I spent Thanksgiving in Allegan, Michigan, a town of about 5,000 in Southwest Michigan. It is nestled between Kalamazoo and Grand Rapids near Lake Michigan. It is the county seat of the county of Allegan, founded in 1833, making it among the older American settlements in the state of Michigan.

The town grew because of the timber and other natural resources in the area. Located on the banks of the Kalamazoo River, which flows to Lake Michigan, big timber mills sprang up in town. Town history says that Allegan was instrumental in rebuilding Chicago, with its timber shipments, after the Great Chicago Fire.

Today, the town has been a bit left behind. It isn’t on Lake Michigan so the gentrification (or Starbuckification, some might call it) has passed it by. Sagautuck, Holland, and South Haven all became hip and cool. Yet Allegan has a fine collection of civil war era homes in its downtown and a cute, still intact downtown with antique shops, a five and dime and a few restaurants. Hollywood could film movies in the downtown. There are no Gaps, Starbucks or Banana Republics there (only a Pizza Hut, that has been there for about 20 years.)

Oh, and Kay’s Beauty Boutique.

My grandmother and mother had hair appointments the day after Thanksgiving at Kay’s Beauty Boutique. My grandmother got a shampoo and a set.

Price? $12

My mother had a shampoo and a cut.

Price? $15

Kay, a woman in her late 40s or early 50s, has been in business for a few decades and the beauty boutique looked it. But it was homey, with a small tv at the front of the store so that customers could catch Ellen, The View or Oprah. Kay also keeps several bookcases of books for her customers to take, read and exchange. And they do. Kay is quite the expert on the latest bestsellers. When the books get a little old, the librarian stops by from the Allegan library and takes them to add to the public collection.

Who better to know what is going on in Middle America then Kay?

The largest employer in Allegan is Perrigo. Perrigo is the world’s largest generic drug company. Perrigo is listed on the Nasdaq (ticker PRGO). you know that Walgreens brand toothpaste or Wal-Mart brand vitamin you buy? Odds are it was made by Perrigo.

The company has long roots in Allegan, having been founded there in 1887. It employs about 3,000 workers in Allegan and another 2,000 in overseas operations.

Another big employer is Haworth, an office furniture and workplace architectural interior company. They are headquartered in Holland, 16 miles to the north, but have other facilities in the area. The company surpassed $2 billion in sales in 2000. They are still privately owned.

No recession to be found in Allegan

When asked how the local economy was doing, Kay said that the downtown businesses were having their problems (several storefronts were empty) but that wasn’t a cause of the local economy but more a cause of the wrong stores in the spaces. One recent store closed because the “prices were too high” for the area, she said.

Allegan’s median family income is $45,000 with 11% of families living below the poverty line. There are ritzy houses on the shores of Lake Allegan, but you can still buy an older historic Victorian for $110,000 near the downtown. And there are older, not so nice homes, for sale for even less.

Kay said that Perrigo was doing great and that there were no signs of a slowdown at that company. Same with Haworth. Everyone I talked to seemed to know someone at Haworth and who loved it. No one was worried about their job security.

Michigan continues to struggle

Allegan seemed to be doing alright, but people there were in agreement that Michigan, as a whole, was not doing well. Young people are fleeing the state. In general, the job market is horrible. The worst of the pain seems to be focused on the eastern part of the state however (near Detroit.)

The housing market is bad everywhere

One thing Kay did concede was that the housing market was awful. There are simply too many homes on the market. But, as she put it, “it’s like that everywhere.” It’s not an Allegan specific problem.

Out of a town of 5,000, there are about 540 homes on the market. That is an extraordinarily high number. Several have been on the market for years. One house, down the street from my Grandmother’s, had been on the market for over 2 years before they recently finally found a renter for it.

Black Friday seemed slow

We went to Holland on Black Friday (population of 35,000 in the city limits or 95,000 in the metro area) that is north of Allegan. They have a small mall, a Wal-Mart, Kohl’s, and Sam’s Club. We went to the Sam’s Club and were stunned at how dead it was. Granted, we did not go early in the morning (we got there at 12:30 pm) but it pretty darn dead inside.

We didn’t go into the mall, but we drove by the parking lot (on both sides) and it wasn’t full to the brim either.

Again, maybe we simply missed the mad rush of the doorbuster crowd.

Or maybe not.

I was surprised at how calm the Holland shopping scene was. But this was, after all, one of the most depressed states in the country.

Could it be that the Michigan consumer was finally pulling back? It appeared so to me (in my non-scientific observations.)

Still, for those thinking the “end is near” on the US economy, I didn’t see that in small-town Allegan in a state with the highest unemployment rate in the nation. There was no recession in Allegan.

Not yet, anyway.

Perhaps the US economy is stronger than the “experts” think.

I was in the Bay Area for a week recently and got a feel of the lay of the land in Silicon Valley and San Francisco. For those of you who don’t know, I used to live there (on the Peninsula and in the City). I was there for the dot-com boom, the bust and left just as things were picking up about two years ago.

You could tell by the feel of the city, that the boom is back. All of my friends are now employed (something not that common even three years ago) and all of them told me the job market was “great” or “the best they’ve seen in awhile.” Salaries are starting to inch higher.

The housing market is starting to wobble on the outer fringes of the Bay Area now (in Solano County and Contra Costa County.) But you don’t feel the housing downturn in the city yet. Sales are slowing even as prices stay sky-high.

Where you do feel the boom is in the rental market. When I first moved to San Francisco in 1998, when you went to an open house for a rental apartment, you had to literally take your resume with you to “convince” the landlord to let you rent their place. It was that crazy. That all went away with the dot-com bust. Instead, landlords were desperate to get you to rent and rental prices plunged.

Now, the city is back to hundreds of people showing up at open houses for apartments and apartments renting in only a day. A friend just searched for a not too cheap two bedroom around $3500 (with parking) and had very little to choose from. What was out there rented nearly instaneously.

So far, I haven’t heard of stories of people living in a bedroom in a group house in Silicon Valley (which was common during the dot-com boom because space was so scarce) but in another year, who knows?

The “average” worker is finding herself completely priced out of even a studio in the city- where prices have gone up to $1400 or $1500 in even “iffy” neighborhoods like the Mission.

I also saw other signs of a booming economy. There were new restaurants and the stores were crowded at the new indoor Mall near Union Square where a shiny new Bloomingdales didn’t try to hide the fact that they were selling $1000 dresses on every floor. The downtowns of the towns on the Peninsula also seemed healthy. In downtown Burlingame, small boutiques with upscale goods seemed to be making it right next door to the big chains like Ann Taylor.

Yes, the money is once again flowing in the Bay Area.

Yet, there were still the usual number of homeless. And the murder rate is scary high in both San Francisco and Oakland for an economy that is this good.

But otherwise, you can feel the prosperity in the air there. And that’s a good thing. Outside of the housing downdraft, it is all systems go.

And you know what they say: whither California, whither the rest of the nation.