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April 21, 2008


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dilbert dogbert

My eyeball says Alan's tech boom was trying to go asymptotic.
Any inflation/deflation factored into the data? Dumb question I know.


I'm reminded of a lesson an old-time carpenter taught me. He showed me the difference between modern fast-grown wood and old slow-grown wood. The difference is in the growth rings. Slow grown wood has a lot of tightly spaced growth rings. This means the wood is dense, strong, relatively stable and, it is less subject to insect damage and rot.

Seeking rapid growth we get unstable market situations that fall apart. Seems to me that markets and communities that grow slowly are more stable and able to withstand shocks.

I have seen it here with development. When the local housing market was expanding slowly the resident workforce of well trained and well paid people was able to keep up. There was little import of cheap labor.

When the developers took over and the numbers of houses multiplied the local labor force couldn't keep up. Cheap, low skill, labor was imported. Much of it illegal. Of course with so many people imported the houses were completed very rapidly. Entire housing projects went from groundbreaking to completion in a couple of months. And when the projects closed several hundred low-skill people were out of work. Some moved on to greener pastures. But a good percentage stayed. A town which had low unemployment, high average skills and good wages are saddled with these leftovers. Average skill and education levels suffered and wages have fallen below what it takes to maintain a family. Unemployment is up. Crime is up.

The difference is that instead of a steady rate of production with a small number of highly skilled and well paid people who stay busy pretty much year round we have a boom-bust cycle where many more people do the work of many years but over a much shorter time period. Everyone stays unemployed, or underemployed, most of the time.

Because of this the labor situation, wages, availability of labor, the stability of the community and local economy all suffer. The need to take advantage of the fat times makes people overbuild retail space. Which loses money in the thin times. Which increases uncertainty and costs. Nothing is as it was, pretty much the right size. Everything is either over sized and under utilized waiting for the boom time or it is under sized and buried when the rush comes. Wages go from beans to sacks of money as employers cut back and then turn around and have to pay a king's ransom to get warm bodies.

Instead of swinging for the fences in this or that narrow sector it seems to me that what is needed is slow growth in all major sectors. That way all the area support each other and we can get out of this boom-bust cycle and running scared mentality. Transition to a more stable and predictable situation.

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