Top Community Organization

If there is one thing that I’d set up in EVERY community in the USA, it would be a community foundation. Indiana has been blessed that it has a community foundation in every one of the 92 counties in the state. The Lilly Foundation made a major push over a decade ago to help set up community foundations in the state and reached their goal of having one in every county.

Jefferson County (population 32,704) set up their community foundation in 1992. Since then they’ve given out over $5 million in grants in the county and today have an endowment of over $15 million. That is a combined $611 for every citizen in the county.

In my talk I spoke of the generosity of rural citizens like those in Jefferson County, saying, “There is no way that a place like Indianapolis or Chicago could ever generate the amount of money that you’ve been able to do here in the past fifteen years.”

After getting back I home I did the calcs. Indianapolis would have to have raised almost $500 million dollars for their community foundation and Chicago $2 billion! It’s not going to happen. It could only happen in a place like Madison and Jefferson County, IN.

Have you started your community foundation yet?

Ohio River Valley Food Venture

One of the more amazing stops on my tour of Madison, IN was the Food Venture, a 5,200 sf shared-use commercial kitchen and food incubator. The spotless facility appeared to me to have everything that a fledgling food entrepreneur could ever need to be able to produce their products.

Corey Murphy explained to me, “This is one of only 15 such facilities in the country. We’ve got 45 companies and individuals who are using it. Some of the better known ones are Nancy Grooms who produces her Ladder 51 Flame-Broiled Wings here, the Millers and their seven daughters who produce their Amish bread and most recently Mr. Yoshi who just got his special Japanese sauce into Costco. He produced 7,000 bottles just to get started with Costco.”

One disappointment was that none of the products are available at one spot in town. I would have been a buyer who would have experimented with several. Hint to local merchants: Make a point of prominently displaying and selling locally produced products.

With the trend toward local foods and also niche products, having a facility like the Food Venture is a big plus.

Picturesque Madison

Midwest Living Magazine wrote, “Towering limestone bluffs and the Ohio River frame picturesque Madison, an old riverboat port of 12,400 so tied to the past, 133 downtown blocks are on the National Historic Register, with buildings dating to 1817. Antiques dealers fill the district, which has served as a model for preservation of other towns.”

I was in Madison last week for the annual meeting of the Economic Development Partners of Jefferson County Indiana, where they were kicking off their new strategic plan. There was a lot of excitement and commitment from the 100 or so that were in the audience. Along with the goals of retention and expansion of existing business, building upon their excellent manufacturing base and continuing to exploit its natural tourism draw, the plan addresses new issues for Madison of attracting active independent retires and developing more of a collaborative approach with the many entities that are involved in ED and tourism. Good goals! The start of some great collaboration!

Corey Murphy, head of the ED efforts, was my tour guide of the community. Once we got to the downtown area it was quick to see why Midwest Living picked Madison, IN as its 4th best small-town getaway in 2007. The town’s historic downtown is largest in the state and one of the largest in the nation from both a physical size and number of buildings metric. Madison was picked in 1977 as one of the three original Main Street program towns, a fact that has only enhanced its appearance over the past 30 years.

An advantage of Madison’s historic downtown is that it is physically separated from its main shopping area. The downtown lies down in the valley along the Ohio River, while the new commercial and industrial areas of the town have grown into the plateau up above. As a result the downtown in many ways looks just like it did a hundred or so years ago.

Over 300,000 tourists come to Madison each year, primarily because of its downtown. However, that downtown is going to be a major plus for recruiting in the new retirees, many of which are going to be starting new businesses. It also could be a major draw for young Millennials who are looking at starting new, innovative businesses. Twisted Pixel, a two year old cutting-edge video gaming company, chose downtown Madison as the place to start their company partially because of this factor. They’ve grown to a dozen employees and look like they could be ready to explode with the new games that they are launching.

Madison has by far the most potential that I’ve seen to really turn its downtown into the main draw for new, creative citizens. The first floors of its many historic buildings are bustling with entrepreneurial endeavors but there is an equally great potential on the second and third floors of those buildings. Upper end apartments and condos would help to create an increasing vibrancy in the downtown, especially before 9 am and after 5 pm.

If you’re in southern IN be sure to stop by Madison.

A Twenty One Bagger!

