October 1, 2008
a
LOCAL
A
The Kings Mountain Herald
Page 5
EMILY WEAVER
eweaver@kingsmountainherald.com
After great urging from
President George W. Bush, a
$700 billion plan to bail-out
struggling financial institutions
was voted down in the U.S.
House of Representatives on
Monday, causing the Dow Jones
Industrial to plummet 777
points and NASDAQ to drop
199 points by 4:30 p.m.
“When the stock market
drops 777 points, that’s an eye-
opener. That gets your atten-
tion,” said Dean Westmoreland,
retired history and government
teacher from Kings Mountain
High School, who was watch-
ing the numbers come in
Monday evening.
“This was a stunning defeat
of the leadership in the White
House, in Congress, among the
republicans and partially
among the democrats,” he
added, about the failed vote in
the House.
He remembered hearing the
president caution against the
possibility of a deep recession
or even another depression if
Congress didn’t agree on a plan
to shore up the banks soon.
Westmoreland was born at
the tail-end of the Great
Depression. “The thing I don’t
want under any circumstances
is another depression. Folks,
that’s a train wreck going some-
where to happen fast,” he said.
“We had to grow everything
we ate. We wore clothes that
mother had made,” he said. “As
a general rule, most of the peo-
ple had no money.”
But Westmoreland said there
is still hope today. “Things that
are ‘killed in the legislature or
the Congress are not usually
dead. They can be resurrected
overnight and this one is going
to be resurrected,” he said.
The Congress hopes to reach
an agreement tonight. But the
second-hand continues to tick
louder on this predicted finan-
cial bomb. “They have to get it
done by Monday,”
Westmoreland said. “If they
pass that bail-out it may just
throw everything right.”
What does this mean for the
American public?
“The thing we need to make
sure that everyone knows is
that whatever effect it has on
the public will be gradual. It
will trickle down,” he said.
“You won't just wake up
Monday and be in big trouble.
(The effects) will gradually
come down.”
But Westmoreland cautioned
that the current situation with
the financial markets will “dras-
tically effect peoples credit
cards.”
He said that banks may begin
reducing the line of credit on
credit cards or become more
choosey in who they allow to
obtain credit. “It will make the
(credit) rates higher on automo-
biles, appliances, furniture and
big items,” he said, adding that
college tuitions are also near the
fire.
“College tuition loans are
practically gone. If they're not
gone they will be reduced,” he
said. “They’ve cut down a lot.”
“The people that have really
been hit are the retirees who
have 401Ks,” Westmoreland
added, joking that his 401K is
now more like a 101K. “The
retirees will have a hard time.”
Stock market a sign, not a
cause
Although the stock market's
plummet on Monday stirred a
little more chaos on Wall Street,
Westmoreland said that the
nation’s current financial trou-
bles are not caused by the mar-
ket, only indicated by it.
“A lot of people think it’s
caused by the stock market, but
that’s not the case. It’s in the
lending, borrowing and credit
industry,” he said. “The stock
market is sort of like a barome-
ter. It watches everything in the
whole economy and if anything
goes awry the stock market
shows it.”
He said that, from what he
understands, when the stocks
fell on Monday, “the American
people lost $1.2 trillion. It just
evaporated.” :
And that trillion dollar loss,
he explained, came after people
rushed to unload their stocks.
The abundant stocks increased
supply in a lower demand mar-
ket, which in turn lowered their
value - a massive loss to many
stockholders.
Depressive signs
“October 1929 - the stock mar-
ket crashed and prosperous
America was suddenly bank-
rupt. The market collapse
instantly checked the uncon-
trolled use of borrowed money
that had fueled the free spend-
ing of the ‘Roaring 20s’ (and)
plunged the nation into a peri-
od of economic hardship,”
according to history compiled
by the S.C. Department of
Archives and History.
“The Depression in ‘29 was a
worldwide depression,”
Westmoreland said.
And the rest of the world is
seemingly not immune to
America’s current economic
slowdown. He said that the
government of Iceland recently
nationalized a bank that was
about to fail. The country of
Belgium has done the same.
“What happens is all of this
money business operates on
trust,” he added. “You put your
money in the bank, trusting that
you can get it out. And these
banks loan other banks money,
trusting that they can get it
DOT repaves part of King Street,
should be complete in about a week
The NC Department of
Transportation is currently
repaving a portion of King
Street from Battleground
Avenue to the Patrick Senior
Center.
Mayor Rick Murphrey said
that the DOT has committed
to repaving that portion of
the road and a lot of their
work is being done at night
when there is less traffic. The -
light-bearing machinery
along the roadsides is what
the DOT uses to help shine
light on their nightly work.
The road is not -being
widened at this time, only
repaved.
The work should be done
in about a week, Murphrey
said.
Will America bail out in
back...Well, when all of this has
time?
- foN7
MOTHER
of all
See BAIL-OUT, Page 12
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