Unfortunately, retail employment, although it’s traditionally been resilient during recessions, especially we saw that during the 2001-2002 recessions, that retail employment held up pretty well. Now it’s not. Now companies from Best Buy to Circuit City -- I mean, again, Best Buy, this morning they said that they had seen a seismic shift in consumer spending, a seismic shift downward. And this is all part and parcel of the same ripple effect from Wall Street down to Main Street, and unfortunately retail is not going to be able to survive this downturn.

Cory Bortnicker: You know, I have to confess. All throughout college I actually worked at Starbucks (SBUX), and they’re also going through a similar thing. So I understand that completely. So if retail isn’t the fall-back job, is there going to be fall-back? Is there going to be a replacement of retail?

Kevin Depew: Well, I don’t know what that replacement is going to be. And that’s why this downturn that we’re heading into is going to be, I think, much more severe than what many of us are anticipating.

Once we get to this point next year, I think we could see unemployment around 8 percent, maybe even higher, and that’s going to really hurt. And so I don’t know what the replacement would be just yet. I think, ultimately, if things continue to worsen economically, as I think they will, then one replacement will be some type of government jobs program, whether it’s rebuilding infrastructure in cities or some type of public works program. But that’s still speculation right now.

Cory Bortnicker: So let’s move on to our next topic, which is the country of Iceland. If things are bad here, then they’re certainly even looking worse over there. There was an article in The New York Times on Saturday talking about how people were coping with the suddenness of the downturn in Iceland. There’s one quote from the article which I thought was really kind of scary. There was one woman who said "it feels like you’ve been put in prison and you don’t know what you did wrong."

Kevin Depew: That’s right. To talk a little bit about that article, the opening sentence is, this is from the Times article, “The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window.” And that’s the detachment from reality, where it’s just unimaginable how you transition so quickly, or how you can transition so quickly from what seems to be a prosperous economic time to a very desperate economic time.

Iceland, they’re undergoing the opposite, really, of what we’re seeing in the United States, although the impact on Main Street is the same. And that is, they’re having an inflationary crash where banks fail, companies slash jobs, the currency has plummeted against the U.S. dollar, and things overnight begin to spiral out of control. Everyday items are going up in price. That’s a very dire inflationary collapse.

We’re going to see the opposite of that, where demand collapses so suddenly that people are no longer buying things that they took for granted - like an iPod or an iPhone -  as recently as two months ago. There’s going to be a reevaluation of just what we’re going to spend our money on, what’s discretionary and what’s not discretionary. Things that a year ago might have seemed that they were nondiscretionary -- Internet for the home, for example, cable TV -- those things could suddenly become very discretionary items and that trickles and ripples out to the economy as well.

Cory Bortnicker: Okay. Our last item for today before we have to wrap up. One last question, Kevin. Is the government trying to take over our 401(k)s?

Kevin Depew: This is a story that somehow began to gain some legs over the weekend, last weekend. And the story was based on an October 22nd hearing before Congress, where a professor at The New School For Social Research -- sounds like a socialist program right there, The New School For Social Research -- suggested that the government just go out and outright confiscate 401(k) assets, dump them into a program, and invest those assets for people in some kind of 3 percent guaranteed government retirement account or guaranteed retirement account.

It’s not true. I actually looked into this, because it would be horrifying to suddenly walk in one day and find that my 401(k) has been confiscated. Even though they may not take the assets away, they can put them into whatever they want and I would no longer have any self-direcrtion about it. So it was a very horrifying thing to read and think that this might be happening.

Well, it’s not. I mean, all that was proposed was that people be allowed to choose to enter into a government guaranteed retirement account program if they wish. There was this hysteria surrounding it. You know, earlier this week when I wrote that article about the 401(k), the potential confiscation,  I got called everything. Some called me a Communist. Some people called me a fascist. Some people called me a right-wing nut. Some people called me a socialist. So I think that when all spectrums of the political realm are attacking you, then maybe I’m just a radical centrist. I don’t know.

But, anyway, f it came to the point where the government were going to confiscate the $2.5 trillion in 401(k) assets out there -- that generate for Wall Street, mind you, and subsidiaries of Wall Street, $25 billion a year in fee revenue just for sitting there, not even for moving -- if it were to come to the point where that might happen, that would be the least of our worries, because, at that point, the game is already over.

Remember, these politicians, they have 401(k)s of their own. So it’s just another case of hysteria, and it fits socionomically with where we’re going.

We talked in the last podcast about the origin of the self-directed 401(k), which was born in the bull market and a period of positive social mood where. Now that the social mood is transitioning to negative, we could see the death of the 401(k) plan, but that death is going to be public driven. It’s not going to come from a policymaker. In fact, at a point, if the 401(k) were to end, then it would be based on popular demand throughout the country, by people demanding that they be allowed to go into a guaranteed retirement account.

So that’s where we are. I don’t think we have too much to worry about. But social mood, as it darkens, causes a lot of crazy things to happen. And the point of my piece in talking about the 401(k) was just simply to point out this is where we are from a social mood standpoint. The dream of the bull market and the ability to pick stocks for yourself and retire happily ever after is over.

Cory Bortnicker: All right. Well, thank you, Kevin, for your time. And thank you for listening. We’ll be back next week with more of 5 Things You Need To Know: The Podcast. Take care.