Bryan Caplan  

Creative Destruction: What's Next?

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Everywhere I look, firms are going out of business.  The recession is obviously the proximate cause.  On closer look, however, the recession is just stepping up the bankruptcy time table for firms that were already on their way out.  In the Amazon Age, why go to Circuit City or Tower Records or Linens 'n Things?  How are high-rent brick and mortar firms supposed to compete against mail-order firms that can operate out of Nowhere, South Dakota? 

The answer, for a while, was that peak-earners in their forties and fifties weren't yet comfortable with Internet commerce.  But now the people who were in their twenties when Amazon opened back in 1994 are in their forties, and barely remember the bad old days of schlepping from store to store to find a backpack.

What's going to happen now?  Most people probably accept the economically illiterate view that the empty store fronts will stay empty forever.  They don't understand creative destruction, the free market's phoenix-like ability to re-invent itself.  Something's going to be done with all these idle resources once we get out of this recession.  The question is: What?

If I knew the future of the economy with any precision, I wouldn't be blogging about it; I'd be making it happen.  (Well, actually I might still be blogging because I don't feel like starting any businesses, but the question is moot because I don't know the future of the economy with any precision).   Still, it's interesting to speculate about what creative destruction has in store for us.

Obvious predictions:

1.  Idle resources won't do things that the Internet is doing better all the time.  Retail of standardized goods with long shelf-lives belongs to mail order.

2. With plenty of inventory of both commercial and residential real estate, construction won't revive for years.

3. Retail will focus on what international economists strangely call "non-traded" goods - services and products with short shelf-lives and/or high weight to value ratios.  Maybe we're on the verge of a golden age of restaurants?

4. Low-rent regions of the country will expand to handle Internet orders cheaply.  Caveat: Perhaps rents in "high-rent" areas will fall enough to prevent this.

Am I on the right track?  What am I missing?  Details, please.


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COMMENTS (33 to date)
Sam Wilson writes:

I just got done working at my local Home Depot to make some scratch in preparation for my move to Virginia. One memorably slow sales day, a few of my co-workers and I spent some time sketching out what to do with the floor space if the store shut its doors permanently.

My favorite idea was roller derby paintball. Other good ones included assault course bungee jumping, tactical night ops anti-terrorist training center, zombie combat simulator (this one had the benefit of allowing many of the existing displays to remain completely intact), and go-kart demolition derby.

I asked my wife about it, and she suggested replacing part of the roof with skylights and make a huge indoor botanical garden. Boring.

Of course, laser tag in an indoor botanical garden might be fun.

And it's not just the big box stores. What happens to dead shopping malls? One might potentially transform an indoor mall into office space, but that seems awkward to say the least.

Anyway, I'd guess that, realistically, we might see a surge of whatever pet project the Administration is pushing. Urban wind farms. Solar panel orchards where once stood gallerias. The roof space at least might be put to some good(?) use.

Then again, to me, preparing for the zombie apocalypse is a prudent use of resources.

Troy Camplin writes:

There is also a tendency for there to be huge art booms in places with large spaces at low rent (think: enough space to have a large work space cheap). This happened in London and Berlin when they underwent local recessions. With lots of large spaces at low rent, might we see an artistic renaissance?

Next, what simply cannot be outsourced (isn't Amazon, etc. essentially outsourcing?) will become more dominant. What about the possibility of inexpensive artisanry? Custom-built cupboards, furniture, etc.? Might not a certain level of uniqueness be increasingly desired in the age of Ikea?

Naturally, the outcome of evolution is inherently unpredictable. If we knw what was going to be invented, we'd have invented it. And those new things are what make the economy grow -- and what make government involvement in the economy simply destructive, and not creatively so.

Jonathan writes:

An ever-more blossoming non-profit sector? Or is there too much governmental competition?

Felix writes:

Maybe we're on the verge of a golden age of restaurants?

Second the motion.

Cheap, gourmet quality meals at McDonalds, each store run by a handful of humans in 10-15 years.

Acad Ronin writes:

When the big box stores disappear, some on-line purchasing will be in trouble. The on-line stores that are not linked to the purchase site free-ride on the physical store, at least for large, infrequent purchases. People often need to see the actual object before buying when there are important experience aspects to the good.

dWj writes:

I would think most services require less commercial space per worker than retail outlets. The result of a drop in CRE will depend on local zoning boards; if residential real estate is tepid over the long-term, some of it could find itself condemned and turned into park land. (Or a produce farm?) The roller-derby paintball sounds good, though, and highlights that there are probably a fair number of things we just don't even consider because of the land they would take up that is currently more expensive than it might be in the future.

