announcements of the Pulitzer Prizes.

Pulitzer Monday is an annual celebration of the good work newspapers do - from bringing down corrupt mayors to digging into an unusual number of construction worker deaths.

But in what might be journalism's most difficult year, the event also was a reminder of the struggles the industry, like many, is facing. One Pulitzer winner, Paul Giblin of Arizona's East Valley Tribune, was laid off three months ago by his cost-cutting employer. This morning, the winner of five Pulitzers, the New York Times Co., reported that it had lost $74.5 million in the first quarter of 2009 after its advertising revenue dropped 27 percent.

Newspapers are being buffeted on two fronts - not only from a recession that has starved ad revenue in print and online, but a changing media landscape in which more advertisers are opting to go online, which is less expensive for them - and less profitable for media companies than print ads.

The result is staffs being cut across the country - and strong reporters leaving the profession - threatening the kind of journalism the Pultizers honored yesterday.

Such financial challenges led the East Valley Tribune, in suburban Phoenix, to lay off 140 employees earlier this year. Giblin, who was one of those employees, had worked with fellow reporter Ryan Gabrielson since 2007 in examining Sheriff Joe Arpaio's efforts to focus on illegal immigration, its cost to taxpayers and to public safety.

The coverage earned the Tribune, which is owned by Freedom Communications, the Pulitzer in the local reporting category.

“The people down there at the Trib are great people. It wasn't quite as painful for them as it was for me when I got laid off,” Giblin told the Associated Press. “But I know it was painful for them. I don't harbor any ill feelings.”

Giblin learned the news while covering a U.S. Senate committee hearing in Phoenix on border violence. He and three other laid-off reporters have started a Web site, the Arizona Guardian, that focuses on politics and the Arizona Legislature.

“When I left, it didn't make me feel any worse as a journalist,” Giblin said. “I was laid off in really good company. I still think I'm capable of doing good journalism.”

Small businesses: "Twisting and turning and trying everything"

Last week, when Ellen Rossiter Houpt was discussing some marketing work for her company, Carolina Corporate Wear, the topic of payment came up. Perhaps, Houpt said, she could offer some work in return - the public relations company's logo imprinted on something?

"They said it was something they'd consider," she says now.

It is also, she says, one of several ways she's trying to save money, like most business people in this recession. A new poll shows how far small business owners are willing to go.

Some measures are all too common in this economy, including half of small business owners cutting staff and 16 percent cutting benefits, according to the survey, conducted by Echo Research and sponsored by American Express. Like Houpt, 45 percent are open to bartering with customers or suppliers.

Some have resorted to more drastic moves, including 30 percent who stopped taking a salary and 27 percent who have family members working for free. Sixteen percent of owners have taken a second job to help pay costs.

"Small business owners are creative and resilient," says Alice Breden, a small business consultant for 20 years who consults with American Express' small business division. "They're twisting and turning and trying everything."

Houpt started Carolina Corporate Wear in 2002, and the Charlotte company has since had two full-time employees - she and her husband, Matt. "Basically, we put a corporate logo on anything and everything companies want to put a corporate logo on," she says.

Her company began feeling the bite of the recession at the beginning of the year, she says, and she and Matt did what all good owners do - looked over all their processes and bills in an attempt to find savings. They also, at times, have stopped taking a salary, although like many small businesses, that was determined more by money that wasn't coming in. "We think of it as being completely commission-based," she says.

Recently, they considered having Matt look for a second job, but decided that the energy spent finding one would be better spent finding new business for their business.

For now, they are confident they can make it until that happens. They have good credit and access to capital. They are lean. And, like 45 percent of the small business owners in the survey, they are ultimately optimistic the economy will come around in time for them.

For many, it's what they have to believe. Breden, the small business consultant, says her research has long shown that small business owners can't imagine themselves doing anything else. "Yes, it's stressful, and you get gray hair," she says. "But once you run a small company, that's all you want to do."

Getting paid to leave your home

By the time David Benham's company knocks on a front door, the owners inside are no longer the owners. They've gone through the pain of losing a home - the missed payments, the negotiating with lenders, the realization that it's not going to work. Benham is there to collect the keys.

He also is delivering a check.

Cash for moving out of a foreclosed home? The practice - called "cash for keys" - has been happening for years, but never as much as now, with home values plummeting across the country and banks trying to avoid long and sometimes costly evictions.

Benham and his identical twin Jason are the founders of Benham Real Estate Group, with 71 offices across the country, including Concord. His office does 15-20 cash for key negotiations a month in the Charlotte area alone.

"It's just a form of eviction," he says. "It's a quick eviction."

It happens like this: After a foreclosed house is bought back by a bank, the "asset" is e-mailed to brokers like Benham. "If it's occupied, the first thing the bank wants me to do is offer a cash for keys," he says.

In Charlotte, Benham's staffers contact the former homeowner with an offer of $500 to move out in two weeks. The offer can go up if the former homeowner haggles - "I can't do it in two weeks" usually is followed by "Can you do it in two weeks for $1,000?" - but most don't know it's a negotation. "No one ever turns the money down," Benham says.

Banks will pay as much as $1,500 for a cash for keys transactions in Charlotte. In other areas of the country, where home values are dropping more quickly, banks pay as much as $4,500 to $6,000. One of Benham's colleagues, in California, delivered a $40,000 check on a foreclosed $4 million home.

Usually, Benham says, the former homeowners are happy to be getting even a small check in exchange for their keys. Occasionally, but not often, the homeowners haven't completed their end of the transaction - having all their belongings off the property in the two weeks. Most, however, seem glad to have it over.

Benham, along with many industry observers, doesn't expect his business to slow anytime soon. When the recent bank moratorium on foreclosures expired earlier this month, there were more than 600,000 foreclosed properties around the country. With home values continuing to fall and the economy still sputtering, that number will likely spike, despite the Obama administration's housing-rescue plans.

"You could see 1.5 million by the end of the year," he says. "There are going to be more foreclosures than you can imagine."

Are Southerners more optimistic about the economy?

