The recent economic news has been unsettling at best, and Jefferson County isn’t immune.
The stock market has charged up and down in wild swings, and mammoth financial institutions like Lehman Brothers and Bear Stearns have crumbled in their stockholders’ hands. Other institutions have been bailed out by taxpayers, as in the case of insurance giant AIG, which received $85 billion Sept. 16 to stay afloat. Meanwhile, Congress passed the bailout authorizing the government to pump up to $700 billion into financial markets. And the three major automakers were quietly handed $25 billion in taxpayer money the last week of September.
The instability and uneasiness have traversed the globe, but have they trickled down to South Jeffco?
"I think the economy is very bad," said a woman at Southwest Plaza Mall the morning of Oct. 6. "I think we're in trouble."
The woman, who declined to give her name, said Congress can't be trusted in this situation, and she's not sure the public is getting complete information about the economic crisis and the steps being taken to address it. "They're going about it the wrong way," she said.
A man walking the mall with her, who also declined to share his name, said: "The bailout is a mistake. Why should the taxpayers pick up all the slack? I wasn't in favor of it. Why should we pick up the tab on all these things?"
Still, the man offered some optimism. "I think we can get out of this, but it's going to take time. It's going to take a while to get out of the hole."
A woman working at a shoe kiosk said the economy has been "terrible."
"I usually get my bonus, but I'm barely making it," she said. She can sell $1,000 worth of shoes on a typical weekend day, she said, but over the last few months her sales dropped more than 60 percent.
"We're struggling," she said. "Since the economy has been an issue, I think people are trying to hang on to their money."
But a man who sells the same shoes from a kiosk at Park Meadows Mall disagreed.
"People are still buying," said the man. "The restaurants are still packed. When I go out to eat, I still have to wait. When I travel, the airports are still packed. I think it's just the media."
Preston Gibson, president of the Jefferson Economic Council, said recent Wall Street issues have indeed trickled down to Jeffco's main street.
"Credit has tightened; it's been more difficult for small businesses to get loans, to buy inventory, pay payroll, all of the needs they have for cash," Gibson said.
Gibson said Jefferson County's diversified business community has helped hedge against the downturn seen in other parts of the state and the country. He said the recent bailout was a good thing and should help loosen credit for small businesses.
David Brewick, president of Evergreen National Bank, said Jefferson County will feel some effects but won't be hit as hard as other areas of the country.
"We're seeing the beginnings of problems in our own state and area," Brewick said, "as people are not buying cars or homes, and there's not a great deal of credit availability."
He said that the current economic situation will require a solution that involves shoring up home values.
"The base problem that this (bailout) doesn't seem to get to is that we have to try and establish some floor under the housing market," Brewick said. "We have to address the foreclosure issue and have to put confidence in that market." Brewick isn't sure how that will be accomplished.
"I don't know that we've got a good handle on what can be reasonably done," he said. "I think everybody is kind of fumbling right now to try and come up with what the right plan should be."
Brewick added that if the government didn't step in when it did, "the depth of the recession could have been a steeper drop and a longer period of recovery."
Still, he was optimistic overall.
"In reality, the banking system is still very sound," Brewick said. "The banks that are being impacted by this just happen to be the behemoths out there. From our standpoint, we are seeing business as usual. We're still doing loans, deposits are normal, some people have asked about the (Federal Deposit Insurance Corp.), and we've seen some movement to keep deposits at the FDIC maximum levels."
The FDIC's ability to insure all bank deposits was raised to $250,000 from $100,000 as part of the bailout legislation.
Brewick said banks that invested in subprime mortgages did so at their own peril. He will keep his loan standards stringent and not make any risky moves.
Brewick tempered his optimism with an acknowledgment of the uncertainty going forward.
"I don't know there's anybody out there who fully understands the cause-and-effect relationship," Brewick said. "If you push here, you really don't know what's going to happen. That's kind of dangerous when you're experimenting with people's financial lives."
Brewick said he's seen similar situations during his 41 years in the banking industry. He talked about the inflationary problems of the late 1970s and early 1980s, but noted that "this is certainly one of the most serious economic problems that we've seen as a country and we've seen as a worldwide banking system, certainly in my banking career."
He cautioned the media and the public at large to keep the situation in the proper perspective.
"Of course we'll be able to pull out of this," Brewick said. "We continue to be the strongest and most vibrant economy in the world. We're stumbling along, but we'll find our way out of it."
He said to look at the situation as an opportunity.
"Painful lessons are never easy to accept, but they can be used to improve your life," Brewick said. "I think it's individuals who have over-leveraged themselves, corporations who have over-leveraged themselves and the government who has over-leveraged itself. We, along with the government, have the responsibility to be honest in our portrayal of what's happening, but not to create more hysteria."