The Hypen Closes

July 8, 2003 8:58 AM

A little coffee shop in a little North Carolina town closes. When I worked in Fuquay-Varina, N.C., the opening of the Hyphen (get it? get it? the Hyphen in Fuquay-Varina?) was a miracle. There, in the midst of antique stores, clothiers, and the Bob Barker Co., was this hip, unique eatery owned and operated by two local artists. Owner Nina Fortmeyer partially cites that the little tobacco town has simply become "Wal-Mart-ized" in its growth, leading to a loss in downtown foot traffic, leading to lost business. This, methinks, is the greatest and most obvious consequence of globalization, the mom-and-pops being run out of town. If this is happening in Fuquay-Varina, it is absolutely happening everywhere. Very sad.
posted by NedKoppel (63 comments total)

If this is happening in Fuquay-Varina, it is absolutely happening everywhere.

just playing devil's advocate here, but you wouldn't happen to have, you know, some documentary support for that statement? "absolute" documentation? i'll be waiting over there next to the abandoned mom and pop grocery.
posted by quonsar at 9:04 AM on July 8, 2003

“We are closing mostly for personal reasons,” explained Nina Fortmeyer, who with her husband, Kurt, had been in the restaurant business for years when they opened the Hyphen. “The Hyphen is more than a full time undertaking and Kurt would like to pursue other things. I don’t wish to run the shop alone. I too, would like some time for artwork, something the Hyphen has not allowed.”

Walmart and the like closing family owned businesses may be true, but it doesn't appear to be in this case.
posted by internal at 9:06 AM on July 8, 2003

How is this a sports story? At least they didn't file it under "Obituaries."

Coffee shops also close in towns with no Wal-Marts, just as an aside.
posted by sageleaf at 9:07 AM on July 8, 2003

It is staggeringly depressing to drive from town to town in America and see the ubiquitous duplicate food & retail outlets. Why bother going anywhere if they're all gonna have the same Old Navy to shop at and Applebee's to have dinner in?
posted by jonson at 9:10 AM on July 8, 2003

jonson, you have to live in a big city to find small-town charm. No Applebee's or Old Navy in DC--not one. Lots of Starbucks, of course, but also lots of independent coffee shops, too.
posted by MrMoonPie at 9:18 AM on July 8, 2003

Actually, Internal, I know the town and can see how it would be a factor. There are two nice downtown sections (Fuquay-Varina is a merger of two towns) that were clearly designed in an age where people drove to a downtown, parked their cars, and walked to do their shopping. Then there is the new section further up the state road, where such simple shopping isn't an option. Perhaps it wasn't Wal-Mart that helped close the Hypen, but I am willing to bet that Arby's, and McDonald's, and perhaps even Applebee's surely didn't help. (And, thank you, jonson...)
posted by NedKoppel at 9:20 AM on July 8, 2003

I'm not exactly sure I see your connection between "Wal-Martization" of a small town (which isn't apparently actually happening according to internal's quote, or at least not in this instance) and the "evils" of globalization. I mean, I see where you are trying to go with this, but the gas station that fills the cars tanks, the bananas at the mom & pop grocery store and the aluminum cans that the locals drink their coca-colas out of are just as blaring examples of globalization at work in a small town and those things were there long before Sam Walton went global! I'd say its more an example of corporitization in a decentralized development zone than globalization, but I'd bet that most of what was the town's central downtown area had already begun to die (decentralize) before Wal-Mart came in. Does F-V have a "by-pass" or a "strip?" Where did Wal-Mart build, out on the hi-way, by the Winn Dixie and the Autozone?
posted by Pollomacho at 9:21 AM on July 8, 2003

Why exactly did the two towns feel the need to merge in the first place?
posted by Pollomacho at 9:23 AM on July 8, 2003

-Why exactly did the two towns feel the need to merge in the first place?-
Fuquay Springs and Varina finally merged in 1963 to form Fuquay-Varina, though long-time residents of both towns may still identify them as separate (Lalley, 1994). The two towns' proximity to each other and use of the same railways for industry likely made the merger an ideal decision at the time.
posted by NedKoppel at 9:31 AM on July 8, 2003

NedKoppel, sadly it's happening here in Boulder and for a variety of reasons. Note however that Boulder has consistently opposed WalMart coming here (too plebian for them I think). We had a K-Mart, but it was flattened for a Safeway when K-Mart went into bankruptcy. Mainly I think the town's zoning restrictions lead to high property prices and high rents, and so the only way to get into retail is either to have a pot of money (chain), or to set up selling expensive chatchkes, handmade paper, pricey (but average) food, etc. Meantime as blocks get redeveloped, old renters get kicked out, and newer folks who can pay higher rents move in. Anyway for whatever reason the town has sadly lost some unique diners and shops.
posted by carter at 9:48 AM on July 8, 2003

I was working as a reporter for a small-town newspaper in Alabama about ten years ago when Wal-Mart came to our town. Within months, the local hardware store was gone, the local optometrist was gone, and two bait-and-tackle stores down by the river were shuttered. This is in a town of roughly 8,000 people.

I was going to write a story for the paper bemoaning the death of small family-owned business due to the big bad corporation, so I went to Wal-Mart. I found the former hardware store owner managing the hardware section, one of the guys from the bait shops running sporting goods, and the optometrist ensconced in a new and slick kiosk selling a better selection of frames and contact lenses at better prices. I found the kid who used to run the register at the hardware store managing the Wal-Mart greenhouse. He hated wearing that blue vest, but he was happy that now he could afford medical insurance for his wife, who was at home raising their twins. He had started a college fund for his kids.