A new business poll offers some fascinating insight into how small business owners view the recession - and what steps they're taking to survive.

The poll, conducted by Echo Research and sponsored by American Express, has several startling numbers, including that one-third of small business owners surveyed stopped taking a salary during the economic crisis. We'll be bringing you one of those business owners, in Charlotte, coming soon.

But buried in the poll's internals is something else that caught our eye: Half of Southern small business owners have a positive outlook about the economic future, at least five percent higher than any other region of the country. New England small business owners were the most pessimistic, with only 37 percent feeling good about what's ahead.

Are Southerners really more optimistic about the economy? We've been suffering as deeply, if not as long, as most of the country, with double-digit unemployment in the Carolinas - and Kentucky, Florida and Alabama close behind.

So why the comparatively positive business outlook? We asked Alice Breden, a business consultant for 20 years and advisor to American Express' small business division. "I have no idea," she said.

Breden, however, is based in Boston, so she gets a pass. Your Squeeze author is likewise a New Englander, but I've been in the South for more than 15 years, which means I know enough to let the natives tackle this one.

Mrs. Squeeze, a Southerner by birth, gets the first opinion. She wonders if the Southern optimism in the AMEX survey comes, in part, from putting on the proper face - that ingrained sense here of saying something positive, at least in public settings.

Tell us what you think. A statistical hiccup (although the sample of 800 respondents is solid) or do Southerners have a sunnier outlook?

Your Morning Edge:

Beware of debt settlers and counselors, who often leave creditors and consumers frustrated, reports the New York Times.

It's time - already - to be preparing for next year's taxes, the Wall Street Journal says.

The lesson from the crash? Nothing lasts forever, including bear markets, Fortune says.

We're looking up, even if our finances aren't

U.S. confidence is at its highest point since September, when the collapse of Lehman Brothers sent Wall Street and the economy reeling.

The Reuters/University of Michigan Surveys of Consumers said its preliminary April reading of consumer sentiment rose to a level of 61.9, up from 57.3 in March and was the highest since 70.3 recorded in September.

Rasmussen's daily consumer confidence index also has spent the past week at levels not seen since last fall.

That optimism is coated with realism, however. Reuters respondents believe things will get better very slowly, said Richard Curtin, the survey's director. Curtin also noted that the positive outlook comes despite most respondents reporting their current financial status worsening.

Most any economist will tell you what small business owners already know - that the country won't begin its recovery until consumers believe it's not foolish to start spending a little money.

"Everything hinges on confidence," economic guru Mark Zandi of Moody's Economy.com told reporters last month. "And it's possible that the policy response (bank rescues and stimulus spending) shows some progress by the summer.''

Meanwhile, despite being buffeted by both positive and negative financial news, we seem to be looking up, proving another Zandi notion correct: "It won't take a lot to make people feel a lot better."

At this point, that's not a bad thing.

Jody's story: She'll save you money

Earlier this year, Jody Mace heard from a colleague in Atlanta who was starting a network of web sites featuring deals in American cities. Would Jody, who lives in the University area, want to build a site for Charlotte?

It seemed like a good fit. Jody has lived here 20 years with her husband and two children. She's an accomplished freelance writer, with pieces in magazines including O and Parents.

Plus, she's a cheapskate.

"I don't like spending money," she says. "It's kind of a challenge. I don't spend a lot of time clipping coupons. I just like a good deal."

The web site seemed like good timing, too. The recession had closed several of the magazines that contracted her work, and assignments were arriving more slowly. "I thought it would be a way, eventually, of making some income more independently," she says. She wrote her first post Jan 11.

It was, at first, fun work. Jody says she's always enjoyed finding "hidden secrets" in Charlotte, and her reporting took her to places she hadn't seen in years - or wouldn't otherwise have seen at all. She took her daughter on the No Da Gallery Crawl. She held a contest giving away a pound of coffee from the Dilworth Coffee Roastery, then got a tour. "I tasted the best latte I ever had," she says.

Just three weeks after she started Charlotte on the Cheap, however, the fun became more personal. Jody's husband, a systems analyst in the banking industry, lost his job.

"I wanted to make sure that my kids could still do fun things even though we didn't have cash to spend," she says. "And I empathized a whole lot more with people who, by necessity, had to live frugally."

Her husband's unemployment has been stressful, she says, but it's brought the family closer, the way time and challenges do. It's also given Jody an appreciation for supporting local businesses, which she sees as the key to getting out of the recession. "Although I do write about national chains, I try to focus on locally owned businesses whenever I can," she says. "I seek them out all the time. Wherever I go, I hand out business cards and talk to people about the web site."

Her hustle is paying off. Her web site usually features three or four deals a day, including some unusual items, such as a free self-hypnosis workshop and free salsa dancing classes. Our favorite: A Harrisburg florist with a sign that read, "Free rose if your name is Bob." It was legit.

Jody will be contributing regularly to the Squeeze, and you'll find a link to her site over to the right. The site, she says, is doing well, thanks to word of mouth, some online social networking, plus her creativity in arranging contests like the free coffee.

The latest, starting April 25, is for a free night at Great Wolf Lodge, a new family resort in Concord. She hopes someone who's out of work is the winner. It would be cool, she thinks, for a family like that to get a treat right now.

Laurie's story: "It's been almost five months"

Since her husband lost his job late last year, Laurie Reid has given Squeeze readers an insightful glimpse into her life - from trying to reenter the workforce to being unafraid to talk about it with friends.

Through it all, she's learned much about herself - and her husband. That is, she says, what challenges offer to us.

We've been bringing you Laurie's story and others from around Charlotte. They are voices that speak to the different challenges that you'll find throughout our city. We want to hear your stories of struggles and successes, too.

Says Laurie:

It's been almost 5 months since my husband lost his job and I remember the day like it was yesterday. I remember where I was standing in the kitchen when he walked through the mudroom door. I remember what he was wearing and the expression on his face. I remember knowing that something was terribly wrong before he opened his mouth. And I remember the sinking feeling in my stomach when he announced, "I've been laid off." It was a cold autumn day and yet I remember it like it was yesterday. Perhaps the old adage is wrong and time flies regardless of whether or not you are having fun.

