The changing face of rural USA

[RobbieB]

Them lobster rolls were good. I think all the can openers here are made in China.

 

[NW-Bound]

Speaking of the many little things that people no longer make, other than the Chinese, I recall this story.

In our European road trip earlier this year, the day after the flight arrival I was walking around a small Spanish town looking for a corkscrew to open the many bottles of wine I was going to drink during the trip. There was no cheap corkscrew, but only a good and expensive one of more than 10 euros. I did not look at the manufacturing origin of the one the store carried, but it appeared people did not buy cheap things to lose or to throw away. They paid more for things that they would use the rest of their life.

When I was in Lisbon, right in downtown I saw a quarter with many Chinese knick-knack stores just like the family-run dollar stores here in the US. It then occurred to me that these Chinese probably were from Macau, a legacy of the Portuguese old colonial days.

Later, when in a restaurant I chatted with the waiter who said that Alfacinhas (Lisbon inhabitants) liked the Chinese stores because of the inexpensive goods. There are two sides to the coin, after all.

PS. No, I did not buy the expensive corkscrew which I would not be able to take back in my carry-ons. A few days later, I was able to buy a cheap one in a French grocery store, to discard at the end of the trip.

 

[Red Badger]

I found most of the text books I read fascinating. I can’t imagine spending my days outside watching plants grow or animals breed without knowing at a fundamental level what is going on. Plumbing = fluid dynamics, welding = metallurgy and phases of materials, kinetics, materials, etc.

You may not be interested in book learning and there is nothing wrong with that. The world needs apprentices, day laborers, and those who can just get things done. Perhaps you should consider that school may be boring and useless to some people but those who are excited by it (actually a large percent of the kids) go on to accomplish great things building off of the knowledge of prior generations stored in those books. I think if you look at the total cost divided only by those who succeed academically, while that costs a lot more per person - their accomplishments have such a large return on investment that it all works out.

Thanks for the condescending feedback.

Traditional book content can be delivered digitally at a fraction of the the cost to print and distribute books that often start on the path of obsolescence before they reach their intended audience. In contrast, a centrally maintained digital version could be updated in near real time. Multiply those efficiencies times millions of books each and every year, and the cost become staggering. Those dollars could be re purposed to reduce class size, increase the number of field trip, or otherwise improve the educational system. I am aware that some of this is occurring, but I'm frustrated by inertia in US public education that is driven by the parties that stand to benefit financially, while the US continues to lag most other developed countries in the field of education.

I won't dignify your comment about my supposed lack of interest in book learning. Other than you've shown a willingness to fire off a cheap shot from the safety of ignorance.

 

[CaptTom]

Among all of the well-reasoned and well-written posts, this one statement still sticks in my mind:

And, thanks to those damn plant experiments making combinations Mother Nature never intended, the surrounding area is infested by invasive pear trees that grow thorns once they're a few years old.

Inquiring minds need to know...where can I read more about THAT

the lobsters are moving north to colder waters anyway (article from 2015)
A big shift is coming to the Maine lobster population — and it could devastate the local economy

Well, as Linda Greenlaw says, "All Fishermen are Liars." But with an ear to the ground, and drinking with the right people, it's possible to learn a bit more about the actual state of the Maine lobstering industry.

My sense is that the catch is down some this year. It's not not clear whether it's a long-term trend or not. Boat prices are relatively stable, but somewhat low. Loss of the China trade doesn't seem to impact the local guys, but maybe it will in time.

The biggest issue they face is the high cost of bait. With bans on mid-water trawls and other fisheries regulation, it's getting harder and harder to find anything to use.

For comparison, many of the zones in Canada haul traps only a few months out of the year. I don't know if they'll be under any pressure to increase that to meet the Chinese demand or not. They already make a good living, since many of them go on unemployment the rest of the year.

The way to judge the health of any fishery is NOT to ask the fishermen. Instead, go to the commercial pier on a weekday and asses the average age and cost of the pickup trucks in the parking lot. You'll find a lot of areas are doing quite well.

 

[jimbee]

Them lobster rolls were good. I think all the can openers here are made in China.

My Swing-A-Way can opener was made in the U.S.A., but I did buy it about 30 years ago.

 

[youbet]

I still wonder about the long term viability of sending our agricultural products and natural resources to China in trade for cheap plastic crap to stock discount store shelves............

And I'm reminded that it was Chinese imports that fueled the demise of town squares and local shopping in lieu of the discount super-store down the highway.

 

[MichaelB]

I still wonder about the long term viability of sending our agricultural products and natural resources to China in trade for cheap plastic crap to stock discount store shelves............

Actually, it's the people importing food that need to be worried. It's easier to do without plastic do-dads than food.

And I'm reminded that it was Chinese imports that fueled the demise of town squares and local shopping in lieu of the discount super-store down the highway.

Was the consolidation the result of low cost imported goods, or did consolidation eliminate costs and drive high cost structure local retail out of business? It happened in other businesses, such as hardware, office supplies, consumer electronics.

