Why Main Street Is Mad: Scenes from a Financial Crisis

After the bailout bill went down in defeat, most of the legislators who had voted against it sang this refrain: The voters made us do it. Indeed, before Monday’s vote, angry constituents overwhelmingly panned the plan championed by Treasury Secretary Henry Paulson. The volume of e-mail crashed the House’s website. After Wall Street tumbled 778 points, voters are still mad — and now even more confused. Representative Steve LaTourette, a Republican from Ohio, tells it this way: until Monday, the calls and e-mails to his office were 200-to-1 opposed to the bailout. But after the huge market drop, only about half the people calling his office congratulated him for voting against the bill. “The other half are looking at their 401(k) drop $50,000 in a day, and they call me up and scream at me and say, ‘You rat bastard, I’m never voting for you again!’ ” he says.

As the Senate prepares for its vote on a revised bill, TIME correspondents surveyed voters and Representatives in seven states across the U.S. to gauge their mood. Here’s what they found:

Texas
When news of the Wall Street bailout plan broke, coffee shops and courthouse-square cafés in the Lone Star State echoed with disgust for it. So great was the outrage that Chet Edwards — whom Speaker Nancy Pelosi once touted for Obama’s Vice President — may be dogged by his yes vote on the campaign trail. Edwards, a popular Democratic incumbent in President George W. Bush’s home district, was one of nine Representatives out of Texas’ 32-person delegation to vote for the bill. (Even four of the five Texas Republicans whom Bush called personally voted against it.) Meanwhile, Democrat Lloyd Doggett, from the Austin area, has found himself in the unusual position of being hailed by liberals and conservatives alike for voting against the bill. His Austin district office had been bombarded with e-mails and phone calls in opposition to the bill. Most Texans don’t see any real signs of an economic slowdown and believe that the bailout is a way of helping the scoundrels who created the mess in the first place.

Blogger Beverly Biehl, an interior decorator, mother and wife, noted, however, that there is some real concern mingling with the outrage. On the Dallas Morning News site this week, she wrote: “The news lately appears to be written by Chicken Little. ‘The Sky is Falling! The Dow is Falling! Our Profits are Falling!’ It’s enough to make you swear off poultry. However, few things can prepare you for the day when your children ask about the headline ‘Worst Financial Crisis Since the Great Depression!’ “

Biehl wrote that her concerned eighth-grader asked, “We don’t have any stocks, do we, Mom?” She said she soft-pedaled any concerns about his college fund to stop the panic. Biehl, whose parents filed for bankruptcy when she herself was in college, wrote: “I briefly explained that it’s all cyclical.” Still, on the Monday of the vote and subsequent market crash, Biehl took a look at her 401(k) and discovered she had lost $6,300. “But then I thought, I have still doubled my money since I first started investing and — as I wrote in my blog — this too shall pass,” she says. While Biehl realizes the need to do something, she wants Washington to go a little slower and more deliberately with the passage of a bailout. “My hope is that we are taking a little bit of a break — hope we can find some sense of calm without that panicked feeling,” she says. — By Hilary Hylton / Austin

Washington State
Jay Inslee was the state’s only Democrat to vote against the bailout, putting him at odds with five other Democrats. It’s not that Inslee was worried about getting re-elected; he won 64% of the vote in the August primary and is expected to easily win a sixth term representing the First District, which includes well-to-do Seattle suburbs and the high-tech enclave of Redmond, home to Microsoft — an area full of people whose 401(k)s and stock holdings would likely benefit from a bailout. Inslee says that he simply felt the bill was being rushed. He describes the situation as the Bush Administration declaring, “Give me $700 billion in unmarked bills or I’ll shoot the economy in the head.”

He does say, however, that the volume of calls and e-mails to his office on the issue was “stunning” and “enormous.” Says Inslee: “The tenor is certainly the hottest sense of outrage, frankly, on anything that I can remember being involved in in public life — next to Iraq, perhaps.”

