Maui business leaders were working, not watching the stock ticker, Monday morning, so they were shocked when asked for reaction to Congress' failure to pass the supposedly bipartisan bailout bill, The Maui News reported today.

The stock market trembled in anticipation of the vote and tumbled when it was negative.

"Oh, my goodness," said Terryl Vencl, executive director of the Maui Visitors Bureau.

Avery Chumbley, general manager of Maui Tropical Plantation, also hadn't heard the news.

He said he had not believed the $700 billion bailout of Wall Street was the right approach, but that neither was inaction.

Chumbley predicted Maui and Hawaii will feel a strong blow, recalling a United Airlines strike. It didn't last long, but it drove visitor arrivals down 40 percent. "This will be worse," he predicted.

Visitor arrivals already are down sharply, and Maui Tropical Plantation has laid off part of its staff. Chumbley described that as a normal move during slow times.

Vencl agreed that tourism will feel Wall Street's pain immediately. "I don't think people are going to opt to spend money on discretionary travel as long as the markets are so volatile.

"It's a real challenge for us."

At Cash for Gold pawn shop, owner Richard Dan wasn't watching the stock market, but he was watching gold prices, which were up.

He buys and sells gold based on the New York price, which has been going up for weeks because gold is often seen as a refuge in falling securities markets. Gold rose as high as $920 an ounce before dropping back later Monday.

"I think precious metals are the safest place to put your money while all the currencies worldwide adjust to the present state of affairs," he said.

His business is expanding, as usual during downturns. "I see a need for our pawn shop services increasing."

On Oahu, Hawaii Pacific University professor Leroy Laney was following the vote in Congress and the trading on Wall Street. "It's been a hectic day," he said, shortly before the market closed.

He and University of Hawaii professor Jack Suyderhoud will be coming to Maui on Oct. 17 for the 34th annual First Hawaiian Bank Maui County Business Outlook Forum. "It was already going to be downbeat," Laney, a professor of economics and finance, said. As of Monday, it will be even more gloomy.

Laney said the county is in or going into a recession.

Like Vencl, and in almost the same words, he predicted that Hawaii would feel the most impact in the visitor count. "Who's going to take a vacation when your 401(k) is evaporating?"

And like Chumbley, Laney said he believed Congress and the administration needed to do something.

Laney said he did not know exactly what was in the bailout bill, had not analyzed it and could not judge it completely.

But he said the government needs to do something "even if it's not perfect."

"It's crazy that Congress can't put its bickering aside."

Laney, who formerly worked as an economist for the Federal Reserve, is concerned about a credit freeze-up, with the snowballing effect if businesses cannot find funds to cover their day-to-day operations.

Even if various fail-safe mechanisms, like bank deposit insurance, prevent banks from closing their doors as happened in the Great Depression, the credit crunch "has the same effect on the economy," he said, because the liquid capital needed to lubricate the wheels of commerce isn't made available.

Unless something is done, for example, he expects housing prices could drop more, because lenders won't write loans.

"I feel sorry for people who are close to retirement," he said, because of the reduction in the value of the stocks they accumulated for their non-working years.

Hawaii's members of Congress, Neil Abercrombie in the 1st District and Mazie Hirono in the 2nd, both voted against the bailout bill.

In a statement, Hirono said: "I voted against the bill because it did not go far enough to protect taxpayers and assist homeowners facing foreclosure. Clearly, we have to get back to work to come up with legislation that will avert a credit freeze, stabilize the financial markets and more directly help homeowners facing foreclosure, which is the underlying problem."

Also in a statement, U.S. Sen. Dan Inouye said: "This is not a time for finger-pointing. This is not a time for wild rhetoric blaming others . . . I say this because I am convinced that our nation is facing a most dangerous situation. The stock market has indicated what the current - and troubling - financial condition is doing to our investments.

"However, there is another aspect to this situation that is far more critical: the state of the credit market. There are clear signs that this market is on the verge of collapsing. Imagine a nation where it is impossible to borrow money to buy a house or a car, or to send your children to college, and on and on.

"We in Congress must stay on our jobs and work in a bipartisan fashion to pass a rescue plan that puts taxpayers first in fixing this crisis."

* Harry Eagar can be reached at heagar@mauinews.com.