The Conundrum of Consumer Spending

"What's good is bad, what's bad is good
You'll find out when you reach the top
You're on the bottom."
--Bob Dylan, Idiot Wind

The Wall Street Journal had a story this morning that began like this:

"Stocks edged lower Tuesday on worries about consumer spending, after Dick's Sporting Goods and Macy's reported weaker sales, sending their shares sharply lower."

It's a perfect illustration of the contradictions inherent in modern life. The other day I wrote about the massive self-storage industry that has been generated by consumerism. America's "I gotta have it" attitudes have morphed into "Where can I put it?" Eventually, we get to this point: "How do I get rid of it?"

And yet, if American's don't fulfill their duty and continue to be good consumers, businesses fail, people get laid off, and the economy weakens.

It seems like we put a lot of responsibility on consumers to keep the economy afloat. Naturally, the banks and financial institutions will continually remind you that the benefits of this or that new credit card can help solve your money problems. 

Haha. More debt is a solution? According to one recent source, "As of the second quarter of 2023, the total consumer debt in the United States is $17.06 trillion."

KEEP IN MIND that this does not include the U.S. government deficits. That's right, American's are on the hook to help pay that down, too. That is, if our legislators had the courage to tell us that we will all need to chip in and pay the bills our taxes are supposed to be used for to run the country. We're talking more than $30 trillion on that deal.

Hmmm. So we have mixed messages to consider. Be responsible vs. Spend like there's no tomorrow.

Good luck.

America's Hoarding Habits Are Making Self-Storage Entrepreneurs Rich

Two weeks ago I saw a story in the Wall Street Journal titled: Is There a Limit to Americans’ Self-Storage Addiction? Billions of Dollars Say Nope. The article begins with a little story about how one entrepreneur milked Americans' addiction to "stuff" to become a multi-millionaire. From there the authors drilled down into more details about the self-storage phenomenon.

One of the observations I made during my trip to Italy in April was that the Italians I stayed with in Florence and Parma (at Air BnBs) had a lot less living space and even fewer possessions. Where did they keep their things? When I looked into it, as of 2018 there were only 50 self-storage facilities in all of Italy. By way of contrast, in this country we have over 50,000 facilities containing 546 units each.

How much stress is created simply by agonizing over where to put all our stuff?  Clutter is a major U.S. industry. How did we become this nation of hoarders? 

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According to the Self Storage Association, Americans spend an average of $180 per month on self-storage rent. This number can vary depending on the size of the unit, the location of the facility, and the demand for storage space in the area. For example, a small unit in a rural area may cost $100 per month, while a large unit in a major city may cost $300 per month.

In 2022, Americans spent a total of $38 billion on self-storage rent. This number is expected to continue to grow in the coming years, as the demand for self-storage space increases. Here are some of the factors contributing to this growth.

Declining homeownership  The number of homeowners in the United States has been declining in recent years, as more people rent their homes. This trend is leading to an increase in the demand for self-storage space, as renters need a place to store their belongings.

Declining living space The average size of homes in the United States has been declining in recent years. This is due to a number of factors, including rising housing costs and the growing popularity of urban living. As homes get smaller, people need more space to store their belongings, which is leading to an increase in the demand for self-storage space.

Of course the flip side of this argument is this: how much junk doyou really need? To reiterate, this seems to be an American problem, not a global one. Consumerism has bedazzled us so that we think we have to have every new toy, even though last year's toys already bore us.

The rise of e-commerce The rise of e-commerce has contributed to an increase in the amount of stuff that people need to store. As more people shop online, they are ordering more items, which they need to store somewhere. Self-storage may seem an affordable option for storing these items, but wouldn't you money be better spent paying down your debt and achieving financial freedom? Instead, we load up our credit cards and pay even more to store what we don't need or use.

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Here's a little reminder from a fellow hoarder: you can't take it with you.

Two Things I've Heard All My Life That Don't Make Sense

Even though we're closer to Armageddon than we were 50 years ago, somehow it seemed like the real "Armageddon Fever" took place a half century ago. Maybe it was Hal Lindsey's 1970 bestseller The Late Great Planet Earth that stimulated the subsequent firestorm of pop-Apocalyptic lit. Or maybe it was simply the turbulence of the times--assassinations, Viet Nam, cities burning--that spawned the belief that humanity was doomed.

