By Laura Short
It used to be that small towns dotted the American landscape. These towns most often comprised of a Main Street with a couple of churches, a Woolworth’s, a diner or two, and a tavern. There’d be a grocer’s, a Ladies Shoppe, a bank and/or savings and loan. Of course, you’d have local government buildings like the courthouse and police station; and then the headquarters of the largest local employer. There were schools, football and/or baseball fields, gas stations, and maybe, a bus stop or rail depot… depending on the local industry. Most of these towns were self-sufficient. The Big City wasn’t too far off for important needs. And, depending on the size of the local industry, a hospital and a country club as well as parks and recreation, movie theatre, even a place for traveling plays and musical acts, might be available. It helped lure potential employees, these amenities. It also helped get them to stay and to invest in the company as well as the community. Put down roots. This was The American Dream, writ large; a place where commerce and society intersected. The Company invested in the health and wellbeing of The Local Community whilst The Local Community invested in the health and wellbeing of the The Company. In 1947, Forbes Magazine wrote an article about such a place, albeit, from their bias and written against a post-war context. The town was Lancaster, Ohio. The employer was Anchor Hocking Glass. It’s a town I’ve been through once or thrice as I’ve traveled in and around Columbus. It’s not so far from where I live in Dayton… and it could be written about pretty much any small town, anywhere in or out of “flyover”country.
Not any more.
I realize I am painting very broad strokes here, but looking back, I can find two things that have aided and abetted the demise of Lancaster, Ohio as well as other American Small Towns with its attendant employer and civic inter-responsibilities: Greed and, well, Greed.
Currently, I am reading Glass House: The 1% Economy and the Shattering of the All-American Town by Brian Alexander. I’ve also read Hillbilly Elegy: A Memoir of a Family and Culture in Crisis by JD Vance and The Unwinding: An Inner History of the New America by George Packer. Oh, and Factory Man by Beth Macy (sense a theme?). I live in an area of Ohio that has been hit (slammed, trounced, overwhelmed, steam-rolled…) by the opiate/heroin addiction epidemic and I want to understand why. Three of these books concern themselves with Ohio business and community because Ohio is about as rusty as a rust-belt state as they come. I’ve lived here since 1993, and I’ve seen countless legacy-companies move out of Ohio for greener pastures either in other companies (such as my Husband’s company, Standard Register) or other states (such as NCR moving to Georgia) or overseas (such as auto companies moving to Mexico). I’ve seen the after-effects of economic policy as small and not-so-small towns have either stopped or, because of massive job-losses, been forced to stop investing in themselves through much-needed infrastructure: school levies, street improvements, local fire and police, and so on. And as multi-national corporate giants have taken over these small-town employers, and either covertly disdained the small towns or actively discouraged their top-level employees from moving to these small towns, the symbiotic relationship between town and employer has crumbled, leaving behind less wherewithal, less interest, less caring for and about one another. One harbinger I’ve learnt to look for is how much United Way donations do these multi-m/billion dollar companies give to the local charities? Um…yeah.
It’s not just about capital investment, though. To me, the Father of all this demise seems to be Milton Friedman. He never really got it, about the real relationship between employer and employee, did he? His later recognition as “the guru of global economic policy” in the 1970s and following (including becoming a Nobel laureate, but NOT for business economics), pretty much put an end to any corporation caring anything at all about the people they employ.
Anyway. Greed. Friedman, in broad terms, gave America the tools to become corporate raiders. He believed and codified the First and Only Commandment of Business (the “Friedman Doctrine”) as written in a New York Times Magazine article published in September of 1970: …that business has only one social responsibility and that is to deliver profits to shareholders. Period. Full-stop. End of story. Businessmen who cared about anything other than that, such as their employee’s well-being, the environment, the local community in which they were based, were “preaching pure and unadulterated socialism”. This, for Friedman, was more than bad business. This was akin to communism; this was unpatriotic, un-American.
This was the man who was Ronald Reagan’s economic advisor.
So. Along comes the beginning of the corporate raiders, such as Carl Icahn who thought American businesses, such as Anchor Hocking, were flabby; they were not margining themselves to be as profitable as they could be for their shareholders. They weren’t “tough enough” with all their local civic engagement and interconnectivity with their local communities. Icahn would start buying them up, getting on their boards, and showing them how to do it better. And making a lot of money by “flipping” them, so to speak. It wasn’t long before other corporate raiders, lured by cheap money, now available through the new “leveraged-buyout” businesses (aka, “private equity” firms), were buying and selling through hostile takeovers, left, right, and center. And with the Reagan Administration’s “economic reforms” and “business reforms” aiding through the new “trickle down economics”. William Baxter, the head of the anti-trust division of the Department of Justice during the Reagan Administration told a Senate panel convened by the Securities and Exchange Commission that “[takeovers] were a very socially beneficial mechanism” for assuring that corporate assets would serve the highest value. Icahn also addressed the same Senate panel, agreeing “no regulation is good regulation”.