Several years later, I visited the town to see some friends and do some fishing. We drove through downtown to see what had changed. The old hardware store was the office of a (new and minority-owned) construction firm, one bait store was back in business (selling more beer than bait, I believe), and the spot where the optometrist's office had been was bought by the city and cleared to put in a Little League baseball field, complete with lights for night games. The lights were donated by Wal-Mart.

Now I'm about as left-of-center as you can get without getting misty when they play "The Internationale", but even I will admit that in this specific instance, the good Wal-Mart has done has outweighed the bad.

I'm actually more concerned that fast food and chain restaurants will kill off the Southern culinary tradition than I am that Wal-Mart will destroy the fabirc of small towns. Hamburgers: an insidious evil.
posted by BitterOldPunk at 9:51 AM on July 8, 2003

Um, I guess I'm going to post my first snarky comment on MeFi. Isn't Wal*Martization old news?woah! The local coffee shop I worked for in high school was closed in 1998 due to Starbucks feeling the need to set up camp 30 yards away.

It is staggeringly depressing to drive from town to town in America and see the ubiquitous duplicate food & retail outlets. Why bother going anywhere if they're all gonna have the same Old Navy to shop at and Applebee's to have dinner in?

While I sympathize with the revulsion to seeing homogeneous towns on the road, it is a problem that can easily be avoided by taking non-major roads. They are almost as quick, less populated, and scenic. It is much more interesting to meet the shopkeep in some small town than dealing with a braces-clad teen at Exit 58. Zen and the Art of Motorcycle Maintenance [full text online] has much more to say about this. /compulsory reference. Ditch Mapquest and just use an atlas.
posted by ArcAm at 9:54 AM on July 8, 2003

see some friends and do some fishing.

You like the punk rock, and go fishing? B_O_P if you were woman, I'd propose marriage.
posted by dhoyt at 9:56 AM on July 8, 2003

dhoyt, if I were a woman, I'd accept. Since my wife would have left me and all, since she don't go fer that lezzie stuff.

Least I don't THINK she does.

"Hey, honey....."

*SMACK*
posted by BitterOldPunk at 10:03 AM on July 8, 2003

Add San Francisco, CA to the list of communities impacted by large companies. San Francisco is only 7 miles square. Adding a Super Wallmart or Home Depot takes up a lot of this land and displaces other small businesses. Allowing super large companies to do business in the city must be approved by the Board of Supervisors. These public meetings are in the public record as being contentious debates of this very issue.

Displacement in suburb and small towns is a sadder issue since many people benefit from the close proximity of these big stores and their cost savings.

It's a quality of life issue decided by the people in the communities and what they are willing to afford.
posted by xtian at 10:15 AM on July 8, 2003

I like how some of you people would rather the entire populations of small towns pay higher prices, work shittier jobs, and be unable to get groceries and other goods any hour of the day or night just so that the one time you drive through that town, on your way to somewhere else, you don't have to see a particular store.
posted by techgnollogic at 10:30 AM on July 8, 2003

*sheds a single tear*

Boohoo. I want my goods cheap.
posted by insomnyuk at 10:30 AM on July 8, 2003

jonson, you have to live in a big city to find small-town charm. No Applebee's or Old Navy in DC--not one. Lots of Starbucks, of course, but also lots of independent coffee shops, too.

MrMoonPie - You are absolutely correct. I live in Boston's North End, and have within a one block radius:

1. Local Italian Coffee/Herbs store
2. Three Local-owned/run convenience stores
3. About a dozen Italian restaraunts
4. Family-run, four generation-old Pizza place
5. (Old North Church, Paul Revere's House, etc.)

There's not a single McDonalds, KFC, Walmart, K-Mart, Pizza Hut or the like for miles. It's wonderful. The nice thing about cities being so expensive is that a place like Walmart could build three super-stores for the same price as a medium-sized store downtown. People looking for culture and independent commercial institutions in the suburbs are going about it backwards. Remember, history and culture started in the cities. If you want land, (lots of land and the starry skys above), be prepared to pay for it (strip malls, highways, no sidewalks, fat people... whoops, did I say that?)
posted by Civil_Disobedient at 10:34 AM on July 8, 2003

According to this article, there are two competing trends, Walmartization being only one of them. Perhaps the second will promote an attractive (or at least, an acceptable) alternative to the disappearing Mom-and-Pops.
posted by rushmc at 10:37 AM on July 8, 2003

When any big chain opens in close proximity to a series of small shops, when they have the advertising budgets, the endless resources and the carefully picked location, it's really no contest. Because the big franchise can afford to take some initial operating losses. The small businesses can't.

Wal-Mart can afford to give back to a small town and create the illusion that one of its outlet stores serves as a community pillar, representing a shining beacon of tolerance. Meanwhile, behind closed doors, they can maintain low wages and union busting, perpetuate an "open door policy" bullshit excuse and stave off multiple lawsuits with deep pockets -- small people who have been fighting against sexual discrimination and many other issues.

And let's not even begin to talk about the communities that rely upon a Wal-Mart when one of its outlet becomes is its sole employer. Close down the local optometrist, close down the local hardware store -- in short, close down every shop that represents even a remote alternative, and you create an autocractic economic situation. I spit in the face of BitterOldPunk's utopian flummery. Because if that Wal-Mart closes down, the entire community is SOL. There's nothing else available. How in the hell can any reasonable person stand behind the nation's largest employer when it continues to fuck the working man while imposing its own moral sanctity over what to sell? That sure is hell isn't the corporations we saw during the Eisenhower days, which not only paid its CEOs left but offered job security for workers who stayed on board for several years. And on the moral goods front, isn't it up to the community to set its own limits and not some centrally operated, monolithic corporation?

