Jeremy Hobson: I remember the exact moment when I realized just how bad the Great Recession was, and how much of an impact the things that happen on Wall Street and in Washington can have clear across the country.
I was driving through Memphis, Tenn., on a reporting trip in the summer of 2010. I got to a neighborhood where just about every other house was abandoned. Many of the former homeowners had been persuaded to take risky subprime loans -- that they couldn't afford. And when the interest rate skyrocketed, well, you know how the story goes.
Now, a year and a half later, to get a sense of how things are going in Memphis, we're joined by the mayor of Memphis, AC Wharton. Welcome back to the show.
AC Wharton: Thanks, glad to be here.
Hobson: Well the last we talked, back over the summer, I asked you about how Memphis was doing then, and we're going to play you a clip now from that answer.
Wharton: All in all, I would say that in the not-too-distant future, you're going to see a pretty good turnaround here.
A turnaround. So is that happening?
Wharton: Yes. We're continuing to bring in jobs. We made some progress on pension reform, which you know the failure to reform pensions has gotten places across the nation in trouble, so that's progress there. And we have a reserve -- a rainy-day fund -- that's up to $80-plus million. So yes, there is a turnaround, but we're not out of the woods by any means.
Hobson: What about on the foreclosure front? Memphis has been an area that's been hit extremely hard. I saw the latest report shows that the Memphis area saw a big drop in foreclosures from a year ago -- is that good news or is it just that every house that could possibly be foreclosed on has been?
Wharton: I think it may be the latter, where I think it has bottomed out. But if it has bottomed out, then that's good news -- it can't get any worse. And we're seeing some uptick in building permits; I think that may be a positive sign, such as it is. I mean, you've hit bottom and you have no place to go but up.
Hobson: Now, it's been a year in which Washington has been in the news quite frequently and usually not in the best light -- a lot of bickering going on back and forth, both sides can't agree on what to do. How is that impacting you as the year comes to a close in Memphis?
Wharton: In so many ways. There's just so much gloom and doom coming out of Washington. Back at home, there are folks lined up outside my door everyday saying, 'we want to partner with the city, we'd like to do this.' It's as if we're living in two worlds. There's the world on Main Street that says 'we want to recover, we're willing to put out some capital to venture into this.' But right when they say, 'we're ready to open our wallet,' somebody from Washington with the gridlock and all, snuffs it out, they throw a wet blanket on this one. Then, one of the most frustrating things, the gridlock in Washington, is just sucking all the life out of our local economies, particularly when it comes to local government.
Hobson: What's the difference? What are you doing right that they're not doing?
Wharton: We know that we are the government of last resort. I think it is imponderable that Washington is in a position saying, 'look even if we don't get it done, they'll make due somehow;' we don't have that luxury at the local level. If I don't provide police services, I cannot say 'they'll defend themselves somehow.' I think maybe Washington ought to have to travel around and hold sessions in various cities every once in a while and act like they are the government of last resort. I think that's what's missing. There are no sick people knocking on their door; they don't look out their Capitol windows and see buildings burning because there are no fire crews around. A lot of this is just too abstract for them and I think that's probably what happens.
Hobson: AC Wharton is the mayor of Memphis, Tenn. Mayor Wharton, it's a pleasure to have you on the program. Thanks so much for talking with us.
Wharton: Thanks for taking time to let me share a few views on what we're doing here.
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