by Tom aka Rusty Rustbelt
RANDOM ECONOMIC OBSERVATIONS WHILE TRAVELING THE RUSTBELT
Even while on vacation the CPA/consultant side of my brain is engaged sometimes (although my grandchildren engaged the Super Mario and Spongebob Squarepants side of my brain).
* small businesses are closing at an alarming rate
* cities thought recession-proof (e.g. Columbus Ohio) are suffering badly
* the hotel/motel business is in a depression
* the housing markets are very weak, with occasional signs of life
* commercial real estate, office and retail, is very weak
* the auto parts supplier network is very fragile, any cascade of closings could shut down the auto industry (domestic and foreign) for a period of time
* the cities of Detroit and Toledo, after 40 years of of mismanagement, corruption, globalization and auto industry deterioration, are near collapse, as are the respective school districts (more on these cities in a later post)
* infrastructure is crumbling, but only a few stimulus projects are visible
* we could put thousands of people to work cleaning up environmental problem sites and demolishing (sadly) former manufacturing plants
* state and local governments need tax increases, but tax increases drive businesses south and west and it is tough to raise taxes on the unemployed and underemployed (moving companies are doing well)
* however — people are hanging in there, somehow, someway
The entire country is suffering to some extent, but these areas have now effectively been in a recession for ten years. Is this the face of the future for the entire country?
Did I mention my grandsons are smart and cute? There is hope for the future.
Tom aka Rusty Rustbelt