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  • Anecdotal Observance About The Economy

    Posted by Dan from Madison on October 22nd, 2011 (All posts by )

    My wife and I live pretty busy lives, with kids, work, a hobby farm, and other diversions to keep us moving. Last night we had the rare date alone. We are building a house on the farm (more on this at a later date) and needed some time alone to talk about a lot of things.

    It was her choice to pick the eats, so she picked this place. It was absolutely jammed and the staff said it was a 1.5 – 2 hour wait for dinner. You literally couldn’t find a place at the bar for a drink.

    I laughed (I assume impolitely) at the staff when they said the wait was so long and we left for another place. The next stop was one of our old reliable eateries, Jac’s on Monroe Street. We were once again greeted with a packed house. The person seating customers had her best frowny face on and told us it was going to be at least a half hour.

    Exasperated and “hungry enough to eat the butt out of a skunk” as my grandfather used to say, we then had a short debate over Indian food or steak. The wife chose steak, so we ended up at Fleming’s. Even this high end steakhouse was almost full. We had a short wait (we got a spot at the nice bar there) and then got seated.

    All of these places are not cheap. Of the three, Jac’s is the most affordable, but you still won’t get out of there under $75 for a couple if you are drinking.

    My wife was the one who said that from this experience she isn’t buying the talk about a bad economy. And that might be true, at least for Madison. It isn’t even a football weekend.

    My thought was that perhaps instead of a larger vacation or other big purchase, people may be doing more “staycations” or going out to eat locally instead of the usual travel destination or vegas weekend. Hard to say.

     

    18 Responses to “Anecdotal Observance About The Economy”

    1. Lexington Green Says:

      Areas that are flush from government money and government paychecks are doing fine. Madison is one of those areas. That probably explains it.

    2. Tatyana Says:

      I noticed the same thing back in 2008 – and even then I predicted we’re repeating the 1st Depression pattern: the industries that offer rapid escape from the cruel world, even for a couple of hours, are going to prosper. Like movies in the 30’s – so are the computer games now; the alcohol in the 30’s – drugs now. Same goes with publicly-consumed food and flashy clothes: live here and now, there is no future to invest to, take a break from responsibility – you were modest and reliable all your life and where did it bring you? to depleted savings account and fallen R.E. value of your home. Hence the mad roof terrace parties, decolletages down to navel, Lady Gaga and new popularity of Prohibition and Roaring 20’s in arts and movies. Feast at the time of cholera.

      In my industry, architecture (and sadly, I became an involuntary expert on the issue) the steady employment has been only in 2 sectors: 1) hospitality/entertainment (casinos, Vegas-style hotels, cruise liners) 2) transportation architecture. The latter is explained by what Lex referred to; government money – or at least what’s left of them after bureaucratic filters – went in huge amount to transportation/infrastructure public projects, a lot of them – in the MidWest and Pacific regions. Those architects who specilize in that sort of things, never lost a day out of work.

    3. Jonathan Says:

      DC is booming. I suspect Brussels is as well.

    4. Dan from Madison Says:

      Tatyana – interesting comment.

    5. TeeJaw Says:

      Tatyana must be onto something. I travel around a lot and find restaurants to be packed, and even the cheap ones aren’t really cheap anymore. I’m also amazed at the amount of money people are spending on alcohol in restaurants. The draconian DUI laws keep me down to one beer or one glass of wine but I see many others who are not worried about that, or the cost. I don’t travel to cities with a large government work force so that’s not the explanation in those places.

    6. Bill Brandt Says:

      Madison is flush with government money (and payrolls) and I too (like Lex) suspect if you were to query the patrons you would find at least half of them are government employees.

      I know in Sacramento the situation is the same – you can visit some nice restaurants – I was on one a few weeks ago – Scotts on the River, and I was astounded at how packed it was ..

      There there have been other restaurants here that have gone under – some who were here a long time.

    7. Michael Kennedy Says:

      We plan to conduct an experiment tonight. There is a very nice restaurant, called the Antler Inn, in Twin Peaks, a small community near Lake Arrowhead. This is definitely not a government employee community and everything is depressed. There is a nice Mexican restaurant near the lake which is always busy but it is very prominent. The Antler Inn is a small resort with cabins and the restaurant. Now is the slow season for them as there is no snow and summer is over. We’ll see how they are doing tonight. I’ll report.

    8. Subotai Bahadur Says:

      Here in my small, mountain town in Colorado the economy stands on 3 legs. Government employment is the largest sector, followed by the tourist industry, followed by ranching/farming with ranching being the largest component of that.

      Government employment is steady, but not growing. Tourism has collapsed in the last couple of years. Ranching and farming are going under, especially since more grain is going into ethanol than food for people and animals.

