Economic Crisis Hits Home

Brendan Morse
News Editor

In the wake of the largest economic bailout in recent history, many Americans have faced the harsh reality that their hard-earned money may not be as secure as they have been led to believe.

With the seemingly daily occurrence of yet another bank closure, as well as the record low stock market, the current state of the economy has been proclaimed by the media as one of the worst financial crisis this country has faced in recent history. However, many here in Canandaigua as well as throughout the numerous other small cities and towns across America, continue to wonder when and where this proclaimed financial crisis will truly hit the local economy.

The good news is, for many of us who reside in smaller towns such as Canandaigua, and therefore place our money in smaller banks, we are mostly safe in avoiding the national decline that has crippled so many of the country’s largest banks. In fact according to chief Economist Gregory MacKay of Canandaigua National Bank, many who invest their money into regional banks will barely notice any form of change at all.

“ There are something like eight thousand banks in the country, when in fact only a few hundred are experiencing problems,” says Mackay. “The newspaper guys make this into an end of the world crisis when it’s actually like the seventh or eighth recession our economy’s had since I’ve started working here. This has been a continual problem in our country since the very beginning of the banking system.”
Mackay cites that the basis of the financial problem has come from a combination of both the poor judgment of the American people in buying houses and taking out loans they can’t afford, and the aggressive business tactics brought on by banks and lending firms such as the infamous Fannie May and Freddie Mac. As Mackay describes, “Prior to this we were having a nationwide housing boom; prices were going up twenty to thirty percent each year. Then all of a sudden the mortgage system became so overbuilt that the wheels stopped turning.”

“Some people were taking out these massive loans, while at the same time flat out lying about even having jobs. In the end it all comes down to who do you trust,” he adds.
When asked the basic question that has been baffling economists and financial advisors since the problem has started; “What can we do to fix this?” Mackay replies, “Nothing at all. Many economists have stated that September for example has been one of the worst months on record for the amount of car loans banks as a whole have been giving out. Our car sale loans are up by fifty percent…Conservative banks like ours work – we have tons of money to lend.”

The main negative aspect taken from the faltering national economy on the local community lies with the hits many small local businesses are taking, as the major toll has been taken on consumer spending thus inflicting the most damage on corporations whose profits depend on consistent income from a regional level.

Many business owners in the local community such as David Behelfer of Crown Jewelers have found that the factor of change in this declining economy is something they must abide by if they wish to continue in turning out consistent profits.

“Obviously none of this is good for business.” says Behelfer, “Fewer items can be discounted and put on sale – but generally speaking to own a business dictates that if you don’t change you will die, and if you can’t change you should die.

Although the national economy may be experiencing hardship, Behelfer points out that local business and all business in general will continue to survive on the premise that “people will always want to treat themselves; for many the wanting is often more satisfying than the having.”

It is in this perspective that while the national economy may continue to falter, the ripple effect that has spread throughout the country on a whole has inflicted much less hardship on the residents of Canandaigua than that of other areas in the nation. “We’ll get through this just fine” states Mackay -and hopefully for the economic well-being of our country, he is right.

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