Many Sense the Good Times Slipping Away

New York Times, 18 Jan 2001

JANESVILLE, Wis., Jan. 15 — When he glimpsed the stone behemoth rising out of the prairie here in southern Wisconsin last fall, Paul Terpstra thought it was a new grammar school, or maybe an apartment complex. "And then I realized, `Oh my goodness, it's a single-family house,' " recalled Mr. Terpstra, a 40-year-old engineer. "And I thought to myself, `Can this extravagant spending go on forever?' "

But just as a glorious autumn slipped into slap-in-the-face winter, Mr. Terpstra has sensed the economy starting to grow cold. Stocks have tumbled, growth has slowed, and companies are cutting back. An old mill here is moving much of its production overseas, and just across the Illinois state line, 10 miles or so to the south, the Motorola plant announced today that it would lay off 2,500 workers.

Add to all that the uncertainty that accompanies a changing of the guard in the White House, and many Americans now seem to be growing skittish about an economy that once seemed unstoppable. "It was just too good for too long," said Mr. Terpstra, who had stopped at the library on Main Street to check out a book. "Now you can feel there's an edginess."

Janesville, a middle-class town of 60,000, is the home of a General Motors plant that makes the Suburban sport utility vehicle, a prime symbol of the fat, hard-charging economy. On a shipping lot near the plant, a sea of shiny new vehicles reflects the nation's voracious appetite, and its ability to foot the bills, at least for now.

After taking prosperity for granted for years, people in Janesville say they can hear the economy's brakes starting to screech. "We've been overdue for a pullback," said Raymond Dooley, a retired farmer and insurance salesman here. "We've forgotten that it's natural for the business cycle to swing both ways. Let's just hope it's not too rough."

In much of the country, people are just now seeing signs of economic slowing, and starting to voice fears about a recession. But for workers in the dot-com world, brutal reality hit months ago. Richard Friedhoff, a 45-year-old technology consultant who works in Silicon Valley, said high-flying dreams had given way to a hard- nosed pragmatism there. "You used to have everyone in their third year of college flying out here with a business plan with aspirations of becoming fabulously wealthy by age 30," Mr. Friedhoff said. "Those days are over. There is zero interest in people without credible track records, solid ideas and management skills. No one even wants to be caught talking to such a person in a Starbucks."

To be sure, there is scarcely a consensus that the economy is headed for the tank. President Clinton, who views prosperity as a gemstone of his legacy, says the country's economic foundation remains rock solid. But President-elect George W. Bush has been talking about the slowdown for weeks, conveying a none-too-subtle message that he should not be blamed for any economic distress early in his administration.

To some Americans, the reality falls somewhere between the roses and the rocks. Jennifer Robischon, co-owner of an art gallery in Denver, said some economic vagaries were to be expected, given the changes brought by an election year. "We're not running for the hills," Ms. Robischon said. "The stock market is reflecting a political year." She added, "They seem to get scared quicker on either coast than in the middle of the country."

Frightened or not, plenty of people in Janesville say they are bracing for leaner times. Jason Dowd, 30, who stays at home to care for four young children while his wife manages a restaurant, said he and his family had started to cut back on discretionary spending. They bought much less during the recent Christmas season than a year ago, he said. "There's just a lot of uncertainty now," said Mr. Dowd, expressing concerns that the new president would chart a different economic course. "People were used to Clinton. They felt comfortable. Now they're not so sure what Bush is going to change, or if it will work."

Of the Bush tax-cut proposal, which the president-elect has most recently promoted as insurance against a recession, Mr. Dowd was skeptical, saying that whatever version emerged from Congress would most likely favor the affluent. And a Republican president, he said, is likely to tolerate higher unemployment rates.

Not everyone, though, saw a slowing economy as all bad. Wendy Zanoni, a 33-year-old customer service representative for a utility company here, said her family was counting on even further drops in interest rates. "We're waiting to refinance the house," Ms. Zanoni said.

But for Mike Fertal, a student searching for part-time work in Chicago, the hunt has suddenly become tougher. "I can't find a job," said Mr. Fertal, who had stopped at Marshall Field in Chicago to file an application. "I've gone to Armani, Kenneth Cole and some of the other independent stores. All of them are cutting back on their part-time help."

Kelly Skinner, 29, of Dothan, Ala., said she and her husband, who has just completed his residency as a doctor, were trying to pay off credit-card debt and putting off "life-changing decisions," uncertain what the economy would look like six months from now.

Most people say they are not sure about the cause of any slowdown. But they tend to agree that Americans cannot forever buoy the economy by spending to the hilt. And they say people have become more than a bit spoiled. "We've gotten to the point where people expect that the world owes you a great big house and a great big fancy new car," said Mr. Terpstra, the engineer. "For a while, almost every new house was being built with a three-car garage. That wasn't enough. Now they're building them with four-car garages."

He shook his head and managed a pained chuckle. "Is that what we really need?" he said. "In this country, we pay so much attention to image that sometimes we lose sight of reality."

-- Andre Weltman (aweltman@state.pa.us), January 18, 2001