      We have been losing businesses since 2008. About 1/4 of our retail storefronts are closed. A number of restaurants went Tango Uniform, but now some of the restaurants are re-opening under new management/formats, and they seem to be making it. Not packed, but making it. One interesting thing is that almost all of the new restaurants opening are being opened by people whose restaurants in larger cities could not make it and they moved to a smaller town. They are also niche restaurants with reasonable prices and have novelty going for them. We actually just got a Vietnamese Pho shop here. One of the restaurants that closed here, moved to North Dakota, and the owner is prospering. We have a lot of Mexican restaurants around here, in N. Dakota not so much so. Moving to smaller demographics may be a trend.

      The only other businesses sprouting up are second hand stores. This not being Louisiana, they are still allowed to deal in cash

      It is even hitting the big companies. We have a Super-WalMart. For over a year they have been leaving areas unstocked when they run out of a product. Gaps in the shelves throughout the store. Talking off the record to one of their drivers; they are holding off on restocking until they can pack the trailers tight, to reduce the number of trips and save fuel costs. Not a sign of recovery.

      Subotai Bahadur

    9. Bill Brandt Says:

      Subotai – I read an interesting thing about North Dakota a few years ago – they have been immune to this recession – alone among the other 49 states – because of the conservative financial habits of both the state govt and the citizens.

    10. Phil Fraering Says:

      Oh, and they have an ocean of oil they’re actually allowed to drill for.

    11. Bill Brandt Says:

      Phil – if you are talking about the Bakken field are they even drilling there yet?

    12. Tatyana Says:

      Bill: of course they are.
      See here
      and here.

    13. Bill Brandt Says:

      Tatyana – that is interesting. I hadn’t heard anything like the beginning of the North Slope production.

      Years ago when the North Slope was just starting one of my temporary summer jobs was to be a “bean counter” for what was then Brown & Root Construction – one of the biggest in the world at the time.

      A local contractor was producing pumping stations for the Alaska Pipeline on a “cost plus” contract – then floated up by barge – and I was to “count the iron workers” to ensure that everyone they were billing us for was there.

      Naturally diplomacy was important when dealing with a 6’6″ iron worker ;-)

      But the point of this story – I learned that the pipe welds were critical – they would even be X-Rayed and if a flaw discovered. torn apart and re-welded.

      I suspect that what is going in in the Bakken is primarily exploratory now – it isn’t at full production – but I am basing this on speculation.

      I haven’t really heard anything on the news about the Bakken that rivals the North Slope.

    14. Kirk Parker Says:

      I’m with TeeJaw–the same phenomenon is seen in Seattle.

    15. dearieme Says:

      I was in an English supermarket yesterday. A chap in his sixties was shopping with his daughter – around thirty. He said to her “people spend an awful lot on wine nowadays”. And it’s true – not just plenty of bottles, but bottles of good stuff.

    16. Michael Kennedy Says:

      The Antler Inn was packed last night. There was a large and noisy party so I think I will try a week night next time. The food is excellent; I usually have fish when I go to a restaurant as I don’t know how to cook fish well. The restaurant is old and largely constructed of logs; some nearly four feet in diameter. We watched the USC-Notre Dame game until it was time to leave for the restaurant. Condolences to ND fans; it is never wise to make either SC or ND the favorite unless the team is clearly dominant. I’ve been to a lot of them over 60 years and some amazing things can happen; like the 1974 game where Notre Dame was up 24 to 7 at half time and it ended 55 to 24.

    17. Shannon Love Says:

      I read an analysis a long time ago, IIRC, sometime in the early-90s, about the pattern of businesses in recessions. Most people assume that there is just an overall downshift so that the businesses at the bottom e.g. fast food restaurants, expand while those at the top decline.

      However, the actual downshift is not smooth and continuous apparently because of persisting class identification. We can think of businesses as as specializing in specific income demographics i.e. poor, lower middle-class, middle middle-class, upper middle-class, rich. Within each of those, we can think of each demographic as being divided into a top, middle and bottom. People will strongly resist dropping out of their demographic altogether but will cut back at the top. People in the bottom segment of the demographic strongly resist dropping out of the demographic altogether.

      So, the businesses that prosper in recessions are those that service the middle and of their respective demographic segment. That is the segment that people will move into the easiest. So Target will do good but Walmart will suffer. Restaurants that cater to the professional class will do fine but those who cater to those on the way up to rich won’t.

      Businesses at the far extremes of rich and poor usually see little change. The super rich have assets so their spending is not dependent on recessions of a few years duration. The extremely poor are largely dependent on government largess or grey or black market work so their income isn’t affected.

      Local entertainments prosper while those based on long range travel don’t. Historically, Las Vegas has taken it on the chin during downturns.

    18. Fritz Eco Says:

      Being a Madisonian, I am a little disappointed at your choice of Fleming’s. Don’t get me wrong it is a decent national steakhouse, though fairly standard and not much better than I can do at home. Eno Vino is a very non-standard local place and Jac’s is a typical Madison-type place that is a higher-end and more creative version of national family restaurants…my babbling aside, I am disappointed, in this economy, you passed on many more above decent local places and chose the standard high-price (for the quality and value) chain…