From the AP:
President Barack Obama’s $30 billion small community business lending program faces one big challenge: many of the community banks and businesses it’s supposed to help don’t want it.
The lending program is part of a bill that passed the House of Representatives on Thursday and now awaits the president’s signature. The legislation contains a mix of tax cuts and credits aimed at helping small businesses. The centerpiece of the bill is an effort to make billions of dollars available to community banks for loans to small businesses…
…Bank executives say their customers don’t want loans, even at low interest rates, because the sluggish economy has chilled expansion plans. Some say the federal money isn’t worth it because they fear it will come with too much regulatory oversight.
“We have taken a strategic decision not to have our primary regulator, the government, also be a partner in our bank,” said William Chase Jr., CEO of Triumph Bank in Memphis…
That is the first intelligent statement I’ve seen from a banker in quite a long while. Mr. Chase seems to have learned the lesson – when Uncle Sam comes bearing gifts, think “Trojan Horse”.
The flaw in the Obama plan is that it is geared toward identifying what Obama and Co think should be done. The trouble is that no one in DC can really know what should be done. The US economy is 300 million people all doing things day by day which no one can track. The smartest people in the world in possession of the most detailed analysis of the economy can’t figure it out – its simply impossible. Too many variables.
This is why if you’re going to cut taxes, at all, they should be cut across the board. When you do that, you simply allow people an easier time of doing whatever it is they prefer. The economy is not some esoteric thing separate from the people – it is, simply, the people living their lives. Right now, the people are laboring under straightened finances and this has caused economic growth to grind to a halt – and we may, indeed, slip back in to full blown recession (with the caveat that, federal number crunchers aside, we may never have really left it).
Leave more money with the people and they’ll immediately gain greater flexibility as well as greater ability to make long term plans – recovery is automatic under such circumstances because the people don’t just sit around waiting for government permission to create wealth. They just do it, unless the government prevents them (which is, essentially, what government has been doing these past two years).
Outside of the financial straight jacket we’ve got on, the biggest threat to the economy is our debt – and investors can perceive that we’re fast approaching a fiscal brick wall. So in addition to across the board tax cuts to get things moving again, we need to seriously and deeply cut government spending. If we do this – cut taxes and spending – then we’ll be in a real recovery in less than a year, and on the road to returned prosperity in two or three years.
Obama’s little program is just more of the same economic idiocy – it not only won’t fix things, it will make them worse. And people see this.
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