What we have here is a franchise situation that is, in particular towns, has in its own way found an oblique avenue around the Sherman Antitrust Act. And it appalls me that their capitalistic despotism continues to find deluded converts in otherwise sensible people such as BitterOldPunk.
posted by ed at 10:45 AM on July 8, 2003

When I walked past just like I say,
And I felt this hurt that that would not go home
I can't expect that you gonna see it my way
But you may not know the trees that I've known
And I want them to put back my old corner store

Jonathan Richman - Corner Store

I used to live near the corner of Bellevue and Thomas, where there was a two lot mini-park with a huge horse chestnut that used to be in the front yard of a house where I sold some kid a Harmony Sovereign in 1972. That tree was over a hundred years old--remarkable in this town.

And kitty-corner to that was Kay's Grocery, which was open in 1967, when I moved here--I remember buying packs of cigarettes there when I was going to Seattle Community College back then. It was run by old Henry Lee and was named after his wife, I think.

He was a widower and Chinese--in those days all the corner stores on Capitol Hill were owned by Chinese. (These days, it's Koreans and Ethiopians.) It had those old wooden floors worn with the grooves from the old shopping carts, the usual crappy old shelves and sun faded Bubble Up thermometers in the window. I used to go there and buy cigarettes and beer and such for years.

Man, I remember him talking about cutting classes at Franklin High School and sneaking into a Nat King Cole Trio show in 1948. In his 80s and there he was--still chasing out the kids trying to boost Olde English 40s. One day, one of them asked for a pack of cigarettes and whacked him across the back of the head, cleaned out the register, the cigarettes and left him lying there. That was it--his kids retired him and closed the store

But at least the building's still there--now a coffee shop owned by a local dot com millionaire in his 30s.

The horse chestnut fell over a few years after the store closed--that was a bigger trauma for most folks. They were standing around crying in the street the day it happened, left a shrine of flowers and poems for it that was there for weeks. I miss them both--but what can you do? They've planted a copper beech sapling in the park--what will the corner look like when it's a shade tree, I wonder.

These places are meeting places, points in common, touchstones for people. I don't think an aircraft hangar sized megastore will replace them in that capacity. That's what all these sorts of stories lament, I think. Everything passes. My grade school was torn down years ago, most the houses in which I lived are gone. There's a whole scale of life that's disappeared, a more human scale--which is what I think Jonathan is singing about. It's gone.
posted by y2karl at 10:51 AM on July 8, 2003

Why bother going anywhere if they're all gonna have the same Old Navy to shop at and Applebee's to have dinner in?

What you gotta understand is, this is what a lot of people want. Predictability, convenience, and cheap stuff. {Period.

Sarcastic or not, Insomyuk speaks for many.
posted by gottabefunky at 10:58 AM on July 8, 2003

jonson, you have to live in a big city to find small-town charm. No Applebee's or Old Navy in DC--not one. Lots of Starbucks, of course, but also lots of independent coffee shops, too.

It'll be interesting to see what happens when they open up the Target in Columbia Heights, though, huh? I live a few blocks away, in Mount Pleasant, which (for you non-capitalites) is one of the most diverse neighborhoods in the city - dollar stores, pupuserias, taco shacks, pumping tejano music galore. A wonderful contrast to DC's typical blandness. CH is next in line for "revitalization," which includes sticking this big box store in a currently empty lot. My feelings on this are mixed.

And it'll also be interesting to see how the Starbuck's does that just opened a block from Tryst (big, popular local coffeeshop/bar in nearby Adams Morgan, comfy couches and primo people-watching). Surprised people aren't picketing the place.
posted by gottabefunky at 11:07 AM on July 8, 2003

*wiping ed's spit off the face of my nice new utopian flummery*

(Fortunately, Wal-Mart's generous return policy will allow me to exchange the flummery for an item of equal or lesser value. I still have the receipt, and it's still under warranty.)

A couple of points:

If Wal-Mart ever closes in this town, I imagine Mr. Green (or someone similarly inclined) will see an opportunity to reopen his hardware store.

There were city-wide meetings before ground was broken on Wal-Mart, and the only argument from the citizens who attended was over which contractor could get the store built faster.

Wal-Mart is a horrible employer. I take issue with their union-busting and the whole corporate brainwashing mentality. No arguments here.

But you can whine about it all you like, the facts remain: these people like having Wal-Mart in their town. The tax base for the city has grown, independent truckers are getting work hauling goods for them, and fewer people now have to go to work in (dangerous and low-paid, unbenefitted) jobs in poultry or catfish processing plants to feed their families.

This is a bad thing?

I never said Wal-Mart was the solution to this town's problems. I never said I admired them or agreed with them: I don't.

But you've never been to this town, ed. You have no idea what poverty in the Black Belt region of Alabama is really like. You think they've struck a Faustian bargain with a big bad evil corporation, and even though I'm inclined to agree with you in principle, in practice the situation looks very different.

You know who else they were trying to woo to town? A chemical waste hauling firm, another catfish processing plant, and an injection-molding company that was to make plastic containers (and drain their effluent into the beautiful Black Warrior River). So who would you have picked for your town?

It's easy to sit back from your lofty perch atop the latest stack of copies of The Nation and hurl rhetorical bombs at small towns who have to make hard decisions based on criteria other than ideology.
posted by BitterOldPunk at 11:12 AM on July 8, 2003

No Applebee's or Old Navy in DC--not one.

