In what appears to be a very disingenuous and pathetic assertion by Barack Obama, the banks of America now are obligated to facilitate economic growth because the government came to their aid, and the economic crisis was “largely of their own making.” Wait, I thought the stimulus spending by the government had done the job already. You know, spending hundreds of billions for job creation a jobless recovery.
What Obama is really saying is the bailout didn’t work, and now he needs some quid pro quo so the Democrats aren’t completely obliterated in the 2010 elections in response to the bungling they and Obama have done with the economic and banking situation.
Some banks and investment banks have implied they haven’t needed the bailout funds, which essentially were forced upon them in some cases; although which banks and financial institutions, along with other businesses, were picked and chosen as to who got a reprieve via taxpayer funds.
Talk about ultimate denial by Obama as well, not even taking into account the key role in the disaster of the Federal Reserve and the Treasury Department. The banks aren’t even close to being near as culpable as these two entities, yet Obama incredibly doesn’t even mention them.
The reason why is obvious: this has nothing to do with cause or obligations in relationship to the financial and economic meltdown, but everything to do with the failure of Obama and Democrats in handling the disaster.
As with all politicians blinded by delusions of grandeur from the alleged saving of people through spending, Obama ignorantly states concerning banks and other financial institutions that “we expect them to explore every responsible way to help get our economy moving again.”
Let’s put it another way: the stimulous wasn’t. It has failed to do anything.
It’s extraordinary to see what is happening here. Obama is admitting the economy isn’t moving, contrary to endless assertions we’re well on our way to economic recovery.
Politics aside, this is just incredibly stupid. Banks have an enormous number of commercial loans which are projected to default throughout 2010-2011, with the latter half of 2010 looking like the peak period for those defaults to occur.
But in order to bail him out, Obama is now asking for banks to increase offering risky commercial loans in an economy that is not growing in any significant manner. Who’s going to pay for those loans while consumers continue to hold onto their money?
That’s what Obama is asking banks to do, lend money in an attempt to force a recovery to happen after the ridiculous and irresponsible programs like “cash for clunkers” created a temporary and artificial market, which probably hurt more businesses than it helped.
So Obama and big government spending has failed, so now they want the fragile banking system to offer up risky commercial loans to hide the fact of that failure to the voters and general public.
To focus on the short term because of political expediency at a time like this is reckless and dangerous. Put it in whatever words he wants to, Obama is asking the banks to resume lending practices which could largely backfire on the American people. As mentioned above, this will backfire because consumer spending isn’t going to rescue the economy any time soon like it has in the past. To encourage this type of behavior again by banks, businesses and consumers is a testament to the reality that Obama and the Democrats have learned absolutely nothing concerning markets.
You don’t stupidly call for lending when there is nothing to support borrowing money, as people aren’t increasingly buying more goods and services. All you’re doing is recreating the very circumstances that led to the debacle in the first place: low interest rates and borrowing beyond the means to pay.
