Locals see effects of global financial crisis
Families, businesses tighten belts, offer other solutions
BY JANE MEGGITT Staff Writer

UPPER FREEHOLD — The financial tsunami hitting the world's stock markets and the global credit crunch are impacting many Americans.

Local residents were asked about how the crisis is affecting them. They responded with discussions about their personal lives, their pocketbooks, their businesses, real estate, government, community services, energy and agriculture. Some also suggested solutions for the current economic woes.

Real estate agent Carolyn Shen, of Millstone, said homes on the market are sitting there longer. She said homebuyers can no longer be sure that they will get mortgages, even when they are as close to buying a house as the closing table.

Shen said "squeaky-clean" credit reports are a definite plus to have when buying a home.

In her view, the people responsible for the country's financial turmoil should be held accountable for the policies they created that got the country into this situation.

"Names should be named and penalties should be imposed and no one should get their 'bonuses' when the taxpayer is picking up the bill, again," she said. "We need to strive for an honest government with accountability."

Ron Harning, of Millstone, said the United States cannot be the savior for all companies lost in the crisis.

"This is not in the best interest of capitalism, in my opinion," he said. "Companies that behave poorly, from a financial perspective, will cease to exist or be purchased by others. This is the natural selection process in capitalism."

Beth Klein, of Millstone, who has two children in college, said she was a no-frills person before, but has cut back further. She now brings lunch to work and spends less on going out to dinner with friends.

"I refuse to look at my 401K monthly statements," she said. "I think twice before taking my car out on errands and try to condense my trips, even if it means waiting an extra day to pick something up on my way to the office."

John Nanni, of Upper Freehold, said that as a person on a fixed income, the financial crisis strongly affects him in a negative way.

"When one plans for their retirement, it is impossible to predict future market strengths and weaknesses," he said. "I know many retired neighbors who have taken part-time jobs to compensate for this negative turn in our economy."

Upper Freehold's Chris Shaw believes that the community is hurting but that the East Coast has yet to feel the same pains the Midwest has been experiencing.

"Michigan is a downright scary place to be economically," Shaw said. "I am hopeful that the east avoids that same level of pain despite our strong ties to the financial markets."

Shaw said that the world is coming off the high of easy credit.

"It's time for everyone to run a more fiscally conservative budget," he said. "The times of taking out home equity loans against booming house prices are over."

Shaw noted that there is a house in his neighborhood with grass as high as the windows. He said the local community would probably see more pending foreclosures in the near future.

"People need to make a budget and live within their means, pay down credit and start saving, which we all don't do enough of," he said. "The people who do this will be OK in the long run."

Tom Frascella, a member of the Upper Freehold Economic Development Committee, suspects that the credit crunch will seriously impact the farming community, which borrows at planting time expecting harvest profits.

"We could be in a situation where borrowing is hard to get and crop price may decrease at harvest time," he said. "From an economic development point of view, it is something our committee will be watching, as well as the overall health of the existing small business community in the township."

Bob Marks, the marketing director of Perretti Farms in Upper Freehold, said it's hard to imagine the current financial climate not having a negative impact on the horse industry, since racehorses are a luxury and not a necessity.

Marks, an advocate for slot machines at New Jersey racetracks in the face of competition from neighboring states, pointed out that Foxwoods casino in Connecticut recently laid off a number of employees and questioned if Atlantic City would also be adversely impacted by the current financial climate.

Doug Walsh, the developer of the Cox's Corner Professional Center in Upper Freehold, said he has never seen the financial market this bad, with all fail-safes having no impact and 401K plan losses devastating families' retirement plans.

"You just can't get your arms around the financial market," he said. "It's like walking into a room filled with mirrors and having no idea which direction to go."

While the collapse of the residential real estate market has impacted resale and new construction, it's effect on the commercial real estate business has yet to be seen. The residential real estate boom created the need for more commercial development but lending institutions are no longer doling out as many loans, Walsh said.

"This means that the needs for goods and services are present," he said. "The problem is the lending institutions have portfolios that are riddled with non-performing real estate loans and now have tightened up on the lending practice making it very difficult to borrow."

Walsh remains optimistic as he has received more inquiries about his business park from investors who removed themselves from the stock market.

Millstone's Dan Lichtman, president of Absolutely Energized Solar, said his company is having trouble borrowing money.

