“While the wheeler-dealer side of the financial industry, aka trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole,” columnist Paul Krugman wrote. He noted that many banks “remain reluctant to lend, and tight credit, especially for small businesses, stands in the way of the strong recovery we need.”
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16 Comments
“that many banks “remain reluctant to lend, and tight credit”
Crazy media. The helter skelter wide open lending practises of the banking/mortgage industry are a leading cause of the housing meltdown. Can’t the media put subprime loans and lending to-get-her?
Duh.
These industries got their hands slapped for making risky loans – and now they are getting hammered for not continuing the wild lending practices of before.
Crazy world.
Amway,
No, the banking industry is getting hammered because we supposedly bailed it out, and the executives seemed to have thought that the bailout was their personal payday.
I can’t believe I am actually siding with Jed on this one but in the small business world this is way too true.
Small businesses are the job creators of our economic world. They are also the most vulnerable finacially. If you aren’t well capitalized and most small business aren’t then having a line of credit pulled can put you out of business quickly.
This is what the bailout was supposed to prevent. It has only made it worse because many like AMway link it to the housing debacle. Nothing could be more wrong.
Everyone is gun shy now, having heard the big boom of the banking crush.
With the O’BAMA administration using the ‘big government’ can solve all problems mindset, I don’t see an environment for small business to expand opening up anytime soon.
Just traveling around Wichita, one can readily see that small businesses of all kinds, from service to manufacturing industries comprise the majority of business in the City and surrounding communities.
I don’t have a solution, but I know it’s not big government. Big government takes money and redistributes it, it doesn’t create money or jobs. Only business can do that and grow. Big government is a static, limited economic model that has no growth other than rising deficits and taxes.
“and the executives seemed to have thought that the bailout was their personal payday”
This is what you are siding with?
Sorry – banks are not lending money. That’s the issue. Not that they are skimming a bit off the top. Besides, the small banks didn’t get the bailouts. So you are mixing apples w/oranges. They did get the stricter rules and don’t want to get burnt.
It isn’t greed which is hurting business. It’s the government interfering again.
Which Obama is proposing another Stimulus to bail them out too. Will be interesting this time. They know in advance – Obama is going to set their salaries, taking away 90% “IF” they accept bailout bribe money from the government.
More government interference. yeah, that will work.
Oh, c’mon, CONs –
You know full well the initial Wall Street bail-out was part and parcel of the CON philosophy and style of government personified by George WMD Bush and the whole Reaganomics approach to… well, everything.
The money was supposed to “trickle down.”
Guess what?
It didn’t.
It went to summers in the Hamptons and yachts off the beachfront mansion on San Bernado.
The fat cats took the money and ran. Leaving nothing to “trickle.”
This new — extremely moderate — President took CONs at their word about economics… and they punked his ass.
So much of CONs’ criticisms of President Obama are based on CONs dancing around, “He actually BELIEVED our lies! So he’s incompetent.”
I tend to take WE Blog CONs (and their alleged sock-puppets) at face value and address them accordingly.
I don’t remember the last time any of them were accurate in their predictions or proclamations.
Any of you CONs have some examples to share?
Amway no I didn’t agree with that particular statement. What i agree with is that big banks got the money and the smaller hometown banks got squeezed out. The banks that grow communities. The banks that invest in small businesses got the shaft.
They don’t have the money to loan and are afraid to step out on a limb fearing it would be chopped off behind them.
The only thing this week I have agreeed with Obama on is that we have to prop up small businesses. Eighty five % of all new job growth comes from small businesses with fewer than 200 employees. This doesn’t mean handing them something for nothing. It means giving them the means to stay open by giving banks guarantees that SBLs will be backed by the gov. These are still loans that are first secured by the business owners and then the gov.
This is really investing in job growth instead of the flim flam stuff we have seen the stimulus spent on so far.
Obama,
Just hold a gun to the bankers heads, and force them to make some more bad loans!
(Even though that is what caused this financial crisis to begin with!)
Thanks for clarifying Okobserver. I may be oversimplifying too.
To me, we are just handing out money we don’t have. Everyone is trying to justify it for each instance. And since we already helped the big guys – who am I to disagree with helping the little ones? Geez, at this point, after handing out billions which have not helped and will not help – I’d have agreed to just paying off all the bad loans for the little guys if I could do it over.
You know small business better than I do, but I still think the banks are being pulled in two directions. They are darned if they do or if they don’t. And I sure as he11 don’t want them beholding to the democratic party by taking loans with interference and government hand attached in now small business and banks.
I do have to consider all of a post – before I say I agree with the entirety of each one.
Monkeyhawk, would it be name calling to start calling you MonkeyCon, because that’s all you ever complain about.
If you want an example, I’d suggest you go back and look what happened to federal and state revenue after Reagan passed legislation lowering the highest rates from the 60’s to the 30’s…
Look at job creation during that time too. And yes, the national debt which went up.
JJ I’m not talking about bad loans. A line of credit is a necessary evil to most small businesses. Cash flow for some especially new start up companies doesn’t match payroll dates and the line of credit is a bridge between payment received and money paid out.
This is what I am talking about and what smaller banks have shut off. This is why you are seeing many small businesses closing their doors and laying off employees.
It’s a start. Much more will need to be done but this would help.
Granny,
It’s nice that you find something you agree with me on, and it’s a good sign; you’re thinking past the con talking points and getting somewhat closer to reality. I’m not expecting people to agree with me, I just want them (cons in particular) to actually think about the issues and relate them to their personal experiences rather than parrot what Rush or Glen or Cheney or even Obama have to say. Too often people are asking what to think on complex issues and our politicians and pundits are all too happy to oblige them. I’m not telling you what to think, I’m attempting to elicit thoughtful discussions and observations about issues that are vital to our nation. Agreeing with me isn’t necessary; thinking is in a democracy.
Obama’s on it!
Obama announced Wednesday that banks with less than $1 billion in assets are now eligible to apply for Troubled Asset Relief Program loans at a reduced rate. Since March, banks with less than $1 billion in assets could apply for TARP loans carrying a 5% annual interest rate, as long as their federal regulators approved. Now, those same banks are eligible for loans a just a 3% rate.
Of the 8,200 banks in the U.S., roughly 7,200, or 89%, have fewer than $1 billion in assets, making them eligible for this rate reduction should they choose to apply.
Told you so.
And the beauty of it is…
it’s only just begun.
This disaster, had/has absolutely NOTHING to do with Bush or Obama, “con” or “lib”. Will you never figure that out?
The banks are not going to start loaning to us little people. Those banks got “bailed out” and took the cash overseas to buy currencies that are going to replace ours. And gold, don’t forget the gold.
Why are you people so determined to make it a left and right issue on everything. Get a little sophistication. You all WILL go to the bottom blaming each other, dragging the rest of us down with you.
Get over yourselves.
The Fed runs things, not their demogogue puppets that they select and you adore.
http://www.politico.com/news/stories/1009/28677.html
Let Alan Greenspan explain it. Since I’m too stupid and paranoid to take seriously.
http://www.youtube.com/watch?v=ol3mEe8TH7w
A shorther, much more concise version. Let us cut to the chase.
http://www.youtube.com/watch?v=pVmxQsvj6lo&feature=related
Is he a “con”? Is he a “lib”? Hmmmm…
He’s so “apolitical”, so “finandrogonous”.