On Monday, Sept. 29, the U.S. House of Representatives voted down a $700 billion “bailout” bill that was intended to provide relief to failing financial institutions and inject life into a struggling stock market.
Following the rejection of the bill, the Dow Jones Industrial Index fell 777 points — the largest one-day loss in history.
On Wednesday evening the U.S. Senate passed an amended version of the bill by a vote of 74 to 25. The House will vote on the amended bill later this week.
Major investors are not the only ones affected by the economic turmoil. NMU students also hold strong opinions on the economic subjects.
NMU senior, Frank Mumford, double majoring in economics and business, said that he is against using $700 billion to bail out Wall Street. Instead, he is in favor of giving a smaller amount of money to help the companies.
“We need to give them a small amount of money and make the rest the responsibility of the companies. They need to clean up what they [screwed] up,” he said. “We need to give them just enough to get rolling. If we give them $700 billion, it is ridiculous.”
He continued to say that he thought the crisis was an avoidable one.
“I am disgusted that something like this has happened in the free market, and I blame the fact that there was no regulatory policy on these processes,” Mumford said. “It was brought up to the [U.S. House of Representatives] in 2004, and both then-Federal Chair Alan Greenspan and the secretary of the treasury said we needed more regulation of this, but nothing happened.”
Mumford is also the president of the Economic Students Association.
He went on to say that with the failure of many prominent financial institutions it would be increasingly difficult to find a job after graduation.
“With future unemployment being projected at 7 percent it’s not looking good for entry level jobs,” he said. “Definitely with banks failing and companies downsizing they aren’t exactly going to be lining up to hire me once I get out of school.”
Mumford did say he was comforted by the education he received at NMU.
“I’m still worried, but I know that because of my educational experiences here at Northern, I will have a leg up on a lot of other candidates in the real world,” he said.
Senior economics major Rob Doepker agreed with Mumford’s sentiments about the bailout plan and job market.
“Currently, I do not support the plan because they are putting too much money (in the plans),”he said. “[Executives] should not be getting severance pay and right now we have millions going to that (in the bailout bill).”
Doepker said he thought his job prospects looked bright in the future despite the economic turmoil.
“Right now, economists are in demand, he said. “I’m also lucky enough to have a job where I could work overseas. We are going to be seeing more people working overseas in the next couple years.”
Economics professor Tawni Ferrarini said college students can do several things to help themselves through the current economic turmoil. One of the major things Ferrarini stressed was avoiding credit card debt.
“The main impact is going to in the credit department,” she said. “A lot of students are taking on a lot of debt and that is going to hurt their ability to get a loan in the future for a house or a car.”
According to the Incharge Institute of America, a non-profit debt counseling service, the average undergraduate student is carrying a credit card debt of $2,700, and nearly 10 percent of undergraduates are carrying over $7,000 worth of credit card debt at any given time..
She added that responsible use of a credit card has benefits for students.
“Now, having a credit bar, using it, and then paying it off that cycle isn’t a bad idea,” she said. “It teaches financial responsibility, which is something everyone needs to learn.”
Another thing that Ferrarini recommended for college students was to begin working on a financial plan and putting money into savings.
“We all know that cars break down and need repairs. What it comes down to is do you want to be able to borrow that money from your [savings] or do you want to have to borrow that money from someone else?”
“Every student on this campus could become a millionaire if they plan out their savings and start working on a plan early,” she added.
The final piece of advice that Ferrarini had for students was to stay mindful of what is happening politically with the economic marketplace.
“[Students] need to be concerned not only with what the markets are doing, but also with what politicians are doing. The decisions they make now with this bailout are going to be costing students tax money in the future,” Ferrarini said. “The most important thing they can do is get informed and vote.”
