Paul Yeager: We had you on with Dave Swenson back in -- I think it was February and things were pretty dire then. Things had, you know, or at least we think that is what it was. We don't know if it's going to get worse. What's changed since early winter or mid-winter to now? We've seen some, like you said, some climbing been in Iowa-- what's helped Iowa, what's hurt Iowa and their economy and their recovery or were they even in a spot that was needing recovery?

Ernie Goss/Creighton University Economics Professor: Oh it was. Yeah, Iowa was and it really began with the floods of last year in June. At least according to our survey and lots of other data that you had a real hit to the economy and then on top of that then you had the down turn the overall economy and back to the farm equipment area, bio-fuels production, ethanol has not been -- it's been a tough couple of years for ethanol and bio-fuels.

On the flip side of it -- the good side is you got wind energy. Some of the production of towers -- tower production, blade production although not -- unfortunately we're still buying blades from Denmark but they're shipping them in and there are truckers out there that are -- that are making profits from shipping in those blades and also insulation of the blades and even some of the small, you know, for the home, for the farm for example your own tower to produce, you're won wind energy production for your own operations. Seeing some of that. I'm not certain about the long-term outlook for that because of course what the economy is a scale. I just -- the numbers right now, the re-capture period seems a bit too long to me, but they got a lot of folks out there investing in it. That's spilling over.

Then -- then of course in Iowa you got the casino industry and that's that's an industry that's -- Iowa I don't -- Iowa has got a -- Iowa has got to take some real look at that industry very hard, very long look and understand that it can't be fundamental to your economy. I mean I think it's an important industry no doubt about it. However with the competition we're now seeing and you're certainly seeing it from Missouri that took the loss limits off which affects the Iowa casinos right there.

People that -- that didn't want to go to a Missouri casino because of the loss limits were going to Iowa. Now they're going back to Missouri. You got Illinois which is pretty competitive although the tax rates are higher there on the casinos. The casino gambling it's a -- it's a foundation of sand. Not again saying that you can't depend on it but it -- you've got, you've got to go to the products like farming. You've got farm products, you've got manufacturing, it's just -- casinos is is entertainment because that -- that's entertainment and it should be treated as such.

Paul Yeager: And you have Iowa looking. I mean you saw the -- probably the feasibility studies or the studies that Iowa said "Well, you could put one here and one here. If you put one here it's going to kill this one. If you put one here it's going to hurt that one." Des Moines has said Prairie Meadows has said "No, we're just not going -- we're the ones that would open that second one. No." Lyon County still looks like it could possibly be in far Northwest Iowa. If Iowa goes any further than that is that to the point of -- I don't know not no return but the point is we're really going to start losing?

Goss: Well, you're cannibalizing business from other casinos. There is no doubt about that. In other words when you open a new casino in -- across from Sioux Falls if that one is opened it will cannibalize some business from the other casinos. Now that window there is no competitor in South Dakota. No large competitor. So, you could have some significant increases there for that one at least in my -- in my judgment, but again what -- from the state's standpoint, hey open more casinos.

The revenues go up. They just don't go up as much and so the real hurt is delivered to the community or to the casino itself because obviously if you have lower casino revenues in Council Bluffs or you don't have the growth that you were expecting then they're going to hire fewer workers and then some of those workers go to the -- to one of the other operations whether it's in across from Sioux Falls. We don't -- we don't know. That one is still in the drawing boards at least as I understand it.

Yeager: Yeah they haven't decided yet, but that could come early as October.

Goss: I would expect it to.

Yeager: I think that's when the licenses are due at the end of September or maybe it's the end of October.

