Report from the Ailing Heartland
I have a fond feeling toward Springfield, Mo., where I have spoken five times in the past 30 years under the auspices of Commerce Bank of Springfield.
This bank has long been an affiliate of Commerce Bancshares of Kansas City, Mo. - a solid, profitable organization now being managed by the fourth generation of the Kemper family. David Kemper, schooled at Harvard, Oxford, and Stanford, obviously loves his work in Missouri.
Strong Bank, Troubled City
Commerce Bancshares is doing just fine and has been named America's best by United States Banker in 1990 and this year.
Springfield is not doing fine. A walk in town on my latest visit revealed about as many stores empty as occupied. Of those with tenants, many have minimal fixtures and sell such things as products made locally by the handicapped.
Jobs are the key.
When I mentioned U.S. employment in my talk, the audience got cold - and extremely serious. And when I asked, "Who drives a foreign car?" not one of the 1,200 guests was willing to raise a hand.
The seriousness of the jobs issue was highlighted when I looked at that day's Springfield News-Leader. The banner lead headline screamed, "5 Ash Grove Teachers Laid Off."
There are ironies in the Midwest. Everyone talks of loss of jobs, and Zenith has just laid off about 1,000 TV makers near town. Yet Toys R Us is a major success. In the fall, when that chain opened a store in nearby Joplin, it was mobbed. People waited in line to get in and spend their money!
Where are the most jobs in Springfield? As is typical of America today, they are in services. The No. 1 employer in Springfield is its network of hospitals. Next is a company that does mail-order sales of fishing equipment.
Typical of the change in job opportunities was the story told by a small-business owner who for years has supplied components to plane maker McDonell Douglas. He still produces as much for McDonnell, he reported - but with new machinery, the number of people needed to do this work has fallen sharply.
Very few people in Springfield seemed to care about the federal deficit. Rather, many wanted tax breaks restored or developed to help their companies cope better.
There was one real estate agent, as there is at every meeting I address, who cursed the Revenue Act of 1986. If people could only get 4-to-1 or 5-to-1 tax writeoffs again on property investments, he said, they would be buying houses and commercial facilities, and his business would be better.
My response - that houses should be built because someone needs to live in them and not just to sit idle so the investor can save on taxes - did not convince him.
The Public-Sector Paradox
But I did get one unusual question. A woman asked why we do not tax the churches to close the budget deficit, since public-service organizations now do most of the social work that churches used to do.
This suggestion, while completely impossible in our religious nation, did bring to mind the key problem today: The local public sector is where our needs are, yet in the past decade the revenue flows have been directed to Washington and the private sector.
This helps explain why David Kemper was so enthusiastically applauded when he announced that a Kemper family foundation was donating sizable sums to the local theater, the local college, and the local public television station. These areas have been especially hurt by the nation's redirection of fund flows to the private sector in recent years.
Still, the public sector's failure to win support is understandable. Most government employees treat us as if flaunting the knowledge that we have no options. No wonder some training programs tell people: "If you want to know how the public feels when you don't care, just think of what it was like going to your state motor vehicle bureau for a license."
(On a walk in town I saw a building with a door whose sign said: Use Other Door. I knew instantly that this was a public office. No private office would move you on so officiously, without at least a "please" or an explanation of why a longer walk was necessary.)
Not the Banks' Fault
So Springfield has its troubles - more than I saw on any of my previous trips.
And there is special significance in the Springfield bank's theme as president Ken Carter greeted his guests.
The theme - competitors trumpeted the same - was that money was available for decent loan requests.
The significance is that no matter what politicians and the media say, this city's economic problems go far deeper than a shortage of credit from the banks.
Mr. Nadler is a contributing editor of American Banker and professor of finance at the Rutgers University Graduate School of Management.