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Rural America asks: What recession?

Dante Chinni

Posted: 05.06.2009 / 7:37 AM PDT

In some areas of the country they wonder when the recession will end or at least hit bottom. But in one small agricultural community, they wonder what the recession feels like.

Tucked in the northwest corner of the Iowa, Sioux Center seems a million miles away from Fed chairman Ben Bernanke’s improving-but-still-troubled assessment of the US economy on Tuesday. Construction is still happening here, and new houses and lots around the new golf course are still selling – with no drop in prices. The owner of a local furniture store says last year was his best … ever.

America may still be months away from the national economic turnaround, but when economists and journalists hash out the story of what really happened, they may want to look at places like Sioux Center and ask, “Why not there?”

It’s not that this town has been unscathed by the economic downturn. Some light manufacturing has taken a hit. The local Pella Window plant, for example, had to lay off a few hundred workers.

But even that action came with management saying it expected to rehire everyone by September, says Mayor Dennis Walstra. And the foreclosure fiasco never hit here.

What’s more, these trends are true for the larger “Tractor Country” community type that Sioux Center represents. In our monthly look at economic hardship, “Tractor Country” is always among the least hard-hit places.

There are a few reasons for that.

A culture apart

For one, unlike other sectors of the US economy, agriculture has been spared from sharp pain. Aside from a dip in pork prices due to stories about the swine flu, people here say the farming business has been relatively stable.

But another part of the story becomes clear when you drive around town. There are no well-known banks here – no Citigroup or Bank of America – but there’s the First National Bank of Iowa and the People’s Bank, a locally owned institution.

These banks know the people they are lending to, says John Hansen, grain manager at the Farmers Cooperative Society office in Sioux Center. “There are some hard feelings there about the bailouts. They’ve played by the rules.”

A community type that never rode the economic boom over the past 10 years, much of “Tractor Country” is now largely avoiding the bust thanks to the thread of fiscal conservatism that runs through it.

That attitude extends beyond the banks. Sioux Center, and places like it, don’t play by the same rules as the rest of the country, say residents here. Leveraging one’s own assets for most things is seen as a risky move and doing it to “keep up with the Joneses” is seen as foolishness.

“The American dream has gotten overblown,” says Dennis Van Den Berg, owner of Furniture Mart on Main Street. “You should buy a car when you have the cash to buy it.”

Concerns remain

None of this means that people here believe the national economic storm will pass them by completely. Despite the relatively good times, business people and city officials say they are still cautious about embarking on any new projects involving big spending.

They hope the larger economy improves and helps bring back those jobs in light manufacturing. They wonder about the ethanol plants in the area, which suddenly faced a tougher road when gasoline prices dropped.

But the larger point that much of the country missed, residents here say, is precisely that caution. They say it is that steady keel that helped Sioux Center avoid the depths of the recession – or at least has so far.