Goss: This is a huge windfall. Governor Sebelius got the approval for four casinos and some of the casinos pulled out. They saw it as we can't compete when Missouri takes -- Missouri retaliated because they voted to take the lids off. All of the sudden Las Vegas Sands was not interested in competing in Kansas. Well, to think that you're going to put one across from Sioux Falls without competition from South Dakota. Now there have to be some changes in the South Dakota Iowa or perhaps even the Constitution. I'm not certain there but South Dakota will retaliate. They're not going to sit there and watch their monies going elsewhere when they have casinos already. Now, Nebraska is a little different. Nebraska doesn't have casinos. So, you still have the casinos in Council Bluffs.

Yeager: Iowa is still taking in money.

Goss: Yes. Yes.

Yeager: We discussed before.

Goss: Yeah and if, you know, it's a legitimate business, it's entertainment for most all of us, it's a high tax entertainment, but it's but there are about three to five percent for whom it's not entertainment. It's just an addiction.

Yeager: You talked about flood. That was a big problem of East Central Iowa, Cedar Rapids, Iowa City, there were other parts that had flood that sent our economy down. Cedar Rapids is trying to recover. Des Moines has had their hit a little bit this year if you look at insurance. Principal -- there's always the rumors. They've kind of maybe calmed down that they're going to be sold. They're not going to be sold, but Des Moines and their industries, I mean that's really the engine that drives the state now.

So much of the state is Des Moines central. When you look at their economy and how it plays, is it a shining star like an Omaha has been or has it seen better days and what is going to help get back to better days?

Goss: Well, it's not been the growth engine that Omaha has been. Des Moines is slower growth and some of it of course has just been drained off to West Des Moines. I mean it's just the numbers are in West Des Moines proper. So -- but you put it all together it's still not as much growth there, but the industry you can never, I mean, to anyone who thinks that any company can't be sold and moved. So, Principal -- well, Mutual of Omaha, I don't want to go on this broadcast saying Mutual of Omaha is going to move. Goodness knows but even with that name who's to say. In other words the idea that things tomorrow are going to be like they were yesterday or today, you just can't count on that.

So, I think-- but in terms of insurance Des Moines is one of the star communities in America. Harford, Omaha, Des Moines -- three of the communities right there. An insurance health care reform -- now the health part of it and apparently insurance companies have become evil. At least according to some. I don't share that sentiment but there is some motivation to coral in of course healthcare but then does it extends to automobile or property and causality? Does it extend over into life insurance? I don't know.

This government and it's been going on. It's not just the Obama administration. It was going on with the Bush administration as well is this idea that somehow we've got to coral some of these businesses. Well, insurance is just not an industry that generates a heck of a lot of sympathy from the public. Now it does from economists but the public out there, you know, they're like insurance? No, it's like lawyers and economists. We just don't get any -- we don't get any respect and maybe we shouldn't. I don't know.

Yeager: Iowa in terms of diversifying it's economy. Is Iowa diverse enough?

Goss: My concern for the Iowa economy would be the dependence or continuing dependence on the farm sector -- diversify from that. Although I've said the farm looks very good going forward. Well, just as soon as you, you know, it can look bad. You ride it up but you ride it down when the value of the dollar up and down with the dollar and health care. Now we don't know what's going to happen there, but that's certainly an important industry.

You've got Des Moines which is a health care center with insurance connected to that and business and professional development services they're very strong for Iowa and for Des Moines. Bio-fuels and alternative energy -- when you change administrations you change policy, and we've got to, we've got an election next fall in 2010. We don't know and just as you have a import ethanol today, who is to say it doesn't go away in 2010 with a new election.

So, my concern is with alternative energy production there's too much government in there for me to be comfortable. For me to be comfortable is you don't get these swings. You have an election -- well, we have elections every two years, congressional elections. We have elections of governors although that in terms of industry that tends to have less of an impact, but in terms of Iowa again I do think Iowa needs to look at casinos and map out a strategy long term understanding that there is going to be more competition.

I'm not saying close down casinos. I'm not saying don't expand. Just recognize that the casino of tomorrow is probably not going to be the casino of yesterday and understand that how do you meld that industry which is a good solid industry. How do you meld it into your economic growth strategy and I don't think you're competitors there you got Illinois, Missouri, and now Kansas.