Stand-alone restaurants on big lots, surrounded by grass, might take a lot of square feet per worker, though.

Matt writes:

I think Sam hit it on the head. The future is in stupid sports and the zombie defense industry.
Chessboxing is on the rise and I think Americans would be very receptive to the idea of amateur hot dog eating competitions. Just ask Andy's.
As for the zombies, there wasn't a run on guns and ammo in this country because people were afraid B.O. would chip away at the second amendment(well... maybe). It's because people want to be prepared for the undead apocolypse.
It's always interesting to see what is going to fill all the voids caused by an economic vaccuum, but the coming years should be especially interesting considering how bad the economy is sucking.
I just wish there was half as much speculation about that as there is about the upcoming football season.

Michael writes:

I think you're on the right track with the restaurant suggestion.

Along that line, I expect a "hipsterization" of many areas. More local bars, more small music venues, niche restaurants and artsy businesses (custom bike shops, etc).

Chris writes:

I'm really skeptical about restaurants. Even low rent restaurants have a hard time making ends meet. The margins are really low.

My guess is entertainment activities. Stuff like Whirleyball, Paintball, Lasertag and whatever other dumb hybrid games people come up with.

You could also include other gaming activities Xbox bars.

Potentially more healthcare services (but only if Obamacare doesn't pass) eventually the market will try to bypass the insurance market and start competing with the CVS/WalMart low price clinic services.

Mark Bahner writes:

Hi,

I think we've already seen enough automation in automobiles to envision, in less than 30 years, there will be cars that drive themselves.

It's amazing to think of the implications of just that one technology. Highways will be able to handle cars going 70+ mph separated by less than a car length.

Perhaps car ownership itself will become obsolete. Why would one ride in one's car to work, and have the car sit there for 9 hours, just so it would be ready when one gets out of work? Why not have a car that's on the go nearly 24/7? I come out of my house in the morning, get in a car that's already warm (in the winter), have it drive me right to the door of my workplace. Then, in the evening, the same or some completely different car arrives right at the door, already cool (in the summer) and takes me home.

Then THAT eliminates the need for parking lots both where I live and where I go to work.

I go grocery shopping every week at the local Target superstore. It's less than a year old, so it's very clean. Very wide aisles, very well lit. All the frozen foods (Target has great prices on frozen foods) are in their glass-doored freezers.

But there's no reason I should have to go to a grocery store to get frozen foods. I could just choose from an on-screen menu, and have the self-driving car or delivery truck deliver it to my door. That completely eliminates the need for the wide, bright aisles and the glass-doored freezers. The frozen food section could be condensed into a completely dark 10 x 10 x 10 freezer, with an automated system that spits out the frozen foods that I order (into the self-driving delivery truck). The whole frozen food section...in fact, the whole grocery section...of the Target store is eliminated.

And the rest of the Target is also unnecessary. The clothing section, auto parts, everything. Needless to say, the mall is in trouble. Especially the mall parking lot.

And the airport parking. Kiss that goodbye! Now, I pay $50 a week to park my car at the airport. When my car drives itself, it either comes home and parks itself, or it serves other people while I'm gone.

Another thing is that old people ~30 years from now will not have to worry about limited mobility from not being able to drive a car. You'd have a bunch of 85-90+ year-old people cruising the interstates at 100+ mph.

Soccer moms will be history. Not moms. And not soccer. But there won't be any need to chauffeur kids to their activities. The car will drive them.

drobviousso writes:

If you thought it was cool to turn an old warehouse into a beautiful set of condos, imagine what you could do with an old big box store.

Service and recreational facilities are probably more likely. Having been a teenager not too long ago, I remember not being able to find anything interesting to do on a Friday night in my suburban-ish hometown.

Niccolo writes:

Acad Ronin,

I think the problem will go down as reliance on internet purchases goes up - as I think reliability will increase in step with it.


Also, I don't see all that many big box stores going away all too soon and I'm kind of pessimistic to what can actually happen with these large eye sores given the really unfixed mall situation in the US.

