Thread: Kiss the Banks Goodbye

Kiss the Banks Goodbye
It's Time to Put a Stop to This Farce!


by David Lindorff
Global Research, March 9, 2009
CounterPunch - 2009-03-06


The futility and stupidity of the Fed’s and the Obama administration’s policy of pumping ever more money into failing banks and insurance companies in a vain effort to get them lending again was demonstrated—if anyone was paying attention—by the collapse in auto sales this past month, with all the leading companies, Ford, GM and Toyota, reporting sales down by about 40%.

This fall off in car buying was despite record discounting by the auto industry, and offers of 0% financing.

Clearly, obtaining financing is not the reason people are not buying cars.

People are not buying cars because they are worried about having a job to enable them to pay back the loan.

It’s the same reason people aren’t buying houses. It’s not that you cannot get a mortgage. There are plenty of smaller banks that would be happy to lend money to buy a house these days. But who’s going to go out and buy a house in this economy? First of all, to buy a house, unless you are a first-time buyer, you have to sell your current house, but that would mean taking a huge loss. Indeed, one in five homes in America today is technically “underwaterâ€

All so very true on the consumer end of it, that's for sure.

My husband works for a fabric wholesaler, one of the biggest. Sales are down recently. He was talking to his supervisor and was told one of the biggest problems is that all of the small fabric shops across the nation, who normally make up a significant amount of their sales, are not able to get the loans they usually purchased with.

Banks simply were holding onto the federal dollars and refusing to loan it out, then the domino effect started up. Banks did not make those loans they always had, small shops could not buy, wholesale sales went down, no raises for the wholesale employees, and many small shops began to close.

However, on the consumer end of that, they did have customers, as most of those shops customers never had to buy a lot all at once, which made it an affordable purchase, and many were in the retired age groups anyways (quilters), which had a steady income or retirement.

The banks in this situation were the problem.

"Restoring the American economy is not going to be a matter of simply jump-starting consumer spending, or even business investment. It’s going to take a long, hard, focused effort to move away from a parasitic consumer economy in which profits are largely made through speculation, and towards a real economy that actually makes things that people both here and around the world need. "

So what will we be able to export----at competitive prices---in this new century? Simple and dependable American technology gave us an edge in the post-WW2 world until the ruse of planned obsolescence took over. That did help to keep the profits coming in....until upstaged by sturdy and cheap---if rather unreliable----export products from Asia. Our exports of intellectual property----the IT revolution---will soon be overtaken by other countries.

So how can this country redevelop an export base and at the same time prevent American companies from outsourcing production? I think the Republican Party dropped the ball on this issue, although I have seen some signs of hope that they are getting it. Obama was certainly promising to deal with it---as witnessed by his concentrated efforts in the upper Midwest before the election. But I don't know if his financial policies will allow him to deliver on it.

Originally Posted by Captainron

"Restoring the American economy is not going to be a matter of simply jump-starting consumer spending, or even business investment. It’s going to take a long, hard, focused effort to move away from a parasitic consumer economy in which profits are largely made through speculation, and towards a real economy that actually makes things that people both here and around the world need. "

So what will we be able to export----at competitive prices---in this new century? Simple and dependable American technology gave us an edge in the post-WW2 world until the ruse of planned obsolescence took over. That did help to keep the profits coming in....until upstaged by sturdy and cheap---if rather unreliable----export products from Asia. Our exports of intellectual property----the IT revolution---will soon be overtaken by other countries.

So how can this country redevelop an export base and at the same time prevent American companies from outsourcing production? I think the Republican Party dropped the ball on this issue, although I have seen some signs of hope that they are getting it. Obama was certainly promising to deal with it---as witnessed by his concentrated efforts in the upper Midwest before the election. But I don't know if his financial policies will allow him to deliver on it.

It might require us to take on an isolationist/protectionist policy to get this country back on its feet. We have to quit exporting our wealth and the only way to do that is to quit importing goods and outsourcing jobs! If we produce what we use then there will be jobs and the money will stay at home provided or course that those jobs are filled with American citizens.