I'm a bit behind the ball with my usual news-type magazines, so I completely missed this interview with Bill Janklow, the former Governor of South Dakota, about my home state's role in the ubiquity of the credit card. A number of my relatives--and later, my friends--took jobs working for these 'financial services' companies, but I never questioned where the jobs came from or why they were in South Dakota instead of some place with better infrastructure, larger population and/or a greater base of support services. So maybe this is an old story to people my parents' age, but for me it explains a great deal.
Most interesting to me, then, are a couple of quotes from the interview. Citibank offered to move their credit card operations from New York to South Dakota in 1981 to take advantage of new legal rulings that would allow the corporation to turn around its unprofitable credit card division. When they opened negotiations with then-Governor Janklow, the state was in dire straits:
I lived in a state where the economy was, at that time, dead. I was governor of South Dakota at the only time in this state's history when the economy shrunk from one year to the next. It actually was smaller in one year in the early '80s than the year before. Our sales-tax collections actually took in less total money one year than the previous year. That's how bad our economy was in South Dakota. I was desperately looking for an opportunity for jobs for South Dakotans. To me, this wasn't a credit card deal; it was a jobs deal. It was an economic opportunity for the state.
So the political and banking leaders of the state got together and capitalized on the opportunity. Within weeks, the necessary legislation was created and passed and soon thousands of jobs were created, and millions of dollars poured into South Dakota. Soon other states moved to follow South Dakota's example.
But if they'd have waited just five or six more months, we'd have had 20,000 more jobs in this state. We would have had to import workers. Seriously, we would have had to import workers. [South] Dakotans would have come home.
See, one of the things that always haunted me -- you have to understand where I'm from. I'm from a remote, rural, Midwestern/Western state. Citibank, the second year they were in operation, had 24,000 applications for work on file. Twelve thousand of them were former South Dakotans that live out there in the universe someplace who wanted to come home.
Some of them got the chance, but not that many. And in the intervening years, investment in the state dried up again and, well, here we are, exporting talented, educated young people in droves. Shoot, I left. Most of my friends from high school moved away and have no hope of returning. With the exception of some promising small-business growth in Sioux Falls, South Dakota is slipping back to where it was in 1980, except this time there's no hope of another deus ex machina to bail us out. What happens next?
Anyway, the rest of the program--titled "The Secret History of the Credit Card"--is an interesting overview of the state of our consumer debt, and the Janklow interview is of particular interest to my fellow South Dakotans. I can say that even without taking a snide pot-shot at ol' Wild Bill; it was that good.
OK for now. January was pretty gonzo, but February should be better. Will continue to work on the site in my spare time, an hour or two here and there. Stay tuned!