We haven't spent the months moping around and feeling sorry for ourselves; quite the contrary. This is the 6th post I have written for The Squeeze; those of you who have read the previous entries know that my husband is incapable of looking at a glass half empty and that his positive attitude is contagious. Even after 5 months, he continues to view this experience as an opportunity to grow as a person, to gain a better understanding of his strengths and talents and to land the job of his dreams.

Sounds too good to be true, doesn't it? Believe me, there are days when I want to slap him upside the head and shout, "This absolutely sucks and the news just keeps getting worse, how can you be so @%$# optimistic!?" But I've never actually uttered those words, which is more a testament to the invigorating effects of his positive attitude than it is my ability to practice self-control.

But I would be lying if I didn't admit to having bad days. Well, maybe not bad days, but bad nights, for sure. Why is it that things that are quite manageable in the light of day intensify as soon as the sun sets? Instead of shutting down and recharging at night, my mind has a tendency to wander to strange and scary places.

But over the past couple of months I've become an expert at reeling it in and forbidding my imagination to get the best of me. In doing so, I've gained power and strength. Which brings me to another old adage: that which doesn't kill you, makes you stronger. I believe that most of us choose to make lemonade out of the lemons we are handed. What other choice do we have, really? It's a survival instinct, the human spirit at work.

It's a shame, though, that most of us don't appreciate it until after the fact. It's not until we've been put through the ringer and made it through to the other side that we look back and see that we were capable of much more than we initially gave ourselves credit for. Perspective is beautiful thing, but too many of us lose it along the way.

As much as I would like this all to be over, for my husband to be employed and the economy to get back on track, I simply cannot afford to wish away this part of my life. I'm 45; I'm middle-aged, for crying out loud, every year counts! I hate that this is a difficult time, but time is going to pass whether or not I am smiling, so I may as well smile. My kids are 12 and 9 for only one year; I don't want to regret not having enjoyed every minute of it. I want to look back on this and be proud of how I handled myself and how I supported my husband and family. No regrets allowed.

This past weekend I saw one of the women I mentioned in an earlier post whose husband was also out of work. I will miss getting to know her better, but I am delighted that after only 6 weeks of unemployment, her husband found a fabulous job in Atlanta. They put their home on the market and it sold in 10 days.

Granted, their story is not the norm; at least, it's not the kind of story that the media seems focused on these days. But wouldn’t it have been nice to see that story in print? I joked that my husband and I should rub the couple for good luck.

But my husband is also doing well in his search. He hasn't secured full time employment, yet, but he landed an incredible consulting gig that brought him to the Ukraine for a week of very exciting work. I've been busy, too, and have actually deposited two paychecks in the last month. It's not steady work for either one of us, but it's a start and we're not complaining. In fact, we're smiling.

Which brings me to my last adage; I believe Robert Frost deserves the credit for this one, "In three words I can sum up everything I've learned about life. It goes on." I suppose the mark of a successful life is one where the days fly by ... but the years are long and full.

Jobless claims show surprising drop

An encouraging jobs report today from the Labor Department - the second in two weeks.

New jobless claims fell more than expected for the second straight week to a seasonally adjusted 610,000 - the lowest level since January. The number, a drop from the previous week's 663,000 claims, was well below analysts' expectations of 655,000.

Two positive reports don't mark a trend, but they indicate a possible leveling out of unemployment. Two pieces of context, however: 1) Similar signals have been followed by bad news, including earlier this month, when jobless claims spiked to 669,000; and 2) The jobless claims still are much higher than a year ago, when claims stood at 369,000.

What to take from today's report? UNC Charlotte economist Carol Swartz has reminded Squeeze readers that when economic recovery starts, businesses see their orders and sales increase. Only when they are confident that the activity is lasting will they begin to hire again.

First, they have to stop firing people. We are, perhaps, nearing the beginning of that process.

Your credit card company seems to hate you (continued)

After taking a thrashing last month on Capitol Hill, banks and credit card companies may be showing some sensitivity to the struggles some of their customers are enduring.

But many, including Bank of America, are still raising interest rates in the face of severe losses from loans.

A consumer credit protection group announced yesterday that 10 banks, including Bank of America, have agreed to make credit card repayment concessions to help delinquent customers avoid bankruptcy.

The National Foundation for Credit Counseling said the banks agreed to modify and expand debt management plans through which creditors provided some repayment concessions, including waiving late fees.

Such plans have been in place for 40 years, the NFCC says. But in this economic downturn and recession, fewer consumers have sufficient income to be eligible for, or the ability to maintain DMPs, often leaving bankruptcy as the only option.

"This represents a significant action on the part of the creditors to take additional steps to help consumers, which is our collective mission," said Susan C. Keating, president and CEO of the NFCC. "This will provide those in debt with more options to stabilize and rebuild their economic lives."

Those creditors are American Express, Bank of America, Capital One, Chase Card Services, Citi, Discover Financial Services, GE Money, HSBC Card Services, U.S. Bank and Wells Fargo Card Services.

Certainly, the agreement isn't binding, but banks and credit card companies may be starting to nod to the seeming incongruity of accepting bailout money, then showing little compassion to struggling consumers.

Such behavior has led senators to float the idea of an interest rate cap on credit cards, a notion that's gaining support across the country.

Still, banks continue to raise those rates in an effort to compensate for loan losses. Starting in June, BofA is raising rates for customers who have rates below 10 percent and carry a balance, the Observer's Rick Rothacker reported today.

These customers, who account for less than 10 percent of the bank's portfolio, will now pay rates in the low and mid-teens, spokeswoman Betty Riess said.

Bank of America did retreat this week from an earlier announcement that it was increasing the fee it charged customers when they make purchases or withdraw money without enough to cover it in their accounts.