The correspondence from his constituents fell into three camps, Inslee says. The first group thinks any bailout is an outrage at a time when CEOs have been getting such huge bonuses. These people, says Inslee, “are so outraged, they don’t get past that.” The second group comprises people who recognize the need to intervene to avert further financial calamity “but are absolutely outraged that we’d do something that is so inequitable to Main Street.” This group, he says, is considerably larger than the first and wants a more balanced bill. Finally, Inslee says, there is a third group that “is in favor of doing anything because the situation is so dire. And his name is Bob.” Inslee isn’t being facetious: it is a group of one, a constituent named Bob, who avidly promotes the view. Inslee hopes to be able to vote yes on a revised bailout bill later this week, but only if it satisfies his concerns. “We’ll see what’s presented to us,” he says. — By Eli Sanders / Seattle

Ohio
Marcy Kaptur, Democratic Congresswoman from Toledo, says the crisis “is as big as it gets. I haven’t seen this kind of reaction from constituents since the [savings and loan] crisis of the 1980s. I am getting thousands of letters, phone calls, e-mails and faxes. A handful of them support some kind of bailout. But the overwhelming majority is against it.” She cites one letter as representative of the bile poured forth against the bailout: “I live on $23,000 a year. Why should I be asked to bail out a bunch of overpaid greedy heads of companies like AIG, Freddie Mac or Fannie Mae? … If you’re going to pass this bill, then it is only right that you the government pay off my mortgage. All of you ran back to Washington and took care of these overpaid CEOs, but when gas went up to $4 a gallon, you did nothing.”

Curt Olson, editorial page editor at the Willoughby News-Herald, says “there’s been a lot of negativity about the rescue. People have all been saying, ‘Let ’em suffer.’ ” Personally, he says, “there’s a side of me that agrees with the populist feeling that this is something that Wall Street created with their exotic financial instruments, and if it was a businessman here in Willoughby who tried to do something cute and it blew up in his or her face, they would be stuck with a bankrupt company. On the other hand, we have companies here, Steris, Lincoln Electric, Lubrizol — just the three of them employ 2,400 people. When will this mess trickle down and affect those companies, and start affecting moms and dads whose kids are trying to go to college or get a car loan?”

Steve LaTourette, the moderate Republican who is likely to win re-election in November but may be vulnerable because of the foreclosure crisis, says the problem is that no one has explained the bailout in terms that the public can understand. “I went to the financial services hearing and begged them to explain this to the guy on his couch, and they never did. They never really explained why they needed all this money in a simple way to the guy with the 401(k), the guy with a small business who already pays a lot in taxes, why he should support this thing. We have to make sure the taxpayer is made whole.” — By Christopher Maag / Cleveland

(See the ten steps to the financial meltdown here and TIME’s photos of the global financial crisis here.)

(See TIME’s Pictures of the Week here.)

California
“If I ask, Should we bail out Wall Street?, you won’t get 1 in 50 of my constituents to say yes,” says Pete Stark, the Democratic Congressman from the Fremont area. “They don’t want their tax money to pay for this.” And so he voted against the measure. “Fremont has one of the highest foreclosure rates in California, and unemployment is high. I think their feeling is, Why should you be bailing out Wall Street when we know people who can’t afford junior college tuition? They see the Wall Street giants as extremely rich people very different from them.” Stark evinces no panic when told the markets may tumble further. “The sky isn’t falling,” he says.

“It’s the water-cooler conversation pretty much everywhere you go,” says Bruce Cosgrove, head of the Auburn Chamber of Commerce (local Congressman John Doolittle voted against the bill). “We’re all talking about this right now. [But] we are at the mercy of Congress. In the end, we have to hope they get it right, and that’s where the uncertainty fits back in again.”

In St. Helena, farther north in the state, Dave Smith, who owns a business that makes electronic musical instruments, says, “I just want them to come up with something that’s more reasonable and more fair and that still might help. Unfair would be the biggest one-word comment. No one is going to help me if I have problems with my company. Especially considering the huge amounts of money these companies were paying themselves, it’s really obscene.” Another St. Helena resident, Paul Tuttle, a registered Republican, peppered his Representative, Democrat Mike Thompson, with anti-bailout e-mail. “I think it was bad legislation,” says Tuttle. “You’re socializing risk. It’s like creating the U.S.S.R. under the U.S. flag.” Thompson voted against the measure. Says Tuttle: “We have a perfectly valid branch, the FDIC, there to take care of problem banks. Let them close the bad banks, sell the branches and go through a process we already have in place.” — By Kristin Kloberdanz / Modesto