. . . yet.
posted by archimago at 11:16 AM on July 8, 2003

ed, in my experience, the "autocractic economic situation" already existed. I lived in Carrollton, GA, for three years. One ophthalmologist, who was very aware of his lack of competition. Typical wait there was two hours, three if he had a long lunch. and it was the only place in town to get glasses. One hardware store, and it was terrible--open 9-5, weekdays, a couple of hours on Saturday morning, limited selection, exploitive prices. Need a box of screws or a gallon of paint Saturday afternoon? Tough--wait until Monday, then take time off work to go get it. Don't like that? Again, tough--no where else to go. These local businessmen were not beneficient stewards of good will, but would-be captains of industry. They had no more concern for the good of society than did Sam Walton; they just had fewer resources. WalMart thrived there because it was filling a huge consumer void. Yes, the local hardware place went out of business. Good riddance, I said.
posted by MrMoonPie at 11:26 AM on July 8, 2003

BitterOldPunk, you're batting 1000 in my book.
posted by widdershins at 11:27 AM on July 8, 2003

Interestingly, now that I live in a big city and have several Home Depots at my disposal, I do most of my shopping in small, independently-owned hardware and garden shops. They're closer to me, have better stuff, and the workers there can answer my questions. They're more expensive, sure, but I make more money now, so I have the freedom to make the choice.
posted by MrMoonPie at 11:30 AM on July 8, 2003

Just a comment on the impression people are giving of DC -

Mount Pleasant as a neighborhood is hardly diverse. Have you priced a house there? Mount Pleasant St. has managed to survive the gentrificiation (for the most part) of the neighborhood, but I think that the people who are keeping the dollar stores open are coming from the surrounding yet-to-be-gentrified neighborhoods.

No Applebee's or Old Navy in DC--not one.

Yes, but only because there's no market for them. There are plenty of chains stores and restaurants (Gap, Cosi, Banana Republic, Starbucks, Barnes and Noble, Fresh Fields etc.) DC is an extremely expensive place to live (outside of Northeast and Southeast DC - areas that I doubt the people who live in NW DC typically venture for dinner and shopping) and therefore attract a different kind of chain store.

And while it's not DC proper, I work in PG county in proximity to Northeast DC, and yes, there is an Applebees here.
posted by drobot at 11:37 AM on July 8, 2003

From the June 2003 Harper's Index:

Number of states in which Wal-Mart is the largest employer : 21
posted by rushmc at 11:55 AM on July 8, 2003

It is staggeringly depressing to drive from town to town in America and see the ubiquitous duplicate food & retail outlets. Why bother going anywhere if they're all gonna have the same Old Navy to shop at and Applebee's to have dinner in?

Not to be rude, but if the only reason you can think of to travel is to buy stuff and eat, then maybe it's better that the prevalance of Old Navy and Applebee's is keeping you at home. This just seems like an unhealthy obsession with consumption to me.
posted by kindall at 11:56 AM on July 8, 2003

Not to be rude, but if the only reason you can think of to travel is to buy stuff and eat, then maybe it's better that the prevalance of Old Navy and Applebee's is keeping you at home.

I don't think that was jonson's point.... often the point of travel is to do/see new things. Some things are new just because they're a different setting.... you have to eat anywhere you go, and it's sometimes nice to be able to do this in a novel way. I like going to Mom's Diner in Salina Utah because it's a pretty unique place. I don't ever go there just because, but it can be part of the pleasure of going somewhere on highway 89.

Furthermore, commerce and culinary arts are part of culture, and when you see a homogenization of both offerings, it's more than a bit depressing. Everywhere is exactly like everywhere else is not what you're hoping for when travelling.
posted by weston at 12:11 PM on July 8, 2003

Has anyone considered that a "hip, unique eatery" might just not do that well in a small town? I don't intend any condescension, but I used to work for a software company whose headquarters were in a little town in Kentucky. When I visited, they took me to a terrific independent restaurant with stylish food and an arty but unpretentious atmosphere. Sounds great, right? But then they told me that the place was struggling because no one in the town liked that style of food, except for the employees of my company. Goat cheese was cited as a particularly unpopular ingredient.

Of course the owner of such a place would like to blame Wal-Mart, but sometimes it's more complcated.
posted by transona5 at 12:58 PM on July 8, 2003

I don't understand why Walmart (and other large corporations) are blamed when smaller businesses go out of business. From the economist point of view, I can understand that some of Walmart's pricing practices are predatory and anticompetitive. But nonetheless, the magic of capitalism is that unless people shopped at Walmart/Starbucks/McD's, they would go out of business.

As another poster mentioned earlier, it seems a bizarre hatred of consumption leads MeFiites to want people poorer than us to pay more for worse service so that we can see a Rockwellian hardware store when we roll through in our Beetles.
posted by Kevs at 12:58 PM on July 8, 2003

Kindall! Don't nitpick - all I was saying was that homogenized culture (which, yes, can take the form of consumables as in my examples) cuts down on the value of going somewhere, at least somewhere urban. Rural travel such as national parks or road trips are still lovely, I just like to be able to tell one city from the next.
posted by jonson at 2:11 PM on July 8, 2003

