OMG! It Turns Out That NO ONE Qualifies For A Loan!

MeanMesa sympathizes with the President as he points out what America's banksters (half bankers and half gangsters) have done to divert the Recovery Act money into nothing more than the latest layer of cash in their money bins.

"Hey guys!  The idea was to start lending to small businesses who need credit!"

Senate Republican "Closet" for TARP and Recovery Act  Dollars

!  Image source

Well, Short Current Essays has already been there.  This self-serving, bankster  phenomenon did not begin last week! 

Take a moment to visit an old posting from January, 2009.  Unofficially dubbed "The Winnebago Solution," you can visit the old post here

Otherwise, spend a few minutes with this re-printed version.

Gee, mom, did God make Banks?

January 23, 2009 - MeanMesa

Everything that is "extra, extra complicated" really is "extra, extra complicated."
How to selectively avoid understanding almost anything.

Oh darn. That $300 Billion bail out was supposed to help get credit started back up again, whatever that means. (For the numerically challenged, 300 billion is 300,000,000,000.) Gosh, we put the money into the “thing” at just the right places, but there are still all sorts of folks who can’t borrow anything. Nothing. Certainly not enough to keep business going and jobs in place.

Well, most of the most important people who could have signed off on those bail out checks, have. They are okay. They have enough money to last them through the disaster the rest of the country is facing. After what’s left straggles back to its feet, they can start the “trickle down.” Again.

“Trickle down” means that their banks will finally start loaning the money businesses need to keep going. Just before these "trickle down" folks start “trickling down,” most businesses will be in a failure state. They will be on their last legs. or, perhaps, on their backs. You know, “for sale” at a really cheap price. If the neo-con wet dream has come true by this point, it will be a shopping extravaganza if you have any money.

Gosh darn it, no one seems to have any money, though. Wait! There’s still the “trickle down” folks wandering around with what’s left of their $300,000,000,000! After all, they certainly haven’t lent much of it to anyone. Maybe, out of the goodness of their hearts and their great love of our country, they might be inclined to take a risk here and there, buy a few American businesses at bargain basement prices, and try to start the economy again.

That would be something new. Once again, they would wind up owning everything, strangling the rest of us not by “innovation,” “invention” or “competition,” but by good old fashioned business sense, funded with the tax dollars they took from us back in 2008. This next chapter of the “American Dream” just happened to have fallen into their laps by extraordinary good fortune!

They will have solved the labor problem, too. Labor problem? That means excessive wages and benefits will have been curtailed just in time for prosperity! The American worker's race to the bottom will be well under way by this time. No business means no jobs. No jobs means extra, extra low wages and plenty of desperate workers ready to gobble up any job (and any wage) they can get. It will be paradise! You know, just like "the good old days."

Captains of Industry. Maybe Dick Cheney will feel well enough to be President for a while. You know, well enough to “git ‘er did!”

Solution-wise this travesty makes the black hole of Calcutta look like a Sunday school social. Turn on your television. The man in the suit will explain everything. There is no solution. We just have to pump as much money as possible into these banks and then patiently wait and see if they start making loans again. Sort of like pushing a lobster through a key hole. It might work....

The reason it is all so complicated is because we just have to wait for these frightened bankers to get themselves into a little better frame of mind. They must be reassured. Right now, they are so freaked out with the prospect of being poor, they won’t even loan money to each other! The television man will provide you with 97 reasons why that is the case and another 231 reasons why this insanity is the only chance we have to get the lobster through the key hole.

Well, there is another solution.

A surprisingly American solution.

Here’s the plan. Split off a few billion of the bailout money and convert it to cash. (Bushie’s old Iraqi viceroy knows how to do this. And how! He was tossing around pallet loads of bundled U.S. hundreds to everyone who would stand still!)

Next, buy two or three thousand used Winnebagos. It’s okay. Gas is cheap right now, and we’ll be done with them before the price can get back to $4/gallon. Put a cot and a coffee maker in each one. Pack the back half of each Winnebago with cash.

Hire ten thousand bankers. There are plenty of unemployed bankers running around loose right now. Loan officers would be good.

Divide the bankers into three groups. Make them all Federal employees. The first group will go in the Winnebagos to make loans. The second group will be in charge of bookkeeping. The third group will be in charge of catching bankers from the first two groups when they cheat.

Next, park the Winnebagos in every city where the banks have not started loaning money, put out a sign, open the door and start making loans. I have to suspect that business will be good.

Pretty soon all those frightened bankers will get over their fright. Oh, whatever. In any event, they might stop buying each other, paying stock dividends and huge executive bonuses with our bail out money and start making loans again.

Total cost? $30 billion ought to get things rolling right along. Bailout money going to banks ($300 billion) hasn’t done much yet. Bailout money to businesses who need it and qualify might accomplish quite a bit.

God, is this ever complicated.

