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People the last few years have been flocking to Charlotte, even compared it to Atlanta in the 1970s. With the crash of the financial system and the once robust job market all but gone, is Charlotte's growth now stunted? is is days a boom town over?
Stunted is not the word I would use - slowed is more like it - and THANK GOD for that.
Isnt this the case for the rest of the USA as well?
: Turn back, nothing good ahead and it's long and boring _
Indeed it is. IMO, Charlotte has some serious issues facing it. Remember the what has happened in the past is no indication of what will happen in the future. As an example, St. Lewis was the 4th largest city in the USA in the middle of the 20th century and it looked to heading towards rivalling Chicago. However instead, by the end of the century it was thrown up as an example of complete urban failure. It's population fell by 500,000 during this period. The point is that you can't look at the past and assume the future will be the same.
Charlotte's economic past has always been reliant on these 3 items:
Direct manufacturing. Yes, there was a lot of manufacturing in the city.
It was the administrative and distribution center for the manufacturing and farming in the Southern Piedmont.
Some sort of banking and finance. This ranges from the good rush at the beginning of the 19th century, to the US Mint producing gold coins in downtown, to the handling of money for the cotton mills, to the growth of the large banks.
So why has it gone wrong and what is going to happen to Charlotte? Well unfortunately Charlotte's fortunes are tied to the nation's fortunes which really stink despite what you hear on the news. In order to understand what is happening here you have to first accept what is really wrong in this country, and I have found that few really know. (and if told dismiss it) Against my better judgement I go over it here so people can throw rocks at it.
First understand that real wealth in an economy is generated by just 3 things. 3 things, nothing else. They are:
You dig it up
You grow it
You manufacture it
People hear this and they roll their eyes and say you are crazy. The tell you that banking, that big thing in Charlotte, has made plenty of people here wealthy. Yes it's true but look at how it works. Banking and the associated make people wealthy by transferring the wealth created by the above activities. It doesn't create it. When all the wealth creating is gone, guess what goes next?
This is all well and good and one asks then why shouldn't Charlotte be doing a lot better. Well that is because nationally our economy has participated in a mass transfer of our manufacturing industry, including all logistical technology, to China, Mexico, Vietnam, India, etc etc. The excuse as been that it is cheaper to produce stuff there and good for all. All good economists and MBAs from fine American universities know this. Where this has failed is in the lack of understand of what this means to the economy.
There are two ways to explain it. First remember the 3 items that I said create wealth? Well if you eliminate manufacturing you are left with:
You dig it up
You grow it
That's fine, but this is a description of a 3rd world economy with no middle class. The middle class is disappearing in this country no ifs ands and buts about that. Another way to explain it, where the myopic MBAs don't see and don't care to see, is that when you pay, say $2 to someone in Charlotte to make some steel in one of the mills left here, they will turn around and spend that $2 on something else here. Pay a Chinaman $1 to make that steel and the money is gone from this economy forever. What does China buy from us? We don't have anything they want except for our food and our resources. They certainly don't want our bankers, insurance and real estate people.
So this is a long winded talk that would seem to have nothing to do with Charlotte's future. But there is one final element to this. When we got rid of manufacturing over the last 30 years, we replaced it with something referred to as FIRE. = Finance, Insurance, Real Estate. Which was proped up by cheap energy and the huge printing of money.
FIRE is why Charlotte has boomed in the last 25 years because we were a perfect place for it. First there were state laws that protected BofA (NCNB) and Wachovia (First Union) from any competition. Then when they got big enough, the laws were removed and replaced by different laws that allowed them to swallow up bank after bank. This created a bunch of symbiotic industry here related to real estate, home construction and everything needed to supply all the happy people with their McMansions and Condos in skyscrapers downtown. Second we were a place that had little regulation on development and business. This is why the city of Charlotte sprawls over 300 sq/miles. Meanwhile all of the manufacturing around Charlotte was being dismantled and shutdown. The failure of Cannon mills years ago should have been a big warning shot when 5000 were laid off, but nobody paid notice. Charlotte was invincible people said. "Those are ignorant "put tops on bottoms" people, doesn't mean anything to us educated here in CLT."