If casinos, bars, cigarettes, alcohol, and every other related sin wasn't so highly regulated in the US, I could see more to be done with these places. Even an idiot can make money with a bar or a small casino.

Even then, however, these spaces are really expensive with not a whole hell of a lot of attraction to speak of. I fault the existence of it all on the interstate system and the spread of suburbs, actually.

In a suburb, where I lived for my entire life, there's really nothing to do for anyone and no where to do it if there was.

Maybe if these little towns and suburbs were to creep back into the cities we could just see these things abandoned and either bulldozed for farming space or left for the hobos.

Mass writes:

Economists are depressing: Everything is shrinking. Only conservative service sectors like education and health care are safe. First autos, finance, consumer electronics, and IT, now retail.

Ultimately, we need more exports. Americans have spent, while certain other parts of the world hoard currency and slow the world economy.

Retail does need to shrink as a portion of the overall U.S economy, however I can't imagine retail space staying vacant. Lower rent operations should still move in.

dave.s. writes:

I think it costs a lot to box stuff up at Amazon and send it specially to your door, sending a truckload to your local Home Depot and going and getting it (sackrete, 2x4s etc) for your project is going to remain more efficient. So, for long tail stuff, Internet suppliers will rule into the future, but for everybody-wants-it stuff, local retail has a future.

JasonDK writes:

I think more brick and mortar stores will survive than some people think. I know I like to be able to see and handle something before I buy it. I just bought a GPS unit for my car, and I never would have bought one without trying it out in the store first.
Of course, after I tried it out in the store, I went and bought it off Amazon anyway, so I could be wrong!

Troy Camplin writes:

Why is it depressing that everything is shrinking? I think it's amazing that only 1% of the work force is needed to make all our food. That freed up people to make manufactured goods, a sector now shrinking as well, freeing people up for . . . what? And that's the fun part.

cm writes:

Brick-and-mortar stores won't go away for one reason: Shopping isn't just about buying stuff, it's also a social experience.

John Thacker writes:
And the rest of the Target is also unnecessary. The clothing section, auto parts, everything. Needless to say, the mall is in trouble.

Clothing I'm not so sure about. It's one thing for standardized products, but I think people will still want to see how clothing fits for a while.

Maybe not for generic socks and underwear (OTOH, people will need them in an emergency) and maybe not guys for standardized slacks, but in general clothes seem like something that will remain brick and mortar for longer than music or movies.

Auto parts will still be sold, but presumably by facilities that also do the installing. Even the (very nice) Tire Rack online ends up shipping tires to local tire shops who install them for people.

Pointer writes:

"Perhaps car ownership itself will become obsolete. Why would one ride in one's car to work, and have the car sit there for 9 hours, just so it would be ready when one gets out of work? Why not have a car that's on the go nearly 24/7? I come out of my house in the morning, get in a car that's already warm (in the winter), have it drive me right to the door of my workplace. Then, in the evening, the same or some completely different car arrives right at the door, already cool (in the summer) and takes me home."

Oh you mean like a taxi-cab? Heard of zipcar? They already have remote-starters. So all you have added is the auto-drive. Why would single person vehicles that constantly drive around be the equilibrium? Why wouldn't bus size or train size mass transit be more cost effective?

Mark Bahner writes:

"Oh you mean like a taxi-cab?"

Yes, but a taxi-cab is really expensive, in part because the driver alone costs...$30,000 a year? $40,000 a year? (I have no idea what a cabbie makes, including tips.)

Plus, a taxi service has to actually send a cab to your place to pick you up. I live in multi-unit townhomes. There are probably ~15 families per acre. So there are probably 15-20 cars per acre. Right now, except for the morning and evening commutes, at any given time of the day, probably 10 of those cars are parked. And overnight, it's more like 15 are parked. So why not have 1/3rd or 1/2 the number of cars, but have them on the go virtually constantly?

Another really beautiful thing about not owning cars is that the car that comes to your house, or your work, or the place you're shopping, can be tailored especially for the job desired.

I bought a Camry XLS because I wanted the luxury of leather seats and power everything, but still wanted the fold-down rear seats for trips to Home Depot. If I get a car that comes to me, I don't have to make those compromises. When I'm at Home Depot, a cargo van or even a truck meets me at the door. And when I'm going to work, I can have a two-seater or even a one-seater.

