Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, January 6, 1992 TAG: 9201060081
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: ROB EURE STAFF WRITER
DATELINE: MANCHESTER, N.H. LENGTH: Long
RECESSION COULD DICTATE N.H. VOTE
David Lewis numbly recites the steps taken on his personal road to ruin.Lewis, a 33-year-old cabinetmaker whose company builds interiors for some of the nation's biggest retailers, planned to save what he could through the year as a buffer against a layoff about now. But in July, he cut his hand in an accident and lost six weeks of work.
Then the layoff notice came at Thanksgiving, five weeks before he expected it.
It isn't until he begins talking about his two daughters, ages 3 and 6, that fear registers in Lewis' gaze and his voice.
"I don't know how I'm going to put food on the table. My wife and I have been eating one meal a day for the past several weeks, but the girls are still eating, at least for now."
The bank began foreclosing on his home the week before Christmas. He hasn't seen his first unemployment check, but the monthly total of $628 will be $2 less than he needs for the mortgage alone. There will be nothing for food, utilities or the car. These days, Lewis walks and hitchhikes the 20 miles to Manchester to stand in the unemployment line.
And the line is getting longer.
When New Hampshire crowns a front-runner in the Democratic presidential campaign Feb. 18, the recession here will be entering its third year.
The length and depth of the downturn in a state used to sailing through sour economies has an electorate already known for unpredictability in an explosive mood.
"It's as wide open as I've seen it since 1976," said Raymond Buckley, a state legislator and political director of the state Democratic Party.
In 1976, New Hampshire voters gave a surprise boost to Jimmy Carter, elevating the former Georgia governor from obscurity to the leadership of a crowded field.
New Hampshire residents, who like to repeat the state motto "Live Free or Die," relish their quadrennial chance to scrutinize candidates in person, before television ads take over the campaign. They enjoy defying the conventional wisdom of the national press and take seriously their responsibility in designating a front-runner.
And this winter, perhaps as never before, the voters have a practical reason to pay close attention to the politicians they meet.
"The people of New Hampshire are not going to worry this time" about choosing the most effective leader, said Bob Shaw, a Republican and former mayor of Manchester. "They figure none of them could do any worse than this."
Shaw, who managed President Bush's primary campaign in Manchester four years ago, said voters are in a mood "to teach Bush a lesson." Shaw will do so by voting for conservative columnist Patrick Buchanan, although he said Buchanan does not measure up to the job.
"You might want a telephone pole, but if all you've got is a baseball bat, use it."
Cabinetmaker Lewis will abandon his Republican leanings and vote in the primary for Tom Laughlin, a Democrat best known for his portrayal of Billy Jack in two 1970s movies. Lewis identifies his own alienation with the political system in Laughlin's maverick candidacy, which includes abandonment of America's role as world caretaker until "we take care of our own here at home."
\ `This is a calamity'
\ "The dynamics here could have the primary decided by a few hundred votes," said Chris Spirou, chairman of the state Democratic Party. "This is a calamity. The middle class - people who make $40,000 and $50,000 - these are the people coming down in this recession."
Paul Houghton's case is typical. He spent 19 years working his way up to a managerial position with a computer firm. The last of his seven children was in college and he was planning his retirement when the company closed in 1989 and moved to Europe.
At 56, Houghton holds two jobs to maintain his home and the vacation place he bought at a lake up north. At night, he's a maintenance man for the city of Manchester. During the day, he has built a small business tailored for recessionary times. He manages vacant industrial properties, including the one where he used to work.
"We have got to get back to manufacturing," he said. `We don't make widgets anymore, and this service-based economy stinks. I think the candidates all recognize it, but they're all part of the system that put us in this mess."
\ Wilder `can play here'
\ The volatile year might seem to present an opportunity for a lesser-known candidate such as Virginia Gov. Douglas Wilder, a veteran at capitalizing on underdog status. But Wilder's campaign is making almost no impact - he was trailing the field at 1 percent in a poll conducted last month.
Wilder's New Hampshire campaign operatives are beginning to set new, lower expectations, saying privately they would be grateful to match Jesse Jackson's 1988 New Hampshire total of 7 percent.
Wilder "can play here, sure," said Spirou, a developer who has lost most of his properties in the crunch. "He can play. Mind you, I didn't say win."
Indeed, instead of picking a clear front-runner from the field of six Democratic hopefuls, this year's New Hampshire primary appears positioned to pick the issue of the 1992 presidential campaign.
"The issue is going to be the economy," said Bobby Stephans, a retired Democratic state senator and owner of two Manchester restaurants. "I know we are a small state, but Bush should have paid attention. If he walked the streets of Manchester, he would see it."
New Hampshire leads the nation in the rate of personal bankruptcies, with 3,578 filed in federal court as of early December. At the height of this year's real-estate season in spring and summer, one in five transactions in New Hampshire was a foreclosure. On a single October day, federal regulators seized five of the state's large banks, with 25 percent of the state's assets.
