Business

Local businesses large and small — entrepreneurs who depend on ready credit for expansion and continued operations — were watching events unfold on Wall Street and in the nation's capital with varying levels of dismay Monday, Sept. 29.

The House of Representatives voted down a $700 billion Wall Street rescue plan Monday by a tally of 228-205. Wall Street was stunned. The Dow Jones Industrial Average plunged 777 points, the biggest one-day point drop ever, surpassing the plunge that occurred immediately after the Sept. 11, 2001, terrorist attacks.

Steve Reeves, president and co-owner of P&R Communications Inc., said the timing of the news was a concern. He has been awaiting a scheduled closing Wednesday at First Financial Bank of Hamilton on a loan his company will use to buy a communications tower and build another.

His Dayton company's business is solid because public safety agencies, local and federal government entities are the bulk of his customers. Still, angst in the financial markets is worrisome, Reeves said.

"Depending on how bad it is, everything will slow down," Reeves said. "So much of this financial stuff right now is psychology. It's how people react to it."

Rick Little, chief executive of Starwin Industries, said his company's relationship with its bank is solid. But he wondered if the unfolding situation could change how banks perceive customers seeking credit.

"If we can't get operating capital or if we can't get money to expand, that is going to be critical to Dayton," Little said.

"The American economy runs on credit, like it or not," said Doug Fecher, president and chief executive officer of Wright-Patt Credit Union Inc. "Consumers will become very nervous tomorrow — if they're not already today — in not knowing quite what's going to happen."

Credit unions, structured as not-for-profit cooperatives to serve their members, aren't as dependent on credit markets as many larger lenders are and remain a reliable source for community loans, Fecher said. But, credit unions account for only 6 percent of the nation's deposits, he said.

The tightening of access to credit is likely to continue now that the House has rejected the Wall Street rescue package, said Frank James, chairman and founder of James Investment Research Inc., in suburban Dayton. James said he believes the rescue package wasn't necessary.

"I don't think we have to do this. You have to let the market work its ways," he said. "We got into a bubble, as we sometimes do. ... It's not the end of the world."

U.S. builders are producing too many houses for the market demand and home prices are still falling, so a tightening of credit could provide a needed sobering effect for the economy, James said. Unemployment likely will continue to rise, he said.

"It is a difficult situation and clearly there is no easy answer," said Bill Van Den Brandt, a spokesman for paper producer Appleton, which has more than 400 employees at its West Carrollton mill. "My understanding is, something needs to be done."

Chris Kershner, vice president for public policy and economic development for the 3,000-member Dayton Area Chamber of Commerce, was watching events from a front-row seat. He was in Washington, D.C. to attend a U.S. Chamber of Commerce meeting Monday.

"This is something that impacts all businesses all across the country and across the world," Kershner said. "We're in a global economy now, and this is something that impacts everybody."

The Dayton chamber has not taken a position on the bailout package, Kershner said, noting, "We have members on both sides of that issue."

His personal opinion of the situation: "You should let the market decide how this economic situation is going to end up. On the other hand, people are facing challenges they've never faced before, and there has to be a solution to the problem."

Steve Staub, 2008 president of the Dayton Tooling and Manufacturing Association, said the economic situation is a matter of concern for his members.

"I'm hearing a lot of people talk about it," said Staub, whose family owns Staub Laser Cutting.

Lou Luedtke, president and chief executive of the National Composite Center in Kettering, wonders when and where the federal government should step back.

"The obvious concern is should the federal government be out there to that extent," Luedtke said, adding, "I think a bank or two should fail."

TWhat do you think about the failed bailout attempt?