Good Point and The Myth of Regional Economics

Carlos makes a good point about fear-mongers who do not understand trade. The sad thing is that the majority of the American public do not understand trade, and they think Lou Dobbs and Pat Buchanan are experts. I blame economists for this state of affairs. Ask Career Intern about his PhD level class in international trade. He learned some mathematically complicated models, but they never talked about how to explain the mutually beneficial nature of trade to the lay person. I am interested to here comments on why you all think that trade is so hard to explain to the masses.

Part of the problem is the myth of regional economics. People think they can grow their region without cost. They do not understand that every dollar they bring in comes from somewhere. Here is a local article about an economic consultancy team who gave suggestions on how to revamp Downtown Harrisonburg, Virginia. The link is only good until tonight so I posted the whole article.

After reading this article, I am ashamed to be an economist. As long as there are consultancy studies like this one, free trade will never be possible. Ask Career Intern about IMPLAN.

Main Street Consultant Gives Assessment http://www.dnronline.com/story1.asp by Dan Wright

Downtown Harrisonburg is not getting its share of the retail dollar.

Downtown merchants are capturing less than 10 percent of the $500 million in buying power wielded by residents of Harrisonburg and Rockingham County, says Kennedy Smith, a principal with the Arlington-based Community Land Use and Economics Group LLC.

As part of the city’s Main Street program, Smith presented a "sales gap analysis" to the Harrisonburg

Downtown Renaissance board of directors Tuesday afternoon.

She cited downtown’s "relatively weak and unfocused retail base" as an issue to be addressed.

Downtown businesses average $155,000 in annual revenue, she said. "Many retail businesses in downtown Harrisonburg are struggling," she said.

Downtown businesses are capturing about 15 percent of the retail purchases made by city residents and about 7 percent of the purchases made by county residents. Those figures should be 20 to 22 percent, she added.
Very few downtown businesses are open in the evenings or on Sundays. Convenient and consistent shopping hours are crucial to building the district’s economic base.

"Mall stores are open until 9 p.m. Why? Because it’s required in their leases," Smith said. "So why don’t downtown leases require it?"

Huge Potential

Despite some challenges, though, the city’s downtown district has the potential to become a thriving destination, Smith said Tuesday.

With more than 2,000 workers, historic buildings and several retail outlets that "appear to be attracting shoppers from a broad geographic area," downtown has potential.

Smith suggested grouping businesses near one another, using destination businesses to generate traffic, and placing convenience businesses near major hubs.

A survey of consumers in the downtown district indicated they want more clothing stores and boutiques, restaurants, specialty grocery stores, bookstores and music venues.

Downtown should work to attract higher-end clothing stores, said Brian Shull, the city’s director of economic
development.

"I think over time that we’ll see different niches develop," Shull said.

He cited recent developments such as One Court Square becoming the Harrisonburg Innovation Center, a zone of information technology businesses, and the Harrisonburg Children’s Museum’s planned move to the A&N building.

"Those are destinations," Shull said. "They are reasons for people to come downtown."

The downtown district needs a major anchor and a sense of community, said Jerry Lawrence, owner of the Daily Grind, which has a location on Court Square.

"Harrisonburg lacks a sense of itself," Lawrence said. "The perception of an outsider is that it’s a town with a mall."

Lawrence recalled a nationally syndicated radio talk show he heard. A woman identified Harrisonburg as "having a lot of Wal-Marts." He thinks the city needs a core concept, possibly the children’s museum or Civil War history.

"Downtown Harrisonburg has huge potential," Lawrence said. "And the heart and soul of any city is its downtown."