Prairie economics

AMARILLO, Texas-Barack Obama and congressional leaders sold the stimulus bill with doomsday scenarios set in New York, California, and several other states. But what's in it for Amarillo, a Texas panhandle city of 170,000 people who generally go to work, love their families, and love their churches?

Amarillo, of course, is not merely a laid back city in the American heartland. It is home to cowboys, bankers, oilmen, and building contractors. It has a federal nuclear weapons facility, a Bell Helicopter plant, West Texas A&M University, Amarillo College, the "nation's largest family owned bank," and an economy built on cattle, agriculture, and oil and gas. Does Amarillo need emergency help? When it comes to the stimulus bill, what's in it for Amarillo?

I recently sat down with Stu Lake, owner of Lake Construction of Amarillo. Lake's company does everything from faucet repair to home painting to remodels to ground-up construction of new homes. I asked him to focus specifically on his business in the last year, during which Obama (according to the Reuters news service) said we were in "the worst financial crisis since the Great Depression." Lake laughed and said, "Look, we're usually booked two months out right now with jobs, and I think we're only booked one month or a 1½ months out currently; that's about as much change as my business is facing."

Lake said he doesn't doubt that we're going through some type of economic recession, but he rejected the idea that Amarillo or cities like it are desperate. He said, "I don't expect a big decline in my business this year, but not a lot of growth either. It is on people's minds just enough to make them hold off on some of the bigger projects."

I walked away from my lunch with Lake asking myself, "What if Lake's missing something?" Could construction still be strong but retail tanking? So I called on Craig Gualtiere, owner of Roasters Coffee & Tea Company.

Gualtiere has three stores in Amarillo, where he roasts approximately 1,000 pounds of coffee a week. I sat down with him in his newest store on Georgia Street and asked him the same questions I had asked Lake. He expressed concern over the damage the bill will do to small business: "The stimulus package is going to have no positive bearing on retailers in Amarillo or anywhere else. It may help giant corporations, but it's going to kill small business. Small business is going to be taxed to repay monies that are going everywhere but small business."

Like Lake, Gualtiere said he has seen a slight slowdown in some aspects of his business: "We have more customers now than we did a year ago, but the amount of things they buy has decreased. They buy a regular cup of coffee instead of a mocha or a café latte." Other than that, Gualtiere said the business in his new store is right where he needs it to be.

I then called on Ron Boyd, an Amarillo city commissioner and owner of Duncan and Boyd Jewelry, with a store in Amarillo and another one in Austin. Boyd said, "February 2009 sales were up 30 percent over February 2008 sales." I asked him about January 2009, and he said, "About the same as every January we've seen for the last five years."

So I asked Boyd to put on his commissioner's hat and give me some specifics on the Amarillo economy. He said, "December 2008 tax receipts were the most we've ever collected in one month in this city." He added, "More negative comes from the national media than anything else. They have created this view that everything's getting ready to blow up, but it's not, not in Amarillo anyway. Not in West Texas."

Time to mosey over to Amarillo's KVII television station to talk with station manager Mark Gilmour. He said his station had seen strong spending continue through the first two months of 2009, where KVII's advertisement sales "were up 19 percent." I then went to Amarillo National Bank, our nation's largest family owned bank, and sat down with Senior Vice President Craig Sanders. He said housing starts in Amarillo were down 4 percent to 5 percent compared to a year ago, but he said such a "drop certainly wasn't significant enough to qualify this as 'the worst financial crisis since the Great Depression.'"

I asked why the economy was so much stronger in Amarillo, and this region of the heartland in general, than in the rest of the country. He pointed to the "conservative banking principles" regional banks like Amarillo National stuck to when other banks did not: "There will always be people who take loans they can't pay back, but this has happened predominantly on the East and West coasts, Las Vegas, Phoenix, and Chicago. We have a higher number of borrowers here who, even if they lost their jobs, have savings, they have other income options, so they could bridge the gap and repay the loan."

Sanders also said that part of what Amarillo National does for its customers "is try to contingent plan" before the loan is issued, in order to "prepare for life's unforeseen events." He mentioned that Amarillo National rejected all bailout money because it didn't need it, and because taking the money equates to giving the government control over the bank.

Sha Gearn, Amarillo National's vice president in agricultural lending, concurred with Sanders that there is a slight slowdown in Amarillo, which he views as a necessary market correction following the record increases midway through 2008. He pointed to how corn prices that were around $7 a bushel in July 2008 have now returned to $3.50 a bushel. "We saw the same thing with oil and gas, and where crude oil was at $140 a barrel, it's now at $35 a barrel."

Gearn believes this correction will "eventually trickle down to Amarillo to a greater degree," but he noted that "we don't need as great a correction because we didn't see the inflated prices here that were seen on the East and West coasts, in [Las] Vegas and in Florida." He said Amarillo's unemployment has risen, "but it hasn't spiked," and he attributes that to common-sense economic practices: "We run our own little pattern in the Texas Panhandle, and it has a lot to do with the people here. We haven't had a huge growth in population, but we've seen enough increases in dairy, and oil and gas, to maintain steady growth."

As Gearn spoke I thought to myself: "But what if these positive things about Amarillo's economy don't really matter? What if Amarillo is simply the exception in a nation of cities that are failing everywhere else?" So I asked around to learn how things are going in Oklahoma City and Lubbock, and found the same positive responses for those two cities as well.

The view from lots of people here in Amarillo is that bad aspects of our current economic slowdown were exaggerated in order to get a stimulus bill through. While times are tough in parts of the country where the banks and local governments loaned and spent without common-sense restraint, Amarillo and other West Texas cities are chugging right along and would rather not have the federal government giving them money or telling them what to do.

Here in Amarillo we have people who know what it's like to raise the capital necessary to start a business and who also have the expertise to keep that business solvent. These are the people who will pay the taxes to fund the stimulus bill, although they will receive no benefit from the bill they're funding. What's in the stimulus bill for Amarillo? Stu Lake of Lake Construction spoke for lots of folks when he said, "Nothing at all."

-AWR Hawkins teaches history at West Texas A&M University