Recession In The Media
Just some random tidbits about how much the recession has become mainstream (and maybe that is a sign of a bottom…one time?)
On Desperate Housewives, a lot of the conversation was about how people were cutting back on spending, affecting Lynette and Tom’s pizza place.
Luby’s, which has been raising its prices on dinners in recent years (due to enlarging their portions) is now offering a $4 Luann Platter on Friday and Saturday nights. Valentine’s Dinner here I come!
Recession Tradeoffs
In a recession, we all cut back on spending on major purchases, like a car or a new house. Often though, we ‘trade down’ and buy something of lesser quality since we are all less rich:
- We eat a hamburger at McDonalds instead of a steak at Outback.
- We watch a movie instead of going to a sports game.
- We shop at Wal Mart instead of anything that is higher end.
- If we’re getting married, it’s going to be a cheap wedding, not a luxury wedding.
- We may not even buy coke, we buy generic brand soda.
I’ll make a new post with some more of these when they come to me.
The Lawyer Bubble
In a way, I saw the leverage and investment banking bubble coming. I wasn’t smart enough to capitilize on it, but the clearest sign was there. The most popular jobs among college graduates, especially of the upper tier college, was going to hedge funds and investment banking operations, followed by consulting firms and law school.
If there’s one thing college kids do, they like to imitate others, espeically people that are in their opinion successful. After seeing people have high six figure salaries in a decade of work, they figure why not them too. The best paying jobs were often with funds and investment banks, so college kids chased those jobs.
Now, there is a glut of 20-somethings in New York City that have been laid off or are still hoping for that hedge fund job that isn’t going to come. Since Lehman isn’t hiring anymore, where are the college kids flocking towards? I assume many are still hoping to get ‘consulting’ jobs, whatever those jobs may be. It’s not clear how the consulting arena is doing, since most of the major firms are private. Somehow, I doubt businesses that are struggling to survive are going to spend money listening to other people how to run their business; they’ll just figure it out themselves.
The one tried and true arena for college kids to still run towards is law school. Since they don’t need to be ‘hired,’ they just need to be accepted (and some school will accept them), the recession won’t affect getting into law school. Also, the recently laid off investment bankers and hedge fund workers are the same types of people that would go to law school; their first choice just happened to be Wall Street.
Already law schools have been pumping our more lawyers than ever. Law school is already the default option for a college graduate with good grades that either does not want to go to work or doesn’t know where he or she wants to work. Added to that now is that many laid off Wall Street workers may run to law school instead of finding work in another arena and there just are fewer jobs for college kids to get in general.
All of the signs of a labor bubble in law is in place. The question though is what does this mean for us? Hopefully, the bubble won’t become a self-fulfilling prophecy, where lawyers lobby lawmakers to make more laws just to necessitate their employment somehow. Assuming that’s not the case, the wages of lawyers may go down or many lawyers may just end up as glorified legal aides and secretaries.
I don’t see a way to take advantage of the lawyer bubble, and I honestly can’t see how it will play out. I can just tell that there is one. My only advice is that if you are in college and are about to graduate, don’t go to law school unless you really, really want to.