Ohioans React to Presidents's Bank Investment Plan
President Bush today announced a $250 billion plan by the government to buy shares in banks - the latest move to calm the turmoil in the financial markets and stave off a deep recession. Bush said the plan, along with other steps, would help return the economy to a path of growth and prosperity. Some Ohioans agree with the president, others are skeptical.
The president's plan is meant to generate confidence in the U.S. banking system and to stimulate greater lending by banks. Mark Schweitzer is a senior vice president with the Federal Reserve Bank in Cleveland.
"The banking industry was somewhat limited in its capital level and that limited its lending to commercial and private clients as well, Schweitzer says. "So this injection of additional capital will cause the banks to have high capital levels."
Which means banks can lend more money and make more profit. Some people on the sidewalks of downtown Columbus agree with the plan. Karen McCall and Chuck Cook say they support Mr. Bush's approach.
"I think it's a good idea," McCall says. "I think they need to do something instead of letting any of them fail."
"I feel the same way I think it's a good idea to infuse the banks with capital," Cook says. "This is following the lead of the Europeans. Getting some leadership from Europe instead of from our government. But it's good. I think it's going to be a good thing."
The plan is designed to provide capital for five years. The government might even make money on the deal. The shares require a 5 percent return. But Randy Artrip isn't buying it.
"No I don't agree with our lame duck president there," Artrip says. "We should stay out of private business. You know the way government works that we'll never recoup that money. So yeah I disagree with it. Another one of his boondoggles I guess we can call it."
Charles Knight has mixed feelings about the plan.
"Well if it cuts down on the possibility of a recession, yeah," Knight says. I mean if it's going to benefit everyone and not just a few, yeah."