President Obama wants banks to lend more to small businesses

[cal04]

Source: Associated Press

Banks should return the favor they received in their recent taxpayer-financed bailout by lending more money to small businesses, President Barack Obama said Saturday.

In his weekly radio and Internet address, Obama said too many small business owners remain unable to get credit despite administration steps to jump-start lending, which was virtually frozen when the financial crisis took hold last year.

"These are the very taxpayers who stood by America's banks in a crisis, and now it's time for our banks to stand by creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs," Obama said.

"It's time for those banks to fulfill their responsibility to help ensure a wider recovery, a more secure system and more broadly shared prosperity," said Obama.

Read more: http://news.yahoo.com/s/ap/20091024/ap_on_go_pr_wh/us_obama_small_businesses

[natrat]

1. what a tool-maybe he should have thought about that before giving trillions to goldman

[mule_train]

7. +1

[phasma ex machina]

11. If you found yourself encircled by hungry Goldman Sharks

you too might throw a trillion at one to chum the rest away. LOL.

[Better Today]

19. +1

[shadowknows69]

2. Gee, ya think maybe those funds should have had some conditions attached?

Like most of us were screaming to our Congresscritters at the time.

[mule_train]

5. there were strings attached

to the money wall street gave to his campaign

[shadowknows69]

8. Ding ding ding! We have a winner.

[mule_train]

9. he's more beholden to them for a penny, than they are to him for a million

and that's not an exaggeration, if you compare the campaign contribution/bailout spending ratios

[bamacrat]

27. Small businesses arent the bad guys, their little guys who cant get ahead.

Theirs and our tax money bailed out the big guys and has been alloted in this bail out they should be given loans at a low interest rate, like only .5 or one percent more than the govt is giving it to the banks. Ed Shultz has it right.

[No Elephants]

30. No one here is attacking small business owners. I agree with you on Shultz. He usually gets it

right. And I like that almost everyone can understand him and relate to him.

[No Elephants]

33. I was one of those screaming. However, realistically, look at health care reform, something much

more popular with voters than giving trillions away to the likes of Goldman Sachs and AIG. Yet, look how long it is taking and how watered down it is getting. I remember Paulson going on all the Sunday morning shows and insisting there just was not enough time for that process. It had to be done ASAP, like the next day, or dire consequences would ensue immediately.

Was he right about the timing? No, because Congress took more than a week after that. But, he was probably close. Should there have been more conditions about lending? Probably, but that may have taken time and possibly required changes to, or suspension of certain banking regulations. I don't know how much time they really had to research and think through every detail and I REALLY don't know how many specifics Republicans and Democrats (and everything in between) could actually have agreed upon in time to avert global economic collapse..

[AndyA]

3. Hey Barack: Perhaps if you ask them really, really nicely...

or Michelle could make them a home made dinner, perhaps?

You could get down on your hands and knees and beg them...that might work.

Nah...the only thing that will work is to legislate them, regulate them, and provide oversight of everything they do. They have already shown what they really are. They won't change until they're forced to change. Stop asking and start doing.

[mule_train]

4. why couldnt he have just given some of the bailout funds to the small business administration?

there's already a government infrastructure to do this!

give the money to greedy a-holes instead, what did he think was going to happen?

[No Elephants]

31. Don't the banks make/process most of the small business loans, with the SBA serving as guarantor?

I am not sure, so I am really asking. However, that has been so of the small business loans with which I am familiar. The banks handle them; the SBA gave its approval and served as guarantor.

[Le Taz Hot]

39. You are correct

and it's as hard to get the SBA to guarantee one of those loans unless you ALREADY have a bank that will lend to you and lots and lots of duckets in the bank already. IMHO, the SBA is just one more lending area of big banking and should be shut down. It serves virtually no purpose for the small business owner or entrepreneur.

[No Elephants]

40. Well, either shut it down or change its mission and operations.

IIRC, the SBA once did actually make loans to small businesses, without involvement by banks.

Thank you for your reply. I wasn't sure.

[mule_train]

6. the banks get a trillion, and the public gets 'soaring rehetoric'

and good intentions

[phasma ex machina]

14. The grayed haired guys in the back office just gave you a fresh face.

How dare you ask for more. Leave the business of governing to them and get on with your life. They know what's best for you.

[No Elephants]

41. You and my son seem to share a vision of the Republicrats and Demlicans.

He has two scenarios. In his more innocent one, the two major parties have become like each other because of things like K Street. In his less innocent one, they actually work together and only pretend to be different Parties.

[FarCenter]

10. Per recent reports, small businesses need customers, not more debt

[phasma ex machina]

15. To truly help small business the powers that be could stop coercing small business

into collecting taxes (fees, surcharges) that ultimately get passed along to the public in the form of higher prices.