In our business we like to talk about eking out singles and occasionally a double, doubling the value of an investment over some period of time. Very, very rarely we’ll get a round tripper, when we’ll multiple an investment by four times. We call them “grand slams” and have a big gong in the office that we pound, celebrating successes.

Ponca City, OK, who I’ve written about before, needs to get themselves a VERY BIG gong. They’re not just hitting singles or even doubles; they’re shooting for much bigger returns. Would you believe 21 times?

Mark Snead and Suzette Barta, economists with the Spears School of Business at Oklahoma State University, recently completed a study of the economic impact of Ponca City’s ED efforts since 1994. What they found is that for every dollar that Ponca City invested in their ED efforts from a sales tax initiative have returned $21! The projects completed during those 13 years generated $530.4 million in direct economic benefit. In particular, the report shows the resulting strong wage growth and per capita income growth in the past four years since Ponca City Development changed strategies, striving to diversify its economy from one largely dependent upon oil and gas. Since then the average wage of jobs created has been $41,250/year.

David Myers, Executive Director of ED said of the study, “To have the state’s leading expert on local economics say that the strategy of pursuing high wage new economy jobs is paying off is, to say the least, reassuring. The key finding in the report, that our economic growth is the result of local economic programs rather than a reliance on the state’s economy or strength of the flourishing oil and gas industry signifies that Ponca City’s economy is becoming much more diversified than previously thought.”

The report details 30 projects completed during the 13 years studied, some of which started and quickly folded while most started small and continued to add jobs and investment. Some of the major ones include a meat packing plant, a customer service outsourcing center, several manufacturers and most recently a sensor research and testing laboratory.

I hope that Ponca City gets its share of recognition for the results that they’ve generated. After all, a 21x return on investment is something that should be celebrated long and hard.

Angels in 2007

The Center for Venture Research showed that angel investors continued to pour money into start-up businesses in 2007. A total of 57,120 ventures received funding to the tune of $26.0 billion with software (27%), healthcare (19%), biotech (12%), industrial/energy (8%), retail (6%) and media (5%) being the top sectors for investment.

I’m continuing to see a rapid growth in angel investor networks in rural areas and hope to see more. Are you looking at doing something in your town/region?

Jobs--Gotta Have Right to Work

A recent study from the National Institute for Labor Relations (NILR) on job growth over the past decade showed a marked difference between Right to Work (RTW) States and those that are not. RTW states allow each worker to decide if and how they want to be represented with management, whereas Non-RTW states force workers into specific unions.

Here’s what the NILR found in the data: RTW states grew their jobs by 17.7% from 1997 to 2007 compared to 8.6% for Non-RTW; by 9.7% from 2002 to 2007 compared to 3.6%; and by 1.7% from 2006 to 2007 compared to 0.7%.

In the Midwest, RTW states grew their jobs by FIVE TIMES the rate of non-RTW states during the past five years!

Another amazing difference between the two groups of states was in the growth of patents granted annually, which increased by 33% in the RTW states from 1995 to 2005 vs. only 11% in non-RTW states during the same period.

The freedoms enjoyed in RTW states is drawing much of our site selection business attention. We see that continuing and the gap between RTW states and non-RTW states continuing to grow in the future.

Pay Me Now--Or, Pay Me Later

There was a famous TV ad a couple of years ago which showed a greasy auto mechanic explaining how a good oil filter could help to prevent engine problems. The tag line was, “You can pay me now or you can pay me later.” It was obvious to anyone who saw the ad that it was much cheaper to pay him now with a good filter purchase than later. Yesterday, I wrote about an example of a pay me now or pay me later with an old building purchase we made a couple of years ago. Today, I want to show how it is affecting the USA and specifically the impact upon rural America.

This past month you probably saw the dramatic pictures of levees breaking along the Mississippi River. Whole towns were suddenly under water, farmsteads were often small island specs surrounded by the murky backwaters of the ‘Mighty Mississip’. The levee problems in New Orleans and the bridge collapse in Minneapolis are other examples of where delayed maintenance led to catastrophic results.

In my travels around the country I’m often astonished at the poor condition of infrastructure, especially in some rural areas. The American Society of Civil Engineers estimates that we need to spend $1.6 trillion just to bring the USA’s infrastructure into good repair. And, that is just to fix up what we have…not adding one more bridge or mile of road!

The USA is only spending 2.4% of our GDP on infrastructure compared to 5% in Europe and 12% in China.

