Hyper-ventilation over the economy has spread from Wall Street to Main Street to Pennsylvania Avenue, and most of it is well-placed. The United States is bleeding jobs, credit markets are still bound up, home prices continue to crash and no one seems to hold the silver bullet to make it all go right.
Cast against that backdrop is Buena Vista County, Iowa, (pop. 20,000) where we wait for the other shoe to drop as the local economy appears to be chugging along as it always has. The farm economy was good in 2008—tremendous through the first half and slacking off in the second. The banks are making loans to good customers. Property valuations are up slightly. The two meatpacking plants are running strong. The car dealers tell us they’re doing okay. Downtown retailers had a good, if not great, holiday sales season.
Our anecdotes are generally confirmed by Chad Wilkerson of the Kansas City Federal Reserve Bank. The economist recently reported that the housing bubble explosion was not felt along rural byways because housing values in the hinterland did not rise as they did in urban areas. Rural housing markets were stable, not up nor down, in 2008. If only San Diego, or even Des Moines, could have such problems as a flat market.
It has been well-noted that metro areas lost tons of jobs in the third quarter. Rural areas added jobs in the same period, according to Wilkerson. Iowa’s economic index eroded considerably since October, but the heaviest damage still appears to be in urban areas where manufacturing losses have been the deepest.
We are hardly walking in tall cotton. The overall economy is holding rural wages back. 2009 is likely to be tighter for ag production than last year was. We could, unfortunately, catch up to the rest of the economy in the first half of this year. But nobody really knows.
A banker from a nearby town quipped that his burg has been in a recession for the last century, so it is insulated from the current crisis. He’s more right than wrong. Rural Iowa is stuck in a low-wage, low-margin economy of row crops, livestock production, meatpacking and service jobs—average wage in our town, $12 per hour. Few are getting rich but fewer are diving into hard poverty.
If you are inundated with constant noise about the next Great Depression you can start to believe that you are living it—even if you’re not. We must be cognizant of challenges while keeping things in perspective. Things are okay in Buena Vista County.
Art Cullen is editor of The Storm Lake (Iowa) Times, where this appeared. Email: times@stormlake.com.
From The Progressive Populist, Feb. 1, 2009
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