By Donna St. George and Jonathan Mummolo
Washington Post Staff Writers
Monday, September 29, 2008
Carlos Aulestia, 46, a Rockville toy store owner angry that the economic crisis has brought his business its slowest weeks ever, was hoping yesterday that the proposed bailout plan would end the downturn.
Aleena Hampton, 61, a retired federal employee in Alexandria, was wary that the massive rescue package was only a "Band-Aid" solution but acknowledged that the government needs "to do something."
Jim Dinegar, president of the Greater Washington Board of Trade, described a wave of relief among the mid-size and large businesses his organization represents in the region. "The nation dodged a bullet," he said. "This is as serious as it gets."
As leaders in Congress yesterday released the details of a proposed $700 billion bailout of the financial industry, the issue weighed on the minds of people across the Washington region. They voiced a range of emotions: anger, apprehension, relief, hope and doubt.
Some had worries about financial fallout in their own lives. Others were concerned about issues of government oversight and the size of the cost involved. They wanted to know exactly why the crisis happened and whether the bailout is a long-term fix.
As Dan Jeffers, 51, of the District said, the $700 billion price tag "doesn't seem comprehensible to me. Theoretically, most of it should be paid back, right?"
Matt Johnson, 23, of Capitol Hill said he recognizes that the bailout is needed but that "in general, I'm just dumbfounded that some of the smartest people in this country, working at some of the biggest banks, have screwed the economy over."
As details were posted online yesterday, some people focused on the provisions of the accord between the Bush administration and congressional leaders, one of the largest government interventions in the private sector since the Great Depression.
Others were still angry over the financial collapse that led to such a drastic measure.
Richard Fleet, 60, a retired utility company supervisor from Brandywine, said a government bailout is the "wrong method" of addressing the problem. "They put themselves in the hole, they should get themselves out," he said. "Greed got them where they are, anyway."
Leaving church services yesterday in the District, Carl Bennett, 76, expressed a widespread view that the bailout should not leave any corporate executives with golden parachutes or other compensation for missteps that have taken the economy to such a perilous ledge.
"Seeing what we have come to, I see it as we really have no other choice," said Bennett, a retired teacher who lives in Clinton and said the issue is all the talk within his civic association and at his union meetings. He finds himself "disappointed that we would allow ourselves to get to this point. . . . Someone must've seen it, but no one has acknowledged it."
Personally, Bennett said he had investments in AIG, the troubled insurance giant, and remains uncertain of the toll. "I'm afraid to call and find out," he said.
Hampton, the retired federal worker from Alexandria, said the economic tumult might force her back to work because her retirement portfolio has shrunk about 10 percent this year.
"If the banks go down, then the whole economy is going to go with it. . . . I don't see any other answer," said Hampton, adding that money being spent in Iraq could be put to better use at home. "It's always the taxpayer that has to bail somebody out."
For businesses, the outlook has improved with an expected House vote on the bailout package, which could come as early as today. Dinegar, of the Board of Trade, said a number of real estate projects had been put on hold by developers in recent weeks.
"In the business world, stability, predictability and certainty are absolute requirements," he said, "and all three were missing over recent weeks and months."
Arnie Raley, 45, manager of Leesburg Auto Finance, said he hopes that the plan will help the overall economy and free up credit lines and that eventually "the American taxpayer will get their money back, with interest."
"It's a necessary evil," he said of the bailout. "This is our penance for greed."
The Bush administration came in for blame from Democrats.
Wayne K. Curry, a former Prince George's County executive who is a business lawyer, called the crisis "a shameful culmination of a series of catastrophic policy blunders and ideological excesses that have defined this administration for the entire eight years."
Curry said he knew many people who were feeling so shaky about their 401(k) retirement funds and stock investments that "they won't even look at their statements."
Regina Kimbrough, 43, of Oxon Hill said she thought it was important to have help for "Main Street" in the form of assistance for homeowners and increased regulation on the mortgage process. Kimbrough, a school psychologist in the District, said energy costs and inflation in general forced her to take a second job late last year.
Many of those interviewed spoke of how unnerved people have seemed in recent weeks, amid daily news of financial upheaval.
At the almost two-year-old Toy Kingdom in the Rockville Town Center, Aulestia said the past three weeks have been "the worst weeks we've had. The falloff was huge. People are worried. They are just waiting to see what the government is going to do."
Aulestia said he supports a cap on executive compensation at the failing companies. But he said letting the banks fail completely would only hurt the thousands of workers in those companies who had nothing to do with the ruinous policies formed in the executive suites.
"If I go out and drive a Lamborghini and ruin the business, why should my employees pay with their jobs?" asked Aulestia, who has a staff of 12 on his payroll. "I should sell that Lamborghini and fix the business."
Others, too, compared the bailout to what they knew from their own lives about financial risks and responsibilities.
M. Linden Griffith, 71, a semi-retired nutritionist who lives in the District, said that when she opted to send her children to private school, she made tradeoffs. "I didn't do that and relax on a yacht or live in Potomac," she said. "I had to make choices."
In contrast, the financial industry did not operate as soundly, she said. "I am angry," she allowed. "To think someone can just say '$700 billion.' "
She repeated the number with disbelief.
Staff writers Steve Hendrix and Petula Dvorak contributed to this report.