Depression Impacts on “Make or Buy” Decisions

I beg your pardon, but this morning over on the Peoplenomics side of the house, we will be engaged in some forward-looking on how humans will relate to machines as the world changes in times ahead. This is useful stuff to be thinking about because it will likely be a major part of our shared economic future.

So this morning, both for subscribers and non – I wanted to toss out some ideas about what can happen when the fundamental changes that may be ahead for the economy really begin to impact such basics as the typical family’s “Make or Buy” decisions.

As you can see above, if one has a fairly well-equipped shop, there are tons of things to be made while, at the same time, Amazon and Walmart make it oh-so-easy to buy.

I wanted to talk with you about this because when the Depression arrives (it’s only a matter of when) you will experience a once-in-a-lifetime event:  A sudden shift of your personal perception of “worth.”

Last week, since we were talking about the prepping role of mountain bikes around here, Elaine came up with a simple request.  “You know, we could get one of those bike Exercise Stands and put it in the gym… I’d use it….”

When Elaine wants anything, I jump into action.  After all, my role is as the Provider in Chief and it’s my self-defined job to facilitate.

The mental ping-pong game that followed is worth considering because the answer will depend very much on what your present economic position is in life.

I began looking at options I could buy.  The simplest one was to hit Amazon and pick out a URSTAR Magnet Bike Trainer Stand – Bicycle Indoor Exercise Stand with Front Wheel Block and Skewer/Blue/  Not only is the name “close enough for govt. work” but it was $60-bucks.  (They had more pricey models, but the only difference I could find was color.  Clue was cheapest.)

BTW, this was a hang-up for me.  I wasted a good 10-minutes arguing with myself over whether color would make any difference.  In the gym, most of the equipment is black of grays (inversion table, treadmill, weight machine, but the free weights (smaller) are all colors.

In the end I opted for the cheapest color and I figure if Elaine doesn’t like it, she’;; get a can of spray paint and point me to that project down the road.

Except for that, it was ONE-MINUTE and $60-BUCKS.

But Shouldn’t I Have Made It?

Guilt was coursing through my veins now.  I had done an “instant” decision and I hadn’t costed out what a similar project would have cost had I “tolled my own.”

Building anything is a process.  I blocked out the costs knowing the steps.

  • Design.  I would likely spend half an hour looking at various designs and figuring out what would be easiest to fab up here in the shop.

If I can make $20-an hour or more by working, writing, consulting, and so on,  it was safe to guess that I would spend $10-bucks worth of time on the design aspect of a home-made bike stand.  Doesn’t take too many clicks and only a handful of videos to burn through 20-30 minutes, right?

  • Materials:  Once I had a design, there would be some time spent rounding up parts

Just a quick look at what I’d already “jumped the gun” and bought I could see that my frightfully over-wrought design would involve some thick wall 1″ X 1″ square tubing.  None on hand, so I’d have to drive into town to the local machine shop.  This is great fun…BUT it’s an hour of driving, then toss in half an hour of BS-ing time with the yard crew and then a side-trip to Lowes to get the parts the scrap pile won’t have:  Bolts and such… What they didn’t have would mean a trip to Tractor Supply….so by now I was looking at 2.5 hours because I might as well top off the gas and then there’s the Chinese joint to visit…

Thing is, now – even at a modest $20 an hour, there was $100 worth of lost income time and on top of that maybe (exercising total self-control) $20 bucks in metal and parts…

  • Fabbing:  Takes a little time to cut and weld metal…fun time, don’t get me wrong, but time.

I’m pretty good fabbing up things when the material is on hand.  Thing is, though, I still need to move out a torch (can’t weld inside the shop because of fumes and fire risk, right?)  So from just moving a welding, plasma cutter out into position and set-up that’s 5-10 minutes.

Fabbing would involve a number of machine processes (all fun!):  Cutting whether plasma or on the metal cutting bandsaw, then some welding, then dtrilling (if I forgot to punch in the holes first, which I sometimes do…) then grinder time to clean up the messes on cuts and…well, you get the picture.

Let’s say I have everything fall perfectly into place.  Don’t need to change out the MIG rig tips, the bandsaw blade doesn’t come off…you know, all those time sinks.  Let’s says a half hour to fab like hell.  $10-bucks worth.

  • Assembly and Finish:  Well, I least I know who to blame is there’s a run in the paint…

Still, the one that I bought online for $60 bucks is likely powder-coated.  I haven’t gotten into that for two reasons.  One is I don’t have a used oven in the shop for “cooking on powder coat” and even if I did,. I would have to run a new 220 line over from the site main disconnect and that would involve burying cable and if I’m going to do that, why not just run some single ought underground and rewire the whole shop?  You see how a simple project like this can let loose with a whole crap-storm of domino effects.

