economic rumblings in the Valley

Brent Finnegan -- September 30th, 2008

Yesterday I posted about one economic analyst’s opinion of how the apparent economic doom might affect the Shenandoah Valley. Today, I’ve seen several more.

Opponents of yesterday’s failed “banker bailout” span the political spectrum, from local mortgage brokers, to Republican Bob Goodlatte, to liberal filmmaker Michael Moore.

Harrisonburg representative Bob Goodlatte is one of the Republicans from the Virginia delegation that voted against the “Wall Street bailout” package yesterday, in favor of an alternate proposal featuring less government regulation:

Goodlatte said there are other ways to stabilize the economy.

In a statement to NBC29 Goodlatte said, “…we must eliminate the government-imposed mark-to-market accounting regulations that artificially devalue assets in times of market instability.” […] Goodlatte says Congress must stay in session until an agreement is reached.

Local mortgage broker, Michael Walters, was also opposed to the bailout. Like Goodlatte, Walters favors less government regulation to get the local housing market moving again. From TV3:

Walters says in recent months, it has been difficult for many first time buyers and those with fluctuating incomes to purchase homes.

He is concerned that the government may have too much control over policies and guidelines. That leads to no flexibility and Walters says not enough flexibility means no loans for many potential buyers.

Walters says the proposed, and rejected, bailout plan would have been a Band-Aid to cover up the mess, but not the solution. He does say we need something, he’s just unsure of what that something is.

Experts and reporters are now scrambling to figure out what all this means for the local economy. Unemployment appears to be on the rise, but the construction industry hasn’t come to a halt (yet). The consensus at this point seems to be that things might get worse, but Harrisonburg and the surrounding areas may not feel the pinch as badly as other parts of the country. In fact, at least one Maryland resident says that if the sky falls too far, she’s headed down here:

Sonya Shooshan, 51, an information research specialist at the National Library of Medicine [has been] shopping for a house in Montgomery County, Md. But she is worried about the chaos in Washington, and she is hesitant to buy right now.

“I’m skittish,” she said. “God forbid if the economy falls off the cliff, I might be going out to my friends in the Shenandoah Valley and living off their farm and growing vegetables and raising chickens. Could it really get that bad?”

The bad news for Virginia is that there are some major state budget cuts expected this year. WMRA’s Tom Graham recently spoke with Governor Kaine’s secretary of finance, Ric Brown about those cuts, and the outlook isn’t good.

6 Responses to “economic rumblings in the Valley”

  1. elroy mcneil says:

    “I’m skittish,” she said. “God forbid if the economy falls off the cliff, I might be going out to my friends in the Shenandoah Valley and living off their farm and growing vegetables and raising chickens. Could it really get that bad?”

    That sound pretty good to me.

  2. Jamie Smith says:

    I saw the interview with the mortgage banker who bemoaned regulation. It was lack of regulation and/or adherence thereto by lenders that started this problem.

  3. finnegan says:

    That was my thought.

    There are clearly two opposing views, and politicians that run the gamut in between. Free Market Libertarians would say “get rid of most (or all) federal regulations, and don’t bail anybody out.” On the other hand, you have pro-regulation types that would say “regulate the markets heavily, but if something goes wrong in a regulated market, step in and try to fix it with federal tax money.” I have to wonder if many of the Democrats and Republicans that voted for the bailout were indebted to financial interests that helped fun their election campaigns.

    However, yesterday seemed a rare victory for the pro and anti regulation proponents (Michael Moore and Ron Paul, for instance) from the margins of the political spectrum who were all opposed to a bailout for very different reasons.

  4. finnegan says:

    Most area banks are faring well amid the crisis, said economist Pamela Drake, the head of the Department of Finance and Business Law at James Madison University in Harrisonburg.

    “We have some very healthy banks in the Shenandoah Valley,” Drake said. “Most banks are quite healthy right now. We hear about all the ones that are in ill health, but truly, most are doing quite well.”

    from the News Virginian: http://tinyurl.com/3kzax6

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