While Christians were reading about the end of the world and looking for their Lord's return, secular readers were engaged with books like Paul Ehrlich's The Population Bomb and doomsaying by groups like the Club of Rome. And let's not forget the angst generated by the somewhat intangible, though ever present, threat of nuclear holocaust as presented in books like On the Beach and Pat Frank's Alas, Babylon.

From those times to the present I've observed a few statements by pundits that never seem to go away. They may lay dormant for a season or two, but pretty soon they are being recycled again.

The first: In 10 years we will be out of oil.
This declaration was always accompanied by hand wringing about oil running out and the need to cut our dependence on oil. The latter is noble, though when I was young the statement emphasized cutting our dependence on foreign oil. There is so much oil under U.S. soil that you can't even imagine it. For some reason this off limits and that is off limit and those folks should be permitted to use their oil rigs and that pipeline has to be shut.... Bottom Line: It's empty rhetoric.

The real moral of this story is: Repeating silly pronouncements with specific dates or numbers will diminish your credibility

The second: There are too many people to feed. The world can't sustain any more.
In 1960, the population of the world was 3 billion. By 1974 it had grown to 4 billion. As of this moment, August 2023, there are 8 billion people populating our planet. 

Paul Ehrlich's book predicted mass starvation of the global population by the end of the 70s. 

What I remember most is that despite the troubling rise in population, technology was also advancing to make production of food more efficient and human life sustainable.

Now here's what I don't understand. After decades of handwringing about not being able to feed the world population as it grows, these very same people are diverting food crops for ethanol. And they are eliminating cattle in the Netherlands because of flatulence. (Ireland and Canada are pushing 30% cuts as well.) And I just heard that even more cropland is being eliminated for solar panel farms.

What happened to the concern about hunger?

Photo by Jesse Gardner on Unsplash

Sometime around 20 to 25 years ago Popular Science magazine had a detailed breakdown of the costs and benefits of turning corn into ethanol for car fuel. By the time you grow the corn, harvest it, transport it, convert it, distribute it.... There has been absolutely no gain. It uses up as much energy to create ethanol as the net gain from using it. In short, it is a waste.

Here's something else they don't tell you. E-10 gasoline (E-10 means 10% ethanol) can cause damage to small engines if not handled properly. It's too technical for this blog post, but you can look into it. The problem is called "phase separation." 

So what does our Minnesota leadership do? They are now pushing the use of E-15 instead of E-10. Moving forward with ethanol is ridiculous. Lawmakers close their ears to the experts who point out the silliness here. First, ethanol can damage older engines because it is a solvent which can dissolve some of the plastics, metals and rubber components used in older engines. Second, it has a lower energy content than gasoline. The result is lower fuel economy, the exact opposite of the increasingly stringent fuel economy objectives pressed by the EPA through CAFE regs. Third, because ethanol evaporates more easily than gasoline, it can contribute to smog formation. So why is Governor Walz celebrating the increased use of E15?

Why are we decreasing food production to increase production of a form of fuel that is less efficient and creates more smog? Whatever happened to all that concern about not being able to feed the masses?

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A couple stats about corn in Minnesota. According to the USDA, Minnesota farmers planted 8.5 million acres of corn in 2021. 31% of this corn crop was used for ethanol. That's slightly more than all the acres used for cities, towns and roads in Minnesota. 

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It's time to take a walk.

Why Are Retailers Fleeing San Francisco?

It's not my sole news source but I do follow news on Twitter. I hear something on the radio or read something in an eNewsletter, then go to Twitter and see what others are saying about it. Stories about crime in San Francisco have been crossing the wire a lot the past few years, so I thought I'd see what the impact has been. Here's what I found.

At least 17 big box retailers have left San Francisco in the past 5 years. These include Nordstrom, Nordstrom Rack, Saks Off 5th, Whole Foods, Anthropologie, Office Depot, CVS, Walgreens, and Amazon. In addition to these big box retailers, many other smaller retailers have also closed their doors there in recent years. The exact number is unknown, but it is estimated to be in the hundreds.