10-minutes for spray paint, 3 beers waiting for things to dry if the sun’s out, and let’s not even count the time on this damn project because buying instead of making is the right choice.

Until the Depression

Because when THAT SHOWS UP all those provisions for “time costs” will be blown out the window.

You can’t pencil in $20 bucks an hour from all your side-hustles if there is no one buying because we’re in a what”  “Oh, yeah.  DEPRESSION?”  Bada-bing!

Then when a project is looked at there is almost no ‘time cost” because everyone will be brimming over with what we call ‘FREE TIME.”  And with a little cleverness, you can focus on things that will really matter.

Come to thing of it, in the Depression, the idea of a bike exercise stand on a small ranch becomes an absurdity.  Because both Elaine and I will be out planting and gardening as much as we can to I can maintain my boyish figure, lol.

Which gets us on to the bottom of this Economics 101 lecture for this fine day:

When the Big Depression shows up (although we hope it never does) the following will happen:

  1. People will stop buying things.  Short almost anything but food stocks will make sense.
  2. People will not be making much, either:  Our storage units are overflowing, people have too damn much crap.  Any calories that yu have left over should be going into making food.
  3. A HUGE portion of things in the Services sector will simply implode.

This all gets us looking even further:  You see, we have a structural problem in that while Capitalism is great on the way UP in the economy, it blows-up badly when things turn turtle.

When it comes, people will be building anything they can out of whatever raw materials they have on hand.

And when time comes, I bet I know someone who might part with a good condition almost new bike Exercise Stand for, oh, $10 bucks.

I hope it doesn’t come to that, but that’s the kind of future that could be arriving within a few years (or months) – depending on how lucky (or un) we are.

Write when you get rich,

George@ure.net

20 thoughts on “Depression Impacts on “Make or Buy” Decisions”

  1. One of my favorite expressions of Murphy’s Law is this one:

    “When you want to do something, FIRST you have to do Something Else to enable that.”

    To this self-evident Truth, I modestly contribute: “BUT! ‘Doing Something Else’ is ALSO a doing! And this suggests that BEFORE that ‘Something Else,” yet another pre-doing thing will need doing.”

    Now to the pessimist, this may seem hopeless; but fortunately real-life experience shows that each preliminary ‘Something Else,’ as they telescope out into impossibility from EVER getting ANYTHING actually done is of a lower intensity, importance, contrariness, or frustration level. In fact Universe seems tire of the game, and it peters out over from three to five preliminary Something Elses — and Universe finally relents, and allows some actual doing and progress to take place.

    Example:
    You wish to drill a hole. Fine.
    Is the drill press bed set up to the right height?
    –of course not.
    Where is the special Allen wrench to do that?
    –Ah! Here it is!
    Ok. Select the correct drill.
    –That one is missing. Find it. Ah! Good!
    Now, where is the chuck key—

    —One can quickly see this process can extend without limit if Universe is feeling particularly prickly that day.

    But usually, The Big U lets us finally get it done.

    Thank God. (…or whoever designed this Quantum Universe.)

  2. One thing I strongly encourage for a prep supply item is shoes. Very few are made in the USA and they’re hard to improvise past the tire sandal phase.

    People can learn how to alter & repair clothes again with little but threads and a sewing machine, but shoes require gizmos & materials that very few people have. To say nothing of the skills.

    • Every 9yo should have a baseball.

      It should be a favorite piece of sporting equipment.

      After a few hundred pop flies, the stitching will part.

      Assuming one’s father is forward-thinking enough (as mine was), he will have acquired a spool of waxed linen cobbler’s thread at some time or other.

      This is when, why, and how I learned to double-stitch.

      Once one learns to double-stitch (use two needles simultaneously) both a straight row and a cross-stitched seam (like that baseball) they can build shoes without much thought. A real awl to use as a punch, would help (‘can’t push a sewing needle through anything thicker than kid or perhaps chamois, so you’ve got to punch out every hole through which thread will pass), but a brad in a Vice-Grip jaw would work in an emergency.

      If I had to do it now, I’d use kevlar thread, because I have several miles of it laying around, but cheap repair kits with nylon thread are plentiful, all over the Internet, as are hanks and spools of linen and kevlar thread…

  3. Food water and making your back 40 an attractive place to put 4 or 5, 105 or 155mm howitzers. Call it Ure Fire Base. The future is all about Resourcefulness. Bicycles will be king. Food will be no.1, No.2 will be in an outhouse. Proper out house construction, they still come in handy for social gatherings where allot of beer is involved.

