Tuesday, May 27, 2014

The Maple Grove Economy

A few clicks south and about 10 more west you'll run into a town called "Maple Grove."

Well, there really isn't a town or veritable "city center" there, but that geographical location is called "Maple Grove."

Maple Grove, for the most part, is inconsequential to yours, mine, or anybody else's life.  But there is an important economic lesson to pull from it that is consequential to our lives.  And that lesson is what the entire American economy is slowly morphing into.

Understand that Maple Grove did not exist at all of 10 years ago.  When I was in college it was where the city and suburbs ended and farmland began.  But 10 years ago, overnight seemingly, it burst into a large sprawled out, multi-mega-strip mall area. It now covers about 5 times the surface area of the Mall of America, has (by my ballpark estimation) more retail space and outlets than the MOA, and if it doesn't already, it will have more restaurants than the MOA.  If you name a chain restaurant, a national retailer, or any kind of American brand name, Maple Grove has it.

When this massive development first went in, my economic spidey senses tingled at the back of my mind.  I couldn't understand it on several levels.  One, where was the city center?  Why did all these stores and retail outlets just open up in this area?  Was there some center of commerce I was unaware of that economically warranted such a development?  Two, who the hell would go there?  It was the epitome of cookie cutter.  There was not ONE unique restaurant in the entire area.  Just Applebee's after Houlihans after California Pizza Kitchen, after Joe's Crab Shack.  Only the most boring, SWPL, mindless suburban automotons would patronize the place, and I didn't think there was a high enough SWPL population make all those businesses financially viable.  Three, by god, there was a high enough SWPL population to make it financially viable.  HOW???  How could there be that many milquetoast people?  There's enough flavorless people in the area to make this a go???  But the key thing that was tickling the back of my brain, but never made it to the frontal lobes until last week was;

Where is all the production?  How does this purely retail economy exist?  How is this supportable in the long run?

And thus the important economic lesson.

Realize that in the Maple Grove economic nothing is produced.  Only consumed.  There are no factories, no assemblies, no plants.  It is 100% pure, cookie cutter retail.  Maple Grove's "Municipal Gross Product" is 100% retail clerks, waiters, bartenders and baristas selling you things that are made outside of its city limits.  It is the first entire city that is solely dependent upon retail and would not exist otherwise. 

But while Maple Grove effectively only serves as a large sprawled out mall, it is a microcosm of what is in store for the American economy.  A fate where we slowly switch from that of a industrial, productive economy where actual things of value are produced to one where we merely become...

one big ass mall. 

Already this is happening to a certain extent globally.  The West, including America, the UK, and western Europe act like the world's mega-malls.  China, SE Asia, India and nearly all other 2nd world serve as our factories.  And the debutantes of western society act likes spoiled suburbanite princesses, borrowing money from daddy (China and other creditors) so they can buy worthless, meaningless crap that only serves to play an unwinnable status game in the West.  However, equilibrium is universal, and no unsustainable system can survive.  And thus, just like Maple Grove or a suburbanite princess cannot maintain their parasitical existence without the constant supply of foreign made goods (and credit), so too will the American economy inevitably collapse.

Maybe not today, maybe not tomorrow, and maybe not even next year, but the time will come that China, Japan, the Arab nations and other creditors will realize that America is just a mall, it's people suburbanite princesses, and that we really don't produce anything of value here.  Once that happens, the dollar will drop in value, nobody will lend us any more money, and unfathomable amount of economic hurt will slam into our increasingly spoiled and delusional people.  Adult-children more concerned about privilege, falsely claiming PSTD, the earnings gap, or the Kardashians will be blindsided as society is no longer concerned about their petty, politically drummed up drama, but rather why there is no electricity, why gas is up to $5 a gallon, and why their bank accounts were haircutted.  Their primary concern won't be whether they can live at home, but whether mom and dad can even afford food for the week.  And they're going to be begging and pleading to work as a barista as Starbucks lays off 70% of its labor force because nobody can afford a $7 cup of coffee.

Of course, this is already happening to a certain extent already.  Matter of fact, I'm surprised our foreign creditors hadn't dumped the US dollar sooner.  But they are, and the "factory" of the world is slowly realizing the US for the financial deadbeat that it is and switching out of US dollars, increasing reserves in gold and other currencies.  We are now engaging in thinly-veiled inflationary hanky-panking with our "quantitative easing" as one last final desperate ruse to make it seem like everything is normal.  This is nothing more than daddy going to the bank to secure one last desperate Keynesian loan to keep his trophy wife and princess happy and spending, "hopefully turning the economy around."