For a quick review of the journey of bail out money so far:
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/

Ho Hum. Lies about the banks and lies about the White House

Another refreshing "Turn and Fire" departure from a White House which has been far too reluctant to simply share the truth and hope for the best.

Hey.  We can handle it.

MeanMesa is relieved to note that the Obama administration has begun to forcefully dislodge the glacial morass of half-truths so carefully fabricated by the neo-cons.  The direct citation posted below is from the White House daily blog.  This Short Current Essays posting is much more about the nature of the carefully groomed misinformation campaign than about the banks, although both issues may be of interest to our visitors.

Read the White House Blog here

Please note that the "Fiction" comments are easily traced to the inflammatory commentary of the legion of suspiciously paid pundits now charged with discrediting the administration.  The hill billies and bigots who tune into such sources daily are, presumably, neither capable of considering factual information nor particularly interested in anything which might impede their rush to ever more ossified racist positions.

The Limbaugh - Hannity message to the ill informed and uninterested is clear. "Resistance is futile.  Contradiction is error.  The entire world is trying to deceive you.  There is no need to think.  Just listen to me and be afraid.  Very afraid."

MeanMesa considers the Beck far too similar to the Borg. Yuck.  This old geezer ain't even close to being ready to take this garbage layin' down.

The really startling part of this story is that, while  irritatingly similar to the relentless, idiotic ideology of the neo-con pundits, this story "originated" as an Associated Press release.  MeanMesa just has to wonder, "How exactly could this have happened?"  Think it over a little.  News-wise, maybe the corporate media fraud is more "invective infected" than even we thought.

Since the idea is clearly to "get the word out," MeanMesa is pleased to do our part.  Take a minute to read through the White House posting.  You'll get the idea right away!

From the White House:

The White House Blog

Distorting the Small Business Jobs Act

Posted by Jen Psaki on August 01, 2010 at 09:37 PM EDT 

 

 

America’s small businesses are essential to our nation’s economy and its recovery. They create two out or every three new jobs in the private sector. Their ability to hire and expand is crucial to putting our economy back on the right track. But in the wake of this recession, too many small businesses are struggling to find the loans they need to strengthen their companies.

And that’s why President Obama has called on the Senate to swiftly approve the Small Business Jobs Act – a set of tax breaks and lending incentives designed to spur hiring and growth at small businesses.

As we continue to fight for essential assistance to small businesses we know there will be a lot of misinformation and given what is at stake we want to provide the real facts.

Below is a point by point fact check of a story about the small business legislation the AP ran this weekend:

1. FICTION: “Congress is at work on a new program that would send $30 billion to struggling community banks”

1. FACT: To participate, a bank’s Federal regulator must deem it viable – helping to protect taxpayer investments and ensure that they can increase lending. Indeed, Treasury and the Administration have opposed any program that has a focus on “bailing out” struggling banks rather than supporting viable institutions that will extend more credit.

When banking groups or Members of Congress have proposed legislation that requires Treasury to allow weaker banks to participate, the Administration strongly and successfully opposed these measures. For example, when an amendment was added to the House bill to allow small banks to be able to put off recognizing losses in impaired real estate loans, the Secretary of the Treasury publicly and strongly opposed it, and worked so that this measure was not included in the Senate bill. In fact, the Administration supported in the House and Senate language that explicitly prohibits banks on the FDIC’s problem list from participating. 

2. FICTION: “Yet under the new program, the 775 banks on the government's ’problem’ list could qualify for bailouts for the first time.” 

2. FACT: The legislation explicitly states that “an eligible institution may not receive any capital investment under the Program, if (i) such institution is on the FDIC problem bank list; or (ii) such institution has been removed from the FDIC problem bank list for less than 90 days.”

3. FICTION: “For banks in the hardest-hit areas, it can be nearly impossible to recover once too many loans sour. Yet the bill would require that banks be protected against "discrimination based on geography." It says the money must be available to lenders in areas with high unemployment.” 

3. FACT: The legislation requires that regulators or Treasury not “discriminate” on the basis of a bank’s location.  It does not remotely suggest that a weak bank can get capital simply because it is in a high unemployment area or distressed location. Not even close. To the contrary, the legislation is crystal clear that every bank must stand on its own and pass the same consistent, uniform viability test administered by its regulator – no matter where it is located. In addition, Treasury anticipates that the application process would allow for other Federal regulators to confirm the primary regulator’s decision where necessary. 

4. FICTION: “Many community banks are overseen by state regulators struggling under budget cuts and limited expertise. Many are ill-equipped to monitor banks during a crisis” 

4. FACT: The legislation makes clear that every bank’s primary Federal regulator would play the key role in determining whether or not an institution was eligible for the program – not state regulators. In addition, the legislation provides for strong oversight by the Treasury Inspector General and the Government Accountability Office – institutions with extensive experience in overseeing programs that require similar expertise as the SBLF. 

