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Economic View From Main Street, Iowa

Charlie Gibson Talks to Iowans About Finance, Fear and 401ks

The "World News" Battleground Bus Tour's first stop was Dixon, Ill., to see Ronald Reagan's boyhood home. We were just curious about it really -- but we were visiting at the point the market was down 700 points this morning, so we stopped off to meet the local broker.

"We're trying to encourage people to, one, to make sure they're diversified properly and, two, if it's not money you need right away, you just need to stick to it," said Kim Pettigrove, financial advisor with Edward Jones. "I am booked throughout the day, and I have a stack of phone messages I keep trying to get back to."

Across the street in the local book store, four retirees made appointments to see Pettigrove.

"Like everyone else I got that quarterly [retirement savings] report a week ago and went, 'Oh, my God'; it was just really scary," said Marilyn Coffey. "I had a total of $125,000. It was down $17,000 in three months."

Coffey's husband was more optimistic.

"I think the bottom is close and I think it will start rebounding," said Tom Coffey. "But my fear, again, is that when you retire, your needs are more immediate. So hopefully, it will rebound faster than when I run out."

Next, the bus tour was off to a family farm in Eldridge, Iowa.

Neal Keppy and his brother run a 1,900-acre family farm. They grow corn and soybeans, and raise 7,000 pigs each year for market. For them, times are pretty good.

"It's kind of like the stock market," Keppy said. "It's more volatile now than any time in history before. The market now can move up and down 30 cents a day for corn -- whereas when my brother and I first started farming corn in 2000 ... if it moved 30 cents in a year that was a big move."

This is harvest season, so Keppy took ABC News on the combine to give a sense of what farming is like. Fifty feet into the first rows of corn, the combine harvester plucked the ears from the stalk, shucked the ears and stripped the cobs of kernels that were already flying into the back of the combine.

The corn will either go to ethanol production, be shipped overseas or be used for livestock feed selling for twice what it did just two years ago.

"The banks that lend to agriculture have not seen the meltdown that we've seen in non-agriculture lending services," Keppy said. "Lending is critical to agriculture. I don't necessarily like the government being involved in bailing out every industry when there's a hard time. But the credit market, I understand why they cannot let that dry up."

Next, it was off to Bettendorf, Iowa, and Ross' 24-hour diner, where business is off by nearly 20 percent.

"When people on the networks are saying, 'Here's a way you can cut back on your expenses: Eat out less often,' that hurts us directly," Ron Freidhof said.

A few of Friedhof's customers at the diner shared his concern about the economy.

"It is very frightening when you work 35 years to have what you have, and then to have 20 percent of it gone in just a month's time," said Jackie Johnson.

"I just want to make sure I retire here in five years," said Diane Nelson. "I want my medical and I want a pension. I worry about that, and I worry about my 401(k)."

Despite hardships and fear, the people expressed resilience.

"I'm proud of the people in the Midwest," said Cynthia Ross-Freidhof. "And we're going to get through this no matter what happens. ... We'll help each other out."

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