Updated: Good Versus Bad Loans

Barack Obama, Business, Debt, Economy, Federal Reserve Bank

Steve Bartlett of the Financial Services Roundtable told Judy Woodruff of PBS: “I have never met a small business man who applies for a loan that doesn’t think that he or she is qualified.”

Bartlett’s group represents most of the banks that met with Obama to field the fool’s demand that banks lend for the sake of lending (the practice that helped bring about the financial collapse).

Bartlett: “The fact is you have to do it one loan at a time and make sure it’s a good loan. And that is what we communicated to the president today. We’re setting out to look for ways to make more loans, to increase business lending, but we’re not going to get back into that old habit of making bad loans.”

AND:

“A loan is not capital. … Capital is your own money. A loan is the money that you have to pay back. … There are 8,000 banks out there and 50,000 other non-bank lenders, so it is a competitive marketplace. If someone has a loan that has full cash flow and full collateral, they will be able to get the loan.”

Peter Schiff, on the other hand, isn’t buying anything the bankers claim: “Major investment and commercial banks are not back on their feet,” he notes, “but remain fundamentally insolvent. Their current business model of risk-free speculation depends upon the maintenance of government backstops, the continued availability of cheap money from the Fed, and the use of accounting gimmicks that allow them to conceal losses behind phony assumptions.”

Amity Shlaes, who knows a thing or two about FDR, informs us that “capital strike” is the label “a petulant Franklin Roosevelt” gave to the banks’ refusal to lend:

“Election cycles also contribute to capital strikes. Banks today know that whatever the White House says, it has to stop pouring out the cash eventually, probably after midterms. Banks in the 1930s held onto cash because they knew Roosevelt would stop spending after the 1936 election, and he did.”

“These bankers had been burned. The wary banks reacted by stashing away yet more cash. The result was an unforeseen tightening and less cash in the economy.”

Update: Ron Paul: “The banks seem to be hoarding liquidity now but once these dollars make their way into the economy, hyperinflation and economic chaos will be a real possibility.”

Socking It To The SEALs

Bush, Criminal Injustice, Individualism Vs. Collectivism, Military, Neoconservatism, Political Philosophy, Republicans, Terrorism

Another of the many stories covered and analyzed on BAB for its significance ahead of the rest was that of Petty Officers Matthew McCabe, Jonathan Keefe and Julio Heurtas. The three Navy SEALs stand accused by Ahmed Hashim Abed—thought to be behind the premeditated murder and mutilation of four U.S. contractors in Falluja in 2004—of punching him. The real scandal is that our bloated behemoth of a military, the Navy in this instance, is acting like the state bureaucracy that it is and proceeding at full throttle against the these patriots.

Read “Make Me Thankful: Don’t Enlist!.”

The common refrain you’ll hear from your garden variety neoconservative is that Obama is to blame.

Please! Bush was every bit as hateful when it came to unleashing his bloodhound, U.S. Attorney Johnny Sutton, on Border-Patrol agents Ignacio Ramos and Jose Compean, to give but one example of Bush’s many betrayals.

“The state’s ‘rules of engagement’ rule-out any meaningful defense of American lives and property; they are rigged against America’s defenders and favor her infiltrators.”

Don’t expect the megaphones for the Republican-cum-neocon cabal to be capable of articulating this reality. At core, they are tribalists and collectivists who cleave to their own no matter what.

Obama Promises Sexed-Up Homes

Barack Obama, Economy, Environmentalism & Animal Rights, Political Economy, Technology

How will Big Brother O get you to sex-up your home? Why by skewing production in parts of the economy.

Here is a perfect example of how central planners direct scarce resources into inefficient technologies:

BO is nudging Congress (isn’t that our job?) to provide temporary incentives for Americans to weatherize their homes.

But how—and more importantly why—would cash-strapped Americans spend money they don’t have on retrofitting their abodes with expensive green gimmicks, ASAP?

The first economic order of the day in pushing people to squander scarce resources on fashionable items is for the fool-in-chief to sell the tinsel nation on the sexiness of these consumption goods.

Big Brother Barack says he finds insulation sexy. Sex sells; Obama and sex doubly so.

Is there anything Big Daddy Can’t deliver? Watch:

Update II: Bush & Barack Sitting In A T-R-E-E …

Barack Obama, Bush, Business, Neoconservatism, Regulation, War

Who Does Barack Obama Remind Me Of? BUSH. The indignant protestations from the Republicans notwithstanding, the two parties and potentates are interchangeable.

Dec 11, 2009: “… leaders say they will try to raise the ceiling to nearly $14 trillion as part of a $626 billion bill next week to pay for the wars in Afghanistan and Iraq and other military programs in 2010.”

September 11, 2003: Bush increases the ceiling on a whopping $6.8 trillion national debt.

Pleasing neoconservatives: Bush’s preemptive war doctrine never failed to bring a smile to Bill Kristol’s face. Pursuant to last week’s Nobel War Speech address, Obama too is making Bill warm all over.

Read the “Remarks by the President at the Acceptance of the Nobel Peace Prize” to see why Bill is glowing.

Update (Dec. 15): The two converge on war and on chasing “fat cats” (bar the likes of Barney Frank):

Bush: “The Sarbanes-Oxley Act of 2002, courtesy of the Republican Party, cost American companies upwards of $1.2 trillion. The capital flight it initiated caused the London Stock Exchange to become the new hub for capital markets. Given America’s habit of forcing its habits on others, SOX struck fear into quite a few Liberal Democratic hearts in the House of Lords. Lord Teverson worried about the ‘increasing danger of regulatory creep from American regulators that threatens [Britain’s] own light-touch approach to financial regulation.'”

Barack: “A regulatory tsunami is on its way. ever-increasing regulation, stricter corporate-governance standards and the threat of higher taxes in response to the ballooning deficit. This week the Environmental Protection Agency announced that it considered carbon dioxide to be a dangerous pollutant, raising the spectre of clumsy administrative measures to reduce emissions—a prospect even more terrifying to business than the cap-and-trade scheme currently under consideration in Congress. Meanwhile, hopes of business-friendly reforms to America’s convoluted corporate-tax regime, among other things, have fallen by the wayside. …

‘The concern is pervasive but rather amorphous in the sense that different executives have very different worries,’ says Joe Grundfest, a former member of the Securities and Exchange Commission (SEC) who now runs a ‘boot camp’ at Stanford University for corporate directors. ‘Some fret over tax policy. Others agonise over cap-and-trade, or health-care reform. Many worry about additional corporate-governance regulations. It’s a smorgasbord of corporate neuroses out there.'”

Update II (Dec. 15): Peter Schiff, of course, is hip to the Bush/Barack overlap: “Through aggressive monetary and fiscal stimuli, we are trying to re-inflate a balloon that is full of holes. This was the Bush Administration’s exact response to the 2002 recession. It’s shocking how few observers note the repeating pattern, especially the fact that each crash is worse than the last.”