David Weidner's Writing on the WallRoad trip across economic America
7/10/12 6:29 AM ET (MarketWatch)
SAN FRANCISCO (MarketWatch) -- Two weeks ago, I left New York City to relocate to the West Coast. But, as some of you know, I didn't take the easy way and fly the friendly skies.
One minivan, two daughters, 10 days, 15 states and 3,668 miles later, I arrived with a firsthand, if cursory, look at the "real" America between the coasts.
In many ways, it is an America battered by the financial interests from the city I left. Driving north of Las Vegas, we saw miles of newly constructed homes. Many of them seemed to be unoccupied or had "for sale" signs out front.
It is also an America shaped by technology innovated on the coast to which I was headed. At a service station in Tuba City, Ariz., a voice on a loudspeaker beckoned me to join the company's
"No relationship is official until it's on Facebook," the looped pitch said.
Unemployment was palpable, but more striking were the working poor and the debt burden so many people seemed to be facing. In Louisville, Ky., a lawyer advertised bankruptcy services with a sign reading "Yes you still can!"
We stopped at a motel in Cambridge, Ohio, and waited in line to see the clerk. A father and son truck-driving team were sent away after the father's credit card was declined. He's not alone. Credit-card default rates have been dropping but still remain historically high at close to 4.5%, according to S&P/Experian Credit Default Index.
At the same hotel, between 50 and 100 road workers were staying. Black, white and Hispanic laborers grilled and relaxed by the pool, some still wearing orange safety vests.
Work along Interstate 70 had traffic crawling. Under the American Recovery and Reinvestment Act, better known as the 2009 stimulus bill, Cambridge received four contracts worth a combined $729,814, but much of the work from nearby Columbus -- 309 contracts valued at $3.34 billion -- had spilled over.
The workers were the most obvious evidence of the stimulus bill, but there was more: The motel staff, the restaurants, the local supermarket and convenience stores were seeing a benefit, too.
Ohio, by the way, was also the most populated state with the worst cellular data service on the trip. Can you hear me now,
By the time we hit Kansas, the heat wave that swept most of the country was in full swing. At Bunker Hill, the Weather Channel had the temperature at 113 degrees. The heat showed in the yellow and brown fields. Even the still-green corn seemed to be wilting -- empirical evidence that we're experiencing the worst drought since the U.S. started measuring drought severity 12 years ago.
Not unrelated, when we arrived in Colorado authorities had closed roads leading toward the Waldo Canyon wildfire. And when we stopped in Gunnison, Colo., the motel lobby was full of families displaced from their homes. Insurers have $110 million in claims, but actual losses are expected to be much higher.
But the economic recovery -- if there is or was one -- seemed to skip over Nevada. The Charleston Preservation neighborhood in Las Vegas and areas around it still have some of the highest foreclosure rates in the nation. One in 168 homes was served with a foreclosure notice in May, according to RealtyTrac. Housing prices are 60% below their 2008 highs.
As a result, everyone seems to be moving. Everywhere there were pickup trucks loaded with personal belongings: mattresses, furniture, appliances and more. More than 12% of the workforce is unemployed, according to the Labor Department, and that's actually better than the state's 15% rate last year.
Nevada could have used more of that stimulus money. It only received $986 million. A $217 million education grant created 4,158 jobs, but Nevada is badly in need of construction projects. It's one reason why Ohio, helped by the auto-industry bailout, has an unemployment rate that's half of Nevada's.
The last state on the trip, California, is really two states economically. Everywhere except the Bay Area around San Francisco, the economy is depressed.
Fresno's unemployment rate is a jaw-dropping 14.9%. Colusa County in the Central Valley has a stunning 19% rate. Even Los Angeles's unemployment rate is 11.9%.
By contrast, Bay Area unemployment is relatively low, around 6.5%, thanks to the profitability and success of Silicon Valley giants like
Home prices in Stanford, Calif., have recovered to bubble levels. A house in western San Jose that sold for $728,000 near the top of the bubble sells for $681,300 today, and prices have risen 3.4% in the past year and 3.3% in the last quarter, according to RealtyTrac.
By the end of our trip, we had learned a few things.
First, most people would rather talk about Tom Cruise, Katie Holmes and Suri than Bob Diamond, the chief executive of
Second, everyone who has a job seems grateful to have it, from the cashier, to the waitress, the farmer, the maintenance man and the reporter on the road.
And, finally, it seems the nation could really use a reset button. So much of the economic hardship has to do with money spent before the financial crisis that has to be repaid now.
That, of course, leads us back to the financial system -- and Wall Street, where the trip started. How far do we have to go to get away from that?
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