Georgia
Eleven of the state’s 13 Representatives voted against the bailout on Monday — decisions that may have had added impetus thanks to Georgia’s recent gas shortages. Representative Hank Johnson, a Democrat, says locals have been waiting in long lines for gas and paying big prices to fill up, which could be “partially responsible for people’s desire not to bail out Wall Street.” An editorial in Tuesday’s Marietta Daily Journal gave a thumbs-up to the thumbs-down on the bailout, calling it the “right move from a long-term perspective, but what it means for the shaky economy in the short term is anybody’s guess.”

There is anxiety, of course. And that has fueled some support for a bailout — or a “buy-in or rescue,” as Jesse Stone, a bankruptcy attorney and chairman of the Burke County Republican Committee, calls it. “I hate that it has to be done, but I don’t know of any other alternative. I’m just afraid that credit will dry up and the markets will plunge further. My whole retirement is based on what I have invested, and that could be wiped out.” (Stone’s Representative, a Democrat, did not support the bill in Congress.)

Some locals point their finger at Republicans for bringing the country to the brink. “I have to believe that if nothing has happened by Thursday, the market will tank,” says Phil Solari, a Marietta resident and registered Democrat. Republicans, he says, “created this mess, and they’re now incapable of getting their own people behind the President to vote for this bill. They either didn’t understand what it meant to the average person on the street or they didn’t care.” — By Paige Bowers / Atlanta

Michigan
Sherrill Freeborough owns two Saturn dealerships outside Lansing. She was nervous about the proposed bailout and relieved when it failed. “My fear was they didn’t have time to study it,” she says. “I wanted them to make sure they knew what they were doing, and that it was the right thing to do. My fear was this was too quickly put together. I was surprised and relieved when it didn’t pass.” Freeborough says she’s a “little more confident today that Congress will do the right thing. Now, I feel like they’re going to take the time to see if this is really going to work, if this is the best option out there.”

As a small-business owner, Freeborough has already felt the pinch of a tightened credit market. She’d like to expand her service department from four bays to 10. But her lender was a tad leery a few months ago about extending her credit. “I had so much else going on at that time, I held off,” she says. “Now I’m thinking I should have just done it then. I am worried I won’t be able to get a loan for it, and that will pull my business back.” She says that even if car sales slump further, people still need to maintain the cars they already have. “I’m just starting the process of getting a medium-sized loan, and I’m concerned I won’t be able to find the money,” she says.

The worst for small businesses is the freezing of credit markets, says Pat Convery, president of the Howell Area Chamber of Commerce. “There’s a lot of angst and confusion,” she says. “People are almost afraid to turn on the radio or TV. No one knows what’s coming next.” — By Maggie Sieger / Grand Rapids

Iowa
Joyce Carle, 65, of Des Moines retired from the U.S. Postal Service after 25 years. But when the Paulson proposal came up, she immediately wrote a letter to the local paper to voice her opposition. “A $700 billion bailout I feel is going to my grandchildren. They’re going to inherit that. I don’t think it’s going to solve the problem. It may fix it for a while. I don’t trust the government to do what they say they’re going to do.” She says, “I’m no genius [but] it’s basically a mortgage crisis, [so] work with the homeowners and renegotiate their loans and work out something where they can make out the payments to the people who have the paper on their loans.”

Still, the market collapse on the same day that the vote came down concerned her. “I’ve got money in the market, and I don’t want to lose my money. [My husband and I are] retired, and I really don’t want to go back to work — but if I lose all my retirement funds on Wall Street, I will probably have to. I put in a lot of good years working and I paid my dues, and I want to stay retired.” She says she’s hoping the market “will bounce back if they come up with a plan that people see will work.” But, she also says, “I’m not sure I trust what they’re saying.” — By Betsy Rubiner / Des Moines

(See the ten steps to the financial meltdown here and TIME’s photos of the global financial crisis here.)

(See TIME’s Pictures of the Week here.)