Iowa caucus 2012: The economic upside goes beyond restaurant tips

Dozens of journalists and local residents cram into the Family Table Restaurant to hear former Massachusetts governor and Republican presidential candidate Mitt Romney speak during a campaign event Jan. 1, 2012 in Atlantic, Iowa.

Kai Ryssdal: Politicians have been workin' in Iowa for months now -- years, in some cases. The payoff comes tomorrow. The Iowa caucuses will be the first time in what's already been a long campaign that anybody is going to stand up and be counted.

Betweeen the candidates and their entourages, not to mention the press corps rolling on through, the caucuses make a nice little New Year's present for hotels and restaurants in the Hawkeye State. The long-term impact, though, can be even richer.

Iowa Public Radio's Sarah McCammon reports.


Sarah McCammon: Centro is one of downtown Des Moines' swankier restaurants, a place where President Obama has eaten, and a popular spot with politicians, their staffers, and well-known journalists. It's one of those places getting a small sliver of the millions spent leading up to the Iowa caucuses.

Chris Diebel: This is a huge spot for people who are coming in not only to cover the caucuses, the press, but also stargazers. They know Centro is one of the top places to see folks.

Chris Diebel is the marketing director for Centro. He says the restaurant has gotten a 10 percent boost in revenue some caucus years. And the numbers are up this year.

But Iowa State University economist Dave Swenson isn't all that impressed. He analyzed the last two quarters of campaign spending before the very competitive 2008 Iowa caucuses. It added up to less than 1/100th of a percent of the state's GDP, or about 230 jobs.

Dave Swenson: So it's not a big deal. It doesn't drive our economy.

McCammon: So what does?

Swenson: It provides a lot of exposure for the state of Iowa, to a certain degree it covers our issues that people think are important.

Swenson says it's why most candidates make promises to continue farm payments and ethanol subsidies, whether or not they make economic sense.

Dave Miller is with the Iowa Farm Bureau. He says federal support for ethanol has insulated the ag sector during this economic downturn.

Dave Miller: It is jobs for rural America. It is better pricing, better asset values for Iowa farmers. Yeah, we care a lot about biofuels policy. And the caucuses allow us an opportunity to have interaction and debate with presidential candidates with regards to that type of policy.

And if you believe the industry's numbers, it's no small value. The State Renewable Fuels Association estimates Iowa biofuels were worth about $13 billion in 2010 alone and created 49,000 jobs.

In Des Moines, I'm Sarah McCammon for Marketplace.

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