But it won't work.  And the reason is simple.  No economy can exist purely on consumption.  It needs to produce something of value.  And while Keynesians, economic professors, and idiot presidents may tell you otherwise, in the end you are foolish to believe them, just as you would be foolish to believe Maple Grove is a self-sustaining economy.

Consider that next time you order the chicken quesadillas at Applebee's while celebrating a hard day of shopping for a new Korean-made smart phone and an Indonesian-made scarf in "The MG."


This post brought to you by Asshole Consulting.
"Asshole Consulting" - when you want lies, hire a regular consultant.
When you want the truth, hire an asshole.
Asshole Consulting - "The truth hurts, and we're happy when it does."


Anonymous said...

This is absolutely true. I am from the UK and in my small town, which was once populated with jute factories, ship manufacturing docks and other manufacturing plants, have all disppeared, and are now turned into useless real estate and more council flats (housing projects) for the benefit eating locusts, thanks to our corrupt politicans and the evil of socialism.

The onbly jobs that are now available (if you are lucky to even get them) are garbage retail work or government public sector jobs.

Even the "Wolf of Wall Street" Jordan Belfort mentioned exactly what Aaron has stated here, in this interview:


Keep up the great work Aaron.

Sincerely, a British fan

Anonymous said...

This is absolutely true. I am from the UK and in my small town, which was once populated with jute factories, ship manufacturing docks and other manufacturing plants, have all disppeared, and are now turned into useless real estate and more council flats (housing projects) for the benefit eating locusts, thanks to our corrupt politicans and the evil of socialism. The onbly jobs that are now available (if you are lucky to even get them) are garbage retail work or government public sector jobs.

Even the "Wolf of Wall Street" Jordan Belfort mentioned exactly what Aaron has stated here, in this interview:


Keep up the great work Aaron.

Sincerely, a British fan

RobertW said...

Sorry if I'm being slow but is Maple Grove an allegory, a real town, or both?

grey enlightenment said...

Seems like you're very negative about the economy , the future of America, its youth, and other stuff

I don't buy in to the America is doomed belief even though I'm a republican and libertarian

Eric B said...

I work in Maple Grove at a company that designs and manufactures medical devices. There are a bunch of those type of companies in Maple Grove and the bordering cities.

That said, Maple Grove is basically a bedroom community of people commuting into the Twin Cities for work. I don't live there because I could get far more for my money living further away.

The reason the shopping center developed here is because of the 494/94/694 interchange, open land, and that the area population was growing.

Anonymous said...

I agree. I think someone once called the current economy "Trading Pizzas". In Layman's terms could you do a post or a couple of scenarios how a crash might occur.

Anonymous said...

Maple Grove is a high-income suburb where a small number of high-paying jobs exist in medical research and the local hospital (and of course the city itself), and those six-figure jobs support all the horrible retail Cappy is talking about. It's a big circle of welfare, because without the government spigot, it wouldn't even exist.

Hilariously, the suburb is Republican.

Mark said...

Most factories and business start ups come from money saved and invested. All government policies discourage this. Any new factory faces taxes and massive safety, environmental and labor regulations which has decreased any return on investment in this area. Large amounts of money which could have been used for new factories that employ people has been siphoned off into expensive foreign wars and a bloated military, welfare for poor people, a higher education system that turns out graduates for jobs that don't exist, green energy boondoggles and dozens of other ways. Average household income is slowly declining. It's happening slowly enough it's not noticeable in the short term but we'll look back fifty years from now and be envious of how well our ancestors lived.

Ingemar said...

I tried my hand at trying to make money on Amazon and eBay: the reason I didn't succeed is because I didn't persist, and the reason I didn't persist was--

--I realized I was producing nothing of value.

People who (try) to make money on The Big Two usually follow the arbitrage model, that is buy something cheap at your local brick-and-mortar and sell high online. Books and apps exist that help you scout items.

The problems of this business are 1.) barrier for entry is incredibly low, meaning competition will be intense and 2.) This business exists only because of inequalities in the market and the imperfect flow of information. 3.) Related to the previous point, the "wholesalers" (usually thrift stores) are adjusting to this knowledge by raising their prices, effectively killing the middleman.

TL;DR this business is a Maple Grove Economy, a facade of activity with no substance.

sth_txs said...

How can you be Republican and a libertarian?

