Watching Mom and Pop Wither

(The Really Sad Truth About the Loss of the American Dream)

By George Mantor

“Mama may have, and papa may have, but God bless the child who has got his own.”

 Billie Holiday and Arthur Herzog, Jr.

I believe in home ownership and I believe that it is part of the promise of life in America….or at least it once was.

But for me, I always thought that the real promise of America was that you could save up some money and start your own business….or at least you once could.

In most cases, you worked longer, harder, and for less money than had you had been working for the man, but that is what true independence is, having your own revenue stream and owning the roof over your head.

Then the game changed.  A few people decided that maybe they could get it all.  Thus began the consolidation of everything into just one big thing:  the “new world order”, “globalization”, “centralization”, “oligarchy”, “plutocracy”, “corporatocrocy”, “fascism”, trickle down”, “post terror”, and “Big Brother” world.

Neighborhoods went from places where people knew each other and did business to subdivisions that morphed into giant low-rise urbias where the houses, all built by the same big entity, all look the same and no one knows anyone.  Some have since turned to ghost towns.

Instead of a tinker, a tailor, and a candlestick maker on a tree lined street with plenty of parking right out front, we get a big-box tilt-up 12 miles away surrounded by acres of parking with nary a spot in sight.

Inside the tinker is working in the maintenance department, the tailor works in a dark tiny room behind the clothing department, and the candlestick maker is unpacking the toxic Chinese candles and stocking them on the shelf.

None have full time hours; all are minimum wage earners whose entrepreneurial disposition has been destroyed by an organization run by people they will never meet.

No wonder the service is bad or nonexistent.  The people who work there have little to gain from the company’s success and the head honchos in corporateville couldn’t care less about the experience of individual customers.  The closest they ever get to customer concern is when they study their demographics.

There was a time when a customer complaint was a welcome and important event that was responded to immediately.  I know because I complain a lot.  And, I used to think I was pretty good at it.

Try to find anyone to complain to now.  To get any empathy, you have to be able to speak Hindi.  Forget about talking to anyone who has both the concern and authority to actually address the situation.

The other casualty of this one-big-thingness is choice.  Mom and Pop decide what to stock based on customer preferences.  The big thing decides what to stock based on a formula of net return per square foot and turnover speed less costs.

When you are big, you see the answer to every problem as bigness, and more and bigger bigness.  Hence the predominant retail strategy of the moment called, “narrow and deep”.  The philosophy is:  “We don’t have much, but what we do have, we have one hell of a lot of and we never run out”.   Choice?  Not so much.

If the “narrow and deep” trend continues, it won’t be long before it will be known as the Coke and Tide store.

Take grocery mega-retailer Super-Valu whose plummeting stock price is beginning to reflect the poor decisions of an indifferent management.  As recently as two years ago, my Albertson’s was crowded with merchandise.  But, one by one, the items that drew me to that store disappeared.  I complained.  More merchandise vanished.

Then, they announced their “Re-Grand Opening” and introduced…more spaciousness. You cannot make this stuff up.

Even less merchandise, but plenty of space.  Gone were the kiosks and the displays in every corner.  And, in their place…well, nothing.  They put in a lounge.  A lounge?  If I want to go to a lounge, I will go to one that makes a mean Manhattan.

But, it gets worse.  I was in the store on Saturday and it looked kind of post-apocalyptic. Lots of empty shelves and, in many cases, just one item remaining.  I wondered if something was happening that I didn’t know about.  Were people stocking up?

Saturday is the day in the grocery business, and they definitely missed sales as a result of lack of merchandise.  I asked an employee why they didn’t have any Mach 3 razor blades.  She told me straight up that they are discontinuing items on which they cannot make an adequate profit.  Wow!  Empty the place out and see what happens.  Maybe they’ll extend their hours to compensate.

It reminds me of when my local home improvement store closed.  They posted a sign on the door that read, “We are consolidating to serve you better. Please visit us at 4888 Convoy Street.”

Just 33.6 miles from where I live.  The “service” would have to be off the charts for me to make that trip for stuff everyone else has.  If they really wanted to serve me better, they should have directed me to the store about ten miles away.  They don’t even know where their own stores are.

The big boxes and grocery chains don’t make much money off me because I don’t eat much processed food.  What I want is the choice of organic food without hormones, antibiotics, genetically modified organisms, and pink slime.  I want a choice of products without high fructose corn syrup.

I am fortunate to live where I do.  I’m just a mile from an organic farm that I visit twice a week year round.

A mile in the other direction is the mechanic who has worked on my vehicles for years. A half mile away is a little coffee shop owned by one of my neighbors.

This is the way it used to be–real community.  Doug Foucault is the owner operator of the Firestone store.  A few years ago he inadvertently overcharged me $190 for a part.  I never would have known about it except that a week later I got a check in the mail.  Who does that anymore?

And yet, I worry about him surviving.  The street he is on, once the center of commercial activity, has been slated for redevelopment for over thirty years.  The City has purchased many of the buildings which now sit vacant and dilapidated while the City plans for a tomorrow that will never come.

There is fully developed, prime retail space in large malls that has sat idle for a decade. Who would build a new development when not all of the space was ever leased during the last boom?  Wall Street, you say?  Wise observation, Grasshopper, but that gold vein has petered out.