In the small Black Belt town I grew up in, the downtown was already dying. The "mall" had killed the pitiful downtown department store, the only thing left was the courthouses, the law offices that served it and the few mom & pop luncheterias that served them in return. They tried and tried to revitalize it, but nothing happened, people drove hours down the crappy roads to get clothes from city malls with department stores in Tuscaloosa or Montgomery or even all the way up to Birmingham. Wal Mart came in and you could suddenly get flip flops without having to drive to Montgomery. Most of the sad dying stores down town did die off, as expected, but really because Wal Mart was really convenient. Because suddenly there was actually a place to buy things people stopped moving away to the cities, other businesses followed. My town had a business boom, down town actually got new stores, the state turned the old two lane road to the West into a four lane highway! Then, the bust came. Companies started going under one by one. Now its a shell of even what it was before Wal Mart. Only the Cigar Factory that got a boost from the blunt craze (Phillies are made there) and the uniform factory are all that's left, now even Wal Mart is closed, sad really. I wouldn't say that Wal Mart was the deciding and driving factor in the boom, but I'd say that it chose a good time to come in and when they did the city took off, with the convenience they provided as added boost.
posted by Pollomacho at 2:14 PM on July 8, 2003

This is in a town of roughly 8,000 people.

By the way, BOP, I don't know any towns in the black belt with that many people excepting maybe one or two, but they aren't on the Black Warrior, seeing as how Greene County only has 9,000 people total, I'd guess that your estimate is a little high! But it is good to hear someone talk about the black belt and not be talking about anything related to karate!
posted by Pollomacho at 2:25 PM on July 8, 2003

From the economist point of view, I can understand that some of Walmart's pricing practices are predatory and anticompetitive. But nonetheless, the magic of capitalism is that unless people shopped at Walmart/Starbucks/McD's, they would go out of business.

Didn't you just answer your own question? Let's say a Walmart comes to town, and 40% of the people who would have formerly shopped at the local hardware store, corner grocery, etc. start going to Walmart instead. The other stores suddenly experience an income crash, since a significant minority of their customers are now shopping elsewhere. They're small independent companies, so they can't take the crunch for very long, and they fold. Meanwhile, the brand-new Walmart writes their first few months of losses off as a startup expense. Pretty soon all their competition is gone, and now everyone has to shop at Walmart whether they like it or not. Bam! Instant homogenization, even if most of the town liked things better the way they were before.

Maybe the Walmart really does a better job at what all the independent stores were doing, but it leaves the town in a precarious way. Instead of half a dozen shops run by locals, it's one giant company half a continent away. The profits don't stay in town, and if some anonymous corporate board decides this particular outlet isn't making a big enough profit, they can pull the plug. Instant local recession.
posted by Mars Saxman at 2:56 PM on July 8, 2003

Mars - that's a pretty good summary of what happens. Funny how predatory practices like this are called dumping when it comes to foreign trade, and are illegal under international law, but it's fine and dandy if it's done on the homefront, under the auspicious umbrella of "capitalism."
posted by Civil_Disobedient at 3:24 PM on July 8, 2003

BOP: The Nation's bland house style gives me a rash after about ten minutes of reading. I try and avoid the experience because skin cream seems a silly thing to purchase with a lefty screed. But there was a USA Today link in that last post, I assure you. :)

To respond to your cogent post:

1. Could Mr. Green really set up his hardware store again? Between startup costs, the likely impoverishment of a post-store closing community relying upon Wal-Mart as sole employer and the low Wal-Mart wages that make your clerk's college fund story quite suspect (unless the couple is living with their parents or in an extremely low-rent/mortgage situation), I doubt this manager would have the inclination, much less the capital to begin anew.

2. In practice, the short-term results sound positive. But witness what recently happened to K-Mart. Business empires crumble, people get laid off, stores close, times get tough. The same swift prosperity could easily result in a similarly speedy recession or long-term depression if this Wal-Mart collapsed or decided to jump ship.

You're right. I don't live in that town. But I'm curious if any of the town's citizens actually bothered to set guarantees with Wal-Mart, something that ensured that this outlet would be around for 30-40 years, binding agreements, something that would ensure that the people of this town have a place for them down the line. If they did, and they wanted the Wal-Mart, then I'm happy that the town's population showed some initiative. But if they didn't (and given Wal-Mart's tendency to bust unions, this would suggest to me that nothing happened), then this really was a Faustian bargain. If a factory, a store or a plant really wanted to open in this town (and it sounds like there were several on the table), then it may have been possible to negotiate a few concessions or guarantees.

That's what capitalism is all about.

MrMoonPie: Point taken. I never meant to imply that all small businesses were nonpareil, although from my own empirical experience, they offer more flexibility and are more consumer-friendly than a franchise which must abide by the company handbook. You also may have a point about small businesses doing better in urban environments.
posted by ed at 4:38 PM on July 8, 2003

it's more than a bit depressing

I have trouble imaginging people getting depressed by this. Depression is what happens to you when a loved one dies or you get evicted from your home because you lost your job. Depression is not something I normally associate with being able to buy all the same stuff you used to be able to buy, except in a different place for a little less money.
posted by kindall at 5:47 PM on July 8, 2003

I don't know, I would find homogenization of America quite depressing, even though it doesn't impact me as directly as the death of a loved one or the loss of a job. I can get depressed thinking about who's running the country, though, and that's very remote from my every day existence. Maybe weston & I are just thin skinned wusses when it comes to cookie cutter communities.
posted by jonson at 7:14 PM on July 8, 2003

Why whine about Fuquay-Varina? Just drive to Raleigh!