Anonymous said...

It may be a story but it doesn't it isn't based on reality.

Consuming is our Soma, our drug of choice. With empty lives based on the most superficial of things how could our most precious activity be but shopping?

How else can a person justify a $7 cup of coffee? It's certainly not on taste, just mindless lemming like consumers guzzling burnt coffee beans because it's the cool thing to do.

Yeah our economy is a Potemkin village - it's fake and I suspect the Asians and Europeans already know it, about the only thing keeping our relevancy is our military and nuclear arsenal. Otherwise we're just a bigger Mexico.

And truth be told we aren't a industrial giant anymore. You can thank the Republicans and Democrats for setting up trade treaties that wiped out manufacturing and the tech sectors and wiping out jobs base. When you want someone to blame and kick in the nuts for why there are no jobs in the U.S. go whack a politician and banker.

But who cares, listen to the talking investment heads on TV, you know the guys who never worked a day in their lives and were born into wealth tell you it doesn't matter. Just invest in stocks or real-estate NOW!!! You will become rich, trust the grinning man on TV, he has your best interests at heart.

You know the same crowd who told you to invest in the Dot Com bubble before it went boom!! Or the real-estate agents who said there is no bubble and encouraged you to buy, buy and BUY!!!.

Who cares if the PE ratio of Amazon, Apple, Farcebook are out in the stratosphere and worth more than all brick and mortar companies combined.

Sure buy into the magic bubbles blown by Wall Street and the banks. Just don't be surprised when the bubbles pop and you find yourself broke.

TroperA said...

Maple Grove is real, but I thought it was a bit older than 10 years. (I seem to recall passing it by in all its tacky retail glory when I traveled between the Cities and St. Cloud about 15 years ago.)

I'd say Albertville (the closeout mall place) is an even bigger example of Useless Minnesota City. The stuff they sell isn't even NEW....

Anonymous said...

I'm sorry if this sounds irrellevant, but it really isn't.

The library i'm sitting in is lit up like a god-damn christmas tree.

It is literally brighter than day in here. There are at least 50 light fixtures in here and skylights. It's the middle of the day, the natual sunlight would provide more than enough light. I could turn these lights off and no one would notice.

They don't need to have all of these lights running, they are doing no good.


I feel like asking some of the library staff, about this but they're all mindless drone public employees, I'm sure they won't care. They come here everyday, turn on the lights like they're told and go about their monotonous existence. Doing the same routine bullshit, never having an independant thought.

This building exists for the sole purpose of sucking resources from the taxpayer.

On another note, none of these people come here to read. They're just here to suck their hour of "free internet time". They come in use the computer and leave. No one ever shows any interest in reading the books.

But, I suppose all light bulbs burn out eventually.

AverageMarriedDad said...

RobertW: Maple Grove is real, I've been there.

Just watched the documentary: End of the Road: How Money Became Worthless (2012) on Netflix over the weekend. Good stuff, basically how the U.S. economy is a Ponzi scheme and how the whole world is being propped up by that. A fall will be a global catastrophe as they go back to commodity backed money (by precious metals). I would be hesitant to own precious metals though except in physical form since I'm guessing that multiple claims can be made on any the physical property that GLD notes represent (AKA there is less gold in the vaults than what is being sold).

David M said...

Everything you wrote about Maple Grove is what happened to Florida. People built hundreds of millions of dollars or billions worth homes and retail developments for MILES. Within a year or two you'd see thousands upon thousands of half million dollar plus mcmansions, built by Mexican labor with rotten materials and toxic chinese drywall, go up everywhere. There was never any thought put into if people could actually afford half million dollar homes on incomes of 15ish thousand a year.

If you want to see what I am talking about go look up econcat88. He has videos where ne drives drives through seemly endless mcmansion developments and retail establishments that are all deserted and or in ruins because there was no economy to support this shit.

Tom said...

You don't want to build a city center because then people can congregate there, share thoughts and ideas and exercise democracy. If there is no central location for the people to meet and do this then you don't have to worry as much about them getting all riled up over anything.

Anonymous said...

If you want a vision of the future, imagine a cheap designer heel of an HR lady grinding in the screaming face of a middle-aged sales associate who had the audacity to comment on a female customer's tank top.

Joe Bar said...

Maple Groves are everywhere. I know of at least four in Virginia. Some even try to emulate old world business districts by selling condos and apartments in the same buildings ar very nearby. Nothing is produced there, though. Only CONSUMED!