Economic woes flavor Sauerkraut Festival

PHELPS, N.Y. | You know the economy is on everyone’s mind when it becomes part of a T-shirt slogan at the annual Phelps Sauerkraut Festival in upstate New York.

“Economy in the toilet — everything is behind schedule — but the kraut is fine in 2009!”

In truth, most of the sauerkraut makers have left town.

But “the festival is a reminder of the good old days,” said one member of the Lions Club, who was sitting at the organizing table. “Right now, it’s kind of an escape. The economy is on everyone’s mind. You can’t escape it, so we felt you just have to laugh about it and deal with it and go forward.”

In Phelps — population 1,909, about an hour east of Rochester — the festival is a slice of Americana; a 43-year-old celebration where a Boy Scout troop will help you find a parking space, the Babe Ruth League plays its all-star game next to the rides of the midway, and various local groups sell pies and sauerkraut fudge.

The Phelps Chamber of Commerce started the Sauerkraut Festival because the town was one of the largest points for kraut production in the world. That was in 1967. In 1969, the Sauerkraut Festival Committee took over the responsibility.

But the Silver Floss/Empire State Pickling plant on Eagle Street stopped canning by 1985, and the Seneca Sauerkraut factory was demolished in 1994. The American Legion Post 457 and the Phelps Fire Department helped with the organizing duties over the years as the sauerkraut makers left town, to the point where there’s now more sauerkraut heritage than actual kraut in Phelps these days. The fair is a reminder of happier, more vital times for the community.

Touring the festival in early August, it became obvious talking to the locals that the economy was a lot more than a funny line on a T-shirt.

Vendors were happy to be there, glad to still be in business and have jobs, but could not ignore that their sales were down, whether they were hawking food or handmade necklaces or air-brushed T-shirts.

The event, according to several vendors, was an excuse for people to spend money, but not much money. And that’s where things tie in well to the big picture.

Investors and consumers clearly are looking for reasons to feel good. They want to believe that the stock market can sustain its recent gains, that the government’s economic policies can take hold and that the worst is over, and yet they can’t live — or spend — like they truly expect tomorrow to be a better day.

The Investor’s Business Daily Economic Optimism Index for August jumped back into positive territory, rising 8.6 percent to close at 50.3. That’s above the 12-month average, and far ahead of the 44.4 reading from December 2007, the month when the economy officially entered a recession.

Consumers are feeling better about all three major components of the index, the six-month economic outlook, their own personal financial outlook and federal economic policies.

And yet, the IBD index was released a day after the Federal Reserve noted that Americans paid off $10.3 billion in debt in June, with more than half of that money shaved off revolving accounts like credit cards. It was the ninth straight month that consumer credit has shrunk.

Consumers may feel better about the economy — and they like the market better now than last year, even if they don’t trust the rally to hold — but they’re not acting like it’s the old days.

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