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<< Previous   of   Next >> (click to enlarge) Buzz Rodland, owner Rodland Toyota (click to enlarge) Greg Rielly, mortgage banker and planner, Mortgage Advisory Group, downtown Everett (click to enlarge) James McCusker, Bothell-based economist (click to enlarge) Jack Myles, President and CEO of North County Bank   ADVERTISEMENT   ADDITIONAL ITEMS • The text of the bill ( PDF)   Related Stories • The world feels Wall Street's pain, from Manila to Paris 10/4/08 • $700 billion bailout deal is law 10/4/08 • 760,000 jobs lost this year 10/4/08 • Nation still gripped by credit crunch 10/4/08 • 58 House members changed vote to 'yes' 10/4/08   CONTACT THE HERALD Robert Frank, City Editor frank@heraldnet.com   Published: Saturday, October 4, 2008 Will the bailout help? By Yoshiaki Nohara and Jackson Holtz, Herald Writers Congress made right choice, but measure flawed James McCusker, a Bothell economist, said Congress did the right thing to revive the credit markets, even though the law is far from perfect. "The economics of this is easier to understand than the politics of it," said McCusker, who writes a column for The Herald each Sunday. "It looks bad. It smells bad. I wouldn't say I like it when I don't. But I'm happy that they passed it." The measure should make it easier quickly for cash-strapped businesses to borrow money, McCusker said. But it could take some time before the real estate market gets relief from the government's intervention, he added. "If (federal officials) are patient with this thing and work with homeowners, I think the loss will be minimal," he said. It remains to be seen how much the bailout plan can improve the nation's financial system, which is plagued with bad loans, McCusker said. "I do think this bill and the Treasury's action will help," he added. "They are going to sort out things that are good and put them back in the market one way or the other." The bank rescue plan that was put together quickly also has many irrelevant provisions such as tax breaks and subsidies for filmmakers, McCusker said. "It's shameful we have to fill the bill with all the junk," he said. State community banks generally fairing well Jack Myles, the president and chief executive officer of North County Bank based in Arlington has 35 years in the industry. He said the bailout will have little effect on his bank, which he said has been immune from the subprime mortgage crisis. "Most of this bill will not do a lot of good directly," Myles said. "I don't have any loans to sell them." Not all of the nation's banks need help from the government, Myles said, noting it's mostly the larger ones. "Most of the community banks in Washington (state) are in pretty good shape, well-capitalized in most cases," he said. "They have been successful. We want to make sure that consumers understand that," he said. Myles, who recently finished a term as chairman of Community Bankers of Washington, said he is waiting to see how the federal government will execute the bailout. "I tend to be a little skeptical when the government does something this big," he said. "How many people will it take to run this program?" He said he hopes to be proven wrong. "If it helps the general economy, that will obviously help us," he added. Financial meltdown hard on auto business Buzz Rodland, owner of Rodland Toyota in Everett, said the auto business has been affected strongly by the financial meltdown. "It's not business as usual because credit requirements have been tightened," he said. "There's very little financing for people with poor credit." He noted that credit markets were "wide open" through early summer and there definitely was money available for first-time buyers. Now, he said, that's changed. "There's very little risk taking with first-time buyers from banks," he added. "Student auto loans and first-time buyer programs are gone." The worsening economy has changed the business, he added. "People don't buy cars anymore because today is their wife's birthday and they want a convertible," he said. "They buy out of necessity." He noted the poor economy has greatly reduced shoppers at his dealership. "Traffic is as low this week as I've seen in 20 years," he said, adding, "Part of that is the headlines and part of it is the Boeing strike." He said the bailout bill will help "in that anything to move on and get these credit markets going again is good. "I think this is the beginning of the end," he said, referring to the economic crisis. Congress' action may help restore confidence Greg Rielly, a mortgage banker and planner at Mortgage Advisory Group in downtown Everett, said the market in the region is still good. He said the bad financial news has undermined people's confidence. "Their