"With six years in business and a great credit record as one of the most successful solar energy companies on the East Coast, my business is finding it harder than ever before to borrow money," he said. "Thankfully our manufactures/suppliers are helping out but I am not sure how long that can last."

Upper Freehold's Elaine McMinn is a small businesswoman who does not see any sign that she will be able to retire. She blames the financial crisis on the American government. In her view, lobbyists should be outlawed, campaign contributions should be limited, and benefits for new government employees should be reduced.

McMinn also feels that money could be saved by consolidating school districts, which would reduce the number of districts, superintendents and "secretaries for secretaries."

Another small businesswoman, Karen Deets, of Allentown, who recently closed the doors to Off the Wall Craft Gallery in downtownAllentown, said the economy has been a troubling issue on her mind for several years now. "The future of theAmerican economy is a time bomb, due to my observations on dwindling American manufacturing and agriculture," Deets said. "Can we survive if the only jobs available are taking care of each other, such as health care, law, insurance, housing, banking, food, transportation, and so on?"

For Deets, another concern is the diminishing middle class.

"In the last few years of owning Off the Wall Craft Gallery, I realized that I had to appeal to the luxury buyer, and so included a significant selection of quality higher end merchandise," she said.

Deets said an article written by one her customers, Herbert Gishlick, a professor of economics at Rider University, warns that government involvement is not a healthy alternative to the financial crisis.

"The economy naturally has its ups and downs," she said. "Frankly, I don't trust government or the wealthy corporate elite, and I am skeptical that this huge amount of [bailout] money will be handled honestly or correctly. The people at the top seem to do everything in their power to protect their lifestyle."

Deets also believes that retirement will have to wait.

"My husband, who lost his corporate job 6 years ago, and I are continuing to work parttime jobs and postponing full retirement," she said. "I just hope that Social Security doesn't disappear and the banks do not collapse. I will try to stay out of debt. But I have to look at my life as a cup half full, so as not to be depressed."

Millstone's Dave Markunas, a fire commissioner, said the township's Board of Fire Commissioners just began preparing its 2009 budget.

"Recognizing that the crisis has affected everyone in some way, we need to prudently balance the district's emergency response capabilities while minimizing the tax burden on the homeowners," Markunas said. "With falling home values, threats of foreclosure, and investment losses, I do not want to add insult to injury during these uncertain times."

Markunas also said he has concerns about the investment company managing the fire district's contributions to the Length of Service Award Program (LOSAP).

"We are currently evaluating the current firm's financial stability and if we should be switching to a different company," he said.

Millstone's Cory Wingerter, who is a restaurant owner, said the current turmoil in the financial markets has adversely affected the restaurant business and its guests and employees.

"Although our Princeton area restaurant hasmaintained sales levels throughout the turmoil, our Howell Township restaurant has been experiencing fluctuating sales," he said. "The economic turmoil compounded with the fact that western Monmouth County has experienced a huge growth of chain restaurants in the last 3 years … has made times challenging for the independent restaurateur."

Wingerter believes the solution is to elect local, state and federal politicians who understand small business, which he considers the life blood of the American economy, and who "have signed the front of a check and not just the back of a check."

He also would like to see the country become energy independent and to offer tax incentives to businesses and technologies that don't rely on gasoline.

Wingerter said New Jersey should also do its part to help citizens through this crisis by reducing the size of the state government, reigning in entitlements and pensions, being more business friendly, enforcing strict pay-toplay regulations and reforming the Council on Affordable Housing to create more homes in areas with mass transportation and jobs.

Roosevelt's Shan Ellentuck said she's losing sleep over the turmoil in the financial markets.

"Although my finances are in fairly good shape, I worry about how a tanking economy will affect other members of our family, our friends and the vast community of Americans who were barely making ends meet before this debacle," she said. "I worry, as well, about the effect our financial problems are having on the rest of the world."

Born in the early days of the Great Depression, Ellentuck saw the unemployment rate spiral to 25 percent by the time she was a toddler.

"People were literally terrified that they wouldn't have homes or food for their kids," she said. "Franklin Delano Roosevelt and the programs of the New Deal gave us all hope again, but even with strenuous government intervention it took years for the economy to rebound."

She continued, "We can only pray that the United States has the will and the resources to rebound again."