There is a growing political push for us to catch up, but that the funds be spent in and around big cities. The Brookings Institute, a Washington DC think-tank recommends that the bulk of any funds be spent on the top 100 metro areas.

I’m hopeful that our politicians will figure out that it would be much less expensive to pay now than later. And, that they don’t forget rural America.

One Lives On--Another Slowly Dies

On Friday Theresa Schackmann, who heads our facilities at Agracel, and I took Alexi Giannoulias, the State Treasurer of IL, and Julie Vahling, his regional coordinator, on a tour of Pinnacle Foods. Alexi is young (32) and dynamic. We had a spirited but brief discussion of our state’s business unfriendly reputation and he promised to have lunch with me in the future to discuss in more detail. He’s an impressive young man who is a rising political star.

Pinnacle Foods is a client of ours. They manufacture food products like Duncan Hines Cake Mixes, Vlasic Pickles, Log Cabin Syrup, Armour Franks and many other products. We recruited them last year into an old manufacturing plant that we’d purchased empty a couple of years prior. In this case the plant was about 550,000 sf when we purchased it but Pinnacle required more room so we added on 100,000+ sf and also added about 50 truck docks.

Buying these old manufacturing plants (we call them our dinosaurs because they are big, old and often virtually obsolete) has become part of our three prong approach to creating new manufacturing jobs in rural America. The Pinnacle plant started out as a printing plant in the early 70s when World Color Press moved to town with their newest plant and later their headquarters. It was state of the art and at the time the largest pressroom in the world. There were a dozen or so massive printing presses lined up with rolls of paper bigger than pickup trucks flying through them each day. At its peak over 1,600 local citizens made a very good living at the World Color Press plant. Union issues, falling productivity and excessive workers comp costs led to the company’s decision to close the plant in 2004.

When we purchased the vacant facility in 2005, we found that there was a great deal of delayed maintenance that hadn’t been done. Theresa and her team quickly found themselves up to their elbows in everything from electrical problems to roof leaks. They tore into everything to try to bring the facility back to a semblance of its prior glory. By the time they were done we’d invested over six times what we bought the plant for to bring it up to Pinnacle Foods’ exacting needs.

There is a sister plant to the one we purchased located 40 miles south in Salem, IL. It was built a few years after the one in Effingham but was closed a few years before. Unfortunately, the delayed maintenance issues and the length of time that it has sat vacant, now makes it virtually impossible to resurrect. I’m afraid that it has gone over the “tipping point” of being salvageable.

One dinosaur plant is up and functioning with people employed…another slowly dies. Both delayed their maintenance and repairs. One was rescued in time. The other one not.

Tomorrow, how this story relates on a macro scale to the USA.

Main St. or Wall St.

Many of the headlines for the past few weeks have dealt with problems at banks, especially after the failure at IndyMac Bank in Pasadena, CA and the near meltdown of Fannie Mae and Freddie Mac. There is a growing concern on Wall Street that there is not enough liquidity at the banks, capital ratios are too low and problem loans are growing. And, if you look at the stock prices of most major banks, it would scare you to death! Most of the major banks are selling at five and ten year lows, with several at major discounts to book value. The market is scared!

From my perspective in rural America the problems that Wall Street is concerned about are just that….Wall Street concerns. The view from Main Street is something completely different.

I see it first hand from my role as Chairman of our Midland States Bank board, a local community focused bank, in Effingham, IL Unlike the major money market banks that often run their operations with paper thin capital of 3 to 5%, our bank and most other local banks have two and three times that amount of capital. It’s called running a conservative, make-no-mistakes approach to banking as opposed to one that is driven by quarterly earnings and “what is my stock price today?”

Today, our bank is as solid as ever. Delinquent loans are down from years past, our total capital is at a record level, our stock price has never been higher, we’ve increased our dividends by at least 10% each year for the past ten years, and our customers are making money and requiring more capital to expand. And, our bank is not unique. It is the same message that I hear in talking with bankers in Ripley, MS; Scottsboro, AL; Camden, SC; Dodge City, KS; Columbus, MS and many other rural towns.

I stressed it in my book and am more convinced with each passing day as I travel around the USA… local banks are key to a town’s development. While they might be run very conservatively from a fiscal standpoint, they are providing the capital fuel that keeps local communities humming. Support your local banker!

Kid-preneurs

I’ve always said that you can’t get entrepreneurs started early enough. Here’s a new company that hopes to turn hundreds, if not thousands of five to fifteen year olds into entrepreneurs….and for only $25.