Commercial real estate is in that awkward place where you can’t make a profit through success or failure.  There won’t be a recovery driven by an improving economy for a long time, no matter what happens in the next couple of years.  First, we have to stop going in the wrong direction.

I appreciate the fact that I actually know the people who grow my food, maintain my car, and make my lunch.

But, gone are the music store, the Hallmark store, the shoe store, and the sporting goods store, all owned and operated by families for decades.  We have hundreds of vacant storefronts primarily created for Mom and Pop operations.

The government thinks of a small business as one with 500 or fewer employees.  That’s not a small business, that’s an empire.  Common sense tells us that a small business is usually one person.  Sometimes a spouse works full or part time.  Maybe the kids work there.  Or, maybe a handful of employees

All across America, small businesses are closing and have been since the peak of the bubble.

All those empty retail, office and manufacturing spaces are sometimes the only evidence remaining of what was a thriving community.

We all know that homeownership is declining, but not much attention has been paid to what it means for a small business to fail.  Indeed, they are often intertwined.  The money to start a business often came from home equity.  The money to make the payment comes from the business.  Or, so it once was.

A typical example might be, Joe the Plumber.  No, not that Joe!  The Original Joe the Plumber.  Before that made up guy with the shaved head who looks a little like Puerto Rican American rap artist, Pitbull.

Samuel Joseph Wurzelbacher is really Sam the Plumber.  Except that he isn’t actually a plumber either.  He’s a plumber’s helper.  So they took Sam and made him Joe and fortunately he actually worked for a plumber at the time.  Now he’s just another desperate hustler trying to get elected to something.

Back before him, the original Joe the Plumber was intended to be a sort of quintessential “everyman.”

A regular guy.  He works for a living.  He likes his coffee black.  His hands are calloused.  He is smart enough and steady enough to become a Master in a skilled and essential trade.  His opinions were not shaped by an Ivy League school, but he might very well have an engineering degree to his credit.  His view of the world is conceived while retrieving 80 feet of snake from a stubborn mainline while steeped in the heady aroma of someone else’s waste.

He makes water flow and shit go away, and when that doesn’t happen, we hope to God that the guy who comes to the door is a real plumber, not an MBA from the Wharton School or an aspiring politician.

Joe got to be Joe the Plumber by working his way up from apprentice, to journeyman, to a master over a period of a decade.  All this time, he has been in the employ of Big Plumbing Company, Joe is ready to start living the dream and launch Joe’s Plumbing.

Between the truck, the tools, and operating expenses, Joe will need $50,000.  He has $25,000 saved, and he decides to use his home equity to bridge the gap.

Everything goes pretty much as expected.  He struggles to find jobs at first, but eventually his name becomes known in a particular neighborhood and his business begins to stabilize.

Then comes the great recession/depression/collapse.  Business slows as people put off home improvement projects, and other homes sit empty and unattended.  The decline is gradual and Joe turns to his savings.  But, the downturn persists.  Joe depletes his IRA.  Joe misses his mortgage payment.  Soon, it’s all gone.  Everything he worked for, gone.

He isn’t eligible for unemployment or social security.  He had to sell his truck and his tools.  Eventually he lost his apartment and is staying with friends.  It’s not all bad news though.  Joe got a part time job in the hardware department at the Big Store.

As for new moms and pops coming along to take their shot at independence, without startup capital, it will be even more difficult to get launched.  And, with a landscape scarred by so many prior business failures, few will want to take the risk.

Out on the main streets of America it’s a bleak picture.  The boarded up windows and vacant stores foretell the next big financial calamity.  The failure of pools of securities backed by commercial mortgages.

The recession never really ended, and it isn’t ending anytime soon.  This isn’t even the last shoe to fall.  A recession has an ebb and a flow, this is a clock-wise swirl.

By now, most people are aware that there are trillions of dollars invested in mortgage backed securities that are backed by only a few billion in actual residential mortgages, if they are backed by anything at all.  The same applies to commercial mortgages that are just beginning to come due and will fail.

So, what else could possibly go wrong?  Most of that crap is owned by pension funds. Many people who were anticipating a secure retirement are going to get a bitter surprise.  Do you know what your pension fund is holding?

There will be new businesses springing up.  The people who start them will have no other choice.  But, many will be the low overhead work from home type individual jobs. Many of us will have to find a new way to get by.  The key is to pick something that many people will always need or want.

This past Saturday was Small Business Saturday, an event designed to encourage people to support their own local Mom and Pop businesses. I do this every day and you can to. The one vote we still have is the vote we cast with our dollars.

Speaking of local business success, over the last couple of years, the number of craft brewers has increased dramatically in my town to a total of nine.  We are striving to be the Napa of beer.

Beer is an appropriate response to seeing the demons in the mist.  Research supports this, noting that consumption of beer is increasing as the economy continues to tank.

I’ve got a frosty West Coast IPA languishing in the fridge, and I was wondering what it says about a man that he would even consider such a thing at 6:37 AM on a Wednesday morning?

Indeed, tough times call for extreme measures, and local business needs my support. But shouldn’t I at least wait for the sun to come up?

You know what? Conflict resolved. After further consideration I’m going to go with the Double Stout, its rich, almost coffee like flavor just screams breakfast food.

Here’s to Mom and Pop and the Main Street we once knew.

~

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