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Politics creates economic illusion in Houdini’s hometown

Josh Boak
Associated Press

Appleton, Wis. – Nothing can shake Scott Rice’s faith that President Donald Trump will save the U.S. economy – not seeing businesses close or friends furloughed, not even his own hellish bout with the novel coronavirus.

Rice reveres the president the way Wisconsin loves the Green Bay Packers. He has painted “T-R-U-M-P” on his lawn, spelled it out with Christmas lights on his roof and painted it on his steel-toed shoes.

He was also a virus skeptic, believing it was a hoax meant to hurt Trump and the economy. But then the disease seeped into the paper mill where he works, and he was stricken, suddenly losing his appetite, even for his favorite Taco Bell. He lay in bed, feverish, drenched in sweat. Two air-conditioner units didn’t cool him. His body seemed at war with itself.

Scott Rice sits in his living room watching a Fox News interview with President Donald Trump in Appleton, Wis., Thursday, Aug. 20, 2020. Nothing can shake Rice's faith that President Donald Trump will save the U.S. economy, not even his own hellish bout with the coronavirus.

After 16 days at home, Rice told his co-workers that the disease was scary and real. But Trump held onto his vote for one reason: The stock market was climbing.

“The 401(k)s, just the economy,” Rice said. “He got jobs going. Just accumulated a lot of jobs, being a businessman.”

Rice’s belief represents the foundation of Trump’s hopes – that Americans believe the economy is strong enough to deliver him a second term.

David, left and Jane Oliver are photographed at their wine bar, Mondo!, in Appleton, Wis., Monday, Aug. 17, 2020. David, 59, would rather keep his politics corked. But he said American businesses desperately need another round of aid. Because the virus has lingered, so have the revenue shortfalls and he blames the president. "They're supposed to be pro-business," David said. "But so much of the Republican Party has reverted to this magical thinking that Trump has that the economy is fine and the virus is going away. They are delusional."

But in Appleton, a predominately white city of 75,000 people along the Fox River, the health of the economy isn’t judged on jobs numbers, personal bank accounts or union contracts. Instead, it’s viewed through partisan lenses – filtered through the facts voters want to see and hear, and those they don’t.

By almost any measure, Trump’s promises of an economic revival in places like Appleton have gone unfulfilled. The area has lost about 8,000 jobs since he was elected.

Even before the pandemic, Wisconsin’s economy was fragile, as job losses began in August 2019 and a recovery in hiring had just begun when the virus struck. The state that is vital for Trump’s victory had more jobs a decade ago when the country was still ailing from the Great Recession than it did in July.

While supporters like Rice are immovable, others have had enough. President Barack Obama won here in 2012, but voters flipped to Trump four years later, and Trump cannot afford much erosion in a state that he won by only 22,000 votes out of more than 2.8 million.

Democratic candidate Joe Biden holds a slight lead over Trump in the latest Marquette Law School poll of Wisconsin voters. Trump’s disapproval rating has risen to 54% from 49% at the start the year. But 52% of Wisconsin voters applaud Trump on the economy, while 56% dislike his handling of the pandemic that pulled the nation into recession.

Even Rice concedes that the economy is not just an argument for Trump – it’s also an argument against him. His 20-year-old daughter, Cassidy, tells him so. She is studying public health at George Washington University and will cast her first presidential vote for Biden.

“The fact that there was a pandemic and the fact that it had those consequences on the economy should be an eye opener, like, hey, maybe we’re not doing this correctly,” she said.

Trisha Kostelny, left, who runs Fischer Ulman Construction with her husband, John, right, looks over their sidewalk concrete project in Appleton, Wis., Aug. 18, 2020. The couple are struggling to find workers. The President Donald Trump administration argues the problem is that the government has been too generous with laid-off workers. But to Trisha Kostelny, the problem is that workers need even more help from the government.

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Trump won the presidency by wringing tens of thousands of votes out of small towns and medium-size cities across Wisconsin, Michigan and Pennsylvania.