I think Iowa could do quite well there if you do it properly. We'll wait and see if it's done properly. Now by properly -- to build up this one across from Sioux Falls assuming you're going to have these kind of revenues. Well, there will be a retaliation from South Dakota. So, planning out for that retaliation. Planning out for the retaliation of Illinois. Illinois is going to have to reduce those casino tax rates in my view. They're not competitive.

Yeager: Well and they've already non-competitive also in the smoking rule. If Iowa changes their smoking rule to lift that exception or take away that exception Iowa casinos have, Illinois has it. You can't smoke in Illinois casino. You can in Iowa. That's a whole another -- if that's a big enough deal.

Goss: Oh, it's a big deal. You think, you know, and it's the only place that -- as far as I know that you can smoke in public in a public place in the state of Iowa is on a casino floor. You can't smoke in the casino restaurant. I guess that's the law. As you can wear -- as you don't have to wear a helmet on a motorcycle but don't get caught with seatbelt off.

Yeager: That's the law.

Goss: That's the law. Yeager: I've done stories for years about oh, look at all these red tag sales at the holidays. They've been pushing consumers to go and buy at a retail store. You know spend, spend, spend. Our economy is a retail economy. There's a lot of people that don't have that extra money. We didn't think they had it the year before and they didn't have it the year before that, but now the data shows that they really don't have the numbers. What is the holidays going to look like and how do people prepare?

Goss: Santa is going to have shorts on. By that I mean you're going to see Christmas sales being pushed up before we even have a frost. They're going to get aggressive. There's no doubt about it. The retailers out there are going to get more aggressive. The sales are just going to be distributed. The lower sales distributed among the more aggressive.

So, it's going to be a tough one. I don't see any way around that. The cash for clunkers program and the cash for appliances -- well, if you buy, I mean, I don't buy anybody a refrigerator for Christmas. I've learned don't do that. Don't buy any of that -- nothing! Don't buy an appliance for Christmas -- buy it some other time. Not for Christmas. So, we're going to buy automobiles. We've bought them. Clunker program ended. The appliance program -- it's modest but still that takes away from what people would spend somewhere else.

So, you maybe making your Christmas. You maybe making some of your Christmas presents this year. Who is to say? I mean I've already gotten a Christmas wreath. One already. So, we could -- we will see more ingenious Christmas presents this year than maybe we've ever seen and you know there's some good out of that. I mean this is just as one of the things that's talked about less is how much -- there are some goods -- good things come out of this and it means that we as consumers have to retrenchment of our spending. Businesses all of the sudden the analysts are out there saying well these -- this is not good.

These profits are coming from cuts in costs. Well, that's a good thing. Now I do feel certain sympathy for those individuals who have lost their jobs because of those cuts. That's obviously not good but this retrenchment in our spending, in our households, I think we were getting, you know, the past few years we were, as a former sailor I don't want to say this but I will is spending like drunken sailor and for all the sailors out there I was sailor. So- anyway not good. We are spending and I think without enough sort of scrutiny. So, now we're all scrutinizing more.

Now, there is some good there. We're saving more. That's one of the issues. So, I'm seeing that less of a negative then as a positive. Saving more. The house as individuals we don't have the house there to tap into to the ATM machine which is our house to borrow to buy Christmas presents. So, it's going to be -- there is going to be some coals in those Christmas stockings. There's not much doubt about that, but I don't -- it's probably not going to be quite as dire as we might think. Parents, we all do, spouses, we find some way to at least buy something. I mean we can't - well, you know, come home tell the kids well sorry there recession you know? Kids don't know about recessions nor should they.

Yeager: Maybe we won't have you back to play Santa this year at the party. We'll do that. Well Ernie Goss thank you so very much for taking time.

Goss: Paul, good to be with you. Thanks.