 

[Amethyst]

Change is inevitable. Extinction is what you have to watch out for. If you keep doing the same old thing while everything around you is changing, you may face extinction.

The older I get, the harder it is to deal with this unfortunate fact.

 

[youbet]

Actually, it's the people importing food that need to be worried. It's easier to do without plastic do-dads than food.

Yep. Unfortunately, in this case, the folks on the other side of the negotiating table don't seem to be particularly concerned about the comfort and well being of their citizens who might have less food or more expensive food available to them.

Was the consolidation the result of low cost imported goods, or did consolidation eliminate costs and drive high cost structure local retail out of business? It happened in other businesses, such as hardware, office supplies, consumer electronics.

A "chicken or egg" or "a bit of both" I suppose. But I do associate the huge Walmart just outside of town that's filled to the brim with Chinese imports with the demise of the locally owned shops on the town square.

 

[Spock]

Among all of the well-reasoned and well-written posts, this one statement still sticks in my mind:


Inquiring minds need to know...where can I read more about THAT
.....

Google "invasive pear trees"

 

[Koolau]

A few things.

About the tariffs... I understand the concern about the political aspect, that we shouldn't get in to, but the tariff that is causing the soybean problem, is from China, which is changing their import source to Brazil... indirectly part of the fire problem there, as farmers re-purpose the Amazon from forest to farmland. The U.S. soybean shipments to China represented 60% of the U.S. production.

No doubt the China syndrome (sorry 'bout that) will cause disruptions. Also, I'm no expert, BUT it seems to me that if someone else suddenly supplies China, they won't be supplying whoever they used to supply. SO... seems like the US could pick up those markets - fractured as they might be. True, shipping costs and lots of other stuff may lower profits, but it's not like farmers will let millions of tons of soybeans rot in the fields. They WILL sell at some price and they WILL be profitable for at least some US farmers. With the spring rains, it wouldn't surprise me that there is a US shortage of SBs this year. That might translate to higher world prices. Again, no expert. Just thinking that soybeans are at least somewhat fungible. YMMV

 

[joeea]

To blame the China tariffs is the vogue political excuse.

Trade wars are bad. That has nothing to do with vogue.

 

[joeea]

may I just remind the OP that the current administration bought forth a proposal for everyone to drop all tariffs (The 2018 July G7 summit). That went over with the other members like a lead balloon.

The current administration said a lot of things at the 2018 G7. A few of them might have been serious - this was not one of them. I'll stop there.

 

[joeea]

Agree that tariffs probably had little to do with this situation.

I live in Maine. I can assure you that the trade war and tariffs have severely impacted the lobster industry here.

Google "trade war impact on Maine lobster" if you want links to sources.

 

[Mr._Graybeard]

The town where I attended high school once had several prosperous industries that supplied the area with family-supporting jobs. A barley malt plant, once the largest in the world, was just outside of town. A sausage plant specialized in pepperoni, and produced a large share of the supply for the nation's pizzas.

Cargill bought the malt plant from the family business that owned it in the early 1990s and shut it down in 2005. Then Tyson bought the sausage plant and, after busting the union in a bitter strike, closed the factory in 2015.

It's a common story -- big fish gobbling up the small ones. But it makes me wonder why a multinational buys a well-run business only to shut it down a few years later. Is it a matter of incompetent management running an operation into the ground or a deliberate effort to reduce effective market competition? I don't have access to the boardrooms or the balance sheets, so I guess I'll never know.

 

[Pellice]

It's a common story -- big fish gobbling up the small ones. But it makes me wonder why a multinational buys a well-run business only to shut it down a few years later. Is it a matter of incompetent management running an operation into the ground or a deliberate effort to reduce effective market competition? I don't have access to the boardrooms or the balance sheets, so I guess I'll never know.

I read an article many years ago on the bankrupting of Harry and David, the fruit basket company. It made a real impression on me. An investment concern (Bruce Wasserstein) bought the family-run company, which had long-time employees, no debt, an established business, etc., and then borrowed, borrowed, borrowed with the company as collateral. Of course, they went bust, but nobody in the investment concern suffered. However, employees lost their pensions, were laid off, the usual.

The investment concern simply wanted to borrow money with which to speculate. I think that happens a lot. I could not find the original article I read - which I thought was in the NY Times - but I found another one:
https://www.investmentnews.com/arti...ts-harry-david-in-buyout-doomed-to-bankruptcy

 

[Dtail]

I read an article many years ago on the bankrupting of Harry and David, the fruit basket company. It made a real impression on me. An investment concern (Bruce Wasserstein) bought the family-run company, which had long-time employees, no debt, an established business, etc., and then borrowed, borrowed, borrowed with the company as collateral. Of course, they went bust, but nobody in the investment concern suffered. However, employees lost their pensions, were laid off, the usual.

The investment concern simply wanted to borrow money with which to speculate. I think that happens a lot. I could not find the original article I read - which I thought was in the NY Times - but I found another one:
https://www.investmentnews.com/arti...ts-harry-david-in-buyout-doomed-to-bankruptcy

That's hedge funds for you.

