ES MOINES - The local news shows are broadcasting specials called ''Crisis in the Heartland,'' the governor is warning that one-third of Iowa's family farms could go bust, and just about every presidential candidate stalking the first-caucus state is promising billions of dollars in relief.
But while this all sounds like a replay of the lean years of the 1980s, perhaps the most surprising news in Iowa this summer is that the state is not about to sink into depression. To the contrary, even with record low crop prices, Iowa in many ways is thriving with an improbably low 2.5 percent unemployment rate.
''There are two Iowas,'' said Governor Thomas J. Vilsack, a Democrat whose election last year was based in large part on cobbling together constituencies from both sectors of the state. The state's transformation during the past decade adds an element of unpredictability to next week's Republican straw poll and next February's caucus.
One Iowa is the thriving urban and suburban area, flush from a decade of diversification into the insurance industry and manufacturing. The other Iowa is limping down the rural road, where the number of farms has shrunk from 145,000 in 1970 to 97,000 last year and prospects can seem bleak.
Now, with Iowa's two economies alternately thriving and sputtering, the question is who will show up at the straw poll on Saturday: fearful farmers or affluent suburbanites? While the poll is nonbinding and often derided as meaningless, many of the candidates have placed enormous importance on it, with Texas Governor George W. Bush staking his front-runner standing on his belief that he can win impressively.
Most of the presidential candidates visiting here seem to miss the complexity of the state, according to Vilsack and other observers. Instead, many candidates are pitching ''boilerplate'' palliatives for one of the fastest-changing economies in the United States, the governor said.
Nowhere is the transformation of Iowa more striking than in Des Moines, with its numerous new skyscrapers bolstering its effort to become an urban center of the Midwest. City officials attribute much of the growth to their effort to become the insurance capital of America, although Hartford, Boston, and even Omaha are doubtful about the claim. The city is headquarters to 70 insurance companies, including the Principal Financial Group, which constructed a gleaming 44-story downtown office tower, the state's tallest.
''People think of us as being in the middle of cornfields, but you can go for miles in Des Moines without seeing corn,'' said Tina Hoffman of the Greater Des Moines Chamber of Commerce.
The front page of the Des Moines Register demonstrated the state's dichotomy vividly one day last week. The lead story, headlined, ''Posh mall is courted for West Des Moines,'' reported that a developer was trying to lure Nordstrom's and other upscale retailers to a neighborhood that recently has become rife with expensive homes. But just below the fold, an article quoted Vilsack urging hard-hit farmers to aim their comments about slumping commodity prices at the presidential candidates touring the state.
It is not just Des Moines that is booming on the strength of the non-farm economy. Two hours east of here, Cedar Rapids is attracting its share of health, manufacturing, and insurance companies. When GOP candidate Steve Forbes spoke in Cedar Rapids recently, he drew an enthusiastic response from about 500 people who gathered to hear his pitch for flat taxes and his attack on Washington.
The story of today's Cedar Rapids could be seen less than a mile away, at the sprawling, 9,000-employee Rockwell Collins plant, which manufactures airplane communications equipment. The company would like to hire another 200 engineers, but it cannot find qualified people. The story is the same all over Iowa, as employers tell of trying to lure immigrants from as far away as Bosnia to fill the void.
The job crunch is slowly erasing some of the stereotypes of Iowa as bland and lily-white. While this state of nearly 3 million is 96 percent white, the Latino population is growing so fast - now at 53,000 people - that Bush last week made an extra effort to court the community.
The labor shortage at Rockwell Collins highlights what may be the most troubling statistic about Iowa. While the state does a stellar job ensuring that most of its residents graduate from high school, with the 11th best rate in the nation, Iowa has one of the lowest percentages of college graduates, ranking 42d, Vilsack said.
Iowa suffers from a combination of ''brain drain,'' with the best-educated people leaving the state, and a lack of high-paying jobs outside the urban areas. The result is a state with nearly full employment but a lower-than-average pay scale, roughly 90 percent of the national norm.
''If you sit in [West Des Moines], you think Iowa is doing great,'' said Hugh Winebrenner, a Drake University professor and longtime trend watcher in the state. But in most rural county seats, ''you would find they are not doing so great because they are so tied to agriculture. It really is the two faces of Iowa.''
Beyond the urban areas, the other face of Iowa rises green and lush, exactly as most outsiders would expect. It is possible to drive for hours across the state and see barely any interruption of the fields of corn and soybeans. Yet these two crops are plummeting in value in the international market. Corn and soy fetch half the price of a few years ago and are at the lowest point in memory.
In Fertile Township, two hours north of Des Moines, farmer BradPetersburg looks upon a verdant, undulating expanse of 1,000 acres, equally divided between corn and soy. Like his father's before him, Petersburg's livelihood depends upon the free-market price of his product. But unlike in his father's day, when corn may have fluctuated by 10 cents a season, corn now spirals up and down by $1 or more. Lately, he has gotten $1.50 a bushel, down from $5 a few years ago, and the lowest price in decades.
In contrast to the drought conditions in the East, the crop here is healthy and in oversupply, which is one reason prices are low. ''There's a lot of pessimism out here,'' said Petersburg, though he is brimming with ideas about how to ''add value'' to his products and cut out the middlemen. Like many farmers in the state, Petersburg said he will be lucky this year to break even, despite the subsidies he receives from the federal government.
The Republican presidential candidates touring the state this month in preparation for Saturday's straw poll have rushed to promise their support to farmers. While many of the candidates normally deride government subsides, nearly all of them have vowed to back aid packages now winding through Congress.
Forbes, for example, is among the harshest critics of government bailouts. But when asked in an interview whether he supports the congressional proposals for increased farm subsidies, Forbes said Congress must act immediately. Forbes said he sees no contradiction in this position because ''government caused the problem'' by being too tight with the supply of money and ineffective at breaking trade barriers.
Vice President Al Gore, meanwhile, took the lead last week in backing a farm aid package after his Iowa supporters warned him that the administration's wait-and-see approach was hurting him in the state.
The candidates also have jumped quickly aboard the subsidy bandwagon for ethanol, a corn-based additive for gasoline. Former senator Bill Bradley of New Jersey once opposed the ethanol on grounds that it was a giveaway to agribusiness that had questionable benefits. But now that he is counting on a strong showing in Iowa in the caucus, Bradley has become an ethanol backer, saying that he was convinced about the merits after sitting down with farmers here.
The only candidate who opposes the ethanol subsidy is Arizona Senator John McCain, and his stance is so unpopular that the Arizona Republican has decided not to compete in the straw poll and he may not make much of an effort in the caucus. McCain said last week that he objected to spending any more money ''on a fuel that has no known benefits and actually takes more energy to produce than a gallon of ethanol contains.'' These are words that few politicians would dare utter here.
Despite the hoopla surrounding the straw poll, it is one of the most un-democratic functions in American politics. Just one-half of 1 percent of Iowa's population is expected to participate.
Historically, Iowa's economy has often determined the caucus winner, although not the winner of the presidency. In 1980, George Bush won the caucus but lost the nomination and became vice president. In 1988, Bush came in third in the caucus because of disenchantment with the Reagan-Bush administration, then went on to win the nomination and the presidency.
