Tuesday, August 2, 2011


(c) by Russ Barnes

I'm a Main Street type of guy.

So I have a story about debt and spending which many will understand. What a boring subject -- debt and spending, yes? Maybe we can liven up the story a bit!


Today the debt ceiling of the United States was raised -- after much angst. Most of the commentary focused on two factors: expenditures (what cash goes out from the government) and taxes  (what cash comes into the government).

What has been little discussed is a third leg of the stool: regional economic development -- the enlargement of the whole economic pie all around. With a larger pie, expenditures and taxes both decline in importance.

Cluss Lumber Company truck

I know this from personal experience -- from my family. And I'm telling this story because I would like to dramatize the importance of infrastructure building in the equation which has been mostly avoided in the current discussion --  by politicians and Wall Street speculators alike. And I would like, later in the discussion, to bring in a Texas perspective.

So to the story. Infrastructure. Building things. Repairing things.

The story is set in the 1950’s and 1960’s in Uniontown, Pennsylvania. I was part of an extended family most of whom lived in houses built close to 19 Eggleston Street. My grandfather owned a family business, O.C. Cluss Lumber Company, which sold  construction materials for building houses, roads, bridges, and other structures. His two sons, Charles and John, worked there, and also my father, Barney.

About the three-legged stool: there were months when our family business could not meet payroll. I was in my late teens at the time. I cannot guarantee the complete accuracy of this report -- but here is what I remember.


At the time the company had about 50 employees. They needed to be paid. The lumber company was reliable as there were good months ahead to pay the debt.. So my dad, my grandfather, and my Uncle Charles would go downtown to the Fayette National Bank on Main Street to meet with the bank president, Jay Leff. This was not Citibank for sure. This was a local bank that was invested in the community.

One month, Mr. Leff declared, "I want to loan you more money than you are asking for simply to meet your payroll.  I would like you to expand your business. If you come up with a good plan, I will put my money into it.  It will do me good as your banker if you do more business; it will help the entire Uniontown community, and that will help both of us. What I ask is that you go in with me on this investment. Take some of your year-end bonuses and match them with what I am offering.  If you are not willing to expand your business, I can't help you to meet your payroll."


This was not a bailout. This was spending for a purpose. What the banker was asking was that a distinction be made between monthly revenue requirements (such as paying employees and maintaining inventory) and making a capital investment. Two different kinds of money, two different kinds of expenditures. He was asking my family to expand the community pie.

Do we not, in fact, need this sort of action in the United States right now?

My dad, Barney (C.J. Barnes), went to work on the case. With the extra capital at his disposal, he spearheaded an effort to build a concrete factory as an extension of the construction company . Building U.S. infrastructure back in the 50's and 60's was politically correct. Both parties -- that of Eisenhower and that of JFK -- cooperated on such projects as the interstate highways and the repair of the old Pennsylvania Turnpike -- all of which benefited all our nation. I was sent by my grandfather to Washington as well as to Harrisburg, the capital of the Commonwealth of Pennsylvania, to make bids for the company's concrete product to contribute to building the country's infrastructure. It was a perfect alliance between the private and public sectors and created many jobs in our region and elsewhere. Such kinds of efforts were a winner, both locally and nationally.


This Thursday I will publish another personal story to illustrate the importance of spending and capital investment. After that, my plan is to interview several sources in Texas on this subject. I like Texans' views on capital investment.   While they are conservative, they are also interested in local /regional development, which makes for a bigger economic pie.  I am especially interested to hear their viewpoints about the Infrastructure Bank which the President mentioned in his speech this afternoon -- hopefully modeled after such institutions as the local Fayette National Bank in Uniontown so many years ago.

Please check in again on Thursday and beyond for ways in which the past may herald the future which awaits us -- perhaps in Texas, perhaps across the nation.

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