My wife Joanne and I left last Wednesday for a long Labor Day weekend of camping, biking, golfing and kayaking. We were in the Manistee, Michigan area for a couple of nights in a hotel, then went camping at Sleeping Bear Dunes National Lakeshore in Empire and Glen Arbor.

In Manistee, there is a nice riverwalk area of downtown that stretches for several miles. However, there was no business. Forty to fifty percent of the buildings were vacant, most for sale, some for rent. These were older buildings, but most had character. There were old drug stores, shoe stores etc., some with signs like “doing business since 1932”, but not any longer.

From the outside the buildings did not seem dilapidated. The area was clean, and the riverwalk nice. We walked a stretch of it. The downtown area is a nice area for tourists, but not if there aren’t any. And without tourists, one after another, after another, businesses close.

The year round population of Manistee is about 6,500 with most businesses along route 31. People go through Mainstee mainly to get somewhere else (Traverse City or Sleeping Bear Dunes to the North, Luddington to the South) via Route 31 which passes right through the middle of Manistee. A few hotels and fast food restaurants like Wendy’s dot Route 31.

If you are into golf, I can recommend the Manistee National Golf Course and Resort. I did some posts from the resort and one more on Monday on the way home from Sleeping Bear Dunes.

What Happened To Downtown?

Property prices and rents are not supportive of a vibrant downtown area, no mater how attractive the area might otherwise seem.

This is a reflection on many tourist towns Anywhere, USA, as opposed to a problem isolated to Manistee, or even the state of Michigan.

Sleeping Bear Dunes Area

After leaving Manistee, we camped at Sleeping Bear Dunes in the Platte River campground. Outside the park, along the river there are also “For Sale” signs seemingly everywhere. Along one stretch of road bordering the Platte River and Platte Lake, about 1/4 to 1/3 of the places were for sale. These seem like second homes that people do not want any more. Prices are way down but asking prices are still too high.

Once again, prices are not supportive of the local economy where wages are low and jobs are seasonal.

We kayak on the Crystal River in Glen Arbor. A shuttle service for our kayaks is a very reasonable $5 per kayak. $half million and up homes dot the river. The shops are full of customers, and most of the houses on Glen Lake and the Crystal River are very nice.

All is not what it appears. Many of the shops are for sale. They simply cannot make it operating on business 3 months of the year, and most of that on weekends.

Sperling’s Best Places has this overview of Glen Arbor (zip 49636), Michigan.

As of 2009, Glen Arbor (zip 49636)’s population is 402 people. Since 2000, it has had a population growth of 2.78 percent.

The median home cost in Glen Arbor (zip 49636) is $428,720. Home appreciation the last year has been -9.00 percent.

Compared to the rest of the country, Glen Arbor (zip 49636)’s cost of living is 50.09% Higher than the U.S. average.

Glen Arbor (zip 49636) public schools spend $5,162 per student. The average school expenditure in the U.S. is $6,058. There are about 19 students per teacher in Glen Arbor (zip 49636).

The unemployment rate in Glen Arbor (zip 49636) is 9.50 percent(U.S. avg. is 8.50%). Recent job growth is Negative. Glen Arbor (zip 49636) jobs have Decreased by 8.20 percent.

Wikipedia notes “Glen Arbor is home to many other small businesses that thrive off of the tourist economy.

“Seemingly thrive” would be a better description. For sale signs on homes are everywhere. Many businesses are for sale as well. Does it really make sense to have a half million dollar weekend home in the area, where seasonal use is three months?

It appears many are deciding the answer to that question is “No”. It’s all part of lifestyle downsizing.

After The Boom

These are the kinds of problems cities face after the boom. There are few jobs for the locals and those locals cannot afford to live in the area unless they have been there a long time.

Cities like Manistee fall out of favor as a destination and the downtown areas collapse.

Road Traffic High Over Labor Day

It is hard to tell much of anything about the traffic on the way up because we left Wednesday evening. However, the roads were packed on the return trip all the way from Sleeping Bear to Chicago. Is this reflective of an economy getting better, or extremely good weather and people simply wanting to get away for a weekend?

Given what has happened to hotel rates and occupancies in general, I suspect the latter. Regardless, judging from the for sale signs, the “Tourism Economic Model” is coming unglued.

Labor Day Wrapup

Reflections On Unions

I received many emails regarding Public Support of Unions Collapsing.

Some think that unions would “Save America” and that my stance is “Un-American”.

Sorry folks, it is crystal clear that public unions have wrecked many cities. Pension promises have been made that cannot possibly be met without bankrupting everyone else. As for private unions, look at GM, auto parts, and any other collapsed businesses.

Unions benefit the few, at the expense of everyone else. Moreover, a key point that nearly everyone misses is that because of automation, manufacturing jobs are shrinking everywhere, including China. Those jobs are gone and they are not coming back.

In general, union wages are too high, with too many benefits relative, with too few people earning them. It’s good for the few employees, it is bad for everyone else.

It’s Not How Much One Makes But How Far It Goes

Like it or not (and most don’t) this is a global economy. The US cannot make itself into a self-sustaining island. Moreover, the idea that we can pay everyone $35 an hour and compete globally is ludicrous.

As I have said many times, the problem is not wages, but how far wages go. Greenspan and Bernanke have wrecked the US dollar. Financial engineering drove property prices up to insane levels. The US wastes $trillions attempting to be the world’s policeman. There are so many student loan programs that the cost of education has soared. This is what happens when one throws money around.

Get rid of those things and the US dollar would soar. Deflation is not a curse but a cure. Wages and prices need to come down.

Finally, there is also a major attitude problem in the US. Too many think they “need” an SUV, granite countertops, a huge house, TVs in every room, Nike shoes, and anything and everything else, all on credit.

Want and need are two different things. The party is over. The Collapse Of The “Ownership Society” marks the end, and tourist towns will be increasingly in trouble.

Mike “Mish” Shedlock
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