He did it in places like Appleton’s Outagamie County. A city of stone and brick, Appleton hugs the Fox River, its currents powering the smoke-stacked paper mills that built fortunes. Steamboats and trains brought the trappings of Victorian-era comfort. The nation’s second co-educational college, Lawrence University, occupies 84 acres at the edge of downtown. The end of World War II brought a suburban buildout, and teenagers increasingly left dairy farms for union jobs at mills and foundries.

But as the need for paper waned two decades ago, the city began a slow evolution. Now condos, cafes, offices and a jogging trail line the riverbank.

The trail ends downtown at Houdini Plaza, a monument to the city’s most famous offspring, illusionist Harry Houdini. His words are inscribed on the monument where his childhood home once stood: “What the eyes see and the ears hear, the mind believes.”

There may be no better explanation of American politics in this confounding moment.

Trump voters listen to his cheerleading for the economy and believe the businessman president has worked his magic. Many write off the pandemic as a speed bump for accelerating prosperity. Biden’s backers see an illusion – an economy that was recovering under Obama, but now, with the pandemic, is trying to crawl back to health, with no real plan from Trump.

The two realities are clear in national surveys. In August, 80% of Democrats call economic conditions “poor,” while 63% of Republicans describe them as “good” in a survey conducted by The Associated Press-NORC Center for Public Affairs Research.

In Appleton, perhaps the only shared view is a deep anxiety about the future. Restaurants and bars worry about customers vanishing once cooler temperatures return. The high costs of childcare and health insurance make it hard to attract workers, despite the downturn.

People cannot even agree on the terms of the economic debate to come up with a solution.

“What we’ve done with politics is gotten into a tribal war that looks only at elections when we should be looking at policies and results,” said John Burke, CEO and chairman of Wisconsin-based Trek Bicycles, one of the state’s most prominent business leaders.

How enduring the divide will be is one of the central tests of the presidential election. Will emotional ties to Trump override assessments of his job performance?

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After 2016, local Democrats wasted no time mourning. Lee Snodgrass became chair of the local party and began a blitz of door-knocking to build up volunteers and voters, a task that led her into areas that were firmly for Trump.

As a candidate now for the state legislature, she has tried to bridge the partisan divide, but often finds few Republican takers.

“It’s like watching a car accident in slow motion,” said Snodgrass. “The behavior and choices that people make in this pandemic reflect fundamental differences between the Democratic Party of today and the Republican Party of today.”

Wearing a T-shirt that said “VOTE,” Snodgrass walked through a neighborhood that leans for Trump. She recited facts about the economy and the pandemic – several millions jobs lost, a rising body count – and Republicans would defend Trump.

She would then try to steer the conversation to common ground, like the need to reduce health care costs, and end by summarizing their conversation by saying, “Here are the things that we agree on.”

These Republican voters found Trump’s demeanor crude. But the unemployment rate was a strong 3.5% before the pandemic. Trump had updated and replaced the North American Free Trade Agreement. They give Trump credit, although he inherited a healthy 4.7% unemployment rate and the trade deficit with Mexico on goods had jumped to $101 billion last year – higher than in any year under Obama.

“There are things that he said he would do,” said Candice Meyer, a retired legal assistant. “And he has done that. He’s done it with a big mouth and a show-off, 13-year-old personality, and he can’t keep his mouth shut. And he’s rude. But he has come through with a lot of his platform.”

The pandemic and recession showed just how ingrained politics was in what people saw, heard and believed. Their partisan loyalties became their realities about how to address the coronavirus and help the economy.

“What really surprised me is how quickly things got polarized,” said Jonathan Rothwell, the principal economist at Gallup. “The pandemic got instantly framed as a piece of good or bad news for the president, much like the jobs report.”

How people feel about the economy increasingly mirrors their politics. AP-NORC found that only 34% of Republicans believed the economy was in good shape in April 2016 when a Democrat was in the White House, a number that swiftly shot upward after Trump’s election to reach 89% this January before the pandemic.