And luxurious! Part of the reason I didn't get a Lexus (other than the not having the fold-down rear seats) is that the insurance probably would have been one or two grand a year. If cars drive themselves, auto insurance goes to zero. Plus, there's no need to have bumpers, air bags, crumple zones, etc.

"So all you have added is the auto-drive."

That's like saying all Henry Ford added was the mass production. :-) I tell ya, self-driving cars are going to be huge! Of course, it might take 40 years before all cars are self-driving. But as I wrote, the implications are so varied, it's staggering. Old people don't ever need to worry about losing their mobility. Young people never need to learn to drive (children don't need chauffeurs). Auto insurance and auto deaths are eliminated. Parking lots might be eliminated. Speeds can go way, way up, while the cars drive incredibly close together.

"Why would single person vehicles that constantly drive around be the equilibrium? Why wouldn't bus size or train size mass transit be more cost effective?"

It could be. I don't see it that way, but the whole thing is so huge, it's tough to say how things will shake out. Personally, what I want for my drive to work is a one-seat or two-seat Lexus (or Rolls Royce). And what I want for Home Depot is a cargo van. The only time I can see that I might want a bus would be if I'm going 200-300 miles, and that bus can do 100+ mph. (And there's a car waiting for me when I get off the bus.)

One thing: it's good to have people thinking about how things will be...because lots of big-money decisions (roads, schools, convention centers, ballparks, parking decks, malls, etc.) are being made without giving much thought to how self-driving vehicles could change the future.

Mark Bahner writes:

"And the rest of the Target is also unnecessary. The clothing section, auto parts, everything. Needless to say, the mall is in trouble."

"Clothing I'm not so sure about. It's one thing for standardized products, but I think people will still want to see how clothing fits for a while."

I was just at Walmart on Saturday. One thing that really bugs me about that place (other than the very dangerous turns across traffic that I need to make to get there) is that most of the clothes are for really large people.

Why can't Walmart know my size (from the stuff I've bought from them in the past) and have my size on the shelf when I come to the store? ;-)

Or even better, why can't I just tell my computer, "I need some more dress shirts: a white, a dark blue, and a black"...and have the shirts show up a couple hours or couple days later?

Somewhere, some Walmart has those shirts...because I've bought the exact same thing from the Walmart I went to on Saturday. Unfortunately, my shirts are probably at a Walmart store where some guy is saying, "Why do they just have clothes for really small people?"

P.S. But one thing the Walmart had that seems to have stopped being stocked at Target are Hostess 100-calorie packs of cinnamon cakes. (So why did Target stop stocking them, when they know I like them so much? ;-))

Felix writes:

Pointer:
Why wouldn't bus size or train size mass transit be more cost effective?

Indeed. Auto-drive is one example of free-range computers - a big thing that's on schedule for the next 10-20 years.

It seems to me that free-range devices would be first used in expensive communal applications that can justify early-adapter costs. Bus and train drivers would be automated before individual cars. And, to the extent that buses are huge and infrequent because of the cost of the driver, then one would expect them to be smaller and more frequent before individual cars are auto-driven. A bus that comes every 4 minutes is a different thing than one that comes every half hour to an hour.

But, this is all in the context that competition for cars is often fiber optics.

Felix writes:

Where's the prediction market here?! :)

The financial industry has figured out ways to bundle risk of certain types. Why are there not ETFs for bundles of "high-risk" trials?

Consider that in the world of development, seed money comes from isolated groups of VC's, angels, and established organizations' R&D departments. Why is this funding not bundled? Why, for instance, if you think that one of many cure-for-cancer attempts will be successful, can you not easily invest in a diversified bundle of attempts?

Or, put another way, why are there not financial vehicles that get around the laws that protect the hoi polloi from being burnt on high risk R&D?

Mark Bahner writes:

"It seems to me that free-range devices would be first used in expensive communal applications that can justify early-adapter costs. Bus and train drivers would be automated before individual cars."

I envision automated systems as being gradually implemented. Right now, the Lexus can parallel park itself. A Volvo model not only senses a collision in front, it self-brakes.

I envision such systems becoming gradually more and more sophisticated. Eventually, there might be particular roads where self-driving vehicles could operate completely by themselves, whereas other roads would not allow self-driving vehicles. The car could sense the GPS coordinates. If the coordinates matched a road where automated driving was allowed, the auto-drive would engage. Otherwise, the car would refuse to shift into auto-drive.

bbass writes:

"Or even better, why can't I just tell my computer, "I need some more dress shirts: a white, a dark blue, and a black"...and have the shirts show up a couple hours or couple days later?"

http://www.ravistailor.com/

This is already an option, it's just not popular because no one can judge the cut, fabric, etc. over a 2-d screen.