Frankly I laugh at the idea that anyone in these small towns would want to go to some of these artsy-fartsy type places (mind you, I love them)...half these people wouldn't even eat Chinese food if you put it in front of them.
posted by konolia at 7:17 PM on July 8, 2003

ed you idiot. BitterOldPunk said there were 8000 people in the city. Do you really think they all work for walmart? That dosn't even make sense...
posted by delmoi at 8:47 PM on July 8, 2003

ed - please don't let semi-literate trolls keep you from coming back. I (for one) always enjoy your beautifully-written, well-argued comments.

[/cheerleader]
posted by stavrosthewonderchicken at 9:05 PM on July 8, 2003

ed and BOP - double 'z' click for both of you! Articulate arguments, reasonable rebuttals. Nice one. I would have emailed this, but BOP has no address listed on his user page.

kindall - I have trouble imagining you could be so pedantic with such a straight face.

delmoi - That dosn't even make sense. You don't know how right you are.

Sheesh, when did I get to be such a bitch? What happened to that nice young man dishing out the unasked-for compliments a few lines earlier?
posted by backOfYourMind at 6:05 AM on July 9, 2003

By the way, BOP, I don't know any towns in the black belt with that many people excepting maybe one or two, but they aren't on the Black Warrior

I knew my mistake as soon as I shut off my computer and walked away last night, I'm a moron, of course I know exactly where you are talking about my parents may be moving there!
posted by Pollomacho at 8:21 AM on July 9, 2003

Pollomacho: OK, so I fudged my geography. It's on the Tenn-Tom waterway, of which I believe the Black Warrior is a part. "Black Warrior River" just sounded better, and was close enough that I felt justified to take the artistic license. The town to which I refer is Demopolis, just south of Greene County at the northern tip of Marengo County, and according to my source (I called her yesterday!), the population is hovering around 7900, so I was close. It's a lovely little town, and anyone with business in Tuscaloosa or Meridian should take an afternoon to explore it. Just don't expect to find a good restaurant. I haven't moved there and opened mine yet. ;)

Now, ed. Your points.

1. I'd bet that after a couple of decades running a hardware store, Mr. Green could walk right into the (still locally-owned) bank and get a loan for his new store. Just a hunch. I can't defend this assertion as anything other than that.

2. If the Wal-Mart collapses, which I see as very unlikely, it would create economic upheaval, but I'm not certain that it would be as devastating as losing a factory or a mill, as there would be less ripple effect among dependent suppliers. If the town lost the Gulf States paper mill, now THAT would be a death blow. (But it sure would smell better when the wind's blowing north-northeast.)
And as a city planner, wouldn't you settle for 20 years of Wal-Mart retail tax base and no guarantees, versus trying to recruit another industry to an area with the kind of severe infrastructure challenges seen in the Black Belt? Bird in the hand and all that.

3. In Alabama we're so desperate for economic stimuli that it's the businesses that extract concessions from the government, rather than the other way around. I'm with you on this one, 100%. (See Daimler-Chrysler, Honda, the shamefully inadequate property taxes paid by out-of-state paper companies, etc)

I think we're mostly in agreement on this set of issues, ed. Our differences are in calculating the consequences: I don't think they are as dire as you think they are.

On preview: I can recommend a good real estate agent, Pollomacho!
posted by BitterOldPunk at 8:33 AM on July 9, 2003

BoP - I'd wait on the real estate. The market's going to tank in a couple of years and property will be cheap as biscuits.

I don't know if that's a saying, but I'm making it one now.
posted by Civil_Disobedient at 10:31 AM on July 9, 2003

Civil - On what do you base your claim that the real estate market is going 'to tank in a couple of years'?
posted by drobot at 10:38 AM on July 9, 2003

I'm not being pedantic, I simply find it suspect that homogenization is automatically considered bad for some reason. I mean, who decided this? I have never seen any compelling evidence for it. Like any cultural change, it has its upsides and its downsides, and its upsides must be fairly major. The idea that aesthetics should always trump commerce is highly debatable and it would be worthwhile to have that debate, but people act as if the issue had been settled already. At root this looks like simple elitism to me, which I often find dubious.
posted by kindall at 10:50 AM on July 9, 2003

I don't understand. Why is homogenization bad?
posted by kindall at 10:50 AM PST on July 9


I couldn't agree with you more, kindall. As far as I'm concerned, the aesthetics here are marvelous.
posted by kindall at 10:51 AM PST on July 9


Yes, looking good in this thread. Sharp arguments, no disagreements, nothing unique here at all. It's a safe sterile environment of conformity. Homogenization is the wave of the future, and I'm happy not to sway the boat. It's great that you can't be elitist when you're busy being autocratic.
posted by kindall at 10:52 AM PST on July 9
posted by ed at 11:52 AM on July 9, 2003

I wouldn't say that homogenation on its own is a bad thing, as long as quality, both in service and product, remains at a standard, however, I'd say that quality has actually dropped in conjunction with this homogenation. With these large corporate chain stores profit is made by buying bulk produced, lower grade products and selling them at a price which undercuts the competition, plus offers greater convenience. In exchange for this convenience and slightly lower price the customer is provided a lower quality product sold to him by someone with no connection to the store and thus nothing to lose if the store loses a few customers due to their shitty work ethic or lack there of. This shoddy workmanship and lack of customer consideration becomes acceptable so when the Applebees and the Kroger open up with the same mediocrity in quality and service, yet convenience and slightly lower prices, we all look the other way. Soon enough, it gets translated to every nook and cranny of our lives, we drug our kids rather than talking to them, we plop our fat, fast-food glutted asses infront of our tvs and get convenient-but-shoddy "news" spoon fed into our bloated brains by corporate corpulence, its even convenient enough to not be too intellectual so we don't have to think too much, but I digress. What is it that makes us feel that Wal-Mart is good for any reason? Is it because they fly so many American flags, is it the nice elderly, retarded man that smiles and says "welcome" when we enter the door. Is it that we can get a Thanksgiving turkey, bleach, a 12-guage, socks and new tires under the same roof? I'm not sure what it is, but I can tell you that living in the city without a car, I sure do love it when someone asks if I want to go out to one of those shit holes, and I'll gladly drop a couple hundred bucks on bulk toilet paper or a 50 pack of Mt. Dew, just because I can.

