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Author: Lokicious Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: OT: Economic Report from The UP Date: 8/13/2006 10:25 AM
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I've made it clear in the past that I think quantitative economics, on which most predictions and policies are based, is a crock (getting jobs numbers wrong by more than 50% almost every month is a good example), because it is a classic garbage in, garbage out methodology. So, although anecdotal evidence never passes for analysis, and experiences are always local and can't be generalized, I like to see and hear first or second hand what people are observing in the economies which they encounter and live (like Bruce's retiree inflation reality).

I'm just back from my annual trip to the Western Upper Peninsula of Michigan, which has seen a steady decline of the mining (copper then iron) industry from when I first encountered it, about 23 years ago, with tourism, gambling, and some revival of timber, the only replacement. I only do this trip in summer, and Jack reminds me how important snowmobiling is for tourism, which will be worth watching from a distance this winter, with high gas prices.

Some driving observations: I got a speeding ticket, for the first time (at normal, if not legal, speed), just east of Ontonagon. Stupid of me not to slow down as the only car on the road, but usually there are others out there. Traffic, even on I-75 and the dreadful Route 2, was relatively light, and no wait to speak of for the Mackinaw Bridge toll booth either direction. I only had to wait for one minivan to finish convenience shopping and let me get to the pump at the gas station on the Rez in Baraga (gas tax savings), which is usually a long line (same for the station just above the bridge, where I fill up before crossing the UP). I think the number of big campers and boats on the highway was down, though there were some. I saw almost no full-sized RVs, normally a plague, especially in the 2-lane roads in the hills and on Route 2 or Route 28 between Munising and Marquette (and when they try to pass each other on I-75). I think the % of cars and car based SUVs was up compared to minivans and truck based SUVs, including at trailheads and tourist spots.

Although I saw very few people on the hiking trails in the Porcupine Mountains, I thought the number of people in peak day-use areas was higher than the last couple of years. However, insider reports are that the campgrounds were less full (which fits with fewer trailers on the road) and the second-tier accommodations were mostly empty, though I don't know about the Best Western in Silver City (where pass-through visitors with money like to stay). Lake front cabins were still well occupied, but that's a crowd like us with more discretionary funds.

I don't remember land and house prices well enough year to year, but lots of reduced prices on real estate ads. You can still buy a good quality home with acreage and river running through it in White Pine for under $50,000 and a turn of the century copper baron home in Bruce Crossing for $80,000. Working class homes are available in the $25,000 range, though acreage prices still seem high (over $1000 an acre for your basic hunting playground).

Bear bait is running about $40 a barrel, $50,00 for pure jam.

Jack: Ontonogan Hospital is in deep doo doo. Story broke in the Ontongan Herald while we were there. Seems to be a combination of poor accounting and billing (knowing how to code for medicare under changed rules is a pain, especially if you can't afford the billing professionals) and broader problems with hospitals trying to stay alive in depopulating areas. The problem is that retirees, looking for calm lifestyle in serene setting at low home prices, at least in good weather months, is one potential growth area, and if the local hospital goes and with it medical staff, retirees have another reason not to live there.

Having driven from Las Vegas to Zion a couple of months ago, the contrast is stark. Everything in the Nevada/southern Utah corridor was under construction, and the real estate prices (including empty land) was 10-fold (e.g., desert acreage as opposed to forest). But Joe, the retired crane operator from the former White Pine copper mine, with the one lung and quadrupal by-pass, whom I chatted with at Antonio's (still surviving in the empty Mineral River Plaza), my only fellow customer while waiting for pizza (50% less than at home with 100 competing pizza places), insists someday people will realize water matters.

I hope Joe is right. At least I understand his faith based economics, which is more than I can say for the quantitative economists.
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