If the president wasn't so busy looking to score cheap political points when he met with the heads of the big banks last month, he'd have listened to their warnings on this very issue. At one point, JP Morgan CEO Jamie Dimon politely interrupted Obama's monologue on how the banks should be lending more to small businesses to explain that many businesses simply don't want to borrow to expand their operations and hire more workers.
"Jamie basically said the demand for loans is way down because businesses, particularly those that are making money and can qualify for loans, simply don't want to borrow," said one person with direct knowledge of the conversation.
And they're not borrowing because they don't know just how high their tax bills will be when the president gets done implementing all his "hope" and "change."...
The issue is strikingly similar to what the banks face. As we're all aware, the banks are making big money and waiting to pay out bonuses in the coming days. But the cash isn't coming from lending the money out. Instead, the banks are cutting costs, hoarding cash and investing some of it in low-risk bonds.
Businesses are doing the same even if the economy "grows" according to official statistics. Why risk expanding operations and hiring workers amid a wild boom in government that will lead to massive tax hikes when you can make money simply by doing nothing or laying people off?
All of which translates into a jobless recovery -- the economy appearing to grow while unemployment remains unnaturally high -- unless of course, you work in government.
Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/how_obama_routing_the_recovery_zneMnksB1VnHzSS7QmuhnL#ixzz0cPdra3Sg
Tuesday, January 12, 2010
How Obama's routing the recovery - NYPOST.com
How Obama's routing the recovery - NYPOST.com
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