Franchild is the brainchild of Ralph Williams who started the company after his sons Patrick and Joe, ages 8 and 6, started a business selling beeswax candles. When their first month sales of $500 yielded them $125 in profit they asked their dad why other kids around the country couldn’t do the same thing.

For just $25 Franchild will give a youngster the start of her/his own beeswax candle, organic soap, and apparel or jewelry business. For an additional $2/month they also will get their own business webpage.

While, I’m certain that there won’t be any great fortunes made on these four business ideas, the life lessons that will be learned from operating their own business could put some young people onto the path of becoming business legends.

Young Professionals

After seeing and reporting on a number of young professional organizations around the USA, I was thrilled when our local Chamber started such an organization, called the YBNext. I was a panelist along with three other entrepreneurs in our town at one of their monthly meetings last week. We had a great time explaining how each had started our businesses and got some very insightful questions from the young professionals. I hope to be able to help mentor several who sought me out after the meeting.

Since starting the organization in April it has already grown to over 130 young people between the ages of 21 and 45. It is a great start to what I’m convinced will become a community changing one for ours. Have you started one yet in yours?

Housing Downturn--Choices Made

My sister-in-law Theresa has been visiting us this past week from Hollywood, FL, one of the counties that is the bright red in yesterday’s blog. She and I have some great discussions. She is slightly left of Karl Marx and considers me to be to the right of Attila the Hun. Obviously we don’t have a lot of things that we agree on. However, this weekend we found one subject that we both were in total agreement.

Theresa and her partner bought their 1,110 sf (2 bed—1 bath) house in a blue-collar part of town in May, 1995 for $80,000. They borrowed $40,000 on a variable rate 30-year note at 7.75%, converting it to a fixed rate at 4.75% for 15 years when rates fell below 5%. They’ve continued to pay down the loan and now have a balance of less than $22,000 for a home that the website zillow.com calculates at a value of $262,000. The high value for this house was $303,000 so it has fallen about 15% in value.

Across the street, the Smiths (not their real name) bought a slightly smaller house (no pool and not a corner lot) at around the same time for $65,000. They also borrowed around $40,000 for their house. However, when housing prices started to climb, the Smiths began refinancing their home, always increasing the amount of the loan for various other purchases. Today they owe $186,000 with a $1,300 house payment on a home that zillow.com values at $197,000. My sister-in-law is convinced that they are on the verge of foreclosure, hoping that they can figure something out to avoid it.

Choices…We make them and sometimes have to live with them. And, sometimes the government will bail us out on those choices. Which do you prefer?

Foreclosures--How Bad?--How Widespread?

The nightly news seems to have a story every night on the problem that the USA is currently facing with a dramatic increase in foreclosures. It is obviously a very serious problem, especially if you are being impacted by the ripple from foreclosed homes. Banc Investment Daily reported last week that for every foreclosure within a 1/8th mile radius will cause a 1% drop in the price of surrounding homes.

RealtyTrac reports each month on the level of foreclosures in the USA, breaking them down both by county and MSA. Their headline last week was, “Foreclosure Activity Decreases 3 Percent in June.” The activity last month was 252,363 properties, which while down from May was up 53% from June, 2007.

The map of the activity in June is shown at the bottom of this blog. Take a close look at it. Red is bad. It means that up to 1 in 250 houses in a county were foreclosed on in June. Pink shows that more than one in 250 houses but less than 1,500. The two shades of blue are more than that and grey means there were NO foreclosures in June.

The worst places to be in this downturn in housing are in CA, NV, AZ and FL. They are also where housing prices escalated 300 to 500% between 2000 and 2006. They were the focal point of the housing bubble.

Back to the map…my rural county is grey, meaning that there were NO foreclosures. However, let’s assume that it was light blue. In my hometown of Effingham there are 12,384 people who live in 5,330 housing units. IF we were blue it would mean that we would have 1 to 3 houses that were being foreclosed upon. It would definitely be hard upon those couple of families but obviously not the catastrophe that the national media would have us all believe.

Take a look at the map again. Focus on places like ND, SD where there were 11 and 29 foreclosures respectively in June.

This housing downturn will pass if we let the markets work. Foreclosed homes in the areas that are affected are being sold to new homeowners at bargain basement prices. It is how the markets work best.

