At a small business conference in Washington DC today, Federal Reserve Chairman Ben Bernanke had ‘encouraging words’ to attendees. Lending is back to “normal.” Actually, banking lending to small businesses is down $40 Billion in the past two years. But what Bernanke is implying that banks are now lending as they should have been all along, not as in the reckless days.
Photo Source: Federal Reserve Bank
The lack of credit is hurting small businesses. But even more so is just the lack of business! To make matters worse, the Federal government under the Obama Administration is playing the game of ‘crony capitalism’. Every minute of each day, the Federal government is spending $1 Million dollars per minute on purchase contracts intended for small businesses to large corporations. It’s enough to make one cry!
The so-called stimulus package that Obama and Congress rammed down the throats of American taxpayers has been a failure. Most of the $787 Billion dollar package that has been spent went to pad state and local government budgets and payrolls. The fraction that did find it’s way to the private sector mainly went to firms with political ties either via campaign contributions or union connections.
Small business is the engine that drives America. In past decades, over 95% of all new jobs created have come from small companies with 50 or fewer employees. This is the heart and brains of our economy.
Ben Bernanke can say what he wants to about getting banks to lend more to small businesses. But the current political climate of uncertainty and threats of higher taxes, mandates and regulations is scaring small business from expansion. Until the Obama Administration reverses course on it’s progressive agenda, small business will continue to be stifled.
July 12th, 2010 at 2:34 pm
I’ve been saying for the last two years that the biggest mistake made by the government in the bank bailout was bailing out wall street investment ‘banks’. The country, I think, would be a lot better off now if we’d have just let them die like the scum that they are, and instead offered local banks the money under the same interest free terms, with the proviso that they loan it out to its customers.
July 12th, 2010 at 4:01 pm
I agree, Arriba.
The nation would be much better off had we let nature do it’s thing. Certainly would have settled the whole moral hazard argument. What did this get us? All the trillions of dollars?
Only 58.5% of the population is employed. I don’t know about you, but in my universe, that’s a DEPRESSION! And it’s getting worse. We were at 59.4% a year ago.
Net job growth, actual full-time private sector jobs created in Q1 2010 was about 40,000. Just to keep pace we need 1.2 million every 3 months. We’re nowhere near that. Obama sure ain’t get us there either.
July 12th, 2010 at 4:07 pm
I saw Mort Zuckerman with Cavuto today. Between 1980 through 2000 (I think he said 2000), America created something like 72 million jobs. 44 million jobs were lost due to technology, new industries, etc. Probably NAFTA, too. But we still came out 28 million jobs ahead.
We’ve lost what now, 8-9 million jobs? So far. We’re bleeding employment. Just wait till next year when all the new taxes, health care, cap-n-trade/tax, etc. The Federal gov’t is now 24% of the economy. It’s devouring capital.
July 12th, 2010 at 4:10 pm
Creative destruction is a good thing. What we have right now is just plain destruction of our economy. I’d hate to say it’s planned, but I’d also hate to say he’s an absolute moron. There’s no middle ground. It’s one or the other.
July 12th, 2010 at 5:11 pm
Loaning to small business is normal, honest, it happened to me once.
It just hasnt been happening for 2 years.
=====================
“I’d hate to say it’s planned, but I’d also hate to say he’s an absolute moron. There’s no middle ground. It’s one or the other’
I’d say he wants to destroy it all, rebuild ala socialist from the ground up. But the dickhead completely forgot and never took into account that he’d have to keep thinks afloat in the meantime.
If you wont say it, I will. The moron had a shtty plan.
He had intent that was plain and clear. But forgot theres a real world out there consisting of people with memories older than him. Ya know, holocaust survivors, East Germans, Carter victims…
July 12th, 2010 at 6:26 pm
Well, Micky, bank lending in general is off $200 Billion this past year. Thanks to Obama, everybody be skerrid!
July 12th, 2010 at 7:29 pm
I’ve always offered every presidency a decent amount of respect because the benefit of my doubt dictates he was only doing what he thought was best. Misguided, but well intended.
I cant do that with this guy because I’m beginning to believe he has some really sinister ulterior motives that have nothing to do with life as weve known it.
Or hes just so fcking stupid it appears that way
July 12th, 2010 at 11:13 pm
“I’ve been saying for the last two years that the biggest mistake made by the government in the bank bailout was bailing out wall street investment ‘banks’. The country, I think, would be a lot better off now if we’d have just let them die like the scum that they are”
I totally agree Thanks A Fukin Lot BUSH……Scumbags !
Same Goes with the Corporations running the Show… Your all Sheep
July 13th, 2010 at 8:12 am
The destruction has been planned.
July 13th, 2010 at 10:34 am
Banks are not lending. They are piling cash because many of them are bankrupt, but that’s not out in the open yet as they still have tons of stuff marked-to-cocaine-induced-fantasy. (Fannie and Freddie scam is helping to kick the can a little further down the aisle.) Once they are forced to write-down and write-off enough stuff, not even Ben’s helicopter or Pelosi’s jet will be of help.