Monday, the House of Representatives rejected the $700 billion plan to bail out the nation's struggling financial institutions, and the stock market fell sharply because of it.
The bailout plan had the support of President Bush along with presidential candidates Barack Obama and John McCain. For that reason many political analysts were stunned by Monday's news. The plan would have allowed the federal government to buy bad debts from financial institutions to free up money for banks to loan and it would have limited multimillion dollar CEO salaries and golden parachutes.
It's still not certain exactly how the economic downturn will effect Lubbock, but local economist Peter Summers says Lubbock is better off than most of the country.
On Meet the Press, Tom Brokaw asked, "I can just see a viewer out there in Lubbock, Texas for example, saying, wait a minute, I didn't do all of this. It's Wall Street wildly out of control, big executives walking away with hundreds of millions of dollars in bonuses for failing in effect. Why am I paying for it?"
Brokaw's question is the same one people across the South Plains are asking.
When it came down to a vote in the House of Representatives Monday, Congressman Randy Neugebauer voted against the proposed bailout plan because he doesn't think taxpayers should pay for it. "I'm a firm believer that markets will offer better solutions that government does if given the time," said Neugebauer.
Even though there's some panic on Wall Street, local economist Peter Summers says Lubbock won't feel much of the pain, at least for now. "Most people in Lubbock probably won't notice that anything has really changed," he said.
That's because Lubbock's housing market hasn't seen hugely overvalued property prices. "We didn't have excesses on the way up, so we're not going to see the severe consequences on the way down," said Summers.
However, if the market continues to decline, Lubbockites with pension plans based in failing markets could suffer, and national companies with Lubbock branches may have to scale back.
We were told there is no need to panic, because right now we probably won't see any major effects from the market failures here in Lubbock. Even if things continue to get worse and we do feel them, it won't be as extreme here as in most places.
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