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Tom Becker leaves after an overnight shift at the Midwest Paper Group mill in Combined Locks, Wis., part of the greater Appleton area where nearly one in five jobs are still in factories Tuesday, Aug. 18, 2020. Between 2001 and 2016, Wisconsin's paper industry lost 15,000 jobs.

At the Midwest Paper Group, where Scott Rice works, there is a story of recovery, but one where credit lay with the union and the Outagamie County executive, not with Trump. Between 2001 and 2016, Wisconsin’s paper industry lost 15,000 jobs. Midwest Paper Group sunk into receivership in 2017 as demand flagged for crisp white paper.

More than 600 workers were handed pink slips in anticipation of the mill being shuttered, in an area where nearly one in five jobs are still in factories.

“Most were resigned to fate,” said Tom Nelson, the county executive. “The paper industry was deemed old and outdated, uncompetitive because of imports, unfair trade deals, electronic substitution.”

A Democrat with tortoise-shell glasses, Nelson won his first election in Appleton in 2005 and still has a boyish appearance at the age of 44, with curly hair that has grown long during the pandemic. By his estimate, the county would have lost a catastrophic 2,000 jobs as collateral damage if the mill closed.

Nelson, the workers and their union representation lobbied the bankruptcy court and struck a deal. “If it were not for the fact that the mill was unionized, it would be a trash heap,” Nelson said.

Instead, the mill added new machines to make materials for cardboard, capitalizing on the growing number of people shopping online at Amazon. For 12 hours a day, Rice mans the control room in a red face mask that says “USA.”

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A Shopko grocery store sits empty after the chain filed for bankruptcy as people sit in the parking lot eating snow cones from a nearby shop in Kimberly, Wis., Monday, Aug. 17, 2020.

There are other winners in the local economy – the Menard’s home improvement store, grocers, fast-food chains. Bike stores are sold out of Treks, which were built in the factory 87 miles away in Waterloo.

Trek’s three U.S. warehouses were emptied by August because of all the buying, yet Burke, its CEO, was agonizing about the fate of the broader economy.

Burke, 58, pedals 110 miles on his standard Saturday ride, long enough for the nation’s problems to turn over in his mind. After his own college graduation, Burke took a day to get his wisdom teeth pulled and started the next at Trek. He’s remained there for the past 37 years.

He decided to write a book in 2016 and updated it this year, “Presidential Playbook 2020: 16 Nonpartisan Solutions to Save America.”

As Burke sees it, Trump has governed with a dangerous set of blind spots that threaten long-term growth.

There were the hurricanes and wildfires unleashed by climate change. Federal debt has surged. Not enough money is being invested in education and children. And Trump initially downplayed the virus and offered the prospect of unsafe remedies like injecting disinfectant to kill coronavirus.

Appleton is testimony to the lack of simple solutions to the pandemic.

Nearly 40% of the city’s leisure and hospitality jobs have been lost. Restaurants have been closed, hotels vacant. The banquet hall attached to the Longcheng Marketplace that serves the area’s population of 5,000 Hmong immigrants has sat empty since March.

The downtown had been evolving as young parents moved back to Wisconsin from Minneapolis and Chicago. Restaurants and boutiques popped up along College Avenue, catering to the professors and students at Lawrence University. The oil services firm U.S. Ventures announced it would build a new headquarters on a city bluff – 500 office workers who could be regulars at Mondo! wine bar.

Then the pandemic struck.

The status of the U.S. Ventures headquarters is now uncertain, but it certainly won’t open as announced in 2022. Mondo! is getting by with retail sales and outdoor seating, until the weather changes.

Since 2017, David Oliver used Instagram to steadily draw people to Appleton’s first skyscraper (1932) and a bar designed to be as airy and light as an afternoon rosé.

Oliver, 59, would rather keep his politics corked. But he said American businesses desperately need another round of aid. Because the virus has lingered, so have the revenue shortfalls and Oliver blames the president.