The recession is strangling governments as well. New Hampshire has no income or sales tax, so state and local governments depend on property taxes. Manchester reported $31 million, or 30 percent, of its property taxes delinquent as of mid-December.
The state's budget deficit of $200 million was erased in December when the Bush administration released extra Medicaid money - one of three gestures of federal generosity that followed Buchanan's entry into the race.
But the effects of recession are plain on the streets of a state that is seeing its first true deep recession in nearly six decades.
\ `The jobs are gone'
\ The Hellas Coffee House on Cedar Street is a small, barren room with straight chairs where old men gather daily to drink coffee as thick as their Greek accents. Many are first-generation immigrants.
A dogeared copy of the Manchester Union Leader sits on the center table, and the talk usually is about its daily chronicle of the tough times.
"Ever since the Gulf War, things look like they are going downhill," said Chris Dakoulas, 63, retired from a nearby race track. "The jobs are gone. The banks are gone."
Dakoulas is lucky. He once owned the boardinghouse where the Hellas is located, and sold it five years ago for $400,000. Five months ago, the building sold at a bank auction for $52,000.
Around the neighborhood, dozens of large homes and boardinghouses sit empty, with plywood-covered windows and padlocked doors.
"Bush is going to find a very different place when he comes back to New Hampshire this time," said Dakoulas' brother, Peter, 64. He retired from Digital Equipment Corp., the state's second-largest employer, as it began to cut its work force by more than a third, from 8,500 to 5,500.
The retirees count themselves fortunate. Their income may be fixed, but that is better than losing a job, they figure.
Old-timers say things are nearly as bad as in the Great Depression, when on Christmas Eve 1935 most of the workers at mills along the Amoskeag River got pink slips at the end of the day. The textile industry moved south after the Depression, and Manchester never regained its eminence in the industry.
"There's a lot of pain up here," said Frank Harlan, president of the local teachers' union and a social studies teacher at West High School in Manchester.
Harlan sees students come to school preoccupied with whether their parents will lose their homes. And he has friends who have lost their jobs during a recession that has taken once-successful business after business with it.
Harlan said that since June, his teachers' union, for the first time in its history, has been working without a contract. "People are afraid of losing their jobs," he said.
\ A fantasy in foreclosure
\ Outside the cities in the state's south and east, recession has beset the picturesque countryside.
Party leaders in Ashland and Plymouth were stunned to see 60 Democrats gather on a recent Friday for a spaghetti dinner and speech by gubernatorial candidate Arnie Arneson, who favors an income tax to relieve the state's high property taxes.
"There's a reality gap" between political rhetoric and the hassle of juggling household budgets, said Janice Gallinger, a retired teacher at Plymouth State College. She has begun volunteer work at the town's homeless shelter, a place that until lately housed mostly vagrants passing through.
It's busy now, and occasionally Gallinger recognizes the face of a friend among the homeless.
"I have a friend there now. She's from a prominent local family," Gallinger said.
Gallinger wouldn't give the name, explaining that trouble is hard enough to keep quiet in a small town. But her friend's story is common among people at the shelter; she lost her job and her home.
"If you lose your job around here, now, you're just out of luck, because there's no job to get," Gallinger said.
Around the White Mountains and lakes - locals call it the North Country - the foreclosure rate outpaces that in the cities.
The popular recreation areas saw a building boom in the past 15 years as suburbanites from Boston and other Northeastern cities built vacation homes and condominiums there.
The construction activity kept the state's economy deceptively healthy, so no one noticed the gradual fade of manufacturing. New Hampshire was the seventh-fastest-growing state during the 1980s, second in the East behind Florida.
But as savings institutions and banks began to buckle and credit tightened, the second-mortgage holders not only lost their second homes, but in many cases lost the equity in their primary home that had been used to finance the second mortgage.
"We fell victim to the don't-worry-be-happy crap," said the state party's Buckley. `And now we are waking up from our little fantasy."
A result has been a flood of vacation homes on a market with no buyers.
Bob Crowley is one of the few businessmen in the North Country who has had a good year. His moving and storage company is busy with customers cleaning out their vacation homes or leaving New Hampshire for jobs elsewhere.
A veteran campaign activist, Crowley is used to the reporters and politicians who show up every four years. He thinks this year's primary may be controlled by voters who have ignored past campaigns.
"I've never thought too much about the impact of New Hampshire as a reflection of the country," Crowley said. "But I keep hearing from people this year that something's got to happen.
"I've been watching this for a while now, and I've noticed that politicians don't lead, they follow what they pick up going on down here among us people. What we have is a couple of generations of people who've tuned out politics, and suddenly they have got to think about it."
Keywords:
POLITICS