Iowa Wind Farm Impact

It isn’t just corn that they harvest in IA. They are also making a push to harvest the wind. And, in the process helping to develop a new industry—a burgeoning cluster of wind power equipment producers. And, with the USA being called the Saudi Arabia of Wind, it’s easy to see the potential.

While there are only 15 wind farms in IA, they already produce 1,273 Megawatts (MW) of power, with 337 MW of that coming online last year. That places IA third in generating capacity in the USA.

The Iowa Department of Economic Development put a push onto recruiting in manufacturers of wind power equipment and within the last two years companies like Clipper Windpower, Siemens, Acciona Windpower, TPI Composites and Hendricks Industries have all picked IA for new major plants. Those five companies have collectively invested well over $100 million and created over 1,000 new high paying manufacturing jobs in communities scattered over the state.

A study commissioned by the state projects that $3.2 billion per year will be invested in new wind turbine farms within a 600 mile radius of Iowa every single year through 2013. Iowa is to be congratulated for taking an early and progressive approach to this new industry.

American Dream--Statistical Analysis

After reading Adam Shepard’s book “Scratch Beginnings”, my blog of June 9th, I wondered if anyone had done any statistical work on income mobility in the USA. My impression from 50+ years of living here is that the American Dream is alive and well, although from what I’ve heard from many politicians and pundits it’s “dying, if not deader than a doorknob!”

The USA has always had a reputation of being a country where meritocracy rather than hierostocracy ruled the day….you were judged upon how well you performed rather than to whom you were born. That difference is visible today when compared to Europe. We are all given somewhat equal opportunities to succeed whereas Europeans would just prefer that everyone is equal.

The U. S. Department of the Treasury did a November, 2007 report on “Income Mobility in the U. S. from 1996 to 2005.” Here were some of their key findings:

There is considerable income mobility of individuals with roughly half of the taxpayers who began in the bottom quintile of income moving up to a higher one.

About 55% of taxpayers moved to a different income quintile.

Of those at the highest incomes (the top 1/100 of 1%), only 25% remained there over 10 years. The medium real income of these highest earners declined over 10 years.

The degree of income mobility from 1987 to 1996 is similar to that from 1996 to 2005.

Median incomes for all taxpayers increased by 24%, adjusted for inflation, with 2/3 of all taxpayers increasing during that period. The median income of the lowest income groups increased by a greater percentage than the highest income groups.

49.4% of those in the lowest quintile in 1996 saw their incomes more than double (adjusted for inflation) in the next 10 years.

Economic historian Joseph Schumpeter once compared income distribution of the population to a hotel where some of the rooms are very luxurious but others are small and shabby. All of the rooms are always occupied but people are constantly moving rooms. I’d much rather have our system where someone like Adam Shepard can move from the absolute worst room in the place to one slightly better but with his eye on the penthouse.

Youthful Experience--Life Changers

Yesterday’s blog about Adam Shepard’s experience of living as a homeless person in Charleston, SC but with a goal of making it on his own brought back some fond memories of some of my own experiences of my youth. Here are two of those stories.

I’ve always loved to travel, as you can probably deduct from reading my blogs. My most interesting trip occurred when I was 19 and decided to hitchhike across the country, not necessarily to see anything in particular but just to see “if I could do it.” As you could imagine, my parents were not exactly thrilled, but I was not to be dissuaded, agreeing only to call home every two days (collect, of course!). I’m sure that they agreed to this concession so that it would be easier to develop a smaller search area of where to look for the body.

I left home that June morning with a sleeping bag, backpack and $35. Off to see America!

My Uncle Art gave me my first ride, five miles to interstate 70. Two rides later I was in Denver where I spent the night with a family friend. Forty nine hours after leaving home I was on the front stoop of my Aunt Delores’ home in Los Angeles. That is 1,970 miles!

My longest wait for a ride was in LA but I was rewarded when an older gentleman (everybody was older to me back then) approached me, asking, “Do you have a driver’s license? Would you like to drive a car for me to San Francisco?” Needless to say, I jumped at the chance, even more surprised when the car turned out to be a MG convertible. This hitchhiking wasn’t so bad!

As you can imagine, not every ride was as much fun. Some were a bit terrifying, at least for a rather naive small town teenager. But, I made it to Seattle, Salt Lake City, Omaha, Des Moines and back home. In all, I traveled about 5,500 miles in two weeks and still had $5 left in my wallet. And, I got a heck of a hug from my Mom when I got home. Evidently, those votive candles she lit, actually worked!