The bank had been telling customers that it was raising its overdraft fee to $39 from $35, but that increase was suspended Monday. Although the bank is charging a new, one-time fee of $35 if accounts are negative more than five days, it also announced a more welcome change: If an overdraft causes an account to become negative by $5 or less, the overdraft charge will be $10 instead of $35.

Bank spokesman Jim Pierpoint told Rothacker that the general overdraft increase to $39 was dropped in consideration of the current economic climate, particularly rising unemployment.

N.C. Sen. Burr to wife last fall: Get our money out of the bank

Sen. Richard Burr (R-N.C.) is getting buzz in Washington and elsewhere today for telling an N.C. audience this week that when the financial crisis began, he encouraged his wife to withdraw all the cash she possibly could from their bank's ATM machine.

The remarks came in a speech on the economy Monday to Western N.C. business owners, the Hendersonville Times-News reports. Those comments have since found their way on several national blogs, including the top spot on The Huffington Post.

Burr detailed to the audience his reaction to the beginning of the crisis last fall. He recalled Treasury Secretary Henry Paulson discussing a call from the CEO of a major company having difficulty transferring money between banks.

“On Friday night, I called my wife and I said, ‘Brooke, I am not coming home this weekend. I will call you on Monday. Tonight, I want you to go to the ATM machine, and I want you to draw out everything it will let you take," Burr said. "And I want you to tomorrow, and I want you to go Sunday.’ I was convinced on Friday night that if you put a plastic card in an ATM machine the last thing you were going to get was cash.”

Burr also offered a dire analysis of the economy.

“I would tell you it’s not a recession," Burr said. "I would define this as a depression. A recession by definition is when you raise interest rates to slow growth. We are at a zero-interest-rate policy and have been. The world is at a zero-interest-rate policy, yet we continue to see the economy slide. We continue to see unemployment grow. We continue to see confidence wane not just here but around the world.”

How would Burr describe what a recovery looks like? Not the quick U-shaped or V-shaped rebound that some economists see, but something more gradual.

“Those are the only things they talk about,” Burr said. “Either it’s a lack of imagination or some belief that you can make everything fit into those two. Let me suggest to you today, I think we are in a Nike swoosh.”

The mighty (Family) Dollar

Worth a look: A Fortune magazine profile of N.C.-based Family Dollar, which is thriving in the recession along with several "dollar" stores.

Family Dollar, founded by Leon Levine in 1959, reported a 6.4% jump in second-quarter sales at stores open more than a year. It's one of the top performers among Fortune 500 companies, with shares are up 28% so far this year after rising 36% in 2008.

The philosophy behind the success? Says Fortune:

While other retailers have courted a more upscale clientele by adding fine jewelry and designer clothes, Family Dollar has stayed true to its roots. A typical shopper earns just $35,000 a year. Says (CEO Howard) Levine: "We want our customers to know they can afford anything in our stores."

How does Family Dollar do it? By selling a greater amount of second- and third-tier
brands, which cost less and possess greater margins than do first-tier brands - more Gain laundry detergent than Tide, for instance - and by cherry-picking inexpensive real estate in unglamorous locations. At $2 a square foot, Family Dollar's occupancy costs are a tenth of what a typical supermarket or drugstore pays, and 1/50th the cost of a mainline department store, estimates Burt Flickinger III, managing director of the Strategic Resource Group.

The story doesn't mention, but you might remember, that Leon Levine and his wife, Sandra, donated $1 million in December for the Critical Need Response Fund, an emergency fund based in Mecklenburg County to help thousands of the homeless, hungry and jobless here through the cold months.

In defense of the splurge...

What to do on tax day? You can contemplate how you might spend a refund. You can protest how the government is spending the rest. You should not, however, skip filing your return - even if you can't make a payment.


We have another suggestion: How about a splurge?


Not a big one. Not anything irresponsible or reckless. Perhaps a nice restaurant dinner with some of that refund, or a subscription to that Major League Baseball package on cable, or some soil and seeds for a garden or flower bed that can give back this spring and summer.


Or, if your budget won't allow for that level of extravagance, maybe a smaller piece of happy - a cup of fine coffee, a chocolate-covered strawberry.

We'll supply the rationalization: Splurges offer a temporary relief from pressure, a small repayment for the unpleasantries of everyday life.


"There's an old piece of folk wisdom that if you're feeling down you should go out and buy yourself a new hat," says author and consumer behavior scholar Michael Solomon. "This is called "self-gifting" and a small splurge can be used to thank oneself for a job well done - or just for still having a job."


It's why splurge items have shown resiliency in recent economic downturns. The previous such dip, early this decade, saw companies such as Starbucks and Godiva thrive selling moderately expensive goods - what analysts call "new luxury items."


Those higher-end, better-quality products have become more affordable in the past two decades, narrowing the gap between how the affluent and others live. There's even an economy built around this consuming demographic, which economists label the "mass class."


Just walk through your local Target and you'll find designer items that decades ago would have been out of reach for many. In bad times, they become even more emotionally important to some.

"When the news is bleak," Solomon says, "people need small indulgences more than ever."

In this recession, however, most of those new luxury sectors are struggling - including Starbucks, which reported a 21 percent drop in sales in the fourth quarter, with more bad news expected soon.


(An exception: Good beer.)


"The core new luxury consumer has a household income of $50,000 to $150,000," says
Michael J. Silverstein, a senior partner at The Boston Consulting Group and the author of Treasure Hunt: Inside the Mind of the New Consumer. "They are not seeing rapid increases in unemployment, but they are scared.

"While they are sipping their $8-a-bottle wine, they are boasting to each other about how good they have become at saving. They are more than balancing their budget. They have rocketed their savings rates by 10 to 12 percent."


People are still splurging, Silverstein says, just in smaller doses. "They are finding solace in one or two categories," he says. "They had traded up in 10 or 15."


Not that there's anything wrong with self-moderation, especially now. And for most of us, one or two splurges is about right in these times.


So go ahead, on this milestone day in this difficult year.


Treat yourself.


It's good for all of us.


-


Tell us what your indulgence is - big or small.