Actually, maybe retail clothing is the future of these spaces... Prices for clothes in real terms have already been falling for a while, and there doesn't seem to be anything to support it at the still-obscene markups charged now.

Ian Busher writes:

Another possible use would be for production of illegal substances. If there are a lot of vacant spaces that receive little attention from law enforcement it would make a cheep, large and convenient way to grow marijuana or manufacture other drugs such as meth or MDMA. This could lead to lower prices.

I concur that there would be much expansion in entertainment and indoor recreation as well. As well as office space. I would imagine that the rent for one of those buildings would be less than for a purpose built office building, but would cause the rent of all office spaces to decline. Which I imagine would lower the entry cost for most businesses.

Bars would work fine in the places vacated by small retailers such as radioshack, but less so in a wall mart or best buy. In fact even a very big dance club might have trouble with the location of a big box store because of the exteriors of the buildings, the "uncoolness" of the location and the isolation from other business of the same type. Also unless new sources of energy are discovered the price of oil might force these buildings to be abandoned in favor of farmland.

In fact because commuting could become prohibitively expensive business could relocate to former retail establishments near where their workers live.

Mark Bahner writes:

"In fact because commuting could become prohibitively expensive business could relocate to former retail establishments near where their workers live."

This is why it's important to think about the many implications of trends such as automated vehicles.

I see commuting as being made dramatically LESS expensive because of automated vehicles. I wouldn't mind taking a Smart car to work (a 5-mile 10-15 minute commute, not on any freeways):

http://www.jeffnewcum.com/blog/SmartCarJeff.jpg

But I wouldn't want to take a Smart car on freeways, because it's too dangerous. And the Smart car is obviously impractical for hauling stuff (e.g. 2x4's, plywood sheets).

So if could get cars/trucks specifically designed for the tasks at hand, my commuting cost would actually be reduced, because I could use the Smart car for commuting. In fact, I could use an all-electric Smart car for commuting, that would plug itself in when it arrived at my work or home. That would have an incredibly low cost per mile.

Greg writes:

Summarizing a bunch of people's comments, I think you end up with a good summary: arts, sports, parks, and other experience-based offerings. Maybe more cooking classes than restaurants per se. Bigger houses, maybe?

Also, technologies to make skilled workers more productive. Even with the economy in the doldrums, I think there's a very limited surplus of particular skills (think software developers or drug researchers), so there will be further substitution of capital and off-shore labor in those areas.

Kevin writes:

I think the predictions of the death of brick and mortar retail are overblown and that the economic difficulties make such predictions more overblown, not less.

As others have pointed out, brick and mortar stores enjoy considerable advantages in distribution costs. These advantages increase in times of consumer distress as people find they have more time than money (i.e. they heavily discount the cost of their time spent going to the store). That works to encourage consumers to buy small-ticket items from brick and mortar stores rather than online.

For big-ticket items, consumers will be more wary of the creditworthiness of retailers who can't deliver on the spot. Buying promises to deliver things is definitely not recession-chic.

Predictions 2 and 4 make sense though.

Felix writes:

And now for something completely different:

Consider a huge change that has gathered momentum in the last 30 years: That median people have a good deal of their external wealth tied up in things like stocks and bonds.

I don't think that's a trend that has stopped.

Therefore, here's one big winner as the economy realigns: Econlog!

In this new world of plutocrats, people need economic knowledge. What better place to find such information than Econlog? :)

Mark Seecof writes:

You're missing a very important dynamic: old-style businesses will try to get their upstart competitors regulated to death. We have already seen this in auto sales-- the dealership oligopoly persuaded State governments to outlaw Internet car sales-- and in telecommunications-- voice and data carriers compete mainly for influence over the FCC; they hardly compete on customer concerns (quality/price) at all (wireless handset choice has been an exception).

The growth area in business management is regulatory competition. That's when businesses compete by lobbying the government (rent-seeking) rather than along traditional avenues of features, quality, price, branding, etc.

The rapid growth of the Federal government just reinforces the trend. As the government regulates the economy more intrusively, established firms have more and more ability to strangle potential competitors at birth.

