Highway 61 visited - some random thoughts on a US road trip

Two weeks and 8,000 km (5,000 miles) later, I'm back home from a US road trip. Here are some random thoughts FWIW. Nothing very important, insightful, or authoritative here.

Itinerary: south from Ottawa to Lewes, Delaware; continuing along the Atlantic coast to Ocracoke Island, North Carolina; Savannah, Georgia; then west across to the Gulf of Mexico and Mobile, Alabama; Breaux Bridge (near Lafayette), Loiusiana; Galveston, Texas; Padre Island, Texas; retraced our route, then north along the Mississippi (hence the "Highway 61" reference) from Baton Rouge to Cape Girardeau, Missouri; then north-east to Port Huron, Michigan/Sarnia, Ontario; then home. We saw more small towns than big cities, and did about as many miles on two-lane roads as on interstate freeways.

Countries don't really exist; they are just more or less random collections of individuals going about their everyday lives. Obvious really, but it is so easy to think of the US especially as some monolithic superpower that acts as a unit.Those who are antipathetic to the US seem especially prone to fall into this way of thinking. Actually visiting a country forces you to realise that countries are constructs. I wonder how long it would take visitors from outer space to figure out that countries existed? (Maybe they would be puzzled by different crop patterns on either side of the 49th parallel?)

National economies don't really exist either; they too are just more or less random collections of individuals going about their everyday lives. Having spent the last few months thinking mostly about the economic crisis, it was good to stop reading economics and financial media while visiting the "epicentre" and just looking around. Macro-economists especially get a warped sense of everyday reality. New car lots seemed a bit fuller than normal, and motels seemed a bit emptier, but otherwise I would not have noticed any signs of economic crisis. (When I was working in Havana Cuba during the 1990's, by contrast, signs of their economic crisis were obvious, even without access to aggregate statistics.)

I did see a lot of advertisements for "Car Title Loans". (But like the pawnbrokers, which were obviously not new, maybe these pre-date the crisis.) I don't remember seeing advertisements for car title loans in Canada. Presumably these are like reverse mortgages, only borrowing against the equity in your car, not your house. I wonder why they are so common? Maybe it's because there are fewer legal restrictions (like preventing recourse mortgages) on car title loans?

"Crumbling infrastructure"? US roads and bridges seem to be in better shape than Canadian roads. Detroit aside, there were a lot fewer potholes, and fewer traffic jams, than I see on Canadian roads (especially in Quebec). And the rest areas for travelers (especially visitor centres) were more common, cleaner, better equipped, and above all a lot less commercialised than in Canada. Less garbage along the roads too. All this went against the preconception that the US, compared to Canada, is a land of private wealth, public poverty, and less governance.

Judging from the housing, some parts of the South did look poor, but no more so than some parts of Quebec and New Brunswick. And the quality of the housing did not generally match the higher apparent quality of the cars parked outside. Why should where you live be such and indicator of wealth and status? Maybe it just makes sense to spend relatively less on housing if you live in an easier climate? Dunno.

Driving West along the coast towards Galveston, it slowly dawned on us that something wasn't right. Eventually we remembered hearing about Hurricane Ike. It seems crazy to be rebuilding in places like the Bolivar peninsula, where everything had been destroyed, but that is what was happening. On the other hand, suppose you face a hurricane once every 20 years, so there is a 5% chance that your $100,000 cabin will be destroyed. That's a $5,000 expected annual loss. Capitalised at a 5% real interest rate, that means your lot is worth $100,000 less than it would be with no risk of hurricanes. Ocean-front building lots with no risk of a hurricane are often worth considerably more than $100,000. So it probably makes sense to rebuild.

The food was good, especially the fish and shellfish. But Adam Smith was right about the benefits of the division of labour. Crabcakes from a Pizza restaurant were a mistake, as I realised later that night. Cheap grungy places where fat guys eat great mounds of crawfish, crab, catfish, off plastic trays caused no problems. Only tried one BBQ place, but I think I can see why Tyler Cowen is so enthusiastic.

And the people were all very helpful and friendly. The "Deep South" did not seem to be the threatening place I had feared. Is that image due to northern, coastal, media elites? Dunno.

Anyway, I'm glad to see the financial world has not collapsed during by absence. Now I must read up on Stephen's recent posts, check what else is happening in the world of macroeconomics, and return to a different reality.

Comments

[Stephen Gordon]

Welcome back - you were missed!

[Neil]

Re: car title loans
They're everywhere in Canada too. All the payday loan places have them, just that they don't usually specifically say "car," just "title loans." Or at least in Alberta...I haven't done a lot of domestic traveling since becoming old enough to notice such things, so I suppose things could be different elsewhere. They definitely predate the crisis.

Anyway, interesting take on the situation to the south. Certainly to hear Americans talk on the internet, you'd think that the country is a complete disaster, which doesn't seem to be the case in the real world.

[pointbite]

Welcome back Nick,

I was sorting through some boxes the other day and found an old textbook you wrote. What a small world.

"New car lots seemed a bit fuller than normal, and motels seemed a bit emptier"

How do you know what's normal in "Random City" USA?

"US roads and bridges seem to be in better shape than Canadian roads."