Today's gloomy news - not as gloomy as it seems?

Two glum financial reports today blunted the recent momentum of positive financial news, but do those reports signal that optimism about the economy is premature?

We asked UNC Charlotte economist Carol Swartz to sift today's data. Her conclusion: "The news on retail sales and inventories was gloomier than expected, but not dramatically so," she says.

She also found a hint of good news.

First, the reports:

The Commerce Department said today that retail sales dipped 1.1 percent in March, the largest decline in three months and a much weaker showing than the 0.3 percent increase that analysts expected.

Commerce also reported that business inventories dropped 1.3 percent in February, matching the January decline and close to the 1.2 percent fall that economists had expected. The sixth straight decline is the longest stretch since stockpiles fell for 15 straight months ending in April 2002, a period that covered the country's last recession.

Although the retail sales figures came in lower than economists anticipated, the numbers weren't stunning to Swartz.

"Retail sales declined in areas households can defer, such as automobiles, clothing, appliances, and furniture, suggesting consumer confidence has not yet rebounded," she says. "The continued decline in automobile sales is the result of continuing tight credit for consumers and the quite public problems at GM and Chrysler."

She similarly cautioned not to read too much into the inventory data, which she called a "lagging indicator" of economic recovery. "This data does not show sustained improvement until the recovery is well underway," she said.

What numbers interest her? Here's one: average total business inventory to sales numbers, which declined in February.

She explains:

"In the early stages of a recession, inventory-to-sales ratios increase because it takes time to identify the recession and adjust orders and inventory accordingly."


For 2005 – 2008, average total business inventory to sales were in the range of 1.27 to 1.31. In June 2008, the inventory-to-sales measure was 1.25 and it has increased steadily since then.

"The decline in February is a hint of good news," says Swartz, "but only a hint."

For now, hints might be all we get.

"The picture suggests that the economy is continuing to test whether additional contraction will be forthcoming or whether we are building strength for the recovery," Swartz says. "The general consensus is that the economy will begin its upturn in the second half of this year, so look for more mixed signals as additional first quarter data become available."

Amid "signs of progress," signs it will take a while

On a day the president noted "signs of economic progress" and the Federal Reserve Chairman nodded to “tentative signs” that the recession may be easing, the government released sober reports on retail sales and business inventories.

The Commerce Department said today that retail sales dipped 1.1 percent in March, the largest decline in three months and a much weaker showing than the 0.3 percent increase that analysts expected.

Commerce also reported that business inventories dropped 1.3 percent in February, matching the January decline and close to the 1.2 percent fall that economists had expected. The sixth straight decline is the longest stretch since stockpiles fell for 15 straight months ending in April 2002, a period that covered the country's last recession.

Obama, in an economic speech at Georgetown University moments ago, tried to find a balance between the sober reality of the reports and an optimism he hopes will encourage Americans to begin spending again.

“The severity of this recession will cause more job loss, more foreclosures, and more pain before it ends,” the president said. “Credit is still not flowing nearly as easily as it should.”

He promised, however, “an unrelenting, unyielding, day-by-day effort from this administration to fight for economic recovery on all fronts.”

The reports, while worse than analysts expected, offer a sliver of promise. Seasonal adjustments could partly explain the unexpectedly weak showing in retail sales. The March 2008 performance had been boosted by an early Easter, while the holiday did not occur this year until April, delaying some shopping.

Also, the decline in business inventory was not unexpected, as companies thin their warehouses to meet the drop in sales.

Other signs of progress? They include a potential slowing in job losses, perhaps coming in part from a 20-percent increase in government-backed loans in the last month to small businesses, which account for more than two-thirds of all U.S. jobs. Also, home-mortgage rates are at their lowest point since 1971 and construction and other money is beginning to arrive from the stimulus package.

“Recently we have seen tentative signs that the sharp decline in economic activity may be slowing,” Federal Reserve Chairman Ben Bernanke said to students and faculty at Morehouse College in Atlanta. “A leveling out of economic activity is the first step toward recovery. To be sure, we will not have a sustainable recovery without a stabilization of our financial system and credit markets."

(hat tip: AP)

When that refund check arrives...

The Squeeze household is happiest in April when it has a small tax refund coming - which means the government didn't hold onto a large portion of our money during the year - or when we have a unsurprising, unsubstantial tax check to write.

This is one of those years, so there won't be a refund for us to spend or save. Which are you doing if a check from the fed arrives?

More people are using their refunds this year to pay down debt, according to a new Associated Press/GfK poll.

The survey found that 54 percent of those getting a refund will use it to pay off credit cards, household and other bills. Only 35 percent said the same thing last April.

Thirty-eight percent of those receiving a refund said they intend to spend at least part of it, but that spending appears to be on the necessary more than the luxury. Seventeen percent said they would use the money for everyday needs such as food and clothing, up from 7 percent a year ago.

Only 5 percent, about the same as a year ago, said they planned to go on a shopping spree.

That frugality might be good news for Americans' long-term financial health, but not so good for the short-term economy. In previous years, tax refunds have helped increase retail sales in March, April and May by 12 percent to 20 percent over sales in February, Internal Revenue Service Commissioner Doug Shulman told AP.

"The tax filing season is its own stimulus to the economy," Shulman said in a speech at the National Press Club. "It helps kick off the spring shopping season and can help kick start the economy."

Which will you do - stimulate the economy, strengthen your own financial status, or both?

The Squeeze is on vacation

Be back in a week. 

Peter

Kasia's story: "I've circled my start date"

Four months ago, Kasia Faryna was laid off from the Charlotte non-profit at which she had worked for six years.

Kasia told Squeeze readers her story last month. Although she wondered then what her future would bring, she wrote more about being able to give to the causes important to her. Her contribution, she decided, would be her time. She became a public affairs volunteer for the American Red Cross of Cabarrus County.

Today, we're happy to report that Kasia has some new time management issues to consider.

Her update:

“If it is to be, it is up to me.” I remember hearing those words for the first time as a teenager. They sank into my subconscious and from then on, I understood that I was accountable for my own future.

