Obama spoke about jobs today..

Discussion in 'Politics, Religion, Social Issues' started by Zombie Acorn, Dec 8, 2009.

  1. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #1
    While I applaud his efforts to try to get small businesses up and running by lowering corporate gains tax and giving tax breaks for the next year the problem seems to be with the banks simply not loaning or loaning at horrendous rates even though they were bailed out by the federal government. A local city's mall section was closed down recently even though it was profitable and employed many people/small businesses/shops. All because the bank wouldn't extend their loan.

    Also I am not sure if this is saying we are going to make another stimulus bill (which will be very unpopular) or if we are just going to spend the money banks are paying back to us.

    http://news.yahoo.com/s/ap/20091208/ap_on_bi_ge/us_obama_jobs

     
  2. IntheNet macrumors regular

    IntheNet

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    #2
    Since Obama achieved very little with the first stimulus I strongly doubt subsequent efforts will be any more successful; his efforts to "spend our way out of this recession" further indenture the next generation to debt, will achieve only stagflation and hyperinflation into 2010, and will not achieve a single new job in the private sector (since both the first stimulus and follow-up stimulas spending does not route money to the private sector but rather to state government entities). Based on what economists are now saying, Obama would be far more successful, for the short term, in helping the economy by cutting taxes, reducing regulations on small business, and cutting the capital gains tax rate through 2012. Expecting him to do the right thing, however, is unlikely.
     
  3. mkrishnan Moderator emeritus

    mkrishnan

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    #3
    I'm concerned, too, about the lack of progress with the banking industry on opening up the faucets of low-risk commercial and private loans and commercial paper.... I have a hard time seeing real unemployment progress without it.
     
  4. someguy macrumors 68020

    someguy

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    #4
    For a moment, I thought the thread title read Jobs, not jobs. ;)
     
  5. rdowns macrumors Penryn

    rdowns

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    #5
    The banking industry needs a swift kick in the ass. They're playing with trillions of our dollars and not lending, imposing ridiculous fees and basically thumbing their noses at this administration and the American public.

    I'd advise Obama to fire Geitner and replace him with Elizabeth Warren. That would have the bankers lining up for a bailout to clean their skid marks.
     
  6. Rodimus Prime macrumors G4

    Rodimus Prime

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    #6
    My understanding is banks were lending more money but the secondary market for commercial paper and what not was still next to dead. I also believe that the secondary market was larger than the one the banks did. So even if the banks were lending above where they were before they still would not make up the huge part of the market that is not there.
     
  7. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    #7
    I heard an interview with Donald Trump the other day and he seemed to think they were using money to play the market and using fees as their new "business model". If they aren't going to extend credit to the private market we would have been just as well off letting some of them tank.
     
  8. rdowns macrumors Penryn

    rdowns

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    #8

    He is right. We propped up the banking industry with TRILLIONS (TARP was a drop in the bucket) and they are still not lending. They borrow money from the Fed at no interest and speculate with it, raise fees and interest rates and pay themselves billions.

    If you're interested, Dylan Ratigan has written several excellent columns on this.
     
  9. Gelfin macrumors 68020

    Gelfin

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    #9
    I think this is exactly right. The story on the ground simply cannot be explained by the traditional business model of a bank, or the idea of interest as the time value of money.

    Here's what gets me, though: believe it or not, I'm not a huge fan of government doing things that can be efficiently done privately, but when these banks are screwing over the economy to profit themselves, who but the government has the leverage to oppose them by providing an alternative?
     
  10. Queso macrumors G4

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    #10
    The account holders do. Organise a grassroots campaign on the worst offender for everyone to withdraw their cash, and start a run. That ought to make the rest sit up and notice.
     
  11. Zombie Acorn thread starter macrumors 65816

    Zombie Acorn

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    #11
    We would need a big bank that wasn't crooked for this to work properly. I personally use a small private bank who has done business the same old same old since early 1900s, but I don't think these small banks could sustain millions in deposits coming from bigger banks. Who knows maybe they would quickly become the "bad banks", money seems to corrupt.
     
  12. Gelfin macrumors 68020

    Gelfin

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    #12
    Switching banks is a massive hassle unlikely to draw a sufficiently large grassroots response among people who see the value of getting a large national bank to underwrite local loans. In the process you're just rewarding some other bank doing the exact same thing.

    For credit card providers, you're asking people with outstanding balances to pay off those balances immediately and close the accounts under conditions that make them unlikely to get another credit card anywhere. Not a practical option for most. Two years ago transfer offers were everywhere, but if you can't find somebody else to assume the debt, you're out of luck.

    Finally, just expecting enough financial sophistication among the general public as to understand how intentionally abstruse business practices are screwing the economy seems unrealistic.

    I would expect such an effort to have exactly as much impact as those "don't buy any gas from Shell on Friday" emails.
     
  13. XNine macrumors 68040

    XNine

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    #13
    Though I don't bank at a "small" bank, my bank isn't necessarily huge. So I'm in the same boat as Zombie here.

    Grass roots campaigns are fine and dandy but do very little to actually topple mega-corporations. Look at the "don't buy gas on such-and-such-a-date" campaigns. They don't work. At all. Why? Because you'll have to buy the gas sometime anyway. And if you don't, the public transport system will.

    It might work, however, if you were to get a majority of people who bank at say, Citi to close their accounts and move elsewhere. Target one giant bank that has nobody's interest but their own and hammer them with a large campaign, but how likely is that to happen?

    Unfortunately, I think Gelfin is correct in his assertion that the Government will have to start controlling these banks and putting them in their places. It's the only entity that's actually larger than these banks, and the only one who can sufficiently manage their lending and practices to benefit not just the banks, but their customers.
     
  14. IntheNet macrumors regular

    IntheNet

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    #14
    We should have let them all "tank" as the taxpayer's money extended under TARP and subsequent "to big to fail" bailout programs has yet to see fruition and will likely be wasted in the final analysis... That said, I do not see the credit market easing a lick simply because of all the debt out there, not the least of which is the Federal government's huge debt footprint... consumers come second in debt payment by banks on federal notes....Therefore what is the point in bailing out banks? It is a Catch-22 situation...
     

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