Oklahoma City Penn Square Lessons Give It 5.6% Jobless Rate

Published: Wednesday, April 15, 2009 7:00 am By: Vivien Lou Chen

Bloomberg.com
Archived Article

April 15 (Bloomberg) -- Oklahoma City has plenty of experience with banking crises. That's helping it avoid most of the fallout from this one.

The 1982 failure of Penn Square Bank, based in an Oklahoma City shopping center, triggered a national crisis and a decade of economic misery for the area. So many banks went down that locals dubbed Oklahoma City "Home of the FDIC," the federal agency that seizes insolvent institutions.

In the aftermath, the city rebuilt its economy on the basis of careful lending practices, diversified industries and debt- free public projects -- the kind of approach disdained in many other parts of the country, local leaders say. Now, Oklahoma City's unemployment rate, 5.6 percent, is the second-lowest of any U.S. metropolitan area; median home prices have increased every year since 2004, even as other Sunbelt cities are posting year-over-year declines of 30 percent or more.

"We're growing at a nice clip; it's very slow, very steady and very solid," said Mayor Mick Cornett. "I will admit that when I saw what was going on in Phoenix and Las Vegas years ago, I was envious. But I call that crazy growth."

The metro area of 1.3 million people -- along with states such as Wyoming, the Dakotas, Nebraska and Iowa -- offers a road map for building a stronger economy without the excesses that lead to booms and busts, said Martin Holdrich, senior economist at Woods & Poole Economics Inc. in Washington, which analyzes data and makes forecasts for every county in the country.

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