Each day I repeat the phrase over and over; when I wake up, in the shower, as I make a meal or drive down the highway. It’s so much more difficult to believe in the phrase with this economy. The uncertainty of each day as an unemployed worker cut away from my drive and confidence, replacing it with vulnerability that makes even the strongest individual question their purpose. Job availability or how my qualifications matched employer needs was certainly not up to me.

So, I had to ask myself, what was?

I was in control of my outlook and my preparation. I learned to let go and accept the fact that a job post or e-mail was not likely to appear, no matter how many times I hit the refresh button on my computer. I stayed in steady pursuit of my mission, visualizing an ideal scenario. I networked, perfected my resume and cover letter and, in what would ultimately be my most beneficial move, worked on getting several letters of recommendation.

Once I let go, it all happened very quickly. A few weeks ago a business associate was nice enough to write a reference letter for an upcoming job interview. A few days later she called to let me know about a position that matched my qualifications with her non-profit organization, one that I had partnered with in the past and one that I held in high regard. They had seen my work, passion and dedication first-hand, and believed in what I had to offer. After interviews and discussions, we were able to come to a mutual agreement about the arrangement; I accepted the job offer. For the first time since my layoff, I was able to sleep through the night.

I’m still in disbelief of how this opportunity fell into place. It was days before I told anyone outside my immediate circle because I was afraid it would disappear just as quickly as it came to be. I felt sick that others—friends—who deserve a break, who have mouths to feed, are not finding jobs or are experiencing salary cuts. These friends are good to me - supportive, understanding and happy that I can break away from the strain of my situation and move on to a new career opportunity.

I’ve circled my start date, April 20th, on the calendar. And with each day between now and then, I allow myself to gain back a tiny bit of the confidence and certainty that had begun to slip away. I continue to repeat my mantra and have come to the realization that all along, the words had held true. It was my actions, both past and present, that made this opportunity come to be.

Is the Final Four recession proof?

Detroit and NCAA officials are predicting big doings this weekend for the NCAA men's basketball championship. More than 100,000 visitors are expected this weekend, NCAA spokeswoman Stacey Osburn tells the Squeeze. That means $30 to $50 million of economic impact to a city that's been struggling long before the recession.

The matchups are stellar, with elite programs North Carolina and Connecticut paired against gritty teams in Villanova and hometown favorite Michigan State. If ever there were an opportunity for sports to show its resiliency in the recession, this might be it. "Everybody's got their eye on this right now," said Skip Sauer, a Clemson professor of economics who specializes in sports.

The early signs are not good.

Advertising and economic impact figures won't be available until sometime after the tourney is over, but Final Four ticket prices on sites such as eBay and ticket broker StubHub are down significantly compared to previous years.

As of yesterday, the average ticket price on StubHub for today's game and Monday's final games was $447, down more than $200 from last year's Final Four in San Antonio. The 2009 average is the lowest since StubHub started tracking Final Four prices five years ago.

This despite ticket prices jumping about $50 after Michigan State advanced with an Elite Eight victory Sunday.

One possible drag on prices is an abundant supply of tickets, thanks to Ford Field's 72,000-seat capacity. The better explanation, according to StubHub spokesman Sean Pate: "Most of it has to do with the economy. We're seeing it across the board in sports."

Two stark, high-profile examples: Average StubHub ticket prices for the 2009 Super Bowl were $2,400 - an $1,100 drop from the year before. At the Masters golf tournament, where buyers have consistently been willing to spend more than a thousand dollars for a single-day badge, prices are at $500 and dropping this month, Pate said.

"There's been a mistaken notion that sports is recession proof," says Clemson's Sauer. "That's been exploded in the past year."

One possible exception, from the News & Observer - if UNC wins it all Monday, everything blue will turn to green.

Are you skipping the Final Four this year for financial reasons - or are you heading to Detroit for a potentially special weekend for your team? E-mail me at pstonge@charlotteobserver.com.

Is company softball a recession casualty?

Jefferson George is an Observer business writer - and starting pitcher on the 2007 Media League championship softball team. Not long ago, he wondered: Is recreational softball suffering in the economic downturn?

Below is Jefferson's initial report, with a request: Give him a call if money has caused you to skip playing this year - or your company couldn't afford sponsorship.

Says Jefferson:

The outfield has been mowed. The infield is lined. Spring is here, and it's time to play ball.

But with businesses in nearly every industry going through layoffs, are there enough company softball teams to fill area leagues?

So far, yes, said Bob Caldwell, Mecklenburg County commissioner for the N.C. Amateur Softball Association. But the downturn definitely has curbed activity on the diamond, Caldwell told Observer reporter Jefferson George recently for an upcoming story.

The number of teams signed up this year for county ASA leagues -- which start play next week and go into July -- is down more than 13 percent from last year, Caldwell said. At least a half-dozen teams that aren't playing this year after previous seasons bowed out because company layoffs left them unable to field a full squad.

Participation by the hard-hit banks has been mixed. A longtime league of teams associated with financial institutions folded last year, Caldwell said. But Wells Fargo -- which bought Wachovia last year -- has more teams this season, up from four to seven.

Not every team in ASA leagues is sponsored by a company or organization, Caldwell said, but about 60 percent are. The rest are made up of people who pull together to cover the $525 team fee.

Have layoffs and tighter budgets led your company to drop softball this season, or field a smaller team roster -- maybe without that big home-run hitter -- than in previous years? Have you or someone you know decided against playing this season, saving the team fee for something else? Or is softball non-negotiable, and a vital diversion in these tough times? Share your story with Jefferson George at jgeorge@charlotteobserver.com or 704-358-5071.

The slow, bumpy road - updated

A poor jobs report this morning was followed with fresh signals that factories are coming back to life, another sign that the economy, though still weak, might be pointed toward a recovery.

Earlier today, we noted the somber news of record jobless claims - 669,000 in the past month - a reminder that economic recovery will come with surges and setbacks. In Charlotte, the numbers are especially grim - an 11.7 percent unemployment rate that could rise to the low teens, one N.C. economist says.