The other experience was a move to Brazil (the country not the town in Indiana) when I was 25. I’d written my thesis on the future of soybeans in Brazil, raised some money from family and friends and moved to Brazil to buy land, clear it and begin farming. I moved to Mato Grosso, which means Big Trees in Portuguese, a state that was nine times the size of IL but with only one asphalted road down the middle of it. It was considered the Wild West of Brazil. My future father-in-law used to drive his children to the river which divided Mato Grosso from Sao Paulo, pointing across the river to the wild wilderness of the country.

The first year (of seven that I spent there) were spent on the farm I was building. We didn’t have any electricity, water was carried from the natural spring and evenings were spent reading under gas lanterns listening to the BBC on the shortwave radio. I’ve always really appreciated taking long, hot showers after that year.

I spent a time or two at gunpoint, had three cars stolen and learned more in those seven years than all of my time in college. I also returned to the USA with about $5 in my pocket. It wasn’t the most financially successful period of my life.

But, I learned a lot. I met my future wife at a cattle auction. Our twin sons were born in Brazil. There are lots of memories from those years.

We all learn from our experiences. Some of those experiences are good ones. Some aren’t. But, at the end of the day, we are formed by the experiences that we’ve had. Those were two of the many that helped to shape me.

Down but Not Out--Starting on the American Dream!

“I am really frustrated with the poor attitudes that seem to have swept over my peer group. Frustrated with hearing ‘I don’t have’ rather than ‘Let’s see what I can do with what I do have.” That’s how Adam Shepard started his book “Scratch Beginnings,” about his quest to see if he could make it in America with literally nothing but the clothes on his back and a plan.

Picking Charleston, SC, one of twelve SE cities out of hat, Shepard landed there with an 8’ x 10’ tarp, a sleeping bag, an empty gym bag, $25 in cash and the clothes on his back. His goal was to not only survive but to have the start up the ladder to the American Dream, in this case, an operating automobile, a furnished apartment, $2,500 in the bank and a good job.

Starting off in a homeless shelter that would be his home for the first several months, the 22-year-old recounts his experience of working as a day laborer, sometimes for as little as $14/day, eventually working his way up into a permanent job as a household mover. Along the way he met a cast of interesting individuals, some of which were real characters and most importantly found out a great deal about himself.

While there were many people in the shelter who were chronically destitute, Shepard also met numerous ones who were at a low point in their lives but determined to work their way out and to get back onto their feet. The biggest vices for all of them were the ones that can constantly eat away at savings: lottery tickets, alcohol, cigarettes, fast food, etc. He told of one example where one guy saved up thousands of dollars over the course of a year of living in the shelter so that he had enough saved to purchase a duplex in North Charleston, living on one side and renting out the other. Shepard explained, “He would never be one or two paychecks away from living at a shelter. He had security. He was prepared to confront financial disaster.”

Shepard achieved all of his goals within six months of his arrival in Charleston, eventually staying 10 months, having to move back home early to Raleigh, NC in order to help take care of his dying mother. When he drove off in his pickup loaded down with items he accumulated during his stay and with $5,300 in his bank account, he was ready to continue to better himself just as he had done in raising himself up from shear poverty.

If you don’t have time to read the entire book, be sure to at least read the last chapter, in which Shepard philosophizes about his experiences. Here were some of my favorite passages:
“Yeah, life is a bitch for sure. Or actually, let me rephrase that: life can be a bitch. It’s all about how we look at things. Moving furniture sucks. Breaking your toe or suffering through seven days of diarrhea sucks. I would have loved a day off, time to relax and rest, maybe a vacation. But that is unrealistic. Good times abound, but time off is a bad investment if you live at the bottom. There are plenty of ways to have fun, plenty of ways to look at our lives as more than just tolerable. All the while, we have to be more focused, keeping our eye on what we really want to do with our lives: move up. Or not. We’re either on a mission or keeping our flight grounded. Either way we are the pilots.”

Or this one:

“Perhaps the ultimate irony of my project is that the American Dream has evolved into so much more than financial ambition. It used to be that a European sold all of his possessions and sailed to Ellis Island with $100 in his back pocket and a dream in his head. He worked hard in a factory, got married, and had 2.3 kids. His children worked hard and got an education so that their children could have a better life. And on and on and on and well, here we are.”