There are a number of reasons why retailers are leaving San Francisco. Some of the most common reasons include:

• The rise of remote work: As more and more people work from home, there are fewer people downtown during the day to shop.
• The high cost of doing business in San Francisco: San Francisco is one of the most expensive cities in the world to do business in, due to high rents, labor costs, and taxes. 
• The increase in crime: San Francisco has seen a significant increase in crime in recent years, which has made some retailers, and their customers, feel unsafe. 

According to a May 17 Associated Press story, Target (nationwide) expects to lose $1.3 billion to shoplifting and organized retail crime in 2023. This is an increase of $500 million from 2022. Here's an example of an organized raid on a Nordstroms that cost that this one store $100k in a single shoplifting spree. That occurred this past week in L.A. Nordstroms closed its SF store in 2021.

The National Retail Federation estimates that retailers lose $68 billion to shoplifting each year. With increasingly lax law enforcement I fear that things will only get worse in our home town as well..

DULUTH, MN

One reason I pay attention to San Francisco and Portland is because I do not want to see their crime trends replicated here. If you talk to businesses downtown, many of the problems we see in SF have been quietly festering for some time.

According to the FBI's Uniform Crime Reporting (UCR) Program, Duluth, Minnesota has a higher crime rate than most cities of comparable size in the United States.

In 2022, the violent crime rate in Duluth was 4.6 per 1,000 residents, which is higher than the national violent crime rate of 3.9 per 1,000 residents. The property crime rate in Duluth was 37.9 per 1,000 residents, which is also higher than the national property crime rate of 29.1 per 1,000 residents.

Crime here is not "out of control" yet, though quite a few people don't like the current trends. Personally I don't believe our media paints the full picture. Could it be in part because one of our primary industries is tourism?

There are a number of factors that contribute to crime rates, including poverty, unemployment, lack of education, and drug use. These factors can vary from city to city, which is why crime rates can also vary. What I do know is that there are two agencies in this city that distribute free needles, one of them alone serving up nearly half a million free needles a year. Few of these needle recipients are shooting up with water or vitamins. Common sense tells you that there are drug dealers coming here to profit by supplying goods to meet the demand.

Another factor many people miss is that Duluth has a higher poverty rate than most cities of comparable size. In 2020, the poverty rate in Duluth was 16.6%, compared to the national poverty rate of 11.4%. Duluth also has a higher unemployment rate than most cities of comparable size. In 2020, the unemployment rate in Duluth was 6.5%, compared to the national unemployment rate of 3.5%.

Much more can be said, but I'll leave off here. Make the most of your weekend. Make hay while the sun shines.

Seven Thought-Provoking Quotes by Friedrich Hayek

I discovered Friedrich Hayek in the 1980s when I took an increased interest in politics. I keyed in on the relationship between the individual and the state. As with everything else, my self-education begins with books. Two of the books I studied were Suicide of the West by James Burnham and The Road to Serfdom by Hayek.

Friedrich Hayek was an Austrian-British economist and philosopher who in 1974 was awarded the Nobel Memorial Prize in Economic Sciences. A leading figure in the classical liberal and libertarian movements, his ideas have been influential in the development of economic theory and political philosophy. Hayek was a critic of central planning and government intervention in the economy, and he argued that the free market is the best way to achieve economic prosperity and social justice.

The quotes here highlight Hayek's belief in the importance of individual liberty, limited government, and the free market. They also reflect his skepticism of central planning and his belief that the best way to achieve a prosperous and free society is to allow individuals to pursue their own interests without interference from the state.  

1. "The road to serfdom is paved with good intentions."
2. "The more the state interferes in the life of a nation, the less free the people will be." <Truckloads of examples can be found.>
3. "The only way to deal with an unfree world is to become freer than it is."
4. "The price of liberty is eternal vigilance."
5. "The use of force to prevent people from making mistakes is worse than the mistakes themselves."
6. "The ultimate foundation of a free society is the recognition of individual rights, not the aggregation of collective will."
7. "The worst form of inequality is to treat unequals equally."

