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Va. escapes worst of recession but new fears ahead

Associated Press Modified: October 13, 2012 at 12:18 pm •  Published: October 13, 2012
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She compares reviving the economy to gutting and then rehabbing a home. "It takes a hot minute for everything to unravel," she says, "but to put it back together is really very difficult."

But Anthony Cavallo, who owns the Vintage 50 restaurant in Leesburg, says lingering questions about the economic future hurt business. He closed two restaurants in the last year.

As a small businessman, he doesn't relate to Obama or Romney. "Neither one of them has ever really walked in my shoes," Cavallo adds.

"Romney — he lives up here," he says, lifting his right hand horizontally above his head, sitting in his candlelit restaurant. "He doesn't know me down here ... and I'm middle class. I own a business. I have a home. I can only imagine how disconnected he is from the majority of the people that don't have that."

As for the president, Cavallo believes that while Obama champions poor people, he sometimes shuts out the middle class.

"As a white American, I can't relate to what he's trying to do," Cavallo says. "I can't relate to where he wants to take the country. Explain to me how my working every day, owning a small business ... how does that fit into his plan?"

Cavallo was swayed by the first presidential debate. Before, he says, "I thought Romney was a wuss. He wasn't coming on strong." But he admired the Republican nominee's "aggressive" performance, and is now leaning toward him.

Nancy King Robinson, and her husband, Allen, owners of Books and Other Found Things, have already decided. They're backing Obama.

"I'm one of the 47 percent," says King Robinson, who has multiple sclerosis and receives Social Security disability. "I get it because I worked for it." She believes Romney revealed his "true colors" in his disparaging remarks, made at a private fundraiser, that 47 percent of Americans who don't pay federal income taxes feel entitled to government handouts.

Romney later renounced his comments, saying he was "completely wrong," but Allen Robinson isn't buying it.

"It's just reinforces to us ... he's willing to say whatever he has to win," he says. "If he's elected, what's to keep him from changing his mind again?"

For some voters, though, philosophy matters more than the candidate.

Chris Charron, who is leaning Republican, likes Romney's run-government-like-a-business approach, though he's less impressed with the candidate. "There's a certain charisma you have to have," he says, "And I don't think he's got it."

Charron recently sold his construction consulting company, nervous about how the business — 80 percent involved government contracts — would fare in this era of budget cutbacks. He also was impatient with the pace of recovery.

"Every time the economy takes a step forward," he says, "you get a little excited, then you get knocked back on your knees."

Now part owner of a winery, 868 Estate Vineyards, and the adjoining Grandale Farm Restaurant, Charron is relieved he no longer works with federal bureaucrats.

"There are some people in the government who are not qualified or capable of doing their job," he says. "But there's no way to get fired in government. You either get moved around or you get promoted."

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THE GOVERNMENT DIVIDE

In campaign 2012, the candidates have repeatedly clashed over the size and scope of government. Obama believes government has a role in creating conditions for prosperity. Romney argues it's too big and intrusive, though he wants to increase defense spending.

Those sharp divisions are reflected among Virginia voters, too.

Tom Mastaglio, CEO of MYMIC, a simulation and training company in Portsmouth — most of his clients are in the defense industry — sides with Republicans on this issue. He thinks the federal government is inefficient and has too many unnecessary programs.

Mastaglio thinks Romney is a good businessman and will likely support him. He believes Obama, Vice President Joe Biden and the Democratic House and Senate leaders share a government-has-all-the-answers attitude, stemming from lifetime political careers. "They don't understand there are other ways to solve problems without federal tax dollars," the Army veteran says. "That's just their upbringing."

But Peter Gillard, a retired Social Security worker, says people criticize government until they need it.

"The attitude is 'As long as it doesn't affect me, government is too big,'" says Gillard, a volunteer at an AFL-CIO Democratic get-out-the-vote phone bank. "But when there's a disaster, like a flood or a hurricane, what's the first thing people say? 'Where's MY government?'"

And in this state where the federal government, according to Fuller, accounts for 32 percent of the economy, candidates tread gingerly.

"You have to be somewhat nuanced in how you attack federal government because many people in Virginia understand their prosperity is in part, dependent on it," says Robert Holsworth, a retired Virginia Commonwealth University political science professor. About 375,000 federal workers live in the Washington, D.C., area.

McDonnell, the governor, has acknowledged the importance of federal government, noting that stimulus funds did help Virginia's economy, but he maintains it was only a short-term benefit.

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NEW ECONOMIC WORRIES

The recession may be over, but a new financial threat looms.

It's sequestration, the automatic across-the-board cuts that will take place if Congress doesn't reach a budget agreement soon. About half, or $56.7 billion, would come in defense, according to a report by Fuller, of George Mason and Chmura Economics & Analytics.

It's a topic Romney dwells on when campaigning in military communities, criticizing the president for the potential cuts, though they were agreed to under a deal between Obama and Republican leaders in Congress.

If the cuts proceed, they could result in the loss of more than 207,000 jobs in Virginia alone — almost two-thirds of them in defense, according to the report. Fuller says the impact would also hit retailers, car dealers and local governments.

"People are scared, extremely scared," says Johnny Garcia, CEO of SimIS, a simulation and information security company in Portsmouth. A Navy veteran, Garcia says his business already has begun adapting to the shrinking defense business, moving into health care and manufacturing.

"The defense industry — if it doesn't collapse in the next six months, it's going to take a big turn for the worse," he says." It's scary not knowing who the next president is going to be. But I don't think it really matters. We're going to be in a downward spiral the next four years."

Garcia says he's "a Democrat at heart," but is disappointed in the president, saying he believed in the "hype" about Obama in 2008 that "this was going to be something different. It wasn't. It's like getting on a roller coaster ride and it's not all that exciting when it's done. It's a dud."

He's still an undecided voter, unsure if Obama should have more time or Romney has the right ideas.

"It's all about who's going to make the difference," he adds. "That's the hard part. I don't know."

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Sharon Cohen is a Chicago-based national writer for The Associated Press. She can be reached at scohen(at)ap.org

EDITOR'S NOTE _ Another in an occasional series, 'It's the Economy,' looking at the economies of battleground states.