Local financial experts say Pulaski economy OK — for now » Local News

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September 30, 2008

Local financial experts say Pulaski economy OK — for now

Anonymous The Commonwealth Journal Tue Sep 30, 2008, 08:40 PM EDT

Somerset — It’s not surprising that Pulaski Countians are alarmed by news of the U.S. House rejecting a $700 billion bailout of the nation’s troubled financial institutions. Local investment specialists have reported phones ringing off the hook with individuals concerned about the status of their money.

Local banks, however, are seeking to reassure customers that they have plenty of money for loans. They aren’t the credit giants that are undergoing such problems right now.

“The effects of not voting on the bill are more on a national level,” said Don Bloomer, president and CEO of Citizens National Bank. “As a community bank located in Pulaski County, we’ve been immune to a lot of the issues throughout the nation.”

Bloomer said Citizen National Bank’s equity capital ratio is at 11 percent, one of the strongest rates in the nation.

“People are looking for safety and soundness, and as a community bank, that’s how we conduct business,” said Bloomer. “We have been answering a lot of questions in regards to FDIC (Federal Deposit Insurance Corporation) and working with customers to reassure them on the soundness of the institution.”

Leroy Bratcher, the market president of Forcht Bank in Somerset, also stated that his bank remains sound.

“There is a difference in the mode of business being done,” Bratcher said.

While the failure of credit giants like Washington Mutual and Bank of America have shaken the confidence of some Americans, Bratcher said small community banks are immune to the turmoil at the moment because the money is kept local.

“We make local deposits and we collect local loans,” Bratcher said.

Cumberland Security Bank CEO Mike Simpson said he was disappointed that the House of Representatives nixed the bailout plan that would have allowed the government to buy bad mortgages and bad assets held by troubled financial institutions.

Simpson stated that the plan, which was defeated by a 228-205 vote, is necessary to ensure that Main Street, U.S.A., and American citizens are not directly impacted by the economic fallout.

“Community bankers across the nation have worked diligently to ensure the legislation contained safeguards and provisions that would bring meaningful and immediate relief to community banks and local communities,” Simpson stated in an e-mail sent to the Commonwealth Journal.

“Community banks did not cause this financial crisis but are determined to do everything possible to help return economic stability to our country and our communities,” Simpson continued.

“This bill was not just about Wall Street, it’s about helping Main Street and the people and towns throughout America.”

While the local banks are letting people know things are safe and sound here on the homefront, Chris Phillips, an economics instructor at Somerset Community College, says people might not want to get too comfy.

“Basically, it’s a credit crisis — loans, credit cards, a whole host of consumption items,” said Phillips. “In a worst case scenario, if the credit crisis gets bad enough, we could see a ripple effect with our local banks. There could be hiring freezes, unemployment could go up. It would be sort of a downward spiral until something could come in and put stop to it.”

Something like the proposed taxpayer bailout? Phillips says that right now, any answer would be foggy at best.

“I think any of the recognized economists would tell you they’re completely uncertain as to the overall impact,” said Phillips. “You spend $700 billion, you may recoup some funds or not, and the market lost $1.2 trillion (after hearing the news about the bailout vote), so it may not be a perfect plan, but what’s the fallout? It’s really unprecedented, so I don’t think anyone knows exactly what to do.”

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Pulaski carries Girdler to win

In the weeks leading up to Tuesday’s primary election, it was impossible to miss the colorful signs dotting nearly every Pulaski roadway. The names in the race for the 15th State Senatorial District seat popped out: A.C. Donahue. Chris Girdler. Mark Polston.

Once citizens hit the ballots, however, the results mirrored the dimensions of the signs themselves: Chris Girdler stood the tallest.

Girdler, deputy district director for Congressman Harold “Hal” Rogers, ran away with the votes inside Pulaski County’s borders, earning 3,926 votes for 62.05 percent of the total number cast.

That number more than doubled the next highest vote-getter, businessman Mark Polston, who raked in 1,624 votes for 25.67 percent.

However, Polston — who owns Classic Carpet, a home-flooring business located just off the southern 914 bypass — can claim a moral victory ... three of them, in fact. In all three counties in the district other than Pulaski — those being Adair, Casey, and Russell Counties — Polston actually edged out Girdler.

In Adair, Polston beat Girdler 629 to 394. In Casey County, it was 538 to 417, and in Russell, it was 1,862 to 1,038.

Polston said he just “couldn’t pull it out with the numbers” and that “the machine worked for” Girdler in Pulaski County.

“I think that was their strategy — I think they had a Pulaski County strategy all along,” said Polston. “They played the political game well.”

Polston said the difference between his and Girdler’s campaigns was that “mine was a very, very grass roots campaign,” he said. “I did not have a political machine behind me. I understand how this process works, and in this instance, he prevailed.”

As for why Girdler didn’t take three of four counties, the winning candidate — since there are no Democrats in the race, winning the Republican primary was effectively a final victory for Girdler — said he didn’t have an answer for that.

However, “I believe things happen for a reason and I hope the long and strenuous campaign will only heighten my desire to move beyond the bitterness and partisanship of the recent past,” said Girdler.

“Regionalism is a goal of mine, and I look forward to helping all four counties,” he added, noting that he campaigned heavily in each of them.

Sen. Vernie McGaha, the long-time state senator whose seat the candidates were vying for, actually supported Polston after Liberty’s Todd Hoskins dropped out of the race earlier this month.

Donahue, a local attorney, got 556 votes in Pulaski County, 8.79 percent of the vote. He only received 145 votes in Russell County, 74 in Adair County, and 75 in Casey County, where hometown candidate Hoskins almost matched him with 71 votes despite no longer being officially in the race.

Polston said he’s “still digesting” what happened, and though “the process has been a very good experience for me,” he wouldn’t commit to running again in the future. “I wouldn’t shut the door to anything, but I’m not opening any doors either.”

Still, “I think I got a lot of people involved in the process that had not been involved before and would not have been otherwise,” he said. “A lot of people got out and worked really hard, got motivated to talk to friends and neighbors. I think a lot of people became involved through this campaign that are going to be involved for a long time.”

Girdler stressed his “positive message” and said that Rogers is a “mentor and good friend” that he would turn to for advice in dealing with a frequently combative legislative body in Frankfort, one for which Girdler hopes to help change the culture.

Girdler said that he was “confident and optimistic” during the day Tuesday because he’d “worked extremely hard.” Nevertheless, the realization that he’d won gave him “chill bumps,” he said.

“I’m absolutely honored,” said Girdler. “The position of state senator is more than an honor, more than an office. It’s a charge to keep, and I will give it my all.

“I pledge to be the people’s state senator,” he added. “I look forward to working with everyone to move this region forward.”

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