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Tuesday, July 24, 2012

It is cheaper to repair than replace?

At one time the statement "It is cheaper to repair than replace" was true about almost everything.Not so anymore. Why is that?

Prior to the 1980's we repaired almost everything. There wasn't a large community that did not have a radio and television repair shop. I remember taking things to be repaired and walking around looking at all the tubs and even a few solid state boards. I even dug a couple trenches for the satellite lines, for the dishes, the really big ones.

Some time in the late 70's or early 80's there was a paradigm shift. It was slow to take over and actually started much earlier. People stopped going to the shoe repair man. Most shoes were no longer made to last. The tops wore out way before the bottoms. The components of electronics cost more than the product itself. If your television went out you bought another without any thought of having it repaired.

Slowly the shoe repair shops, the watch and clock repair shops, and yes the radio and television repair shops started closing. These small business owners are all but extinct. Recently I had a window air condition unit go out. I reacted the way my grandfather would have. I started calling repair shops. I left a message on every answering machine asking if they worked on window units. I called nine shops. Only one called me back. I explained and asked if he would work on a window unit. He said he would if I would bring it to his shop. I told him that was what I expected.

When I unloaded the unit, we started talking. He said that he didn't see very many window units but was willing to try. He checked out the unit and found that the control panel had gone out, so he pulled out a catalog and looked for the the part and found that it would cost $275 to repair. When he told me that, I asked what the most expensive part was and how much it cost. He looked up the compressor and it also was around $300. The unit only cost about $298. We rigged it to work and it works great.

The generally accepted principle is when the cost of repair is 50% of the cost to replace, you would replace. Keeping that in mind when the cost of repair is 90% of the cost to replace there is no reason to even take repair into consideration. This is a truly sad state of affairs.

Now my question is, how does a single part cost as much as the whole? Answer: It isn't possible. That tells me that the culture has had such a violent change that no companies are producing aftermarket parts. This is an intentional move to push people to more consumerism. Diminishing our ability to be frugal and encouraging credit use. Think about what you do and remember to "Keep It Rural".

Wednesday, July 18, 2012

Victory/War Gardens revisited

First a rural economist definition - supply and demand - the more of something people want available for sale, the lower the price. Conversely, the fewer of an item people want to buy, available for sale the higher the price. This is an over simplified definition. I have left out several considerations, but it is sufficient for the discussion here.

If you have anything to do with the grocery shopping in your household, you know how much food prices have gone up. Even if you have nothing to do with the grocery shopping you may remember the news story a short time ago about the price of peanut butter going up 50%. I just heard this week that corn will be going up 4%. This means that everything from corn flakes to beef will be going up as well. While at the grocery store the other day, I was looking at the steaks and was surprised that T-bone steaks were $11.79 a pound. After seeing that I did some research and found an average of $11.68. That was astounding. I being a bit of a nerd decided to do a little math. A person making $35,000 a year after taxes, insurance, and a small 401k contribution around here brings home about $10.84 per hour. That means that this person would have to work 1.07 hours just to pay for a single pound.

With the increase of food imports we are once again weakening ourselves. We are putting our health and well being in the hands of others. We have gotten to the point where we do not know what is in our food. Genetically modified foods are growing. More harsh pesticides are used in other countries. Different herbicides are legal for use in other countries.  We really need to regain control of our own food supply.

Now I can hear a lot of you thinking what does all of this have to do with a Victory/War garden. Well here we go. The National War Garden Commission and campaign was launched in 1917 by Charles Lathrop Pack a multi- millionaire timber man. The reason war gardens were commissioned was because  food production had fallen dramatically. Men who would normally be working the fields were out fighting the war. The idea was that food production could be increased without having to utilize existing agricultural land, labor, and without additional use of transportation.  This campaign promoted the use of private and public lands. The result was over five million gardens. Estimated food production of food stuffs exceeded $1.2 billion and accounted for 40% of food production during the wartime years.

Admittedly the government has not been advertising, encouraging people to use what land they have to produce food, but there is a growing undertow of using available land for food production.  Today we would not call them war or victory gardens.  Today we would call them survival gardens.

There are community gardens springing up all over the nation. I just heard today that Baltimore is making over 20 acres of vacant lots available for food production.  The growth of locavors (we will discuss this more later) is extremely encouraging. The more we can produce for ourselves the less we will have to rely on others.

It does not take much to understand that everything you grow you do not have to buy. The more people that produce part of their own food the lower the demand on the food industry therefore the prices will go down. Savings for you and your family and eventually for everyone. Plant what you can where you can.  Find a local community garden.  Buy food at your local farmers market. Support your neighbors, community, and country.  Let us "Keep It Rural"

Sunday, July 8, 2012

Why The Rural Economist

I have been facinated by economics since in high school. I was blessed to have an excellent teacher. He took what many people think to be one of the most boring subjects and made it very interesting. Thank you Mr. Green.

When ever you talk to most people about economics they think about money, the government, and trade. Some people even think that economics doesn't really affect their lives. This is not these people's fault.
The Mirriam-Webster dictionary defines economics as a social science concerned chiefly with description and analysis or the production, distribution, and consumption of goods and services.

Dictionary.com the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind.

Answers.com the social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economies or economic systems.

Economist.com the "dismal science", according to Thomas Carlyle, a 19th-century writer. It has been described in may ways, few of them flattering. The most concise, non-abusive, definition, is the study of how society uses its scarce resourses.

The last definition is the only one that does not scream money. All of these definitions are at least partially correct, but all seem so far away. I have found if something is not interesting, or if I do not see a clear connection to me or my family I am not interested. I believe many of you are the same way.

Of the definitions above the last one is my favorite, but I would like to expand that definition a little.

The Rural Economist definition of economics: the study of how and why an individual, family, group of people, city, county, state, or nation utilize their available resourses.

All of your resourses no matter if it is money, time, effort, talent, or thought, are economic resourses. All resourses are mutually exclusive. To explain, if you have $10 and you decide to use that money to buy ice cream, that money is gone to you, you can no longer use that money for anything else. Everyone would agree that what a person does with $10 is an economic decicion. The same thing applies to time. You have a day off; you have a decicion to make. You could go swimming, biking, work in a garden, fishing, or watch tv all day. Once you use that time you can no longer get it back. While swimming and biking have a physical benefit and gardening and fishing can have a positive impact on your grocery bill, all of the possibilities are economic choices. This is using your resources, this is an economic decision. Which ones are benificial are dependent on the individual. This is individual economics. When you increase the population reviewed, we can create a clearer picture of economics. I believe the more people that understand these principles, the more power we have over our own situation.

That is why The Rural Economist. Please check back. I will be covering divers topics from a rural economic point of view. Thanks.