This illusion of nice wealth might have gone on for a while except for one thing. The price of oil. It was ignited by Katrina, made very sensitve due to wars, and when the hurricane hit Houston last year, that was the beginning of the end. $100 oil, caused the finance house of cards to start falling and it hasn't stopped yet. Now the finance industry is collapsing and manufacturing is gone. This is 2 of Charlotte's 3 long term mainstays. #3 also has a lot of issues because there isn't much to distribute these days. We hear platitudes about becoming a "hotspot" for energy, but all cities are saying that. We would be much worse off, but the government in it's inability to deal with the issue, handed a $Trillion in borrowed money to the finance industry.
Aside from the one bank left, Charlotte is also a city that doesn't have much political pull either at the state level nor at the national level. The mayor, who took a lot of direct credit for the city's growth but is no where to be found now that fortunes are falling, has pissed off a lot of the state legislators and has no political pull in Washington since he hooked his star to GW Bush and that has since train wrecked. So this means that when Charlotte gets in line for federal cash, it is usually at the tail end.
I realize this sounds pretty negative, but that is because the people running this city and the brain dead media that goes along with it, have yet to admit these are the issues facing this place and are working to put some plan in place to address it. Instead we keep hearing that we will be in recovery 6 months from now when it's talked about. More important news is Michael Jackson, Obama not being American, so forth and so on. They still think a knight riding on a white horse is going to come riding into town with bags of money to save the skyscrapers being built downtown. The fact of the matter is what is left there, is being built with some sort of government assistance. This should be concern enough.
Eventually though the people will figure it out, but it won't be soon. Meanwhile, I am reminded of a quote from the Kubrick movie, Full Metal Jacket, about a certain kind of sandwich that we are all going to have to take a bite out of. It's not going to be tasty or pleasant at all. If you made it this far, you deserve something clever, but I can't think of it at the moment.
: Turn back, nothing good ahead and it's long and boring _
Indeed it is. IMO, Charlotte has some serious issues facing it. Remember the what has happened in the past is no indication of what will happen in the future. As an example, St. Lewis was the 4th largest city in the USA in the middle of the 20th century and it looked to heading towards rivalling Chicago. However instead, by the end of the century it was thrown up as an example of complete urban failure. It's population fell by 500,000 during this period. The point is that you can't look at the past and assume the future will be the same.
Charlotte's economic past has always been reliant on these 3 items:
Direct manufacturing. Yes, there was a lot of manufacturing in the city.
It was the administrative and distribution center for the manufacturing and farming in the Southern Piedmont.
Some sort of banking and finance. This ranges from the good rush at the beginning of the 19th century, to the US Mint producing gold coins in downtown, to the handling of money for the cotton mills, to the growth of the large banks.
So why has it gone wrong and what is going to happen to Charlotte? Well unfortunately Charlotte's fortunes are tied to the nation's fortunes which really stink despite what you hear on the news. In order to understand what is happening here you have to first accept what is really wrong in this country, and I have found that few really know. (and if told dismiss it) Against my better judgement I go over it here so people can throw rocks at it.
First understand that real wealth in an economy is generated by just 3 things. 3 things, nothing else. They are:
You dig it up
You grow it
You manufacture it
People hear this and they roll their eyes and say you are crazy. The tell you that banking, that big thing in Charlotte, has made plenty of people here wealthy. Yes it's true but look at how it works. Banking and the associated make people wealthy by transferring the wealth created by the above activities. It doesn't create it. When all the wealth creating is gone, guess what goes next?
This is all well and good and one asks then why shouldn't Charlotte be doing a lot better. Well that is because nationally our economy has participated in a mass transfer of our manufacturing industry, including all logistical technology, to China, Mexico, Vietnam, India, etc etc. The excuse as been that it is cheaper to produce stuff there and good for all. All good economists and MBAs from fine American universities know this. Where this has failed is in the lack of understand of what this means to the economy.
There are two ways to explain it. First remember the 3 items that I said create wealth? Well if you eliminate manufacturing you are left with:
You dig it up
You grow it
That's fine, but this is a description of a 3rd world economy with no middle class. The middle class is disappearing in this country no ifs ands and buts about that. Another way to explain it, where the myopic MBAs don't see and don't care to see, is that when you pay, say $2 to someone in Charlotte to make some steel in one of the mills left here, they will turn around and spend that $2 on something else here. Pay a Chinaman $1 to make that steel and the money is gone from this economy forever. What does China buy from us? We don't have anything they want except for our food and our resources. They certainly don't want our bankers, insurance and real estate people.