“They’re supposed to be pro-business,” Oliver said. “But so much of the Republican Party has reverted to this magical thinking that Trump has that the economy is fine and the virus is going away. They are delusional.”

Oliver worries about a dark time in which future generations feel it’s too risky to start a small business in their hometown. He can’t support the president.

“This event will impact generations of Americans – just like the Great Depression,” Oliver said. “It’s going to make it much harder to try and take the chance. Because, what happens if there is another pandemic?”

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A set table sits empty inside the closed Vince Lombardi's Steakhouse in Appleton, Wis., Aug. 20, 2020. Appleton is testimony to the lack of simple solutions to the coronavirus pandemic. Nearly 40% of the city's leisure and hospitality jobs have been lost. Restaurants have been closed, hotels vacant.

Other businesses are struggling to find workers. Trisha Kostelny, who runs Fischer-Ulman Construction, could get only five people to apply to lay concrete, even though the job paid $29 an hour with health, dental and a matching 401(k). She found just two of the applicants qualified.

“We’re so short of applicants I’ve wondered if I needed to go out there and do the work myself,” she said.

More than 9,600 people in the Appleton area are still without work.

The Trump administration argues the problem is that the government has been too generous with laid-off workers as officials said that the extra $600 a week in unemployment benefit kept most people from seeking jobs, so their expiration in August should cause a rush of applicants and hiring.

But to Kostelny, the problem is that workers need even more help from the government. Her only way to get more applications is to focus on minorities and women, employees who will likely need to pay for childcare. As of now, she can only afford to cover two-thirds of her 25 employees’ health insurance costs.

If she boosted wages and benefits on her own, she would put her business at risk. She now favors an increase in the minimum wage and some form of universal health care.

Kostelny plans to vote Democratic, as she did in 2016. But her customers and company span the entire political spectrum and she believes the economy is being hurt by the hyper partisanship.

“The more we are divisive – in no way is that good for business,” she said. “That can’t be good for business.”

Matt Albert, chair of the local Republicans, also sees the economic polarization. Businesses were initially less excited about declaring their enthusiasm for Trump and possibly offending Democrats, but those worries faded after the unrest in Kenosha, Wisconsin, after police shot a Black man seven times.

“They had been concerned about losing customers for putting signs up,” Albert said. “But they now feel like if Trump doesn’t get in, they won’t have a business. … The riots will shut them down. The regulations will shut them down.”

Still, Republicans here say that Trump propelled the country to new heights with tax and regulatory cuts, only to be brought low by the force majeure of a virus, and that most voters will hold him blameless.

Republicans’ knock on Joe Biden is that he would raise taxes that could suffocate growth (nearly $4 trillion over 10 years that would largely come from the wealthy).

While Republicans remain confident Trump will carry the county again, some concede the race could be tighter. If he loses cities like Appleton, it could spell trouble for the president.

“I think it will be closer because he’s losing some of the positive momentum that I think he created,” said State Rep. Mike Rohrkaste, who is not seeking reelection. “The pandemic has knocked him off his message.”

Several lawmakers and voters asserted that Biden would become the pawn of socialists and Marxists – a jarring claim in a community whose most notorious native son is Sen. Joe McCarthy, who falsely claimed that the U.S. government was full of communists and whose chief counsel would later become the personal lawyer for a young New York City real estate scion who is now president.

“The COVID has put so much pessimism into the economy – that’s the big killer,” said Marvin Murphy, the 80-year-old owner of Fox Cities magazine. He estimates he has spoken with every business within 70 miles of Appleton over the years.

Only the wealthiest companies with access to cheap capital are likely to survive, Murphy said. He nicknamed the disease the “McVirus,” he said, because McDonalds could not have engineered a “better way to kill off small, independent restaurants.”

A libertarian who said he votes Republican unhappily because “there is nothing else,” Murphy sipped a fresh cup of coffee in his backyard overlooking the Wolf River and lamented that so many people only process the world based on what they see and hear on TV.

“Reality is not the most important thing,” Murphy said. “The perceived reality is what’s important.”