We may see a much less dynamic economy in the future as Obamanomics crushes the creativity out of the business sector. The changes you foresee may be long delayed.

John Dickson writes:

Couple of thoughts from downunder:


1) Retailing is an experience – especially for some people. Internet shopping is functional. Just as banks have discovered a high level of resistance to non- personalised banking (and many have started re-opening branches and also partly explains the success of Kiwi bank – with its highly accessible personalised banking facilities) – internet retailing will prove to have significant limitations. Ok for standard goods, maybe (eg I regularly fly wgton- nelson in weekend – entirely booked on internet – standard product etc) but not much chop for non standard goods or where the experience is part of the thrill eg trying on numerous dresses in women’s clothing stores etc.

2) The impact of the internet on lifestyles has been exaggerated somewhat – eg remember all the talk that we would all work from home, demand for office space would shrink etc etc. Well it mostly hasn’t happened – only at the margin. Partly because people highly value the social interactions they get at work, and partly because there is only a limited scope of work that can be done from a home computer. Most work needs interactions with others.

3) So I wouldn’t assume the demise of large chunks of retailing although some retailing functions are going largely on-line or shrinking demand for office space.

4) Warehousing in low cost areas? Well, these low cost areas are largely distant from major markets where the people are. So what about transport costs? These will no doubt go through the roof again once economic growth/demand for fossil fuels resumes. We are in a 20-30 year transition as we move to non fossil/carbon fuels and both fossil fuels and the alternatives will be expensive. So transport costs will factor highly in the equation. So I am not so sure about that one – you’ll want to move as much stuff in bulk as possible eg through ports with customised delivery over the shortest distance possible.

5) I disagree strongly about the residential housing stock being sufficient. All the evidence points to an underlying shortage (which is the main reason why house prices have not fallen in New Zealand like they have in most other countries). There are some underlying drivers here including historically high levels of net immigration, demographic blips in household formation age group, falling nos of people per household unit, demand for larger houses (ironic) but with smaller sections or none, changing housing preferences of the growing older age group, emerging marked differences in the quality and efficiency of modern housing compared to older housing (leaking homes stuff aside) eg insulation, energy efficiency, design. I see a lot of the old stuff being ripped up over the next 10-20 years and replaced with new town house type arrangements.

The Cupboard Is Bare writes:

1. I definitely agree that the Internet stores will continue to increase their share of the market; but some big box stores are finding ways to hang on to their share. If someone is hesitant about ordering online, many big box stores with Internet sites will allow you to return items ordered online directly to the store, saving the customer the aggravation of repacking the merchandise, the cost of return shipping and a trip to the post office. Additionally, if a big box store does not have a particular item in stock, they will place an online order for you at the register (the customer frequently will not incur a shipping charge). So, there are times when I can shop at my leisure from home (I wait 'til they offer free shipping), then when the item(s) come in, if something is not to my satisfaction, I return it the next time I happen to pass by the store.

2. In case you haven't seen this:

http://www.youtube.com/watch?v=qvrc7x3Amps

The last time something like this happened, huge business complexes were renting out space at prices that just barely covered their costs. However, when it came time to renew the leases, the improved economy tipped everything in favor of the landlords, and it came time for the tenants to pay the piper.

3. Feeling the impact of two large malls that were nearby, along with big box stores and strip malls, many of the small businesses in our village began to close their doors. What began to crop up in their place were retaurants, cafes, bagel shops, two sub stores, ice cream parlors, etc.

This turned out not to be a good thing for the remaining retail establishments as most people who were frequenting the dining establishments were generally not interested in shopping.

There was a hardware store that was so old that they had b/w photos of horses tied to hitching posts out in front of the premises. The current owner who had purchased the store from the original family said that it wasn't Home Depot that was taking him out (he had lots of odd parts that Home Depot didn't have), but the fact that most people dining out are in the village only between 12-2 p.m. and again after 6:00 p.m. He had to close his doors.

Now that the economy has tanked, "For Rent" signs are showing up in the windows of those restaurants that have closed, as more and more people turn to the dollar menus at the fast food chains.

4. I have my doubts about that. As a point of reference, if my friend pays $600/year taxes for a home that has more rooms and floor space than my home, and I pay $10,000 in taxes. I can assure you that many high-rent areas can't possibly compete with the low-rent regions.

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