 

[aja8888]

It's a common story -- big fish gobbling up the small ones. But it makes me wonder why a multinational buys a well-run business only to shut it down a few years later. Is it a matter of incompetent management running an operation into the ground or a deliberate effort to reduce effective market competition? I don't have access to the boardrooms or the balance sheets, so I guess I'll never know.

My 30 years in acquisition and merger work taught me that bigger fish eat smaller fish to capture their market share and get their plant equipment (assets). Then there is no need for the captured smaller fish.

 

[GravitySucks]

Since retiring I've driven through a lot of the USA. With a few exceptions the only places that look like they are not in the decline are Government and Financial centers. Media centers seem to do well also. Changes in trade rules and laws hurt manufacturing towns. Changes in technology have made the number of people farming shrink as farms acreage grew huge. Changes in banking laws consolidated money centers.
Not sure how to bring back the small cities and towns. Don't think the governing class is very concerned about it.

 

[mpeirce]

Around here (northern Ohio - Appalachian Ohio is another matter) I've noticed that most of the county seats are doing pretty well. They are the centers of activity. Smaller towns often aren't doing as well unless they have some focus - some recreational activity or other business that keeps them humming. Basically, there are too many little towns that have no economic reason to exist, just fading momentum.

 

[ERD50]

Since retiring I've driven through a lot of the USA. With a few exceptions the only places that look like they are not in the decline are Government and Financial centers. Media centers seem to do well also. Changes in trade rules and laws hurt manufacturing towns. Changes in technology have made the number of people farming shrink as farms acreage grew huge. Changes in banking laws consolidated money centers.
Not sure how to bring back the small cities and towns. Don't think the governing class is very concerned about it.

I prefer actual data to "driving around and looking":

https://seekingalpha.com/article/4280594-median-household-income-june-2019

Summary

Median household income in the United States rebounded to reach a new record high of $64,430 in June 2019.

This was a 1.0% increase from Sentier Research's initial May 2019 estimate of $63,799.
...

Median household income in the United States rebounded to reach a new record high of $64,430 in June 2019, a 1.0% increase from Sentier Research's initial May 2019 estimate of $63,799.

The following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through June 2019. The inflation-adjusted figures are presented in terms of constant June 2019 U.S. dollars, where June 2019's figure is just a bit below the inflation-adjusted peak of $64,809 recorded in January 2019.

-ERD50

 

[GravitySucks]

I prefer actual data to "driving around and looking":

https://seekingalpha.com/article/4280594-median-household-income-june-2019



-ERD50

That's a fine article about raising standards in the aggragate, but what does it show pertaining this discussion?
I prefer to see with my own eyes not a graph. If you think smaller towns, manufacturing cities, and rural communities have not been declining since the 1970s you must not get out much.

 

[ERD50]

That's a fine article about raising standards in the aggragate, but what does it show pertaining this discussion?
I prefer to see with my own eyes not a graph. If you think smaller towns, manufacturing cities, and rural communities have not been declining since the 1970s you must not get out much.

My point is that we need data.

The rural areas around here back in the 60's and 70's have grown and are booming compared to those times.

http://worldpopulationreview.com/us-cities/schaumburg-il-population/

2018 73,509
1970 18,531
1960 1,000

http://worldpopulationreview.com/us-cities/bartlett-il-population/

2018 40,931
1970 3,501


even going way out in the sticks:

http://worldpopulationreview.com/us-cities/harvard-il-population/
2018 9,130
1970 5,177

We could look at economic data, but I doubt those areas would be growing if there were no opportunities.

-ERD50.

 

[Senator]

Trade wars are bad. That has nothing to do with vogue.

You are 100% correct. The Trade war that China has had with the USA for many years needs to end.

Elon Musk said once "Elon Musk: Dealing with China’s trade policy is ‘like competing in an Olympic race wearing lead shoes’ when he was referring to Chinese import duties.

Musk also noted that U.S. auto companies in China are barred from owning “even 50% of their own factory,” while there are five “100 percent China-owned EV auto companies in the U.S.”

For example, an American car going to China pays 25% import duty, but a Chinese car coming to the US only pays 2.5%, a tenfold difference

https://beta.washingtonpost.com/new...peting-in-an-olympic-race-wearing-lead-shoes/

 

[Mr._Graybeard]

My point is that we need data.

The rural areas around here back in the 60's and 70's have grown and are booming compared to those times.

http://worldpopulationreview.com/us-cities/schaumburg-il-population/

2018 73,509
1970 18,531
1960 1,000

http://worldpopulationreview.com/us-cities/bartlett-il-population/

2018 40,931
1970 3,501


even going way out in the sticks:

http://worldpopulationreview.com/us-cities/harvard-il-population/
2018 9,130
1970 5,177

We could look at economic data, but I doubt those areas would be growing if there were no opportunities.

-ERD50.

McHenry County is way out in the sticks?? It's on the Chicago Metra line.