Credit Crunch–What Credit Crunch?
Published by Bob Foster
The latest government numbers—through mid-October—show commercial and industrial loans from banks are UP, commercial real estate loans from banks are RISING, and interbank loans are CLIMBING. The real interesting thing is, from September 2007 to mid-October 2008, the numbers in all three categories have been consistently rising. So, what, or who, were the big bailouts for?
V.V. Chari, a University of Minnesota economist and consultant to the Federal Reserve Bank of Minnesota said recently that it sounds like the reasoning for the buildup to the Iraq war all over again…”We know things you don’t know. Trust us.” The government’s own data, however, contradicts what the politicians and bureaucrats are saying.
Lawrence Christiano, a Northwestern University economist recently said, “Nobody has explained how the money system has frozen when the data says it has not.” Because our economy is based primarily on emotion, it seems that we are in a situation similar to someone yelling “fire” in a crowded theater. The resultant panic is simply based on fear.
The Good News.
Anyway, this is a small business blog, not a political blog, but I did want to point out that for most businesses, there is no credit crunch, and money is still available for operating our businesses…and always has been. However, there is no question that there will no longer be any subprime loans available for the near future. To get a loan, a business now must be truly credit-worthy. But, isn’t that the way it is supposed to work?
The sad thing is that the politicians and bureaucrats who yelled “fire” in our crowded economy did so just to satisfy the debts created by greed and avarice of a very few rich and powerful people. Now, it will be up to individuals and small business to shoulder a perhaps unnecessary national debt—again.
But, don’t despair—keep on doing what you do so well, and, as usual, small businesses everywhere will stabilize economies and put the world back on track. At least until someone yells “fire” again.
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One Response to “Credit Crunch–What Credit Crunch?”
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Add Liberal Network Media to your list of politicians and bureaucrats. They are likened to someone trying to put out a fire with gasoline.
Steve