Local business leaders share bailout concerns

The prospect of using $700 billion of taxpayer money to reinvigorate U.S. financial markets doesn’t sit easy with some business leaders in the Lynchburg area.

But at the same time, some of them worry the infusion of cash might be necessary to keep the economy running.

“In my mind, there’s definitely a problem,” said Doyle Allen, CEO of engineering firm Hurt & Proffitt. “I don’t know whether the term ‘crisis’ is right or not, but there’s definitely a huge problem.”

In the construction industry, there is some concern about getting financing for future projects, he said.

Allen said his company is also concerned that without some action, plummeting stock values could erode 401k accounts, the primary retirement benefit for the firm’s 100 employees.

“You’re talking about serious, serious consequences for a lot of people. It would come back, but how long would it take?”

For those reasons, “What they’re talking about makes a lot of sense,” he said. “But I am very concerned and cautious about the government’s fixes. Normally when they try to fix something, they make it worse.”

Christian DePaul, a certified financial planner in Lynchburg, opposes the bailout plan.

He thinks the financial markets could recover without the U.S. piling $700 billion onto the national debt.

Watching how the stock market rises and falls based on how the bailout plan is progressing, DePaul said emotions are motivating the rollercoaster.

“The system is just reacting, as it normally would. It’s just that the dollar figure is so high that it’s affected people more than it ever has in our lifetime.”

DePaul said that a financial rescue bill might work, and could help the market recover faster.

However, “in the long term, that money’s going to have to come from some place.”

“There has to be some fundamental changes in philosophy in investing and mortgages. We can’t keep riding high on it. We have to get the philosophies of the market in order.”

Rex Hammond, president of the Lynchburg Regional Chamber of Commerce, said that most small businesses oppose the bailout plan.

“They haven’t been convinced that it will benefit them, or they don’t trust politicians to fix an obviously broken and dysfunctional system,” he said in an e-mail this week.

He said that those responsible for breaking the system — those who profited from mortgage fraud or the sale of bad loans — should be prosecuted and repay their “ill gotten gains.”

But he said a quick bailout might be necessary to keep businesses running smoothly.

“Businesses need access to a flow of credit to finance their normal operations,” even issuing paychecks to employees, he said.

He said that Congress is engaging in a game of “political chicken” by not passing a plan. “Prolonging this crisis will make matters increasingly difficult for businesses,” Hammond said.

“Decisions made in the next few days will have long-term implications for all retirement plans and consumer ability to obtain credit.”