[timo]

29. you get it

so many here do not

[rucky]

42. Wow! Just get more customers. Why didn't we think of that?

[jwirr]

12. I seem to remember that the bank stimulus was voted on during the

boosh years. Am I wrong?

[Robb]

13. Indeed. nt

[mule_train]

16. and i seem to remember that obama was a senator who voted for it

Obama (D-IL), Yea
http://www.politico.com/news/stories/1008/14196.html

[jwirr]

17. It is still boosh's bill.

[mule_train]

18. oh, i guess it's not really obama's vote then

my bad

i keep forgetting that we are to judge him by his intentions, not his actions

(that's getting to be kind of a weird theme, actually)

[No Elephants]

34. If the issue is "Did Obama vote for the bailout," you are 100% correct. If the issue is

"Was the bill a good one," you are not 100% correct.

Bushco did indeed write the bill, although there was some input from the likes of Barney Frank and his committee. And there may not have been time to fiddle much with the bill without causing global economic collapse. AIG, in particular, was apparently about to collapse and its collapse would have caused a domino effect with banks and other financial institutions VERY rapidly.

There may well have been no realistic alternative. See also Reply #33.

[Igel]

26. Only in part.

It's not the bill that's the problem. The money didn't have to be doled out or lent.

The money was divided into two pools. When the entire bailout bill was approved, half was released to *. Half was withheld pending an additional vote by Congress.

* said he would not request it unless Obama requested him to. A couple of days before inauguration, Pelosi/Reid confirmed that Obama had specifically ask * to request that the second tranche be released by Congress. Pelosi/Reid didn't trust * to be honest in saying Obama had requested it, you see. So the vote took place before inauguration--so Obama counts it as money expended under *, even though it was released at his request and none of it was actually disbursed until after his crew took control.

In fact, not all of the first half had been disbursed before the second half was requested or * flew out of DC. A quick way of knocking down the deficit by $400 billion would have been for Obama to just say "no."

So, yeah. *'s bill. But over half the expenditures of the money were Obama's.

[No Elephants]

35. If the issue is conditions in the bill, then Buscho gets almost 100% of the blame, regardless of

when funds were released. Dividing the bailout into two pieces was something of a political game.

The real issue is: was releasing all of the bailout funds really necessary to avert national, perhaps global, economic ccollapse? If not, sure, blame Obama for requesting the second half. If the answer is yes, though, what choice did Obama really have, once Bush said he would release the second half only if Obama asked him so to do?

If the question is, was the bill written appropriately in the first place, though, then Bushco gets 100% of the blame.

If the issue is, how the hell did the American economy get to the point where it was when Bush left office, then blame every administration and Congress from Raygun through Dummya for changing or abolishing the laws and practices that had been in place for years without replacing them with anything better.

Please also see Replies 33 and 34.

[Deja Q]

24. At the time, most people thought - and maybe still rightly so, I don't know - it was necessary

[mule_train]

25. people were 95 percent against it

everyone i talked to was against it

happend to be at a clinic that day - total cross section of everyone - all against it

polls way against

you're a good guy, and i usually agree nearly lock step with everything you write, but i dissagree with you on this one

[No Elephants]

36. .Economists the world over were in agreement that it HAD to be done.

And, while some may differ now, at the time, they were pretty much unanimous.

[No Elephants]

32. That is a negative only if you assume there was a realistic choice at the time to

averting global economic collapse.

[Rage for Order]

20. In other words, he wants people to take on MORE DEBT

I'm thinking businesses, both large and small, and individuals should be paying off debt, not looking to add to their current debt load. We can't borrow our way to an economic recovery.

:eyes:

[No Elephants]

37. No. A much more fair inference is that he wants the money to be available, if a small

business owner feels he or she needs to borrow.

If Obama were offering financial incentives for small business owners to borrow, you could reasonably conclude Obama's goal might be more debt for small business owners. As it is, there is no evidence whatever that he is not seeking to impact their decision whether to borrow or not. If they decide to borrow (or just draw down on an existing line of credit), the money will be there for them to borrow to a greater extent than it has been for the past year.

[rucky]

43. In slow times, buisness need credit lines to make payroll.

And make/buy inventory. That's what the shut-in at the window company in Chicago was about - the one featured in Capitalism - A Love Story. B of A cut the company's LOC and they couldn't operate anymore.

[Abq_Sarah]

45. For some small businesses, increasing debt isn't the answer

For others, credit is required to purchase inventory, particularly seasonal inventory.