Still, many economists are optimistic the U.S. economy will begin to grow by the end of the year. Late today, a report to support that optimism: The Commerce Department said orders for manufactured goods rose 1.8 percent in February after six straight monthly declines.

"There is now some solid evidence that the period of economic free-fall is now behind us, that the next step will be a slower rate of decline," Nigel Gault, chief U.S. economist for consulting firm IHS Global Insight, told the Associated Press.

Tomorrow, the news will swing back to bad, as economists expect the U.S. unemployment rate to rise to 8.5 percent from 8.1 percent, according to a survey by Thomson Reuters. Gault expects that rise to continue - perhaps to 10 percent - before a turnaround.

Economists say that when manufacturing, housing and sales indicators show consistent improvement, businesses will begin to hire again. Until then, we'll have surges and setbacks, sometimes all in a day like this one, which is still an improvement over days with only the latter.

"Her heart sank like the Dow on a bad earnings day..."

Guess which kind of books are flourishing in the bad economy?

Canadian-based Harlequin told the Vancouver Sun this week that profits were up 11 percent in 2008, and revenue rose to $473 million. "The books have been doing very well in this recession," says Marleah Stout, senior manager of publicity for the Toronto-based company.

The success comes despite a poor 2008 for books overall. Total sales at Borders in 2008 were down 8.8 percent from the year before, with fourth-quarter sales falling 12.9 percent, according to numbers released by the company Tuesday. Bookseller Barnes & Noble says its sales fell 6 percent in the fourth quarter - with online sales dropping 10.4 percent.

But while most book genres were flat or down in 2008, sales for romance novels improved. "Romance was strong for us in 2008 and continues to be strong," Borders spokeswoman Mary Davis tells the Squeeze.

What other categories have, um, kindled the passion of readers? Besides Politics and Government titles, thanks to the election, Borders also saw an increase in science fiction, fantasy and humor.

Says Bob Wietrak, a vice president of merchandising for Barnes & Noble Booksellers: "In the fiction world, the fantasy, sci-fi and romance genres are doing very well."

The lesson here: A little escapism sells well in hard times - even if a bodice or two gets harmed in the process.

The slow, bumpy road

Analysts have been warning for months that economic recovery will feel little like a smooth incline and more like a mountain bike trail - a few dips and lots of bumps.

Today's news of record jobless claims - 669,000 in the past month - shows that the U.S. labor market remains weak. That's especially true locally; Charlotte's numbers, released yesterday, show a 11.7 percent unemployment rate, up more than a point from last month.

Those figures, both local and national, seem particularly sobering after recent encouraging indicators had prompted some sunnier forecasts from economists.

That optimism - cautious as it is - remains. Other reports this week include pending home sales rebounding in February from a record low, and manufacturing activity contracting in March but by a bit less than anticipated.

Even the auto industry provided a glimmer of less-than-horrible. Despite a 37 percent drop in sales from March 2008 to this year, but consumers lured by record incentives pushed the February-to-March increase above the normal rise that comes at the end of winter, the Associated Press reported.

That 25 percent increase prompted a little optimism in the gloomy auto sector.

"Maybe we'll get — imagine that — some momentum going," said Mike DiGiovanni, executive director of global market and industry analysis for General Motors Corp.

Last week, UNC Charlotte economist Carol Swartz reminded Squeeze readers that when economic recovery starts, businesses see their orders and sales increase. Only when they are confident that the activity is lasting will they begin to hire again.

We are, clearly, at the beginning of that process. Most analysts continue to project slight economic growth late this year. Even economist Nouriel Roubine, nicknamed Dr. Doom after correctly predicting the recession far ahead of his colleagues, is seeing signs that a slow recovery might be ahead.

Says Roubini, in his weekly column today for Forbes: "One can expect a slow and painful process of mending the U.S. and global economy that will still take a long time. That will, however, allow us to see the light at the end of the tunnel some time next year, first for the real economies, next for financial markets and finally for the financial system and its wounded institutions."

But, he warned: "The road ahead is still very, very bumpy."

This week is yet another unpleasant reminder.

Are we heading toward a freelance economy?

It's a product of economic downturns - companies shedding workers, employees becoming self-employed.

As the recession forces more businesses to save on the expense of workers and their benefits, more of those workers are piecing together their workweeks with contract jobs, often from the companies that fired them.

The shift can be found in most every industry, from manufacturing to technology to communications. There's even a label for it now: "homeshoring" - U.S. companies turning to U.S. freelancers to get work done.

Are we moving toward a project-to-project workforce?

"The economic meltdown is marking this trend," says Sara Horowitz, the founder of the 65,000-member Freelancers Union, based in New York. "This is the future. It is here."

With that future comes questions, she says. Freelancers have little in the way of safety nets. They often face higher health care costs. They receive no unemployment benefits when they get laid off.

Horowitz and New York City mayor Michael Bloomberg announced this month they will seek a new federal unemployment benefit for freelancers that includes a government-matched fund that freelancers could contribute toward. That fund could be drawn upon by individuals when work is scarce.

Horowitz says such a fund is more necessary than ever, given the increasing number of freelancers and the dire economic circumstances many confront.

"I think we're really going to start having a discussion about how we employ people," she says.

Charles Bamford isn't so sure. An author, consultant and associate professor at Queens University of Charlotte, he thinks he's seen this job cycle before.

"In the 1981-82-83 recession, as people got laid off, many of them turned toward starting their own businesses," he says. "A lot of businesses would lay people off and hire them for 20 hours."

Just like today.

"Oh yeah," Bamford says. "The moment the jobs economy turns up and they can get a full-time job, they're gone. They are no more of an entrepreneur than people who work in a bank."

But will businesses be hiring again like they were before - or will the cost savings of freelancers be too difficult to ignore?

"I think companies are going to turn on a dime when the economy changes," he says. "All you get with contractors is their time, their processes. With full-timers, you get a history and you get a development in which workers want to innovate for the company because it's their company.

