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With Trade Hub History, K.C. a Crossroads for Commerce

July 27, 2009 at 6:30 PM EDT
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Economics correspondent Paul Solman explores Kansas City, Mo., home to one of 12 regional Federal Reserve banks and a crossroads for the U.S. economy.
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PAUL SOLMAN: One of 12 regional Federal Reserve Banks, Congress’s effort to spread the wealth and decentralize the Fed, the Kansas City branch is, among other things, a bank to local banks.

Millions of dollars in deposits and withdrawals flow in and out of a three-story automated cash vault every day as the region’s checks are cleared. The Fed sits in the heart of Kansas City, itself in the heart of America.

Back in the 1920s and ’30s, the city became famous as Boss Tom Pendergast’s town. His political machine helped launch Harry Truman; his wide open ways, the Kansas City jazz scene and legends like bee-bop pioneer Charlie “Bird” Parker.

Today, some 500,000 folks live here, within 250 miles of both the geographic and population centers of the country. Location has made Kansas City a long-time trading hub for farm-belt produce in unfinished and famously edible form, though industries like biotech and telecom are now factors, too.

As befits a city of the plains, perhaps, K.C. has been a bit less shaken by the financial crisis than other places, its jobless rate slightly below the national average.

But there are plenty of people here looking for work: 23,000 jobs were lost in the last year, even at such pillars of the corporate community as Hallmark, some of whose cards might speak to the 200 laid off there. At Sprint Nextel, 2,000 jobs lost.

As elsewhere, a sagging tax tank has opened a budget gap. City hall has slashed its workforce by 10 percent, meaning public service cutbacks.

Nor has the area been immune from what you might call auto disease. While the G.M. plant in nearby Fairfax is still cranking, more than a dozen car dealerships are slated for decommission. And the most famous road hog of them all, Harley Davidson, has had to ditch 500 area jobs.

Plus, there’s a mortgage crisis, which prompted a protest at the Kansas City Fed last fall, urging help for hard-up homeowners.

In short, when it comes to the Great Recession, unfortunately, everything’s pretty much up to date in the 10th district of the Federal Reserve.

GWEN IFILL: With that in mind, we asked a nonpartisan organization, Kansas City Consensus, to help us identify area residents with questions for Chairman Bernanke. They were pre-interviewed by NewsHour staff and selected by us. Our staff also helped Jim select questions submitted by our online audience.

Here now is part one of our forum, “Bernanke On the Record” with Jim Lehrer, at the Federal Reserve Bank in Kansas City.