In our case, we eschew credit and operate within our means (we don't hold inventory). We depend on our clients paying us in a timely manner for services received. We operate under the assumption that 40% will pay on time and the other 60% will pay us late. We held a 3 month cash reserve to ensure we could meet payroll, taxes and other obligations. That's gone now and we're meeting our obligations out of our own pocket. Borrowing money is out of the question. What we need is customers who will pay according to the contracts they signed. The worst offenders are government contracts. They seem to think the Net 30 contract they signed allows them to pay 90 days late and they refuse to pay penalty interest.

[mule_train]

21. 1 trillion divided by 300 million - $3,333 per man/woman/child - Bailout was $13.333 per family of 4

and he's ASKING the scum that got the money to LEND it back to US, after lavishing themselves with massive bonusses?

this is change and hope?

[girl gone mad]

22. It's probably a good thing you don't know..

how much we've actually spent bailing out the banks. That might make you really mad.

[Deja Q]

23. If politicians are bought and paid for, then constituents are the corporate interests, not us.

None of us owes that much money to save the special interests that bought their way to America's economic ruin.

Or so one train of thought goes; there are plenty and it's not like I'm sane or anything...

[No Elephants]

38. Ah, now we're talking! The bailout should indeed have been conditioned

on the government's having a say in executive compensation, IMO.

However, even that is open for discussion. A lot has been said about the need for AIG in particular to hang on to its employees. Most of even the financial world did not understand the transactions those employees had entered into and insured. And, again, speed was of the essence.

When a business is going under to the extent that AIG was, employees tend to run out the door to get jobs with enterprises that at least seem to have a brighter future, especially if it is clear that their compensation with the bankrupt will almost certainly be cut drastically by people who see $227,300 as the appropriate salary for the "Chief Executive Officer" of the United States of America, including its military.

Still, some measure of some kind probably should have been in there. Then again, how long would that debate have taken?

And, there were legally binding compensation contracts in place. Laws abolishing them would have probably violated at least two clauses of the Constitution of the United States and probably some state constitutions, too, let alone laws governing AIG's international offices.

Monday morning quarterbacking of impending global economic collapse is fun, but not necessarily easy, if you want to do it analytically.

But, I am with you on this one, at least as to general concept.

[mule_train]

44. 'Still, some measure of some kind probably should have been in there'

"Still, some measure of some kind probably should have been in there. Then again, how long would that debate have taken?

And, there were legally binding compensation contracts in place. Laws abolishing them would have probably violated at least two clauses of the Constitution of the United States and probably some state constitutions, too, let alone laws governing AIG's international offices.
Monday morning quarterbacking of impending global economic collapse is fun, but not necessarily easy, if you want to do it analytically. "


the repeal of glass steigel (many fell this is the root cause) in 1999 happened on clinton's watch, along with WTO, GAAT, NAFTA, MFN-China, massive H-1b increases. People arent 'Monday morning quarterbacking' now, they were saying DONT DO IT! back then, ALL of this stuff was against the public's objection, and shoved down out throats by both parties

"impending global economic collapse is fun"

if you get scraped off the pavement and taken to the emergency roon, they have time to ask for your insurance card before they do anything. the issue here, is whether the taxpayer had a legitimate advocate, and bargained in good faith on his behalf - sorry, i'm not giving geithner the benefit of the doubt


"Laws abolishing them would have probably violated at least two clauses of the Constitution of the United States and probably some state constitutions, too,"

you know what, how many times have corporate America figured out a way to shaft the 'little poeple' when 'things change'. as far as those contracts go, i dont remember signing them myself - they're not my problem. where in the contitution does is say if a big banker screws up, the little guy has to borrow money from communist countries and bail him out no questions asked? i've got no problem dumping the constitution if it doesnt protect me from that, but DOES protect the f--kup banker's bonus. it's LESS than worthless at that point - it becomes an enforcement document of fuedalism. For that matter, where it the constitution does it say I have to turn over my representation to unelected people at the WTO for an endless list of issues affecting EVERYTHING?

the bottom line is they could have put SOME conditions on the TRILLION dollars and said 'take it or leave it'. Why is it that an 'Emergency Powers Act' can not limit eith what you take from the little guy, or give to the richest?' Why has Obama defended one of Bush's guest worker increases in court? Do the banker emplyment agreements force him to do THAT too?
.
this bailout was the fastest most unnatural and breathtaking transfer of wealth from the working and middle class to the very richest i have ever seen in my lifetime. the only think the working person has to show for it is soaring gasoline prices due to the dollar the bailout destroyed

[dysfunctional press]

28. they're going to need that money to meet their healthcare costs...

the BEST thing that could be done BY FAR for small business would be to enact single payer healthcare.

it would relieve small businesses of MUCH of the burden of healthcare, and especially workman's comp costs, and probably allow them to be much more productive.

[Abq_Sarah]

46. Single payer

Won't eliminate workers compensation costs.