BOP, I knew it as soon as I was done here and kicked myself! I grew up in Eutaw and Selma myself, so I know the area well!
posted by Pollomacho at 12:05 PM on July 9, 2003

Look, there is a principle in advertising that states you take a disadvantage and make it an advantage. So if you want to take on the monoliths you do it by providing the things that they cannot. Personal service. Unique inventory. A pleasant shopping experience (which I can assure you that Walmart will NEVER have unless they issue Soma at the front entrance.)

Competition is not a bad thing, it is simply a difficult thing. We are not the country we used to be, and we cannot go back. But as long as there are smart innovative small businessmen and women out there, a way will be made.
posted by konolia at 12:14 PM on July 9, 2003

Pollomacho - You've done a good job illustrating the elitist attitude against wal-mart and the rebs who shop there. Luckily those people can't afford to park in the big city, much less shop there.
posted by drobot at 12:15 PM on July 9, 2003

Housing Crisis
The Housing Bubble
Mortgage delinquency up.

Basically, the problem is that people have been using the excuse of lower interest rates to either refinance their homes, or become first-time home owners. Now, Fannie Mae (one of the largest lenders for home buyers) denies there is a housing bubble because lower interest rates have increased demand, and the aggregate supply of homes has not increased substantially to provide a glut of housing, but this ignores the fact that a lot of people are overextending themselves because of the poor economy -- basically, using second mortgages as ATM machines to sustain themselves while the economy lags.

There are two ways to look at this. If you're a "glass is half-full" person, you think the economy is going to get better, and employment will increase. Once people get back to their old salaries they'll be able to afford their home payments again, and won't be defaulting en masse. If you're a "glass is half-empty" person, you think that employment will continue to lag, unemployment is going to rise, and a lot of people are going to be defaulting on their debt. If that happens, the two largest lenders -- Fannie Mae and Freddie Mac, with almost $11.7 trilliion dollars of notes, will have serious, serious problems. The first article explains a lot more about this.

I'm a bit of a pessimist with the current economy -- I think it's going to get far worse before it gets any better, and that recovery is going to take decades of fiscal conservatism (note, not Republicanism) to accomplish. With Il Duce in charge -- cutting taxes, giving dividend breaks, trying to abolish the estate tax, etc. -- and the stock market still so overvalued, I think we're in for some very hard times.
posted by Civil_Disobedient at 1:45 PM on July 9, 2003

Civil - Well argued, thanks. But Lyndon Larouche?

I would argue that lower interest rates are allowing people who normally couldn't afford homes to build equity in an inflation-resistant investment whose total value has historically appreciated 6% annually instead of pissing their money away by renting. Even if the housing market drops, if you have a fixed 30 year mortgage rate of 5 or 6 percent, you will be able to ride out any fluctuations in the market. Real estate is a long term investment.

Or, you can gamble that the housing market is going to crash and houses are going to be cheap as biscuits. At that point though, interest rates are going to be back up at 12% or higher and you'll have the same buying power. There will be a greater selection of cheaper houses, but you'll still be paying the same amount of money each month, only a bigger chunk of it will go to the bank instead of toward paying off your place. And what are you doing with your money in the meantime, while you're waiting for those cheap houses? Saving it? Are you earning 6% on it? Remember the return on your investment in a house is calculated on what you put down, while the house's total value will, over time, increase 6%.
posted by drobot at 2:03 PM on July 9, 2003

Pollomacho: Eutaw, eh? Now THAT, friends and neighbors, is RURAL Alabama. There used to be (probably still is) a sign as you entered Eutaw that was tragically appropriate.

It read, "Eutaw: A City Poised For Progress".

Think about that.

(And for everyone outside of me and Pollomacho, it's pronounced just like the state, "Utah", with more of a dubyuh on the end.)

And if the housing market crashes, well....like the Subgeniuses say, "Why wait for the Apocalypse? Start looting now!"
posted by BitterOldPunk at 2:25 PM on July 9, 2003

Apparently the bubble varies a lot from city to city. Some business magazine my father-in-law gets had an article trying to estimate the bubble.

Their approach was that rental prices for houses were a good reflection of their true underlying value -- all people care about in the rental market is location, size, amenities, etc, but they don't act as speculators hoping that the house will appreciate hugely.

Anyway, they found lots of cities where purchase prices of houses were 150--200% of the rental price, implying that people are paying substantially more than the true underlying value of the home, implying that there's still a biiiiig bubble to burst.

Interestingly, round here in D/FW, it's the other way -- purchase prices run ~75% of rental costs.
posted by ROU_Xenophobe at 2:29 PM on July 9, 2003

Yeah, I know Larouche is a character, but the article is extremely informative just for its general information on how Fannie Mae and Freddie Mac work.

