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With Stocks Down and Just $44.75 in Backup Kitty, Town's Still Upbeat


WHITEWATER, Wis. — In the middle of the kettles and kames and other rolling remnants of the last Ice Age, the people of Whitewater are following the tales of corporate rapaciousness and watching the stock market fall like a stone down a cliff, occasionally striking an outcropping and bouncing up, then falling again.

In this university town of 12,000, residents discuss recession and "The Fed" and their financial futures. And this, it seems, is what they've collectively decided: The economic forecasters, bankers and broadcasters should really take a walk in the Kettle Moraine State Forest, or maybe have a nice cup of tea, and relax a bit. This is just not the end of the world.

Ronald Crabb is 55, has helped put three children through rather pricey colleges and hopes to retire sooner rather than later. The chairman of the Department of Finance and Business Law at the University of Wisconsin-Whitewater, Crabb's 401(k) and other investments are not looking so good. But like almost everyone here, it seems, he's simply not as worried as the news insists he ought to be.

"The stock market is going to come back," Crabb said. "If it tanks and doesn't come back ... well, the least of your worries is going to be the value of your 401(k) plan."

A place where the taverns serve Miller High Life for the old-timers and New Glarus Copper Kettle Weiss for the university crowd, Whitewater is a town, like most every other, with promise and problems.

Surrounded by some of the very few hills in the Midwest, the area has increasingly become a destination for hikers and mountain bikers, many from as far away as Chicago, three hours to the southeast.

Built like much of the state around manufacturing, however, the city has watched as plant after plant laid off workers as the nation moves toward a more information-based economy, among them the Parker Pen factory in nearby Janesville and the Beloit Corp., whose papermaking operation was the pride of Beloit, just to the south, on the Illinois border.

But Whitewater also has a university, founded in 1868, with nearly 9,000 students each year--this fall's enrollment figures are about the same as last fall's--helping level out ups and downs in the economy with their purchases of clothes, books, pizza.

Unquestionably, this year is different.

Wisconsin has well-maintained roadways, clean parks, litter-free waterways and solid bridges because it has long had one of the highest tax rates in the nation.

When the economy began to slump, however, the state was entirely unprepared. The amount in Wisconsin's rainy day fund: exactly $44.75. Most of that had been donated, as gestures, by various retiring budget directors who had spent their careers pleading with the Legislature to finance an emergency fund.

Facing a $1.1-billion shortfall this year, legislators, following perhaps the most vicious political fighting in state history, decided to make up the shortfall primarily with funds from the state's tobacco settlement. That money is now gone, however, and many state-funded institutions are strapped.

This will be the second year in a row the university, by far the largest employer in town, has had to give back money the state had budgeted, between $40 million and $50 million, school officials say.

Still, folks take the messes--local, state and national--in stride.

As dean of the university's gem, the College of Business and Economics, Christine Clements knows about the various woes. She's just not all that worked up about them.

"Sure, my 401(k)'s not doing well at all," she said. "And if I wanted to retire I couldn't do it. There are many people in that position now. But I'm not ready to retire."

With three children--the oldest is 16--the primary effect of the falling markets on Clements has been considering to reconsider her oldest child's college prospects.

"Now we have to decide: Can we go out of state, do we go to a less expensive school, can we afford a private school or do we stick with state schools?" said Clements, 47.

Those planning to retire, and retirees, have taken the most abuse from the falling markets. With the Dow Jones industrial average down nearly a third since its peak in 2000, some conservative mutual funds off 30% and riskier ones off 70% and more, people who decided two or three years ago that they had just enough money to retire are finding out they may have been wrong.

"I sold my boat," said Jim Edinger, 69, who retired in 2000 after more than 40 years working various manufacturing jobs. "But I hardly used it anyway. We can still pay the bills. If we can't, I'll go back to work."

Mareta Hale-Stoll, 40, who teaches art at two public schools, hasn't had a raise in two years. She has a pension plan that seems pretty stable, she said, but nothing on top of that. However, a family friend who recently passed away left her and her two siblings a house. "I've never made enough money to put into a 401(k) or anything," Hale-Stoll said. "This house might be my retirement."

It could be that few people stumble accidentally on Whitewater, kept away by Wisconsin's befuddling "alphabet road" system, where Highway Z leads to ZZ, which intersects with N and A--and therefore residents have always taken care of themselves.

It could be that some residents ride snowmobiles to work in the winter and find financial hardship not unlike physical hardship: something to face with a shrug.

Or it may be that Whitewater residents are like many Americans: a bit nervous, preparing for perhaps leaner times, and maybe even losing a little sleep over it--but in the end, essentially optimistic.

"I don't watch the news, but my husband clues me in," said Laura Guthman, 32, who with her husband, Bill, opened a computer store two months ago. The couple own falling stock in a company Bill used to work for. " 'We're in a recession, you know,' he says," Laura Guthman said.

"I say, 'I know, I know. So?' "

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