Each of these statements could be elaborated on extensively. I thought the last of these deserved more comment here.

Hayek's statement "The worst form of inequality is to treat unequals equally" is a critique of the idea of equality of outcome. This is the idea that everyone should have the same level of wealth, income, and opportunity, regardless of their individual abilities and circumstances.

Hayek argued that equality of outcome is not only impossible to achieve, but it is also undesirable. People are not equally talented, nor equally motivated. It should be pointed out that equality of outcome is not the only goal of social policy. We should also consider the importance of individual liberty and economic efficiency.

The Hoot n Holler Creation Station at Bent Paddle Mondays

I've been hearing a lot this year about Jakob Mahon and his New Salty Dogs' ongoing command of the stage at Bent Paddle on Monday nights. Two weeks ago I finally made it, returninng again this past Monday. With the advent of nice weather Bent Paddle opened its outdoor and turned the adjacent space into a Happening. 

In addition to the music and dancing, there were booths around the stage occupied by vendors and other creative spirits. One of these tents, manned by Kat Ford and Ayana Greene, has been dubbed the Hoot 'n Holler Creation Station. Essentially Ford and Greene created a collaborative "live art" space, for both children and adults to contribute some of their own creative expressions onto large canvases.

Last night I finally caught up with Kat Ford to learn a little more about their Creation Station and the role of art in her life and career.

"Ever since I was a kid I've been curious about live painting," Ford said. When she was vending at the Salty Dog shows on Monday nights, she says, "I was taken aback by the energy." This prompted her to seek out a second venue so that now you can see her work at The Rathskellar on Tuesdays. In adition she has also painted live in various other places. 

When I asked what happens to the paintings they have been producing at their Bent Paddle Creation Station, she indicated that all the paintings will be on sale Next Monday the 21st at Bent Paddle. Since the art was a group production, she and Ayana did not feel right keeping the money for themselves. "All the paintings will be on sale the 21st as a fund raiser for Valley Youth Center," Ford explained. "In the meantime, they've been a blessing in our living room. When we look at them we reminisce on the stories that go with them."

Though she'd dreamed of painting since childhood, she applied for college seeking a high caliber art school. As it turns out she was accepted by her dream school but even with scholarships the cost of college in L.A. was out of reach. 

"I did some classes at UMD when I was in high school," she said, adding that "my other passion is taking care of people. So I applied to nursing school instead... and just graduated in May." She's excited about her nursing career and plans to coninue making art on the side 

I asked if she has a personal philosophy about creativity and Ford replied "Yes" in a thoughtful sort of way. "Creativity is a gift that can be very healing but it can also be very obsessive. It is easy to corrupt your creativity when you attach money to it. (For this reason) I keep some of my creativity in a personal space that is private." 

When asked about the biggest challenges when it comes to creating public art, she said, "Keeping the creative batteries full. Sometimes the pressure of doing public art leaves you running on fumes." 

On the practical said, when doing live painting with children and groups, it involves paying attention. The canvases are an imagination playground, but some children are shy about making marks on the painting. For the most part, however, many people just love rolling up their sleeves. "Public art is magical and motivational," Ford said.

To see more of Kathryne Ford's art, visit the Rathskellar. To see Kat in action, visit the Rathskellar on Tuesday evenings. Monday the 21st will be the last night for their Creation Station at Bent Paddle.

You can see more of her work on Instagram @Blend_the_Sunshine. She'll also be at a couple shows this fall... to be announced.

A few tools of the trade.

New Salty Dog at Bent Paddle: In the Groove

I remember when Jakob Mahon and his brother first rolled into town several years back. From the start people recognized the Mahon's potential. Whether playing with his own band (New Salty Dog) or mixing it up with other combinations of players, Jakob has lived up to those high expectations and more. New Salty Dog has become a Monday night fixture at Bent Paddle in Lincoln Park. After the 21st they will finish off their summer run and move back indoors.  

Glass blowers were there two weeks ago... maybe they are a fixture, too.

Music to groove on and space enough to move for the dancers... The 21st will be their last outdoor show this season.