Adam Shepard experienced and wrote a wonderful book about his experiences. I hope that you’ll take the time to pick up a copy and also check out his website.

We Want Jobs!

One of the biggest challenges that I see on the horizon for many rural areas is the rapidly escalating price of gasoline and diesel fuel, especially when there aren’t local jobs and a big percentage of the community has to commute to work everyday. Union County, SD (population 13,952) is such a county. Almost half (44%) of the residents drive out of the county each day for work, most 20 miles to Sioux City, IA or 65 miles to Sioux Falls, SD. Jobs in the county have declined from 10,290 to 8,416 in the past ten years so commuting is often the only option.

Last month the voters in Union County were given an opportunity to reverse that trend, when they were given the choice of zoning 3,300 acres between Elk Point (population 1,714) and Spink (population not listed) for a new oil refinery. This $10 billion refinery, which would be the first built in the USA in over 30 years, which is another story, would take 4,500 workers five years to build and once completed would hire over 1,800 employees. The refinery would process about 400,000 barrels of thick Canadian crude per day. The economic impact was estimated at $14 billion per year.

Emotions ran high on both sides of the issue. On one side were people like Dennis Hultgren, who’s lived on the same farm for 78 years about 8 miles from the proposed site. He commented, “I’ve got ten adult grandchildren and not one of them has stayed in South Dakota. I think that this is a great opportunity that will impact the entire area. Not just jobs but an immense growth in other related industries.”

Ed Cable, who led the opposition to the proposed plant is a project manager by trade. His main concern was, “There’s going to be an immediate need to upgrade state, county and township roads. Who would pay for those costs? Who would pay for the increased maintenance costs? Who would pay for the temporary issues of housing and socioeconomic needs of construction workers?”

After being debated for months, two-thirds of the voters went to the polls and supported the new project by a 57% to 42% margin. Construction is projected to begin in 2010.

An article on the vote in the Sioux City Journal generated 450+ comments with them running about 90% in favor of the project and 10% against. Here was my researcher Lisa Huston’s favorite comment from Lawrence, “For those who oppose this oil refinery, why don’t you stop buying gasoline for your cars? Stop buying anything that is trucked or shipped. Stop taking postal mail. It all takes fuel, there is no viable substitute, yet or soon. Get real!”

It will be an interesting project to follow.

Small Wander

“I’d been a long term volunteer for the local arts council in Hillsborough, NC. I started to travel around to see what other people were doing in their towns and saw some very neat things going on but no one knew about them,” John Delconte was telling me about the genesis for his idea for SmallWander.com. The website is a wonderful compilation of what to see and do in small towns around NC but John has plans to expand it nationwide from the current four (NC, WV, VA and SC).

He went on, “The overall concept is to connect travelers who love small towns with the towns. So, we have two clients, the towns and the travelers. We hand-pick the towns, and try to help them to network and communicate with each other to improve and market their product, then we will use the web to get the info about these gems to the public. Smaller towns need to band together to leverage their marketing dollars.”

It’s good to see thinking “out of box” on how we can better promote the wonderful attributes of small town America.

Happy Freedom Day!

This is one of the greatest days of the year. Think about the sacrifices of the brave men who signed the first Declaration of Independence in 1776 on this date. They were risking everything that they owned and loved when they signed that document. If the fledgling 13 colonies didn’t achieve their goal of independence from Great Britain, they were dead men…with a price on their heads and no where to hide. But the dream of freedom burned in their hearts and they put everything else out of their mind….Freedom was the only outcome they would accept!

In 1776, America was a very small island with virtually all of its economy reliant upon agriculture and the exporting of that production to Europe. Living standards badly lagged those in Europe. We were but a flee on the back of the giant Great Britain. From that lowly perch our country has grown into the dominant country in the world. Today, we have a GDP that is twice that of second place Japan.

Yes, we are blessed with very abundant resources, a temperate climate and many other strong attributes but the one thing that sets us apart from every other country and the major reason for our success is our freedom, a freedom won at the end of the long and difficult Revolutionary War. This idea of freedom first started in the USA and has spread around the world, but even today reigns preeminent in this country. It is this sense of freedom that makes us such an adventuresome citizenry and with an entrepreneurial zeal that other societies only hope to emulate. It is why over half of all of the patents in the world have been issued to Americans. There is a sense of optimism that is built upon the freedoms that we enjoy.

