N.C. Secretary of State Elaine Marshall speaks on the financial crisis

N.C. Secretary of State Elaine Marshall said North Carolina can better cope with the financial crisis and economic downturn by ensuring state regulators have the necessary tools for the job.

Marshall, elected to office in 1996, visited The Reidsville Review on Thursday after helping launch Rockingham County’s e-Vault, a digital records project. Marshall, a Democrat, is facing Republican Jack Sawyer in the general election Nov. 4.

Marshall addressed the need for state financial oversight, the mortgage crisis and her thoughts on the upcoming presidential race.

“We’ve got to have local regulation,“ she said.

She said North Carolina is “better off” than many other states hit hard by the loan crisis. She said the state keeps a close watch on its banks and has generally avoided lending tactics such as “no-document” loans.

Marshall lamented the lack of effective federal oversight and cited products such as variable annuities, which are often sold to senior citizens and sometimes don’t mature for 10 years, giving buyers little flexibility in accessing their money. She called the practice “unconscionable.“ Representatives of insurance companies sell the annuities, and those representatives are regulated by the state. The annuities should be regulated as a security, she said, and that would entail state oversight.

U.S. financial policies will change because of

the massive government bailout. But, speaking Thursday, Marshall said, “Federal regulations almost don’t exist.“ She said Securities and Exchange Commission and policy initiatives have taken a hands-off approach, “which in some cases works, but it hasn’t worked in the financial markets.“

On Friday, stock prices in Asia and Europe dove dramatically and fluctuated in the United States, finishing down 128 points to end a week of negative trading. The developments continued the selling that began on Wall Street a day earlier and deepened a global financial crisis that has defied all efforts to stop it, The Associated Press reported.

President Bush tried to reassure Americans afraid for their life savings and their jobs. “Anxiety can feed anxiety,“ Bush said Friday, “and that can make it hard to see all that is being done to solve the problem.“

This week’s coordinated interest rate cuts by the world’s central banks to thaw frozen credit markets and boost investor confidence have fallen flat as markets remain gripped by fears about the scale and depth of the likely global

recession, the AP said. Stock prices were swinging sharply on Wall Street. The Dow Jones industrials fell nearly 700 points soon after trading began and temporarily regained the deficit before sliding to a loss of more than 300 points shortly after Bush’s remarks. The Wall Street Journal, the AP said, reported that government officials are considering temporarily guaranteeing all U.S. bank deposits and billions of dollars of bank debt, in addition to possibly buying stakes in individual banks. The New York Times also said officials are reviewing a British proposal that also includes repayment guarantees for certain types of loans.

Marshall said people should not panic and should continue to invest for retirement, though she advises “moving things around” to take advantage of the most secure options and reining in debt.

“Every last one of us needs to tighten our belts,“ she said.

Talk of the economy has dominated the presidential debates, with each candidate pushing his own plan to rescue the banks and financial markets. Marshall believes more young people will vote in the upcoming election, and she credits part of the renewed sense of empowerment to Barack Obama.

“I’m happy with all the new people who feel empowered this time,“ Marshall said. “We’ve been preaching for years, ‘This is your country, step up to the plate.‘“

People seem to be doing just that. The AP reported Friday that the surge in new voters that helped propel Obama to his party’s presidential nomination is carrying over to the general election - 9 million newly registered voters who are overwhelmingly Democratic and could add up to a big victory on Election Day. In states where registration is recorded by party, including eight key states that could decide the election, voters have signed up Democratic in the past six months by a margin of nearly 4-to-1.

An AP analysis of registration data found that if the millions of newly registered voters turn out at the same rate as in 2004 and cast ballots with their declared party of choice, Obama could have the votes he needs to wrest several battleground states away from the Republican Party and its nominee, Sen. John McCain.

Marshall said Obama has the type of message and personality that connects well with previously disenfranchised people.

“They’ve never seen someone like him have a chance to become president,“ she said.

• Group editor John Trump can be reached at or 349-4331.