  4. George,
    I also wanted to let you know about the Tesla Coil/Tower that’s gone up by Milford, TX. Owned and Operated by Visiv Technologies and there is a You Tube video. I’ll have to drive down and check it out too.

  5. “I began looking at options I could buy.”

    For exercise equipment head to your local thrift shop.
    They’ll have a trailer full of every kind imaginable. Exercise equipment after about the first six weeks sits idle..the thrift shops are full of them..they’ll gladly give you a couple..airdyn and Nordic track are nice.

  6. There was enough increases that my budget cuts have started.. No choice the beginning..bananas,apples and oranges..the parents morning oatmeal..doesn’t sound like much kind of a what the hell..but believe it or not that bowl of oatmeal is five hundred a month..the next cut will happen after Christmas..the wife insisted we buy thanksgiving dinner..I’m still juggling that one..something has to go.

    • Unfortunately Bruno..the decisions I face are being faced by what 65 million other average income earners. The cost of essentials has outpaced income.

    • unfortunately our situation isn’t any more complicated than what.. 65 million other working class families in the same boat.. they to have to face the same options that we do here.. whether or not they wait till there isn’t any other choices to do and are faced to make the hard decisions or they plan ahead you can only kite your income for so long.. the general cost of basic living has outpaced the incomes of the vast majority of wage earners in the USA.
      consider the working class as the canaries in the coal mine.. those laboring at the bottom are the first to feel it.. to face it head on.. the ripple affect is what will hit the rest at a later date.
      the economy cannot survive without those supporting the system for every dollar that is cut from spending will eventually take a toll, there is a reason why one in three are on a social program of some sort.Luckily we still have spending options that can be culled from the budget. whether or not those in power will be giving out tax rebates or expanding the eic tax credit as a ban aide to cover the gap.. eventually the correction will have to be made.The same thing applies to the national budget.. there is just so many dollars available.. ( well they keep printing but eventually that will be a killer there to) the interest on the national debt is the killer there to.. at some point the rest of the world will say hey how can they uphold what they promise. the debt is doubling and tippling and interest is flyaway as if they are owing a loan shark and the once great industrialized nation is but a shell of what it was. broken and dependent on other countries for everything.. the correction has to be made and when it does.. who will truly benefit..for us the decision is to go lean cut deep and spend nothing this year.

  7. The REAL wealth is commodities! Not the type hawked by Wall Street, but the REAL stuff. Tools, for an example, will be useful to those that know how to use them. In any depression/recession, barter becomes the preferred method of transaction since no one has a job or cash. To bring home this point, there is a story about a fellow in Germany who had 100,000 marks in his savings account. When hyperinflation hit, bank sent him a notice his account was being closed because it was too small to handle. The notice was mailed with a 100,000 mark stamp. So much for cash being a safety net.

    I have been buying tools. Five years back bought a new electric Skill saw for $25. Today, same electric saw goes for $82, a 300 percent increase. Doesn’t matter what the price is or was, it is what it can be traded for. That is where the REAL wealth is. Although past depressions have materialized in different ways, they have ONE thing in common. It becomes very difficult for people to buy things they need to live!

    • And people thought I was nuts to buy a plasma cutter, lol.

      a jet 9X20 metal lathe given to me as a gift by a consulting client when it was $600 and new to the market is going for $2900 and change and $240 in shipping, so yeah hell of an ROI – buy tools, use ’em for 10 years and sll at a profit. BTW Why isn’t Andy BUILDING HIS OWN HOUSE? Gotta ask him that

      • Ha! Somebody said that exact thing to me yesterday! “Why dont ya build your own house”.

        Well, for one. I have already done that once and it is now Wife #1 rental house.

        For two. I work 6 days a week 12-14 hours a day! When would i havr time????

        Thought about getting some property with a septic and a well already put in and buld one of those pole buildings. Or one of those Container homes.

        Hmmmmmmm i dont know. But its worth a thought.

      • “I work 6 days a week 12-14 hours a day! When would i havr time????”

        DUH… in your spare time Andie.. I was working longer hours than that and was slightly younger than you when I built our last home. ..