spirits are down," he said. "Now there's some hope, there's some light. They're finally taking some action to create a more favorable environment, but it may not be a perfect environment. No action is not a solution." Rielly noted that people who want to buy a home can find mortgage money. "If you haven't created a lot of bad debt and you have your credit and assets in order, you will be able to obtain a home loan," he said. The market situation is all relative, he said. "People are selling for less," he added. "That means people can buy for less. It's still a great marketplace." He said the bailout will help. "It's a good thing," he said. "The House of Representatives has finally moved beyond paralysis and hesitation. Leaders are finally showing signs of leadership." READER COMMENTS Log in or register to post new comment | Log out Make your vote count this November If you are against this bailout--now costing taxpayers $800 billion with added pork--make your vote matter this November. House members who voted for the bailout: (bad for taxpayers) Rick Larsen (his district covers most of Snohomish County; his opponent, Rick Bart, opposes the bailout) Adam Smith Brian Baird Norm ***** House members against the bailout: (good for taxpayers) Jay Inslee (his district covers southwestern Snohomish county) Dave Reichert Doc Hastings Cathy McMorris Rodgers Jim McDermott (however, he voted for the first version, before the Senate increased the cost by $100 billion) In two years, when Patty Murray runs for re-election, remember that she voted for the bailout as well. (Maria Cantwell voted no) How None | Oct 5, 2008 4:08 pm | 0 replies | View all | Post reply | Request removal Lipstick on a pig We are in this situation today precisely because the government thought that through the Treasury and Federal Reserve (a cartel of *private* banks) it could cover-up the weakening economy after the dot-com bust and 9/11. Interest rates dropped from 6% to 1%, and the Fed injected trillions of dollars of fiat currency -- money with no intrinsic value -- into the market. At the same time, our national debt grew to $10 trillion dollars. In a free market, price, supply and demand seek equilibrium. The market produces less demand for products and services that are over-valued and it adjusts itself, letting bad investments and poorly run businesses dissolve and encouraging good investments and businesses to prosper. By interfering in this process, the government bailout will extend what would have been a 6-month correction into a 6-year depression. Thanks to the continued intervention of the government we are in for a long, slow, painful slide down. Further, we just don't have the money to pay for this. It's ironic that the government's deficit spending habits mirror exactly the behavior of homeowners who spent more than they could afford. Both continue to rack up debt without any means to pay it off. Eventually the consequences must be paid. Even worse, the increased flood of fiat currency will devalue the dollar and cause worsening inflation. The economy is in bad shape whether the commercial banks are paid off or not. But in many ways, this was an artificially created "emergency" so that the legislation would be passed without any serious study or debate. As you can see from the government's own report (http://www.cato.org/pub_display.php?pub_id=9685), credit has not "dried up". In fact, lending is up 15.5% since this time last year. We should vote every single one of our representatives who voted "Yea" out of office (thank you, Jay Inslee, for voting "No"), and send a message that we demand a government for the people, not for the banks that many of these politicians receive massive contributions from (http://opensecrets.org). It's not just a coincidence that Paulson was the CEO of Goldman Sachs who now stands to make billions off of the events of the last few weeks. Here are some great places to get involved and learn more: http://campaignforliberty.com http://mises.org http://lewrockwell.com Alan Cheslow | Oct 4, 2008 9:29 am | 0 replies | View all | Post reply | Request removal (No heading) It was already admitted by members of Congress that there will be little help for those people already in foreclosure and the banks will still be able to do as they please. There is no guarantee that the behaviors that brought us to this point will not be repeated, nor are there safeguards to keep at risk homeowners from being sucked in again. And, you have the very people who created the mess helping in the oversight? This was wrong from the get-go and now we will all pay for it, for generations! CC At the Big B | Oct 4, 2008 8:59 am | 0 replies | View all | Post reply | Request removal

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