Monday, December 14, 2009
President Obama, already at odds with bankers over big bonuses and new regulations, plans to urge executives at a White House meeting today to provide more loans to small-business owners.Remind me again how he voted on TARP? Oh yes. He was for it before he was, um, for it.
Top White House economic adviser Lawrence Summers said Sunday that Obama will remind the bankers of the taxpayer help they received during last year's financial crisis.
"We were there for them," Summers said on ABCsThis Week With George Stephanopoulos. "And the banks need to do everything they can to be sure they're there for customers across this country."
During a taped interview broadcast Sunday night on CBS' 60 Minutes, Obama blasted banking executives for opposing tighter regulations on Wall Street and for awarding themselves multimillion-dollar bonuses after they had repaid federal bailout money.
"I did not run for office to be helping out a bunch of, you know, fat-cat bankers on Wall Street," Obama said.
Anyway, the thesis of Mr. Summers' statement is that customers are there waiting to borrow money from banks and the banks are being stingy. The National Federation of Independent Businesses -- representing the people who would be standing in line in Mr. Summers' story -- say they're not:
�Twenty-four months of recession have sapped the financial strength of many small firms,� said [NFIB chief economist William] Dunkelberg. �Historically weak plans to make capital expenditures, to add to inventory and expand operations also make it clear that many potentially good borrowers are simply on the sidelines. They are waiting for a reason to make capital outlays and order inventory and to take out the usual loans used to support these activities.�That is, there's no demand for loans because small businesses are not adding capital or inventory. It may be harder to find a loan, but most business owners aren't asking for them anyway, and not because of anything fat cat bankers are doing.
Twenty-nine percent reported all their borrowing needs met (unchanged) compared to 10 percent who reported problems obtaining desired financing (up one point, not seasonally adjusted).
Commercial capital lenders are reporting stabilizing demand for loans, according to industry risk management firm PayNet. This is another sign that credit supply might not be the problem the administration wants you to believe it is.
Ed Morrissey writes that the bankers have every good reason to be cautious in lending.