Schoharie County leaders who follow the economy closely hope the federal stimulus and bailout plans are the lifeline they’re supposed to be.
But those observers are only cautiously optimistic the plans being worked over in Washington will begin reversing the deep recession.
Senate negotiations trimmed back President Barack Obama’s wide-ranging stimulus package over the weekend, and a new bailout plan aimed at financial institutions was expected to be made public Tuesday.
Opinions among local experts were mixed. Some applauded funds aimed at infrastructure but derided the financial plan. Others worried about high spending but praised funds for credit institutions.
But all agreed Washington had to act.
“The only entity out there that’s strong enough to restore confidence is the federal government,” said Brian Kaiser, president of Cobleskill Partnership Inc., a downtown improvement group.
“If we leave it to the market to fix itself, there will be a huge amount of pain.”
Mr. Kaiser praised stimulus funds targeting transportation and dam improvements, alternative energy and sustainable farming.
Those investments would not only create jobs now but would also “be long-term,” Mr. Kaiser said.
Schoharie County Treasurer Bill Cherry agreed, adding that such investments “harken back to FDR,” whose infrastructure improvements helped pull the country out of the Great Depression.
And the work could be local, Mr. Cherry added.
“I’d rather see construction workers scrambling over the Gilboa Dam, earning $40 an hour, and taking that money home to buy a new car,” he said.
Bank of Richmondville President Randy Crapser was more concerned with timing. Infrastructure work is a positive, he said, but it will take months––or more––before such huge projects get under way.
“I don’t know if it’s going to do it,” Mr. Crapser said. “And is this just a band-aid? If it doesn’t work, do we do it again? And again?”
Although pleased with the infrastructure work, Mr. Cherry felt the opposite about aid to banks. He pointed to the fall bank bailout of $700 billion in which much of the money never trickled down.
“It has far too much money for banks and financial institutions,” Mr. Cherry said of the current bailout. “Just throwing money at banks? I don’t see it. All it does is throw good money after bad.”
John Fox, a co-manager at Fenimore Asset Management, disagreed. Bailout money will restore consumer credit, especially for auto loans, student loans and credit cards, he said.
“That’s one of the good things the federal government will do,” he said. “And there should be a pretty good piece for homeowners to limit foreclosures and take the pressure off home prices.”
A banker himself, Mr. Crapser wasn’t quick to agree with Mr. Fox. He wasn’t certain banks will be quick to lend and consumers quick to borrow.
“Banks have safety and soundness concerns,” Mr. Crapser said. “They’re not going to make bad loans.
“If people are hurting, are they going to want to borrow money? I’m not so sure about that.”
Both Mr. Cherry and Mr. Fox worried about increasing the federal debt, though Mr. Fox was pleased that the Senate trimmed some non-stimulus items from its stimulus bill over the weekend.
“I’m not so conservative that I think the government shouldn’t be involved, but I’m concerned about the debt it builds.”
Also concerned with spending, Mr. Fox was more positive.
“They trimmed it back to what, $800 billion?” he said, chuckling. “Are we going to get our bang for the buck? It seems we’re moving in that direction.”