Community not sure if they want to bail out banks
By Steve Herring
Published in News on September 30, 2008 1:54 PM
Local reaction to the failure of the White House's bailout plan was mixed today, with many Wayne County residents questioning whether the government should be helping at all and others saying the public was not properly advised of its meaning.
Dallas Cox of Rosewood paused from stirring his eggs and grits this morning at the B&G Grill.
"No I wasn't surprised by the bailout vote (in Congress)," he said. "The way I look at it is that if we give the money, how long will it last? If me or you go broke, are they going to bail you out? Borrow some of the billions from the oil companies. Borrow from some of that oil money in Iraq."
Reactions to the House's repudiation of the proposed bailout plan were a mixed bag around Goldsboro.
Dr. Ken Stokes, dean of the Tillman School of Business at Mount Olive College, was speaking at a meeting of the Wayne County Chamber of Commerce this morning. He called the situation a poor choice of labeling mixed with a poor job of informing the public and a president with credibility issues. Those factors contributed to the plan's failure, Stokes said.
"Whoever labeled it a bailout plan got it wrong, it is rescue plan," Stokes said prior to the start of the chamber's forum on the county's economic forecast. "It is not just about helping Wall Street, it is about helping the world. I got an e-mail yesterday from some colleagues in Korea who are wondering is this going to be a repeat of the 1997 meltdown in Southeast Asia and Korea."
"Things have changed and it will not be as bad as that, and I think there is some optimism," Stokes added. "I think they (Congress) got it wrong. I think they should have passed it. Was it the best deal? No, but there is a fantastic urgency right now."
President George Bush has some credibility issues with the public and with the Congress. He said he thinks those issues played into the vote.
"Language is really important. I don't know how it was first venture but it (bailout) is a sticky label and it stick. It is the wrong label. If someone more in tune in drafting the language (of the bill) I think it would have been more successful."
They have to pass something, he said, they have to get something going.
"It was not labeled right, not pitched right. They had very little time to deal with it. The time it takes a major investment company to go from viable to nonviable is proven to be in the order of three days. How you can you actually prepare the public for major bill like that is major challenge. There is just not the infrastructure for it."
The consensus of Ed Williams, the Rev. Frank Purvis, Donald Radford and Tony Sasser was that "greed" and people's "desire for "instant gratification" had contributed to the meltdown.
The men, part of an informal prayer breakfast group, also agreed members of Congress need to get on their knees and pray.
"The Congress as a whole needs to be deliberate and careful in their bailout plan," Williams said. "I was surprised at the vote. It needs a lot of thought. As taxpayers we are the ones bearing the burden, it should favor us. Helping Wall Street, we must be careful."
"I was surprised it didn't pass," Purvis said. "I thought with the president's appeal and the parties' support it would pass. But when you get down to it, there was no consensus."
Radford said he had seen one report where the phones "were ringing off the hooks" with voters angry at the plan.
"Congress' response was we won't do it," he said.
"They need to be looking five and 10 years down the road at the future," Sasser said. "We need to learn from our mistakes."
"I don't understand what is going on, people are confused," said Dr. Ed Wilson, chairman of the Wayne County Economic Development Alliance, as he waited for the forum to begin.
"I was surprised at the vote,' Wilson said "It is hard to tell what their reasons were for not voting for the package. I don't understand why we are in the mess economically.
"I was very surprised," said Terry Jordan of First Citizens Bank, chairman-elect of the chamber. "I though that over the weekend they had made adjustments and both sides had agreed, but it doesn't look like they did. They need to go to the bargaining table. It is critical for the American economy."
Part of the problem, Jordan said, is that a poor job had been done explaining the plan to the public.
"The American people need more information," he said. "They feel it is rewarding those people for greed and it is coming out of their tax dollars, but there is more to it than that. Failure to act will impact mortgages and banks' willingness to loan money."
"Nothing that comes out of Congress surprises me any more," said Joanna Thompson, president of the Wayne County Economic Development Alliance. "They said they were putting away partisan politics but they are not.
"I was surprised and very disappointed. Every day that goes by hurts America and its citizens."
The breakfast crowd at Wilber's Barbecue also expressed mixed feelings about the bailout's failure.
Something needs to be done right away, they said. But none liked the current plan. It needs to be amended, Jim Mitchell said.
"(The economy) keeps going down. They need to do something, but I've got mixed feelings. How many times has the government bailed you or me out when we've gotten into debt?" he asked.
The government is rewarding bad behavior, more than one said.
The wrong parties are being included in the bailout, said Frank Brown, who was sitting beside Mitchell.
"The only purpose for the bailout is to provide money to the people who have been doing wrong," said Frank Brown. "They give bad mortgages and bet on the stock market. When I went to school, losing money on the stock market was just a part of buying stock," he said.
And it's wrong to charge 35 percent interest on a loan that is considered high-risk, he said. If the loan is so risky the interest rate has to be 35 percent, he said, the bank has no business making the loan in the first place.
"They're charging 35 percent interest on credit cards and pocketing the money."
And the money being used in the bailout is not even the Federal Reserve's money, Brown said. "It's the taxpayers' money. And there will be nothing in (the bailout) for you or me," he added.
But right or wrong, it's scary to think about what would happen without a bailout, said John Best, who was sitting across the table from Mitchell and Brown.
"It's probably got to be fixed. I don't agree with it, but it's got to be fixed," he said.
James Thornton offered one solution. Cut the bank presidents' salaries.
"They need to live like poor people for about a month. Then, they would understand why we are having problems," he said. "You go put $1,000 in the bank, and you're lucky if you get three percent (interest). But if you borrow that $1,000, you pay 10 percent interest. And it's all your money."