        12 hours leaves you twelve minus two hours travel back and fourth to pay jobs average.. this gives you ten… sleep three or four you have six hours.. or four hours if you like to sleep in.. one board at a time.. and one whole day to just wack at it.. twenty four hours.. your time.If you have a (wall square building jig) you can whack out all the walls in one day( which is what I did built a wall jig then numbered the walls as to placement). you can build a home in about three months doing it that way.( you can even pre place the wall outlets and wiring with a wall jig). I had to help take down trees to get help for raising for three wall panels into place the headers put that wall way over what my lifting capacity was.. I did them in ten foot sections to keep the weight down.. I didn’t have a wall jack but made my own version of a wall jack so I could manipulate the majority of them by myself.. an air nailer goes really good you can wack out lots of nails.. easy peasy.. now don’t wait ten years.. something called age hits you and the abilities have to be altered to accommodate those abilities and make decisions now so that you can avoid facing them later like a steeper roof pitch and attic.. rafters I bought mine pre engineered rather than making them it was cheaper.. well..those I hated since I was not a spring chicken and running the walls was out of the question by myself.. many supply places will place the rafters on the walls so it is just a matter of placement.. I there made a rafter jack to position them from the ground then climb the ladder to nail them in and stabilize the rafter so it didn’t move..
        you can do it.depending on what you value your times worth.( I used my hourly wage structure) you can build a home for about fifty dollars a foot… I started mine late since I had to run my own sewer to.. on july 27 and had thanksgiving dinner at my house for the family..
        https://www.youtube.com/watch?v=wLugAuFAS5w

        It helped that I had worked building cabinets and seen how easy it was to make a sort of assembly line for myself.. everything was done at waist height each wall was planned and put together.. stacked.. foundation then go to work.. I had a friend that kept saying he didn’t know how to do his building project.. LOL I told him the same thing.. one board at a time.. but he kept him hawing.. he took me out to show me how complicated it was and his work schedule..since his foundation was already in place in a few hours he had built his frame..

      • I forgot..for the stub walls I built a slide stop for the wall square measure drop it in clamp and bang bang bang..it’s really easy to slap in extra hurricane braces to the wall panels..I drew up the house did the splits and measurements..figured up standard measurements. ( everything has them everyone thought I was nuts just cutting two by sixes at 36 inches etc. lol but when assembly time came just reach and place)

    • My father told me a story that he was told about the depression in Germany..two boys inherited a great deal of money. The one went out partying..drinking wine having sex and hitting the clubs..he blew it all..the other was frugal invested the money he inherited.. The depression hit.. It took wheel barrels of money to buy a loaf of bread.. But because if the depression there was a glass shortage so the first boy that squandered it off on wine women and song had it easy.. The other had to struggle..someplace I seen a picture of someone carrying a basket of silver to trade for food

  8. Make or buy decisions are a normal part of business in good times or bad. Whatever you buy is likely to be “good enough”, if you’re lucky. When you need something that’s not on offer, you’re stuck with making it, and it will take too long regardless of the cost. Some things need to be made regardless, since even the Amazon/Ebay bounty is not fully inclusive. I’ve made lots of stuff that I could not buy, and it can be made very well if you work at it.

    In bad times, you can probably get someone to build the specialty stuff for you, even if you can’t DIY. You just need to offer something of appropriate value – even money if necessary. I don’t know if the electronic markets will survive so that’s iffy, and transportation from such a market might be even more iffy. Enjoy what we have while we have it, and keep supplies of tools and material that you know how to use.

  9. George: I couldn’t find your email address so I’m posting this here.
    I remember you writing about your daughter and peanut allergies.
    Hope this helps keep her safe.

    “Niacin Reduces Anaphylactic Shock: While he was working at Henry Wellcome Laboratories, Nobel Laureate Sir Henry Dale discovered that histamine was released during anaphylaxis, a life-threatening allergic reaction. This is a very complex, severe reaction, and apparently acetyl choline and heparin are also involved. Guinea pigs are very sensitive to anaphylactic shock. Boyle found that if guinea pigs were pretreated for a week with niacin, they did not die after a second dose of protein—a procedure that killed all the animals not pretreated.

    I have used this technique to protect patients against anaphylactic shock. In 1996 I saw a man who was very fearful for his life. He was peanut sensitive and avoided all traces of peanuts, but over a six-month period he had five major reactions and nearly died from the last one. I advised him to start with ascorbic acid, 1 gram taken after each of three meals. Ascorbic acid destroys histamine, which is why scorbutic patients who are deficient in this vitamin have high blood histamine levels. I wanted to build up his blood ascorbic acid levels. After one week he was to take 100 mg of niacin three times daily after meals. This was designed to release a small amount of histamine with a gentle flush. My hypothesis was that the histamine would be destroyed by the ascorbic acid and would therefore be neutralized to a degree. The niacin dose was increased to 250 mg twice a day. [eventually to 1 gm 3 times a day with meals.] ……. He had no more reactions. ”

    I found it very helpful in decreasing the intensity of the allergic reactions, no matter what type of substance the patient is reacting to, although it will not completely prevent these reactions.”

    Excerpt/s From: Dr Abram Hoffer. “Niacin: The Real Story: Learn about the Wonderful Healing Properties of Niacin.”

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