Pacific NW Cover Story
In hard times, an entrepreneurial few are finding creative ways to survive
Facing scarcity and loss, there is new attention to values, and to reinventing our economic lives.
Shoe repairman Ron Ramuta's lucky enough to be standing on the flip side of our flagging economy. Lately he has been awash in worn-out kicks brought to his downtown Seattle shop by customers who, worried about the recession's effects on their bank accounts, have decided to mend their old shoes rather than splurge on new ones.
"Almost every shop in town is so overloaded that we can hardly keep up," says the affable cobbler, whose shop, Ramuta's, has been in the family since his Yugoslavian-immigrant dad, Mathias Ramuta, started it in 1945.
But there's an extraordinary subtext to this shoe-repair boom.
Business is flourishing in part because affluent customers, those supposedly insulated from middle- and working-class woes and who can still afford to drop a few hundred dollars on a new pair of Louboutins or Pradas, are showing up in large numbers, too.
And they're telling Ramuta a strange thing: "They don't want to go around looking rich," he says. "They feel it's a slap in the face of people who are out of work and have money problems."
He's also seeing lots more customers in their 20s and 30s who, having grown up in an era when shoppers blithely charged what they couldn't pay for in cash and dealt with the cost later, have embraced the light of Depression-style frugality.
So the worst economic crisis since the early 1980s, '70s or Great Depression, depending on whom you ask, has come to this.
In a city not exactly known as a showcase for flashy footwear to begin with, people are scaling back right down to the leather and rubber soles on their feet, in the process showing solidarity with others who've been taken under by the recession.
That's just one sign of a sea change brought on by these hard, uncertain times.
A basic trust between lender and borrower, buyer and seller, seems to have been broken at the national level. And that has forced us to think differently about our money, our principles and our connection to society. To be more precise, we are actually thinking about those things, period, in the process adopting values and practices that might have seemed quaint when cash and credit were flowing and we didn't have to worry if the institutions managing our 401(k)s, mortgages and checking accounts were solvent.
We may or may not get a nationwide New Deal on the scale of President Franklin D. Roosevelt's massive set of economic-stimulus policies in the '30s.
This time around, maybe we should implement our own personal New Deals instead.
Luckily for us, Seattle has always been particularly good at this.
You could see that perseverance at work in 1970 when Capitol Hill church activist Peggy Maze helped launch Neighbors in Need to feed local families hit hard by the devastating "Boeing Bust," which saw Seattle's most prominent employer slash more than 60,000 jobs in the space of a couple years.
In the absence of immediate government help, the group set up a network of volunteer-driven food banks — the first in the nation — that handed out 500,000 bags of donated food in its first year alone and served some 15,000 families a week, a feat that garnered attention from Time magazine.
Activist Kirsten Anderberg has written about discovering a thriving barter system in Seattle in the early 1980s when she was a homeless teen working at lefty cooperative pizza parlor Morningtown, in the University District. In return for labor, the parlor paid employees' rent. Workers could eat food from work, and they got pizza barter slips that could be traded for beer at the Blue Moon Tavern on Northeast 45th Street, ice cream from Cause Celebre cafe or books at Left Bank Books inside Pike Place Market.
Even today, as in the '80s and especially during the Depression, vouchers and so-called "local currency" allow people to support neighborhood businesses and provide for themselves without relying on actual dollars or credit cards.
It's a throwback to the days before currency when every exchange required a face-to-face agreement, a handshake, concrete expressions of good faith. Maybe the financial crisis, fomented by faraway institutions that tried to make risk disappear, is our cue to get reacquainted with the practice.
Bizarrely, these ancient ways of doing business are most alive in the virtual world of sites such as craigslist, where people barter for goods and services of every kind. The current recession didn't generate the Internet bartering movement, but it has certainly fanned interest as more people dare to take commerce into their own hands in a largely anonymous underground marketplace.
Here, the age-old balance between trust, which is essential for any business transaction, and opportunism is most precarious. These online transactions, unlike the conventional system of turning your financial future over to some institution, can feel more personal and controllable. It's risky, yes, but also empowering.
Entry to this virtual marketplace means e-mailing complete strangers who've placed an ad for a trade of some kind and hoping they can be trusted to follow through with their end of the bargain.
One day, a man named Paul places an ad specifically calling on Craigslist users to "put our heads together" and find ways to barter on a grander scale to help get through the tough economic times. Maybe three people, instead of the traditional two, could make a swap.
It's odd to find wide-eyed idealism among the ads to swap cameras, home appliances, paint jobs and massages. But Paul, who agreed to use only his first name as many of the anonymous traders do on Craigslist, turns out to be as dreamily forward-thinking in person as online.
A straight-laced, middle-aged suburban man who says he had enough of the blind ambition that defined the corporate rat race he once participated in, Paul seems ill-suited to trading things like vacation vouchers, game tickets and electronics for home repairs, as he has done recently. But he is not alone among professionals who barter to ease financial strains.
"When the economy goes down, I get an overwhelming response from contractors and so on," Paul says. "People are literally trading for food on Craigslist," he notes, recounting coming across an ad for someone bartering her massage services for seafood. "There's nothing wrong with it. You can live like that."
Still, he thinks it's a sign that the "house of cards" that is our economy has failed to create stability in people's lives. That's why many have taken what might have been a kooky idea in happier times — bartering — and turned it into a way of life.
"It's a community thing," he says. "Everybody specializes in something."
He points to the recently installed gray-granite countertop in his kitchen. A stone artist who remodels homes to support his income did the job and gave Paul a deal on the granite, in exchange for a stay in a resort time-share.
He looks at the floor. "My carpet was from bartering."
