Oct 1, 2013

October 1, 2013: Down on Main Street, Stench of Death, Vulchers Looming Overhead

For over 10 years I labored as an account executive, mostly in Ionia but also for brief periods for radio stations in St. Ignace, Ludington, and Hastings, Michigan.  It was during these years that I became intimately acquainted with the business conditions and practices on what is colloquially called “Main Street”.  By Main Street one generally means the old business district in downtown rural or semi-rural America.  Like the passing “family farm” images of which are used to portray a golden era in this country with a square-shooting business and no-nonsense work ethic.  It is to these traditions that political appeals are made to convey a sense of well-being as well as a standard of honesty and integrity.

 But, like so much of what has happened to America in the last half-century, all is not well in the heartland.   Visit any Main Street today and you are likely as not to be confronted with a declining and dilapidated old business environment, with boarded up windows.  As in the financial sector in which 6 banks control two thirds of the national economy, so too retail business today has been swallowed up by a relative handful of regional and national chains.  These operations, all too familiar around the globe, have moved out into the suburbs and exurbs into malls and strip malls drawing the life-blood out of the old business districts.  In fact, they draw the lifeblood out of the whole town as daily deposits are quickly siphoned off to their national and international headquarters.  Wal-Mart is an example.  Importing most of its goods from overseas it quickly draws out the money from towns like Ionia leaving behind only the starvation wages that they pay to their employees. 

 I’ve seen the impact of these operations in the old business districts.  So devastating have they been that storefront rental rates, having quickly fallen, attract business start-ups that are all too often undercapitalized.  I’ve seen people invest their meager savings into small shops and not have a “Grand Opening” promotion because they couldn’t afford it.  If ever there is a time to advertise and promote your business it is when you are opening the doors for the first time.  But funds for this important function were not foreseen and, therefore, were not budgeted, the merchant instead relying on “word of mouth” and his sign hanging outside the shop to draw in customers.  All too often by the time word gets out about this splendid little establishment it is too late.  In the meantime the merchant had to drain whatever his residual resources by way of savings and operating funds to get through.  All too predictably, the business would shortly fail.  After a few years plying the main streets of Mid-Michigan, I could predict with unnerving accuracy which of these start-ups would soon go under.  The stench of death became all too common.

 The price of real-estate and commercial rentals declines to such a degree as to entice the would-be entrepreneur to risk his savings, his credit, and his reputation.  He invests all in an erstwhile effort to establish his own independence and take his place among the “somebody’s” that have traditionally occupied these places. 

But, alas, it is a cruel hoax.  I’ve seen it first-hand.  As far back as the mid 1980’s I began to witness it. 

A new technology emerges, in this case the VHS tape player.  Taking advantage of the readily available vacant storefronts on Main Street, Mom’s and Pop’s across the country opened up video rental stores, investing thousands of dollars in inventory and staffing the operation themselves or employing immediate family for these were not large operations.  Soon they were realizing a modest profit.

There were 3 such stores in downtown Ionia, but these operations soon got the attention of the large chain operations.  In this case it was Meijer, Inc., a regional big-box outfit.  Meijer introduced its 99 cent video and quickly ran these operations out of business. Today, some 30 years later, Meijer is out of this business and no longer handles video rentals having themselves relinquished the field to Blockbuster and Mammoth, who are themselves now under siege from the computer-based Netflix.  The same thing happened with the dawn of the internet.  Small operators pioneered the installation and marketing of dial-up internet service only to be elbowed out of the way by EarthLink, cable and now satellite service companies.  And so it goes.  Today these shops are once again boarded up or being leased to a new generation of start-ups who are themselves doomed in the long run to the avarice of the capitalist pigs.  Like the stock market, the small investor is lured into the market only to be picked clean by the vultures looming overhead as soon as they demonstrate that the industry is viable.   





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