Bernanke's Hometown Struggles In Downturn

For most Americans, Dillon in South Carolina is just another small town you pass by on the road from New York to Miami.

But take the turning off Interstate 95 and you will find yourself in a slice of small-town America that is feeling the economic downturn more than most.

Unemployment is almost 14%, compared to a national average of 7.8%. Most of the traditional local industries - cotton and tobacco farming and small-scale manufacturing – have withered away.

And although the freeway and the railroad still run through town, you get the feeling that while people might have stopped by before, increasingly they just don't bother.

But before you get the impression that this is just another forlorn southern town, there is something different about Dillon.

It is the hometown of the very man whose job it is to do something about the economic crisis and the unemployment problem facing America - the Federal Reserve chairman Ben Bernanke.

Unemployment in Dillon stands at 14%

Mr Bernanke grew up in Dillon, studied at the high school, where he taught himself calculus, and eventually graduated to Harvard. His family owned a pharmacy on Main Street, although it has now been converted into a bar.

He is something of a celebrity here - none of the locals has a harsh word to say about him. Perhaps for them he is a reminder that it is possible to get to the top, no matter where you begin.

But despite their enthusiasm there are mixed feelings nationwide about his policies.

Mr Bernanke has come under fire for quantitative easing (QE), under which the Fed is buying up $40bn (£25bn) of troubled bonds every month.

Some in Washington complain that he has failed, so far, to get the economy going again.

Mitt Romney has said he would not reappoint Mr Bernanke for a second term in office if he were elected president.

Walking through his hometown, you do not have to go far to encounter reminders of what has gone wrong.

Parts of the high school are in disrepair. Mr Bernanke's own childhood home was sold in a foreclosure sale a few years back - though the family had sold up some years previous to that. Locals complain that they have to leave town to find a job.

Even South of the Border, the rather surreal Mexican-themed roadside amusement park where (honestly) Mr Bernanke found his first job, looks rather desolate - although its proprietor insists this is because it is low season rather than because it has fallen on hard times.

Ed Conway with Mr Bernanke's uncle Mort

The people of Dillon are an intensely charming, relentlessly optimistic bunch. Most of them really are on first-name terms.

Every Friday they get together to cheer the high school football team, the Wildcats who are one of the best in the state.

But, like the rest of America, they are still struggling to come to terms with a new and unforgiving economic climate.

The problem is that they have had to contend with two successive blows.

The first was the impact of globalisation, as millions of jobs were offshored to China and elsewhere.

The second was the financial crisis, which has made it extremely difficult for any small business owner or household to borrow the money they need to move on with their lives.

In fairness to Barack Obama, neither of these issues can be laid at his door, but he is nonetheless feeling the consequences.

Economics moves at a glacial pace - it will take many more years for the US to get back to full strength - just as it did in the 1930s.

But the public are already disappointed that not enough progress has been made.

So Mr Obama is not the most popular politician in town - even if his rival does want to get their hometown boy out of the Fed.

Tonight Mr Bernanke will decide whether to continue with QE. The likelihood is that he will - which will only further infuriate his critics.

But as far as his uncle Mort, the last Bernanke still living in Dillon, is concerned, when historians come to look at the crisis again, they will conclude that his nephew saved the economy.

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