I wonder if they would think that today, seeing places like Lancaster, Ohio… 30-odd years later?
For the average American factory and middle-management worker, in a small American town during the post-war period, their income levels were high enough to own their home, pay enough taxes to ensure a good community infrastructure (good schools, good government, good parks and recreation facilities), and to minimize the social caste system between themselves. Especially amongst the company spouses, where volunteerism was important and social activities through Boy and Girl Scouts, church communities, PTAs, and neighbourhood bridge clubs was the very fabric of their lives, the CEO’s wife could be friends with the factory worker’s wife…and no one preally thought much about it. Union bosses and executive types could have a beer, together, at the local on a Friday evening after work. Their kids played ball together; swam at the community pool; graduated high school together. In New York or Chicago, this might not be the case, but in small town America, this was more likely to be so. For a while. But once the corporate raiders bought out these companies, and turned them into profit-whores, all bets were off…and no one played nice anymore. Income gaps grew larger and corporate types lived elsewhere and commuted in, as necessary, using what was now Podunk, Ohio a stepping stone to Management Headquarters.
It became each man for himself. The workers wanted what the TV and the magazines told them they deserved (the greedy 80s: Dynasty? Dallas? Falcon Crest? TV of the rich and famous made everyone want to be rich and famous). Wal-Mart, K-Mart, Target, and Sears were there to provide a facsimile of it. Soon, the BigBox Stores were negotiating for cheaper goods directly with manufacturers. Everyone was looking for cheaper labour markets to provide these very workers with the goods they were already manufacturing… but cheaper meant from somewhere else. Branding. It became all about the branding. Anchor Hocking was bought out by Newell… and they owned everybody, or so it seemed: Mirro, Sanford, Kirsch, Parker, Sharpie, PaperMate, Elmer’s Glue, Uniball, Xacto, Waterman, Coleman, Jostens, Rawlings, Stanley Tools, Oster, Sunbeam, Mr Coffee, Crock-Pot, Graco, Baby Jogger, Rubbermaid, Calphalon, Yankee Candle, First Alert, Nuk… the list goes on and on and on. The worker’s own greed to have the goods, and thanks to cheap and easy credit to buy it, the very goods they were manufacturing, caused the corporations to continually look for ways to margin their bottom lines; to make more for less; and pay their stockholders higher dividends. It was about increasing their profits (remember, their only true responsibility is to their shareholders), causing them to look for ways to do this, even if that meant busting their unions, closing their factories and distribution centers, lying cheating stealing from one factory to serve another. There’s this story about Newell and bypassing court injunctions. But I digress…
We’ve plundered ourselves in a giant pyramid scheme until it all fell down in 2007.
Today, these small American towns are dying, if not dead, populated by people with no hope, no prospects, and no jobs. Their job skills are antiquated. They have no value as the new economy has no use for them. Those who’ve inherited farmland have sold it to developers looking to build bedroom communities for those who do not want to live in dying small towns. Again, plundering ourselves in a bid to escape the mess we’ve made of things. Rather than trying to fix what we’ve broken, we’re choosing to walk away and start the cycle all over again: building cheap and spurning that which we built “to last forever”…because it’s too bloody expensive to build well and, gosh! Downtown has sooo many problems.
The perfect storm, indeed, between economic policy intent to enrich the wealthy and the an emerging new economy we only had glimmers of; between changing personal values and corporate ideologies.
Will anyone, anywhere invest in American intangibles again? It’s not just about the jobs, but about education, training, encouragement, and buying into yourself: paying for infrastructure because you care about your community; you care about yourself and the other person.
In 1990, Ohio finally passed a law against corporate raiders coming into Ohio and launching takeovers of our small town corporations. Psst: there’s a reason so many corporations have their incorporations in Delaware. Just sayin’. And Newell sorta got theirs, eventually, with their takeover of Rubbermaid. But, today, Newell Brands is still here, still alive, and still kicking. They didn’t hurt for very long. But Lancaster is hurting plenty. And OxyContin is there to ease their pain; a pain built from a combination of the loss of the mutually beneficial relationship between employer and employee and plain old greed on all sides.
I’ll be thinking about this a lot, the next time I wander into Target and chortle over how cheap it is to buy this, that, or the other thing I don’t really need.
Or drive through Lancaster or some other small American town that dots the Ohio countryside and try not to think about how I’ve helped to plunder myself by wandering into Target and chortle over how cheap it is to buy this, that, or the other thing I don’t really need.
Historian, self-proclaimed gentleman, agrarian-at-heart, & curator extraordinaire