June 22, 2010

There's a ridiculously EASY solution to this

There is still a crisis in small business lending. The contraction of 2007-2009 hasn't eased any for small and medium sized business. Banks say there are fewer seeking credit and those that are asking for loans aren't credit worthy.

That's a load of bullshit. The problem is, the enhanced guidelines being followed by the banks fail to take into account real world conditions and are overweighted toward hard asset financing vs working capital.

There is, of course, a really easy solution to this... we need to end programs that allow banks to buy Treasuries with deposits and soak up a very nice spread. It's time for them to start taking a little risk again. If they won't, the government should immediately open up a small business funding program and allow all originators of FHA loans that ability to originate loans under that program and sell the loans to the government. We have to get employers back into a position to expand and we can't do that without funding.

While we're on the subject of the economy, let's take a moment to more completely denigrate those calling for AusterityNOW! These are some of the same people who also believed in Drill Here, Drill Now (you know, the assholes blaming enviros for BP's colossal mistake in the Gulf) and are basically the teabaggers you see out, running their little teabagger errands, demanding services (like Medicare and Social Security with a fat COLA) all while bitching about how high their taxes are and making the 7% of the federal budget that's purely discretionary the bogeyman for all their financial problems.

OK, here's the deal fat, middle class boomers... you fucks have made taxes the central issue of your entire political lives as you got more and more conservative. You took your eyes of the ball that IS income and forget that to pay taxes you have to have some. The declining amount of disposable income you've been dealing with for years isn't because of taxes (most of you are paying the lowest tax rates in more than 60 years), it's because income growth in the US (for the lowest 97% of the economy, i.e., the vast majority of Americans) has been non-existent for more than 30 years. Sure, there were a few good years under Clinton but then he got a blowjob from some fat chick and then we got Bush who promptly put an end to the rebuilding of the middle class.

As an aside, it would be super if certain companies would actually pay their taxes like the rest of us do. That would certainly put a big hole in the deficit.

Now you're all whining about the federal deficit as if the massive deficits right now aren't keeping the economy from going into a deflationary death spiral. The latest bit of nonsense is this ridiculous piece from David Brooks (or, as we like to call him, the poor man's William F Buckley).

By 57 percent to 37 percent, voters in these districts embrace the proposition that “President Obama’s economic policies have run up a record federal deficit while failing to end the recession or slow the record pace of job losses.”

Instead of building faith in government, the events of 2009 and 2010 further undermined it. An absurdly low 6 percent of Americans acknowledge that the stimulus package created jobs, according to a New York Times/CBS survey.

Well of course these people think that. They've had a steady diet of just this kind of bullshit from conservative commentators doing their best impression of people far smarter than they. And these voters, overwhelmingly boomers, believe it. None of them look deeply into the talking points from the right and instead take in every breathless word from Rush Limbaugh as truth despite the fact that Rush knows dickall about, well, anything.

The reality is that absent the stimulus (which, because of the Republicans and a few weak ass Democrats, was far smaller than it needed to be) this country would have an unemployment rate pushing 15%. Without the so-called bailouts, we'd have unemployment in the high 20 percent range and we'd be in a sever depression. Have the Democrats done a piss poor job of messaging this? Hell yeah. Democrats need a solid round of completely justifiable self-aggrandizement.

Of course, Brooks doesn't stop there...

Bitterly and too late, Dr. Faustus acknowledged that after a period of overconsumption, Americans now see debt as the primary threat to their well-being. Dr. Faust and his fellow liberals may see themselves as the champions of the little guy, but in the new age of austerity, many voters see them as protectors of the special interests, as the guardians of the unaffordable promises.

Brooks, being an even bigger buffoon than Bill O'Reilly, never bothers to mention that the underlying assumption (deficit spending in a recession) is EXACTLY the right thing to do. He also never bothers to mention that if these people get their way, they can expect their benefits to be cut. Dramatically. And this little offer from Gates would be about $300 billion too little.

I think that's the best talking point to get these folks to refocus their efforts because they need to know... what they are demanding will end up forcing them to eat catfood in their golden years. And we still haven't accomplished any of what's needed to rectify the income inequality that's choking this country.

I leave you all with this from Jim Chanos. You won't know who he is, so I'll just say he's a really rich guy who got that way by making smart decisions and working hard.

“What I do have a problem with, personally, is the hedge fund industry or the private equity industry or the venture capital or the real estate –all private capital –asking for and still getting to some extent, lower tax rates on certain forms of income that I believe are income, not returns on capital, than say teachers, soldiers, fireman and policeman.”

Posted by mcblogger at June 22, 2010 01:22 PM

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Two things crossed my path today... this from Bob Herbert The June 28 cover story of Time magazine is headlined, “The Broken States of America.” As I’ve mentioned here several times, the states are facing a catastrophic fiscal situation that... [Read More]

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