"Before the Internet, we couldn't do anything like this," he says. "Craigslist has become the Internet community in a lot of ways."
"If we go into a Depression," Paul says, "maybe we'll become more of a community, become more humble, rely on each other more."
People bound by scarcity and loss do find ways to look after each other. Like Peggy Maze during the Boeing Bust, somebody always steps up.
That was also true of the 18 Boeing workers who, failing to get loans from a bank to buy tools for their jobs, pooled their resources and formed their own financial institution in 1935 after reading about credit unions in Reader's Digest. Each partner gave 50 cents to start the operation. With $9 in assets, the company that would become Boeing Employees Credit Union, with $8 billion in assets today, was born; a tin box served as bank vault. Credit unions like these flourished in the frozen markets of the Depression.
Chief Executive Gary Oakland says the company tries to stay true to its roots. This past fall, it stepped up efforts to help troubled borrowers refinance their debts to prevent foreclosure on their homes, a move that's part of a $2 billion national campaign among credit unions.
THE FIRST AND, with any luck, only Great Depression in our lifetime brought us those iconic photos of food lines packed with men dressed in suits, fedoras and worn-out shoes.
Today's crisis, a convoluted story of blind aspiration and failed opportunism, offers iconic scenes of a more complicated kind.
Every Friday at 10 a.m. in the front of the King County Administration Building on Fourth Avenue, people gather not for handouts but to bid on hundreds of foreclosed homes in a surreal two-hour, open-air buying frenzy.
People in pinstriped suits, designer jeans and North Face fleece huddle on the cold sidewalk, Bluetooth devices plugged into their ears, Blackberries at the ready, foreclosed real-estate listings in hand, waiting for the chance to buy, at a fraction of assessed value, the shell of someone's nest egg.
One bleak Friday, a circle of prospectors forms around a no-nonsense foreclosure trustee who announces one bank-seized home on a list that is longer than at any time in recent memory.
To qualify for the auction, you need to show him a cashier's check. Buyers come here fully ready to fork over hundreds of thousands of dollars on houses they may never have seen up close.
A blonde woman and a tall man with a shaved head draw closer. It will be a battle of wills between these two.
The bidding starts at $179,500. "One-eighty," the man says.
"One-eighty, five hundred," the woman counters.
They move up in $100 and $500 increments for several minutes, sending a charge of casino-style excitement through the hushed onlookers, until the man bids $192,700.
Reaching $195,500, and apparently their cost-benefit threshold for this particular property, the two stop bidding.
Then, in a gesture of goodwill among competitors that brings a moment of warmth to the proceedings, they lock eyes and shake hands before walking away.
The foreclosure trustee closes out the auction and the house reverts to the bank, because the last bid wasn't high enough.
Even here, where scavenging is an art form, the tug-of-war between value and risk leads to a draw. Are we finally learning our lesson about financial overreaching?
SEATTLE, FLUSH as it is with smart, nimble big thinkers, may stand to benefit from the turmoil in the end. The spirit of risk is never completely dead here, even with layoffs and foreclosures.
"There are definitely going to be some very interesting companies coming out of this climate," says venture capitalist and blogger Andy Sack, whose Seattle-based Founders Co-op funds innovative technology startups run mainly by entrepreneurs in their 20s and 30s. He has especially high hopes for one of those firms, Cooler Planet, run by two guys out of an office in the Eastlake neighborhood. They act as liaisons between solar-power installers and prospective clients. If there is an environmental New Deal for America, companies like this one will be a step ahead.
For some of us, our heads full of headlines forecasting dire times, that confidence doesn't come easily. After all, besides shoe repair the other big growth business in this recession is home safes.
"When things start getting tougher out there, people come in more," says Tom Lambert, salesman at Bulger Safe and Lock in Lake City. "People start to think more about what they need to protect themselves and their way of life."
At $400 to $500, a safe can offer a measure of security but it can't give you a game plan.
"Right now I'm getting a lot of people bouncing back and forth between survival and security," says Justin Harris, a Seattle-based specialist in sustainable investing.
In the past few months, he's been trying to convince clients there's more to worry about than money in and of itself. He wants his clients, in whom he notices "a lot of desire and lust for materialism," to see how they can create more meaning, greater value, in their lives moving forward.
"It's really an opportunity for us to do a re-evaluation of what we really need versus what we think we need," he says. "I'm excited by what's going on."
RETIRED AMERICAN Express financial adviser Jan Foster is 67 now, and she remembers well growing up in the 1940s when her parents, who'd lived through the Depression, stuck to strict accounting and spending rules.
Checking accounts were a novelty then, she recalls, so every payday, her dad would bring home his wages. Mom would parcel out the bills in tin cans designated for food, utilities and so on.
There was no dining out, no spare change for soda pop.
"One didn't go into debt," Foster says. "They paid cash for the one car we had. The house had one bathroom in it. Have you ever heard of anybody buying a one-bathroom house today?"
As a financial adviser, she often had to probe the needs and wants of financially embattled clients, and sometimes left these sessions scratching her own head.
"They didn't realize how much they were spending on lattes or hairdos or lunches out and things like that," she says. "If I told them to cut out the lattes, they'd tell me, 'No way!' It's more of a sociology job than a financial job."
The collision between the things we value and our values will require something more than infusions of capital to sort out. The first New Deal, it turns out, was about overhauled attitudes, not just the economy.
Here's another quaint idea, courtesy of Foster: "I have always lived beneath my means."
The one-bathroom house she lives in today may not be the picture of luxury, but you can take one tidbit to the bank:
"It's almost all paid for."
Tyrone Beason is a Pacific Northwest magazine staff writer. Alan Berner is a Seattle Times staff photographer.
Copyright © 2009 The Seattle Times Company
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