Last October, staff writer Art Pine visited six cities across the country to talk to people about the economy and how they were coping with the problems it created for them. Last month, Pine revisited the same cities and interviewed many of the same people. The results of his trip are outlined in a series which began on Aug. 3 and will end on Aug. 10. Today Pine continues his profiles of individuals and couples and the changes the recession has made in their lives since October.
When Verne Prohaska heard last year that the economy was going to be heading into a recession, his first reaction was to yell, "Whoopee!"
The 41-year-old central Iowa farm implement dealer remembered the big surge in farm income during the 1973-75 economic slump and was looking forward to a repeat performance.
"I'd like to have had another one like it," he told a visitor last month.
But, ironically, this time Verne Prohaska turned out to be a victim, rather than a gainer, when the economy turned down.
This week, Prohaska closed down his 10-year-old, $1.2 million-a-year Allis-Chalmers dealership and went back to full-time farming. "I wanted to get out anyway," he insists. "This helped me make up my mind."
What knocked Prohaska out of the business was last spring's double whammy of sharply depressed farm prices and record-high interest rates, which left farmers cash-short and unable to borrow.
The squeeze, which hit just at the start of the spring planting season, brought the farm implement business to a virtual halt and put Prohaska's operation into the red.
"If I kept this up another year, I'd be flat broke," he said last month. "Last year, between January and March, we sold 27 skid-loaders -- all to farmers. This year we sold three, and two of these went to big cooperatives." f
To Prohaska, there's no doubt who's to blame for his own troubles and the soured economy: "It's the government," he says flatly.
Prohaska traces the slump in farm prices directly to President Carter's Jan. 4 order imposing the Soviet grain embargo. "It started the day of the embargo, just as plain as day," he says. "Just like a light switch."
The sharp run-up in interest rates also resulted from government actions, Prohaska believes. By the time the president's March 14 credit-controls package came, he says, "There wasn't anything left to feel.
"I'm not 100 percent sure what I would have done instead," Prohaska concedes, "but as far as I'm concerned, I'll never go into business for myself like that again. There are too many government regulations. I'm just fed up."