And yes, lower interest rates do encourage new home ownership, except that I don't think as many people are taking the carrot, so to speak, as the market would like. If you're recently unemployed, you're not going to go into a 30 year deal you can't afford. Unemployment is officially at, what, 6%? More realistically 10% (since the economy bust has lasted longer than most benefits are paid, and the rate is only calculated on people claiming benefits -- which is bullshit, if you ask me... anyway). And employment isn't getting any better. Even if and when the economy does turn around, the labor market is going to be the last to see the changes.

Also, a fixed 5-6% interest rate over 30 years is great if you can afford it and don't get laid off, but that doesn't address the trillions and trillions of dollars of debt that the banks hold until they're paid off. If you take a look at the article, you'll see that the housing market was artificially inflated during the early 80's (around the same time you started seeing those 1800-CHAMPION second mortgage ads on TV), and the prices have yet to drop back to realistic levels. Here's the important part from the article:

But starting the 1980s, Wall Street started to transform the functions and purposes of the two large mortgage corporations. Wall Street wanted a housing bubble, and Fannie and Freddie were transformed to become the major suppliers of funds to that bubble. The high prices of homes could only be made to stick if a sufficient volume of mortgages were created to finance the purchase of homes at those prices, including by people who couldn't afford them. Through the secondary mortgage market, Fannie and Freddie infused the mortgage market with cash, so that a mortgage lending institution could make over-leveraged mortgage loans to consumers and sell the mortgages to Fannie and Freddie. Once they gave the mortgage lending institution cash, the institution would make a new mortgage loan to a new consumer to purchase a home at a high price (this process does not include "jumbo" loans), and so forth.

During the past decade, millions of households bought homes at inflated prices, with accompanying mortgages that are likewise inflated. In millions of families, the mortgage payments consume 35-55% of their annual household income. There is not sufficient income left over for purchase of food, clothing, and other necessities. This is an unsustainable situation [ed: particularly in an economic recession/depression], and will ultimately end in default on the mortgage.

The two enterprises also engaged in "financial innovation," which may seem clever from an accountant's perspective, but enlarged the risk in reality. One new instrument is the mortgage-backed security (MBS): Fannie and Freddie would bundle a group of mortgages together, and sell them to investors. The enterprises would put a loan guarantee on the MBS, for which they earn a fee (thus boosting their earnings). In turn, Fannie and Freddie promise, in case of a default on the MBS, to pay interest and principal "fully and in a timely fashion" (thus considerably increasing their obligations).

Over two decades, Fannie and Freddie built up on a large scale, three types of obligations: 1) the bonds (debt) that they issued; 2) the MBS which they guaranteed; and 3) the derivatives that they bought.

For your second point, you argue that if houses are as cheap as buscuits, interest rates are going to be back up at the high end again. This, unfortunately, only happens when your economy is sound enough for that kind of dynamism. Many economists (most importantly, Paul Krugman) argue instead that interest rates are going to go low and stay low due to an impending deflationary period, an economic anomoly called the liquidity trap. This is what has happened, and is still happening, in Japan. We are on the verge of repeating their mistakes, and Bush isn't making things any better with his reckless fiscal policy.

As for the larger question of what to do with your money in the mean time... well, that's the $64,000 question, isn't it? I'm sure a lot of people have some very good ideas what you should do with it, though most of their advice is primarily coming from self-interest. I wouldn't invest it in any form of stock portfolio. I certainly wouldn't invest it in T-bills. My advice would be to go into the foriegn currency market, but choose carefully. Pick a stable country that you think has the most sound financial policies, then buy their notes. If, for example, you'd bought into some general European derivatives market, you'd be up 20% in just the past two years. But everyone was poo-poo'ing the Euro, laughing at it's $0.80 on the dollar. Now they ain't laughing so hard.

You could also pick some form of hard currency, like gold, but might be better off with a precious metal that's also useful and valuable, like platinum. Anyway, read about what's been happening with gold prices related to the interest rate cuts here. To summarize, get out of any investment instruments that are in US Dollars. That means stocks, bonds, t-bills, etc. And especially don't shoot yourself in the foot with a 30-year contract on a home that's very likely going to depreciate 30% in the next 5 years.
posted by Civil_Disobedient at 2:41 PM on July 9, 2003 [5 favorites]

Civil - Do you actually invest this way? In precious metals (which could be argued are also inflated) and foreign currencies? It strikes me as very risky. I think if you were speaking from experience you would take a very different, more diverse (and conservative) approach.

Even if we experience deflation, if you have a 30 year mortgage at a low interest rate you can afford to wait it out. Precious metals might be the way to go if you really think we are headed for financial apocolypse - but if we are, everybody's going to be in the same breadlines.
posted by drobot at 3:14 PM on July 9, 2003

I think based upon the analysis of people like Krugman, that this country is following the exact same steps the Japanese economy did 15 years ago. They, too, cut interest rates in an attempt to stimulate the economy. There, as here, it didn't work. I wouldn't invest in anything tied to the Yen, and I similarly won't invest in anything tied to the dollar except when I'm investing against it. I've shorted a bunch of stocks, and it has paid off. Sad to say, but when your home team is coached by a chimp, you're better off betting on the other team. I don't recommend shorting stocks, however, unless you're very confident in the company's mismanagment. A good bet and a free tip: short SCO before the judge rules in the SCO v IBM case. They're gonna lose, and their $9 stock (IIRC) is going to be worthless.
posted by Civil_Disobedient at 5:10 PM on July 9, 2003

Civil - Glad the shorting has worked for you. I still think that's an extremely risky strategy. Just FYI - SCO hasn't traded for nine dollars since Sept 2002. It's currently in the five dollar range.
posted by drobot at 6:08 PM on July 9, 2003