So this is a long winded talk that would seem to have nothing to do with Charlotte's future. But there is one final element to this. When we got rid of manufacturing over the last 30 years, we replaced it with something referred to as FIRE. = Finance, Insurance, Real Estate. Which was proped up by cheap energy and the huge printing of money.
FIRE is why Charlotte has boomed in the last 25 years because we were a perfect place for it. First there were state laws that protected BofA (NCNB) and Wachovia (First Union) from any competition. Then when they got big enough, the laws were removed and replaced by different laws that allowed them to swallow up bank after bank. This created a bunch of symbiotic industry here related to real estate, home construction and everything needed to supply all the happy people with their McMansions and Condos in skyscrapers downtown. Second we were a place that had little regulation on development and business. This is why the city of Charlotte sprawls over 300 sq/miles. Meanwhile all of the manufacturing around Charlotte was being dismantled and shutdown. The failure of Cannon mills years ago should have been a big warning shot when 5000 were laid off, but nobody paid notice. Charlotte was invincible people said. "Those are ignorant "put tops on bottoms" people, doesn't mean anything to us educated here in CLT."
This illusion of nice wealth might have gone on for a while except for one thing. The price of oil. It was ignited by Katrina, made very sensitve due to wars, and when the hurricane hit Houston last year, that was the beginning of the end. $100 oil, caused the finance house of cards to start falling and it hasn't stopped yet. Now the finance industry is collapsing and manufacturing is gone. This is 2 of Charlotte's 3 long term mainstays. #3 also has a lot of issues because there isn't much to distribute these days. We hear platitudes about becoming a "hotspot" for energy, but all cities are saying that. We would be much worse off, but the government in it's inability to deal with the issue, handed a $Trillion in borrowed money to the finance industry.
Aside from the one bank left, Charlotte is also a city that doesn't have much political pull either at the state level nor at the national level. The mayor, who took a lot of direct credit for the city's growth but is no where to be found now that fortunes are falling, has pissed off a lot of the state legislators and has no political pull in Washington since he hooked his star to GW Bush and that has since train wrecked. So this means that when Charlotte gets in line for federal cash, it is usually at the tail end.
I realize this sounds pretty negative, but that is because the people running this city and the brain dead media that goes along with it, have yet to admit these are the issues facing this place and are working to put some plan in place to address it. Instead we keep hearing that we will be in recovery 6 months from now when it's talked about. More important news is Michael Jackson, Obama not being American, so forth and so on. They still think a knight riding on a white horse is going to come riding into town with bags of money to save the skyscrapers being built downtown. The fact of the matter is what is left there, is being built with some sort of government assistance. This should be concern enough.
Eventually though the people will figure it out, but it won't be soon. Meanwhile, I am reminded of a quote from the Kubrick movie, Full Metal Jacket, about a certain kind of sandwich that we are all going to have to take a bite out of. It's not going to be tasty or pleasant at all. If you made it this far, you deserve something clever, but I can't think of it at the moment.
I think this is a wake up call for Charlotte. We are not "invincible" as lumbollo stated and we need to diversify our economy/workforce. Although it's a little late in the game, I think our leaders are starting to grasp this concept now. For awhile they just sort of sat back and didn't worry about it because we had two large banks headquarted here and the mentality that nothing could ever go wrong with either of them.
Originally Posted by urbancharlotte
Um, Charlotte was the size of Matthews (34,000 pop) 100 years ago. Since then, this city has boomed (most of those years had NOTHING to do with being a US banking center BTW) to nearly 700,000. Even during the decade of the Great Depression, Charlotte posted a 22% growth rate. The Great Depression was also the time period when Charlotte's population reached the 100k mark. In every census dating back to 1850, Charlotte has grown by at least 20% (1970 to 1980 was the lowest decade of growth for Charlotte thus far).
The bottom line is that Charlotte's growth is nothing new at all. What has happened in the last 20 years is the same thing that has been happening for the last 160 years. In fact, Charlotte's fastest boom took place between 1850 and 1900. During this time period, Charlotte went from a small town of 1,000 to a small city of nearly 20,000.