Each year we send out gifts to our clients on only one date, July 4th. This year’s gift is a plaque with the picture shown at the top of the blog. The inscription reads, “FREEDOM…Eternal Vigilance is the Price of Liberty…Thomas Jefferson, 1801.”

Today I’m heading to the Cubs-Cardinal game in St. Louis with my sons. Last night we shot off fireworks late into the night with all of the freedom songs that I could find blaring in the background. I’m proud and honored to be an American on this our greatest day of the year.

I hope that you have a great 4th, our freedom day!

A Pessimistic Lot

Two out of three Americans think that we are in a recession if not a depression despite the fact that the economy continued to grow slowly (1%) in the first quarter of 2008, having had positive growth for every quarter in the past six years. Unemployment is under 6%, a level that was at one time viewed as “full employment”. Without housing and auto manufacturing, the economy grew at over 4% over the past year, something that would generally we would be applauding.

When Gallup recently asked Americans how long they thought that it would take for the USA Economy to recover, 20% thought that it would take more than 5 years! Half thought that it would take over 2 years!

My, but we are a pessimistic lot! Economies and capitalism constantly climbs a wall of worry. In the 60s we fretted over robotics hurting our economy; in the 70s it was OPEC’s lock on high oil prices; in the 80s it was Japan buying up USA real estate; the 90s brought NAFTA’s “giant sucking sound” and today it’s housing, oil, food, etc.

From everything that I’m seeing around the country, this downturn will be swift and shallow. It is too bad that so many don’t have more optimism about the U. S. economy.

Farming in Gourmet?

Normally, Gourmet magazine does all of their articles on the latest place to eat, hot new dishes, and even hotter chefs. However, this past month’s edition features a four page article on why a Gourmet reader should be concerned about the Farm Bill. Betting the Farm: Washington has created a tangled web of subsidies that determines the way our food is grown, is the title of the article which compares growing food in rural Walworth County, SD with the five counties just north of NYC.

Both regions have about 450,000 acres of agricultural production, but Walworth supports only 322 farms today (there were 653 in 1920) compared to 2,500 farms in NY. Average size is 1,500 acres in SD compared to 175 acres in NY, but those smaller farms produce $152 million in production compared to $31 million in SD.

When Gourmet starts digging into the Farm Program and trying to figure out how food is produced, you can rest assured that it is quickly moving up on the radar for people who might not have known that milk really did come from a cow.

New Technology--Obsolete in 18 Months!

Cannons boomed and American flags proudly flew in abundance when the barn doors of Pike’s Peak Livery Barn in St. Joseph, MO flew open and Billy Richardson flew down the street on his coal black horse at 5 pm on April 3, 1860. He was the first rider for a mail delivery system called the Pony Express started by three entrepreneurs (Russell, Majors and Waddell) as a way to tie a young nation together.

That first trip west took nine days and 23 hours. One of the stops on the Pony Express was Gothenburg, NE, which has maintained and preserved its Pony Express station which was moved from a neighboring ranch where it was used as a bunk house until 1931. We stopped in Gothenburg to visit this station along with a Sod House Museum.

The record time for the 1,996 mile route to Sacramento, CA was seven days and 7 hours to carry President Lincoln’s inaugural address to the western half of the country. Rates for service initially were $5 per half ounce, when $5 was often a month’s wage. As with most new technology, rates quickly declined, eventually reducing to only $1 per half ounce. Up to seven hundred letters per week were sent across the country, 308 runs were made each way (616,000 miles) and the world became a little smaller.

It would become even smaller when the continental telegraph line was strung across the country eighteen months later, making the Pony Express obsolete virtually overnight. The three entrepreneurs lost over $100,000 in the venture and fortunately the U. S. Congress didn’t try to save the jobs of the poor riders, letting the service close.

The early settlers in places like Gothenburg have always intrigued me, so a stop at the Sod House Museum was a must. These houses were constructed out of sod because there were virtually no trees in existence on the Great Plains in those days. I have been told that today the USA has more trees than when Columbus arrived in 1492. The early settlers came out west with a promise of 160 acres of land if they built a house and lasted five years. Only 1 in 3 made it one winter, with most quickly moving back east. Those that stayed were a hearty and entrepreneurial bunch.

If you’re travelling across the country, be sure to stop in Gothenburg.