It has to work
Advertisement
Text size: small | medium | large
By Published by The Editorial Board
Published: October 7, 2008
Congress was pushed to pass the $700 billion bailout bill last week. The legislation wasn’t any more popular here in the Dan River Region:
“In my opinion, it’s necessary whether we like it or not,” said Torrey Blackwell of Blackwell Automotive.
“Unfortunately, it’s necessary,” said Ben Rippe, president of Rippe’s on Main Street. “It will put a strain on what a future president or Congress can do by not acting.”
“It’s not about bailing out rich people, it’s about keeping our economy afloat,” Averett University associate business professor Lyle Cady said.
Now that the bailout has become law, the concern is whether it will work to instill confidence in the financial markets — and keep the economy moving.
The fear was that without the federal government stepping in to buy up bad debt, the credit markets would seize up, affecting everything from big companies trying to borrow millions using short-term loans to consumers trying to buy something with a credit card.
No one should be surprised that the bailout bill has received lukewarm support in our community. The idea, as originally presented by the Bush administration, was portrayed as a necessary evil to avoid a much worse problem. Even after the bill went through the congressional sausage grinder, it was still portrayed as a necessary evil.
It’s no endorsement that Blackwell calls it, “necessary whether we like it or not” and Rippe says “unfortunately, it’s necessary” or that Cady warns that it’s about “keeping our economy afloat.”
Beyond the obvious reasons for hoping the bailout works, this community has a unique worry. This region and its people have already been through tough times while the rest of the country prospered.
Now as the Dan River Region emerges from the loss of tobacco and textile jobs, the question is whether this new problem will drag the local economy back down to where it was. More than anything else, that was a good enough reason to support the administration’s bailout bill — and to hope it succeeds.
Page 1 of 1
Post a Comment
The commenting period has ended or commenting has been deactivated for this article.
Can't find what you're looking for? Try our quick search:
Reader Reactions
Posted by ( Vindicator ) on October 07, 2008 at 8:47 am
Well here is what a Florida Representative had to say about this bailout:
Why the Second Bailout Bill Was Worse Than the First
Given the uncertainty in the economy, I thought I would share with you my concern about Congress� recent efforts to address the faltering credit markets. As you know, America hated the first bailout bill at $700 billion. They now despise it at $850 billion. A majority of the House agreed on the first vote, and we rejected it on a bipartisan basis.
I was very proud of the efforts Rep. Spencer Baucus (R-AL) made at the Rules Committee to improve the bill the second time around. He fought for legislation that citizens could accept, one without special tax exemptions for favored local projects, and one that would also help the economy. What did the Senate send us? Well, the Senate sent us the exact same bill the House rejected, but they added another $150 billion on top, still bails out the foreign banks, and raises the debt limit another trillion dollars. That is not leadership. That�s the business as usual that has enraged Americans. This bill does not address the two issues confronting our banking system today � fear and diminished lending capacity.
I would have thought that Senators had learned the lesson that speaking just for political gain can have real life consequences, with jobs lost and investments ruined. In the middle of this crisis, however, Senate Majority Leader Harry Reid caused a 15% drop in the stock of many insurance companies when on the Senate floor, without any facts, he claimed that, �a major insurance company � one with a name that everyone knows � that�s on the verge of going bankrupt.�
Instead of showing leadership and promoting a bill that everyone could get behind, Senator Reid threw out market crashing statements without thinking. A staffer later said that Senator Reid basically made his remarks. I wonder if the SEC will investigate the Senator for spreading false statements? I�m going to tell my constituents to direct their calls to the reckless and embarrassing Senator from Nevada when they wonder why their retirement account is significantly lower next month.
Speaking of the Senate, Democrat Senator Bill Nelson from my home state of Florida voted against this bill. Like Senator Nelson, I wanted to see the sales tax deductibility extended and the AMT patched, but it should have been a separate bill. But both of us saw through this legislation and voted against a bad bill.
Unfortunately, while a few good provisions were added, dozens of sweeteners were snuck in to ensure certain Representatives would vote in favor of the bill. Provisions like special expensing rules for Hollywood film crews and rum excise taxes to Puerto Rico and the Virgin Islands. One provision in particular caught me though: the American Samoa Development Credit. Historically, this credit has benefited a corporation whose main product is tuna and has operations in American Samoa. Figuring out who benefits from some of these provisions is a bit like playing Guess Who, but in this case, it�s easy: Speaker Nancy Pelosi. Two years ago, ethical questions were raised when information came to light that the main beneficiary was based in Speaker Pelosi�s district. Evidently, some politicians never learn.
I said before that a vote for this bill is a vote to ratify business as usual in Washington. Added sweeteners and earmarks were only added to get more votes. If you didn�t take my word on that, now you have the proof.
Thank You,
Ginny Brown-Waite
Report Inappropriate Comment