Driving into Roanoke you see the 21-storey Wachovia building imposing itself on the skyline like a gigantic illusion of economic stability. It is the town’s only skyscraper so the bank’s name can be seen for kilometers in any direction. But Wachovia, the area’s fourth-largest employer, is effectively no more. On the day I arrived it was the subject of an emergency rescue, crippled by bad debts.
Just across the street the head of Roanoke’s regional chamber of commerce, Joyce Waugh, was wearing a badge, courtesy of a local charity, saying “I feel good.”
Even as global capitalism comes crashing down all around, you get the feeling that Waugh, like Roanoke itself, is taking it all in her stride.
ILLUSTRATION: MOUNTAIN PEOPLE
Ironically for a valley town wedged between the Blue Ridge mountains and the Appalachians, the local economy encounters few peaks or troughs.
“We feel it but we don’t go to the extremes,” Waugh said. “During the savings and loans [the failures of financial associations in the 1980s and 1990s] we felt it a little.”
Once a railroad town, Roanoke now has no large-scale industry. The hospital, Carillion, is the biggest employer, but small businesses dominate.
“If this is prolonged it will be a real problem,” said William Figaro, head of Grow Inc, who arranges capital investment for small businesses. “But for now the problem’s more psychological. They tend to be growing well enough to sustain the position they are in, but are worried about the future.”
For most people in the town, said Waugh, the financial crisis seems oblique.
“Freddie and Fannie Mae were everyday people’s loans,” she said, referring to the two mortgage companies effectively nationalized last month. “But these other ... [investment firms that are collapsing] ... people don’t really have a connection with that. They don’t quite understand it.”
The local Republican member of Congress Representative Bob Goodlatte, voted against both of last week’s bail-out bills, claiming that most of the constituents who had contacted him were against it.
Figaro said he accepted the bail-out but didn’t back it.
Waugh sounded lukewarm to Congress’ response.
“It seems oxymoronic for this to be the fix. People have a hard time figuring out why the heads of organizations that are making big bucks are walking away with big bucks,” she said.
While Roanoke may not plumb the depths, some residents nonetheless are struggling to stay afloat. Figaro has found he can no longer raise money through banks and is instead finding capital via individual investors, who demand higher interest rates.
“It’s tough getting capital. Some of our members are having cash flow issues. Maybe they were going to get another piece of equipment and now they won’t. They’re putting off travel. It’s off all over,” Waugh said.
But for the time being, only slightly off. At Pop’s Ice Cream and Soda Bar, Anna Robertson has seen more and more people paying with credit cards for ice-cream. Waugh has noticed the restaurants are emptier than normal.
At the small business awards ceremony last Tuesday the mood was neither one of being in denial nor desperate. Home sales this year are down 18 percent; house prices have fallen just 2.5 percent. But the number of houses on the market is also falling, meaning people are buying.
“It’s much better than other places,” said Laura Benjamin, of the Roanoke Valley realtors’ association.
Recently the local insurance agency, Shenandoah Life, had its ratings downgraded because of its exposure to Freddie Mac and Fannie Mae.
As revenues fall the state of Virginia is starting to wield the axe. Tuition fees at the nearby university, Virginia Tech, have been raised by almost 11 percent for undergraduates. The governor is looking to cut the state budget by 5 percent, a plan that will include some lay-offs.
At a Senator Barack Obama campaign meeting last week the former Democratic National Committee chairman, Terry McAuliffe, advised the audience not to look at their market-based retirement accounts for a few days because it would only upset them. One person asked whether McAuliffe thought he would still get a check at the end of the month.
At the bottom end of the scale the pain is clear. Over at the food distribution agency known as the Southwestern Virginia Second Harvest Food Bank they have seen a 9 percent increase in people in need of assistance. More than a quarter of these are in work. Meanwhile the numbers of those donating food was down 12 percent last month, year on year.
“In the past the American dream was about having a nice house and a yacht,” said Pamela Irvine, the food bank’s president. “But nowadays it’s just trying to make it. If you can pay your bills and put food on your table and feel really good about laying your head on your pillow at night without worrying about your debt — that’s the American dream today.”
For many here, even that peace of mind is a distant prospect. One in eight families in Roanoke lives below the poverty line; the town’s median income is three-quarters the national average.
Robin Barbour and Fred Crews are struggling, living in his mother’s basement until her house is sold. Then it could be the street. Crews has a steel plate in one leg and a bad shoulder.
“They talk about the rich and the middle class ... they never talk about poverty. We’re living in total poverty. We have nothing right now,” Barbour said.
“We’ve got no health care, no home, no nothing,” Crews said.
“It can’t get no worse,” Barbour said. “We’ve got to go up from here.”
Both are volunteering for Obama’s campaign, a very first cause for them.
This is the Republicans’ worst nightmare — an electorate galvanized by a declining economy.
“The scary thing is there’s a receptive audience to [Obama’s message of change], because of the economy,” said Josh Johnson, at a Republican volunteers’ gathering last week.
He’s right.
Republican claims that Obama will bring socialism, higher taxes and wealth redistribution have been little match for concerns over plummeting retirement accounts, jobs and the health care that comes with them.
Even in Roanoke, where the full force of the recession has yet to be felt, as the Dow falls, Obama’s stock rises.
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