The real reason middle America should be angry.

Author:Feldman, Brian S.
Position:Cover story
 
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IN 1980, ST. LOUIS HAD ALL THE INGREDIENTS FOR POSTINDUSTRIAL GROWTH, INCLUDING A BURGEONING "CREATIVE CLASS" LIKE MANY "FLYOVER" CITIES, ITS RELATIVE DECLINE IS NOT PRIMARILY A STORY OF DEINDUSTRIALIZATION, BUT OF DECISIONS MADE IN WASHINGTON THAT UNDERMINED ITS CAPACITY TO COMPETE.

The people of St. Louis weren't really surprised when, on January 12, the National Football League announced its decision to let E. Stanley Kroenke, owner of the St. Louis Rams, move his team to Los Angeles. Kroenke had long signaled his intentions, and LA's media market beckoned as the nation's second largest. Moving the team meant more revenue for the league, and therefore more money in owners' pockets. And that, as serious football fans know, is the point.

The NFL isn't a charity. It's a legally sanctioned cartel that strictly limits the number of franchises in order to maximize the value of each. St. Louis simply was losing another round in the NFL's long-running game of profit-maximizing musical chairs. Indeed, the city originally had lured the Rams from Los Angeles in 1995 after losing a bidding war for the hometown St. Louis Cardinals football team to Phoenix in 1988.

What was surprising, though, and hurtful, was the way Kroenke badmouthed the city. In a twenty-six-page statement in support of the team's relocation to Los Angeles he noted, "Compared to all other cities, St. Louis is struggling," adding that the city "lags, and will continue to lag, far behind in the economic drivers that are necessary for sustained success of an N.F.L. franchise."

St. Louisans, with their formidable civic pride, were outraged. The well-known lawyer Terry Crouppen aired a thirty-second ad that ran in St. Louis during Super Bowl 50 saying of Kroenke's decision, "We cheered [the Rams] year after losing year. In return, they trashed, then left, us." The St. Louis Post-Dispatch columnist Benjamin Hochman struck a more optimistic chord when he declared, "They can strip away our NFL team ... but they can't snatch our confidence because, right here, right now, we will harness it, we will cradle it, and we will carry it into the next year and years, because we are St. Louis."

The Gateway City does have much to boast about. It's home to nine Fortune 500 companies; world-class centers of learning (Washington University in St. Louis); a robust medical system (BJC Healthcare); cultural institutions that rival those of cities twice its size (the St. Louis Zoo); and one of the most storied baseball franchises in history, the Cardinals, a team that has won three World Series in the last ten years alone.

Yet while Kroenke's argument that St. Louis can't support an NFL team is self-serving, he's not altogether mistaken about the city's economic plight. Relative to big metro areas on the coasts, St. Louis has lost ground in recent years. Job growth since the recession has slowed. The city's population growth has stagnated. Downtown St. Louis sits eerily quiet on most days, despite millions of taxpayer dollars spent on upgrades--including on the Edward Jones Dome, the Rams' now-vacant home. The city has a nascent tech startup scene, but struggles to keep its most successful companies from leaving town (the payment firm Square was conceived in St. Louis by two native sons who relocated to San Francisco in 2009). The per capita income of the St. Louis metro area today has fallen to 77 percent that of metro New York, down from 89 percent in 1979. And while St. Louis's nine Fortune 500 corporate headquarters are a lot for a metro area of 2.8 million people, that's down from twelve in 2000 and (correcting for the way Fortune changed its methodology in 1994) twenty-three in 1980.

Experts often point to manufacturing decline, off-shoring, and racial strife to explain the relative economic weakness of St. Louis and other Rust Belt cities. But these ills hardly have afflicted St. Louis more than they have Chicago, New York, Boston, and Los Angeles--which all have mounted much stronger comebacks in recent decades. Yes, those other cities made the transition from manufacturing to services and technology. But a quarter century ago, St. Louis was already (and, to some extent, it still is) a hub of many of the postindustrial industries that have gone on to experience the fastest growth, from pharmaceuticals to finance to food processing.

Moreover, St. Louis had an abundance of what regional economic growth theorists such as Richard Florida, Edward Glaeser, and Enrico Moretti argue is the most important ingredient of success for post-industrial America: a large population of educated, professional, creative types who dream up the innovations that drive growth and profits (think software in Seattle and Silicon Valley, biotech in Boston, finance in New York and Charlotte). In 1980, 23 percent of adults living in the St. Louis area had completed four years of college or higher--double the national average and greater than that of economically "hot" cities like Dallas, Charlotte, and San Diego. Even more important, one out of every five residents worked in fields like finance, insurance, real estate, business, health, law, or medicine.

Indeed, St. Louis contained enough human capital to sustain one of the defining "creative class" industries: advertising. Though perhaps not quite as high-flying as their Mad Men counterparts, St. Louis firms rivaled the biggest New York, LA, and Chicago ad agencies in terms of revenue and creativity during the industry's heyday from the 1970s to the 1980s.

The relative decline of St. Louis--along with that of other similarly endowed heartland cities--is therefore not simply, or even primarily, a story of deindustrialization. The larger explanation involves how presidents and lawmakers in both parties, influenced by a handful of economists and legal scholars, quietly altered federal competition policies, antitrust laws, and enforcement measures over a period of thirty years. These changes, which enabled the same kind of predatory corporate behavior that took the Rams away from St. Louis, also robbed the metro area of a vibrant economy, and of hundreds of locally based companies. This economic uprooting, still all but unaddressed by today's politicians or presidential candidates, accounts for much of the relative stagnation of other middle American communities, and for much of the anger roiling voters this election cycle. The rise and fall of St. Louis's advertising industry stands as a cautionary tale for what ails so many of the once vigorous and innovative cities of "flyover" America.

If there is a living embodiment of the St. Louis advertising industry, it's Charles Claggett Jr. The former creative director at D'Arcy, long one of the city's largest agencies, he retired in 2000, two years before the French firm Publicis acquired the agency. One of his many claims to fame is that in 1979, he and his team penned "This Bud's for You"--the slogan widely credited for helping St. Louis-based brewing staple Anheuser-Busch eclipse Miller during the 1980s beer wars.

On a blustery December afternoon, Claggett and I met at First Watch, a breakfast-all-day chain restaurant in Clayton, the tony old suburb west of the city that acts as the St. Louis region's de facto financial center. A boyish-looking man dressed in a neatly pressed blue sweater and checked shirt, Claggett is like just about every other St. Louisan you meet: wildly upbeat about the city's prospects. "St. Louis is an undiscovered gem," Claggett said, as he gushed about the Municipal Opera, the city's famed open-air theater, and about the young professionals moving into the "loft district" downtown. (This tradition of boosterism traces to 1869, when a local named L. U. Reavis convened a seventeen-state delegation to lobby Congress to move all federal buildings to what he touted as "the future imperial city of the world.")

Another claim to Claggett's fame is his father, Charles Claggett Sr., who led the city's oldest and largest agency, Gardner, in the late 1950s and the 1960s. During his tenure, the elder Claggett oversaw accounts such as John Deere, Ralston Purina, and Jack Daniel's.

Claggett recalled his childhood days, sitting in his father's office, as piquing his interest in advertising. "Ever since I saw John Deere tractor toys neatly lined up on my father's desk," he laughed, "it sealed the deal." Four years after his father retired as Gardner CEO in 1968, he started at rival agency D'Arcy as a...

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