"All you're getting with freelancers is their hands and minds in that one moment, that one task. They are only going to give you what you pay them to do. A lot of companies recognize this. They understand that nuance."

Perhaps the future holds something between. Will companies want that full-time energy and commitment from a select number of administrative and creative positions, but be more willing to pay contract workers for task-oriented jobs?

Tell us if your profession - or your job - has become part of the freelance economy.

The "bailout" pizza giveaway that wasn't

Last December, Domino's Pizza prepared an Internet coupon promotion which would give customers a free medium pizza if they ordered online and typed in the word "bailout." The promotion was never was approved for launch, and it stayed dormant until Monday night, when an enterprising (and, perhaps, bored) customer started typing potential passwords into the Domino's online ordering site.

The customer eventually tried "bailout," found the promotion, and got a free pizza.

You know it doesn't end there.

Word soon spread across the web via CNET. By the time Domino's stepped in to stop the pizza party, 11,000 free pies had been given away.

The company is reimbursing stores for the cost of the pizzas, including one Cincinnati franchisee who gave away 600.

"Silver lining: we learned some things," Domino's Tim McIntyre tells CNBC today, "like the power of viral marketing, the power of the word 'free' (although we already knew that), and it drove thousands of people to our online ordering website that might not have otherwise gone there."

Domino's is handling the goof about as well as corporately possible, even offering free cinnamon sticks for those who didn't take advantage of their initial error.

There's a good chance that most people who got the free pizza didn't know they weren't supposed to. And yet, you can be sure there were some others that wondered. At least one newspaper blogger didn't post the original free offer because she suspected it might be a mistake. That blogger, Lesley Mitchell of the Salt Lake Tribune, says she's finding a number of "deals" circulating that require unethical maneuvering on our parts, such as reprinting coupons only intended for one use.

Our perception of corporate America has never been worse than now, given layoffs and bailouts and bonuses after bailouts. Such sentiments might make it easier to type in that word - "bailout" - and justify a medium pizza as your small part of the pie.

Or you might be inclined to do so regardless of your feelings about the economy.

How hungry you would be for the deal - if you knew it was a corporate mistake?

Downturn upside: Rediscovering Mr. Blue Sky

Frugal Americans may be heading outside, where the air is fresh and activities inexpensive, even after you add in the cost of Bengay.

Sales of all sectors of sporting goods are holding steady - unlike sales of most everything else - according to preliminary 2008 figures from the National Sporting Goods Association.

Many are opting for fishing, according to a Reuters report, which notes that spending on rods and reels hit an all-time high just as the recession was beginning.

(The Reuters story features New Hampshire's Mike MacDonald, pictured to the right, skinning a fish next to an ice hole on frozen Lake Winnipesaukee. "This costs $6 to get a bucket of bait and it will last the whole day," he said. I can confirm, as a N.H. native, that six hours of sub-zero idleness is indeed considered "recreation." )

Sales on sporting goods have taken only a slight dip - about 1-2 percent in 2008 - according to Tom Doyle of the National Sporting Goods Association. Doyle tells the Squeeze that participation in recreational sports has remained strong.

"Typically, the industry is more resilient to recession," he says. "Right now, people aren't replacing equipment, but they're still buying things like golf balls and tennis balls."

The recreational golf industry, which showed some weakness late last year, is holding steady in year-over-year figures so far in 2009. Rounds played in the U.S. increased 8.6 percent nationwide in January 2009 from January 20088, according to Golf Datatech. The South Atlantic, which includes the Carolinas, saw a 4.1 percent drop, due in part to unfavorable weather.

Local golf traffic also has slowed, says Larry Benson, chief operating officer of I.R.I. Golf Group, which operates the Carolina Trail's seven Charlotte-area courses.

Benson, however, isn't sure if the slowdown is because of the economy or the harsh winter and early spring we've endured. "It's going to be easier for me to evaluate when we get two weeks of good weather," he says.

Benson has noticed, however, that fewer players are coming in the afternoons, instead opting to play in the early evening, when they can take advantage of cheaper twilight rates. Those later arrivals also might be due to another reason.

"In the old days, everybody would take Wednesday afternoons off to play - and Friday afternoons, too," he said. "I think they're much more serious about job stability now."

A gloomier future for Charlotte?

(Updated with new unemployment figures)

Earlier this week, we brought you the optimistic outlook of UNC Charlotte economist John Connaughton, who not only believes the worst of the recession is behind us, but that Charlotte may emerge as strong, if not stronger, than before.

Today, a gloomier portrait.

North Carolina State economist Michael Walden sees our city heading toward a stretch of difficulty, one that includes double-digit employment rising to the low teens - 13 or 14 percent. Unemployment for the Charlotte/Concord/Gastonia region in January: 10.5 percent. (Updated: According to new numbers out this morning, that rate jumped to 11.7 percent in February.)

"Charlotte is being hurt by having substantial employment in two sectors that are suffering - financial services and vehicle parts," he says.

Those industries will continue to feel strain, Walden believes. Most business leaders here expect substantial job losses ahead in the banks.

While Connaughton sees a financial industry that soon will concentrate power in just a handful of firms - most notably, for us, Bank of America and Wells Fargo - Walden says it's too early to forecast a landscape that's beneficial to Charlotte.

"I think we're just on the cusp of a reorganization," he says. "I don't think we know what the industry will look like."

Walden is ultimately bullish on Charlotte's outlook - "Costs, location and civic activism are key assets," he says - but he thinks the 4 percent-ish growth we experienced in the 1990s is out of reach for us now. Cut that in half, he says, and figure we'll be flourishing again at the middle to end of next decade.

As for the near future, no. When will we hit the low teens in unemployment? "A year from now," he says.

That sounds like a hard road ahead.

"Yes."


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Squeeze readers: Are you heading to Detroit this weekend to see the Tar Heels in the Final Four? Would you go in other years but are staying home for financial reasons? Call me at 704-358-5029 or contact me at pstonge@charlotteobserver.com.