In the last 20 years however, Charlotte's growth has finally given Charlotte a size that is noticeable on a National scale. I cringe everytime Charlotte is talked about like some city that came out of nowhere. Charlotte has been steadily growing longer than every human on this planet has been breathing. This much is a fact.
If Charlotte's next 20 years of growth is half the rate of the last 20 years, Charlotte will have a city population of nearly 1 million by 2030
Aside from the one bank left, Charlotte is also a city that doesn't have much political pull either at the state level nor at the national level. The mayor, who took a lot of direct credit for the city's growth but is no where to be found now that fortunes are falling, has pissed off a lot of the state legislators and has no political pull in Washington since he hooked his star to GW Bush and that has since train wrecked. So this means that when Charlotte gets in line for federal cash, it is usually at the tail end.
I disagree with most of what you wrote. People always insist that if only Charlotte had a more diverse economy, somehow we wouldn't be in a recession like the rest of the country, I suspose. Yet having a more diverse economy does not explain why cities like Atlanta, Portland or Jacksonville, FL have double digit unemployment rates, all higher than 10%.
Where we do agree is your quote above regarding Charlotte's lack of influence. Now, I do think you've totally ignored the seven other Fortune 500 companies based here. But beyond the obvious slights from Raleigh, I think people here fail to realize the growing influnce of Fayetteville. The millitary is transferring its Forces Command unit to Fort Bragg by 2011 and its estimated that area will gain up to 45,000 people because of it; over 3,000 military personel, and the rest from family members and related contractors. Most important is this quote regarding the move...
"...When the move is complete, Fort Bragg will have more generals than anywhere except the Pentagon..."
We've already seen the controversy regarding our loop highway versus Fayetteville's. And I think you'll only see issues like that grow in the future as that area continues to gain prominence not just on the state level, but also nationally.
I disagree with most of what you wrote. People always insist that if only Charlotte had a more diverse economy, somehow we wouldn't be in a recession like the rest of the country, I suspose. ......
You must not have read what I posted as I didn't say that. In fact I said nothing about diversity. I did say it was long and boring. Maybe you fell asleep and dreamed it being something else.
In any case, if you would like to address anything that I did put in that topic, I will be glad to have a discussion with you.
I think that others have written much more provocative, thoughtful and insightful posts than I could begin to tackle, so I won't attempt to add more.
However, I do have one thought I would like to point out.
Lumbollo mentioned Federal dollars. I think that Federal mandates to states - and the accompanying Federal dollars - are at the root of why states are in the red and why cities are struggling.
If we balanced our budgets based on NO Federal money - then that is how every single state across this nation will get itself back into fiscal shape . . . and how the Federal Treasury can begin to dig out of debt. If a community cannot provide all the bells and whistles . . . then that is what that particular community's citizens should be addressing. If the revenue is not there . . . then folks either need to find ways to handle resources differently, create more revenue - or cut back on expansion (and concentrate on maintenance). We all seem to want more, more, more and getting it from that magical money which is being borrowed from foreign countries is what is tearing down this country.
So I don't agree with pumping federal $$$ into this state or this city - and would hope that we all would see the wisdom in dumping these federal mandates and working towards creating services that we can PAY for. It is no different than running our own household budgets - if we don't have the money to put a new roof on our house - we just patch it. That is how we are gonna have to start looking at services and growth. And even with that approach, taxes are gonna necessarily go up.
Charlotte's economic past has always been reliant on these 3 items:
[*]Direct manufacturing. Yes, there was a lot of manufacturing in the city.
[*]It was the administrative and distribution center for the manufacturing and farming in the Southern Piedmont.
[*]Some sort of banking and finance. This ranges from the good rush at the beginning of the 19th century, to the US Mint producing gold coins in downtown, to the handling of money for the cotton mills, to the growth of the large banks....
...When we got rid of manufacturing over the last 30 years, we replaced it with something referred to as FIRE. = Finance, Insurance, Real Estate. Which was proped up by cheap energy and the huge printing of money.
...Now the finance industry is collapsing and manufacturing is gone. This is 2 of Charlotte's 3 long term mainstays..."
I'm sorry, I thought with the statements above you were suggesting that Charlotte economy was not "diverse enough"; i.e. we have been too reliant primarily on two industries, manufacturing and finance. My apologies for misinterpreting your writing.
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