Wednesday, February 24, 2010

Lending falls at an epic pace



"U.S. banks posted last year their sharpest decline in lending since 1942, suggesting the industry's continued slide is impeding economic recovery..." -WSJ

Unequivocal evidence that the Fed is NOT printing money. In fact it has been the opposite case: money is being destroyed as lending collapses. Furthermore, it shows the idiocy of current Administration policy; its belief that gov't money to banks has anything to do with loan creation. It doesn't. There is one, simple way to restore lending and that is, enact policy that boosts demand and puts people back to work. NO ONE in the Administration seems to understand this!!!

6 comments:

Mike Sandifer said...

Mike,

Based on Summers' published work, and the efforts of Romer to get twice as much stimulus in early '09, what do you think is going on here?

The last time I saw Romer on TV speaking about the latest economic report from the president, she had this creepy, zombie-like grin on her face as she mentioned below trend real GDP growth, compared with prior recessions, going out for years,w ith very poor prospects for rapid employment recovery. This necessarily means there isn't enough stimulus!

I can't figure out what's going on here.

Mike Norman said...

Yes, Mike, there's no level of weak demand and employment that can't be turned around with the proper level of stimulus. Obama is afraid to ask for more stimulus because he believes the arguments of the deficit terrorists and, more importantly, he listens to the misguided advice of his political adviser, David Axelrod, who sees the deficit as a political liability.

TomatoBasil said...

Given the state of lending, unemployment and all the other important issues, one would assume that congress has been working on the issues right? Well here are the votes in the house and senate yesterday:

HOUSE:


1. H.Res. 1066 - Recognizing the bravery and efforts of the United States Armed Forces, local first responders, and other members of Operation Unified Response

2. H.Res. 1059 - Honoring the heroism of the seven United States Agency for International Development and Office of U.S. Foreign Disaster Assistance supported urban search and rescue teams deployed to Haiti....

3. H.Res. 1074 - Honoring the life of Miep Gies, who aided Anne Frank's family while they were in hiding...

4. H.Res. 944 - Expressing the sense of the House of Representatives on religious minorities in Iraq...

5. H.Res. 1048 - Commending the efforts and honoring the work of the men and women of USNS Comfort ....

6. H.R. 3695 - Billy's Law (Rep. Murphy (CT) - Judiciary)

7. H.Con.Res. 227 - Supporting the goals and ideals of National Urban Crimes Awareness Week (Rep. Towns - Judiciary)

8. H.Res. 274 - Expressing support for designation of March as National Nutrition Month

9. H.Res. __ - Honoring and celebrating the contributions of African-Americans to the transportation and infrastructure ...


H. Res. 1083 - Rule providing for consideration of H.R. 2314 - Native Hawaiian Government Reorganization Act

SENATE:

S. 1224, A bill to reauthorize the Chesapeake Bay Office of the National Oceanic and Atmospheric Administration, with an amendment in the nature of a substitute.

S. 2768, to amend title 49, United States Code, to authorize appropriations for the National Transportation Safety Board for fiscal years 2010 through 2014...

Truth in Caller ID Act: Senate passed S. 30, to amend the Communications Act of 1934 to prohibit manipulation of ....


Early Detection Month for Cancer: Committee on Health, Education, Labor, and Pensions was discharged from further consideration of H. Con. Res. 158,....

Recognizing the American Kennel Club: Committee on the Judiciary was discharged from further consideration of...


National Engineers Week: Committee on Commerce, Science, and Transportation was discharged from further consideration ....

---------------

And as you thumb through the calendar, its pretty much always these important matters occupying congress. The politicians hard at work on Capitol Hill.

Ralph said...

Re the fall in lending, it's the same in the UK:

http://business.timesonline.co.uk/tol/business/economics/article7032968.ece

Mike Norman said...

Glad to see House members so concerned about religious minorities in Iraq while millions of American suffer without jobs.

MortgageAngel said...

Recognizing the American Kennel Club: Committee on the Judiciary was discharged from further consideration of...

I don't get it. Normal people do stuff like this in their sleep!