Your Independence, What does Manfred think about a Recession, and all things IE
Next Tuesday, I will be watching some form of celebration for July 4th, and that is why I’m writing this now; next Monday would be a bad time to send out an email; who can resist a four-day weekend? I just can’t compete with barbecues, parades, and fireworks! And besides, you wouldn’t see it until Wednesday. So there will not be a Russell Report next week.
Your Independence
Many of you on this distribution list are business owners, but why are you a business owner? Most of you, at some point, worked for someone. You had a boss, and you worked for a company.
One day, the revelation set in that you could do what they were doing, and you could do it better, faster, or cheaper. And so you did. You declared your independence from the company or boss that was running your life.
Just like you, the founding fathers felt exactly the same way. They could do it better, and they did, just like you.
But not without considerable risk. Just like you.
One day, you got your last, steady, company paycheck; the next, you were working to create that very unsteady cash flow that you now call your business.
Like you, Thomas Jefferson, George Washington, Benjamin Franklin, John Adams, John Jay, Patrick Henry, and many others had families that depended on them just like your family depends on you. If you were married, that was a long conversation with your spouse – “do I go out on my own?”. Crazy, right?
The day the Founding Fathers declared their independence from England, these new, thirteen United States, with its brand new territory, became the competition to England, just like you became the competition to your former employer.
The key difference was that they had to keep their rifles close by because no one else was going to protect their goal of starting a new country.
They even had to form a partnership with France, a potential competitor, to prevent their former employer, England, from working against them.
I heard King George tried to exercise a “do not compete” clause, but I think that got dumped in the harbor too.
And 247 years later, here we are.
The Thursday Breakfast Club
This past Thursday, we had Manfred Keil, Economics professor at Claremont McKenna College, join us for breakfast.
To get to the point, he is expecting a recession in Q3 and Q4 of this year.
Then he focused on the Inland Empire.
The IE has been a bright part of California, where other MSAs - Metropolitan Statistical Areas - are faltering.
The IE MSA (Riverside-San Bernardino – Ontario) is now as big as the San Francisco MSA (SF-Oakland-Fremont).
However, there is now significant pushback on the development of warehouses in the IE because they are believed to be pollutants.
More specifically, it’s the trucks that haul the goods to and from the warehouses that are the pollutants.
If only those folks could see what the air looked like in the 70s. And I mean, you could actually see what the air looked like, mainly because the air blocked the view of the mountains.
But I digress.
There is over 1 billion square feet of warehouse space, with 170 million more going up this year.
That’s 4000 warehouses that provide good, clean jobs, as opposed to mining for nickel, to build the batteries to power the trucks that would carry the goods to and from 4000 warehouses.
That’s my editorial, not Manfred’s.
Oh, and robotics is going to be a problem for the warehouse workers too. If you don’t think so, just look up this video on YouTube.
Consequently, he was an advocate for trade schools so people could learn to fix the robots and the surrounding electronics.
I know it may be a blow to some of you, but being a welder is a lot more lucrative than having a sociology degree.
Either way, it’s still more education, which is something the IE has less of than many other MSAs.
And this is coming from the guy with a geography degree.
Regardless, if the IE wants high-end employers in the IE, they are going to need workers with high-end degrees or certifications.
As a business owner, you always have to be looking for that edge. As an employer, robotics would be that edge. As an employee, expanding your skill set would be the counter-move.
Finally…
When you celebrate Independence Day next Tuesday, remember that it is not just Independence Day for the greatest country in the world. You, as a business owner, are also celebrating YOUR ability to be independent, to call your own shots, make your own mistakes, and create your own successes. There are few greater callings and few greater risks than being a business owner.
But it really is worth it.
If you don’t think so, call me, and I’ll walk you through it.
You have my greatest respect.
Enjoy the 4th!
