This song is about the financial difficulties farmers in the Midwest US face; difficulties that can go as far as having their farms repossessed by banks. Mellencamp wrote the song with his friend George Green, who he worked with on many of this tracks, including "Hurts So Good
"Our songs always came about the same way: talk around the kitchen table," Mellencamp told Rolling Stone
. "I had just played 'Small Town' for him. He said, "I don't know why these towns are going out of business" - towns like Freetown and Dudleytown, Indiana. We couldn't figure out why they were disappearing. We did our research and wrote this song - Reagan had been using grain against the Soviet Union and all sorts of other things. Talking to people was heartbreaking. Nobody wanted to lose their farm."