I lived in the deep south for a few years, they have the best roads in USA, but I disagree with that statement as a general rule. I remember one brand new highway that was built bumpy and annoying from day 1. Roads in the north east are even worse. Have you been to Boston? Their toll roads are better than Toronto's toll road, though. Regarding the lack of traffic jams, that could be the elusive evidence of recession you're looking for.

"And the quality of the housing did not generally match the higher apparent quality of the cars parked outside."

If only you could hear radio from 2006-7, every car dealer (and his mother) was offering free cars. Bad credit, no credit, divorce, bankruptcy, no problem! The credit bubble was so obvious it was absurd. You're definitely right that economists don't get out enough. I bet taxi drivers are better forecasters (don't take offence, just trying to be funny, for some reason I have to explain my jokes on this website or someone will yell at me).

"Adam Smith was right about the benefits of the division of labour"

You remind me of a time I orderer an Asian dish from an American restaurant. I learned the same lesson.

[Nick Rowe]

Thanks for the welcomes back!

I am maybe naive about car title loans. I Googled, and found plenty of evidence of car title loans in Canada (but had never noticed adverts for them before).

pointbite: yes, my impressions were just that -- impressions. And I don't have the time series for comparison. But it does make me wonder how much the "facts" as reported by economic statistics, seen through an economist's eyes, or newspaper stories ("Dog bites man is not news, man bites dog is news") match facts on the ground. Or how much macroeconomic events matter to the daily lives of normal people. Heresy!

[Patrick]

4 years ago I spent a couple of weeks doing work for my employer in Savannah. Really loved the place. I was there in February so it wasn't hot at all. In July/August I imagine it's like living inside a dog's mouth. Probably why all the fantastic old homes in the downtown have beautiful shady court yards and gardens.

[Nick Rowe]

Savannah was beautiful. In a strange way, it reminded me of Quebec city. An old city, leading down a steep slope to the river. But it's also a modern industrial port city, with big ships coming in.

[Adam P]

Welcome back Nick.

On Adam Smith and specialization, I just got back from Geneva. Had a meal at my favorite restaurant in the world, Cafe de Paris. It is a place with only one item on the menu, steak with frites. You get entrecote in a special butter sauce with french fries and a green salad to start. With only one thing on the menu that thing had better be good for the place to succeed. Well, it's always busy there!

There's a few other place that do this too, in London there is Relais de Venise which also serves only entrecote and is quite good. There is a place in Montreal called L'entrecote Saint-Jean which serves an entrecote in sauce similar to Relais de Venise (to my palette it's nowhere near as good as Cafe de Paris). But I think it is most certainly the case that you're best advised to go with the house specialty or, if you don't like the specialty, simply eat somewhere else.

[westslope]

Great post Nick! Thank you for sharing.

I would suggest that crossing from Calexico, southern California, into Mexicali, northern Mexico, or from southern Bolivia into northern Argentina, or from Morocco into Algeria would have presented much starker contrasts.

Southerners are cool, unlike the stereotypes entertained by northern elites. A few decades ago I discovered while travelling in apartheid-era South Africa that reputedly evil Afrikanners actually knew, understood and empathized much more with Black African nations (Zulu, Xhosa, etc.) than many of their British-origin white co-citizens.

[reason]

With southerners, I guess it matters what you talk to them about.

[reason]

Its like children, they are not stupid, they just have a different perspective.

[Scott Sumner]

Nick, It's always interesting seeing the place you live in described by someone from the outside. I often read European descriptions of American and think "yes, there probably is some place in America like that." I travel around China quite a bit and as soon I get there I feel it is much bigger and more diverse than outsiders imagine. So I can identify with your reactions on experiencing America first hand. That famous New Yorker cover describes much more than New York attitudes.

When I noticed the post title, I wondered if we share similar taste in both music and monetary theory.

[Nick Rowe]

Hi Scott: have you ever seen that "low-brow" US "reality" TV show, called "Wife Swapping", or something? It's not what you would expect from the title. It's about culture, not sex. They swap two women (wives, mothers) between two households. And they always choose two totally different households, culturally. And they don't use recent immigrants to get the cultural differences. I have seen a couple of episodes. Scenes like taking an orthodox Jewish New York woman racoon hunting with her new family in the Appelachians (or wherever). That's real diversity.

And small towns (and the countryside) are the reality, not just big cities, which is all we ever see on the media.

My musical tastes are all over the place (maybe like my monetary views?) A bit of blues, yes, but also punk, folk, metal, whatever.

[reason]

And small towns (and the countryside) are the reality, not just big cities, which is all we ever see on the media.

Not where I come from (Australia). If anything the bias is the otherway around (country towns are OVER represented in the media).

[Scott Sumner]

No I haven't seen the show, but it sounds like fun. When I saw the title I thought of an old Dylan album (one of my favorites), but I guess Dylan was refering to blues musicians that came up highway 61 (if my memory is correct.)

[Patricia Shannon]

Thank you for your kind words about the U.S.

But I don't think you can get a full picture on that kind of road trip. You're not likely to see the poor places from the highway, esp. because being homeless is against the law in many (?most) places in the U.S.

And you might see a nice looking motel, and not see that there are a dozen people living in one room.

When you eat at Waffle House, you don't realize that almost none of the employees can afford a car.