5. FICTION: “This time, money is more likely to disappear as a result of bank failures or fraud” 

5. FACT: The independent Congressional Budget Office – which initially projected significant losses under TARP’s Capital Purchase Program (even though it now forecasts taxpayer savings for the program) has estimated that the Small Business Lending Fund would provide taxpayers with $1.1 billion in savings over 10 years.  While CBO acknowledged there were other ways to do such scoring, the way the CBO chose and – by which Congress must abide – found that this program would not cost the taxpayer a penny. 

6. FICTION: “It's supposedly reserved for banks deemed ‘viable.’ But regulators won't consider whether banks are viable now.” 

6. FACT: The only way a community bank (under $1 billion in assets) can get access to the full 5 percent of Risk-Weighted Assets in the program is to be found to be viable before it receives any government capital.

 

The Senate Legislation provides one narrow exception to this rule: in cases where a bank’s Federal regulator determines that the bank has sufficiently strong management and solid long-term prospects – but nevertheless has a small capital shortfall – the legislation allows the bank to get government capital equal 3% of risk-weighted assets provided that private investors will invest the same amount, dollar-for-dollar.  So not only must the government determine that the bank is otherwise viable, but private sector investors must be willing to contemporaneously put in at least as much of their own private sector capital at risk as the government for the bank to be eligible.  Furthermore, the new private capital must be junior to the government’s investment – meaning that Treasury gets repaid in full before any other new investors.  Indeed, when the Congressional Budget Office reviewed this new proposal, because of these protections, they did not think this narrow exception would add any costs to the program at all. None. 

7. FICTION: “But Federal Reserve Chairman Ben Bernanke and others have questioned whether the problem is lack of capital, or if there simply aren't enough creditworthy borrowers.”   

7. FACT: As Chairman Bernanke himself stated last month: “it seems clear that some creditworthy businesses--including some whose collateral has lost value but whose cash flows remain strong--have had difficulty obtaining the credit that they need to expand, and in some cases, even to continue operating.”

Indeed, the National Federation of Independent Business – which reported in a survey earlier this year that 45 percent of small businesses found that their borrowing needs were not being satisfied – stated recently that “the lending fund has the potential to help credit-worthy small businesses that have had difficulties obtaining credit, which is a good thing.” At the same time, the Small Business Jobs Act is designed specifically to address the range of problems facing small businesses – which is why it includes a series of targeted tax incentives for new investments, enhancements to SBA programs, and a new State Small Business Credit Initiative in addition to the SBLF. 

8. FICTION: “The administration's haziness about whom the program benefits has fueled comparisons to the $700 billion bailout known as the Troubled Asset Relief Program, or TARP.” 

8. FACT: The Administration has been very clear about the intent of this program: it is to stimulate lending to small businesses by providing capital and incentives to the community banks on Main Street that make these loans. Indeed, the design of the program has been very explicit in addressing this goal – the program is directed only at small banks, which do the overwhelming amount of their commercial lending to small businesses, and the benefits banks receive are linked directly to their lending to small businesses. Loans over $10 million or to businesses with revenues over $50 million would not be counted. 

9. FICTION: One source quoted in AP story stated, "What we lack here is oversight and true accountability." 

 

9. FACT: There is no doubt that the legislation establishing the Small Business Lending Fund would provide for strong oversight and accountability. As a new program established through new legislation separate from TARP, the Small Business Lending Fund – in addition to requiring a small business lending plan from participants and regular reports on the impact of SBLF capital – would be subject to robust oversight from the Treasury Inspector General and the Government Accountability Office. These two bodies have a strong record of expertise and experience suited to the task of overseeing this program. For example, Treasury Inspector General Eric Thorson – nominated by President Bush in 2007 – has substantial experience and existing responsibilities relevant to monitoring a program like the SBLF: overseeing the Office of the Comptroller of the Currency, conducting material loss reviews of Treasury-regulated financial institutions that cause losses over $25 million to the FDIC’s deposit insurance fund, and ensuring accountability for Recovery Act programs overseen by Treasury, to name a few.

Jen Psaki is Deputy Communications Director

Our Constitution and our democracy are based on the idea of an "informed electorate."  When the prerogatives, agenda, honor and conduct of the Fourth Estate become so soiled, we citizens must charge ourselves to be even more vigilant about the "news" we allow to enter our understanding of events and upon which we base our opinions.  

MeanMesa's compliments to the President.

A MeanMesa "Quickie" - Looking at Obama

Here in the spring of 2010 we have had a chance to take a look at the President we elected.  Although every drawling Southern Senator is still pumping out more "trash talk" in chorus with the high paid, wholly owned fat heads on AM radio and the cable channels, there remains the prospect to size up just what has been accomplished.

A Brief MeanMesa Account of History -- 

Not Opinion, History

To start, try to remember where we were in November of 2008.

Unregulated Wall Street maniacs, often acting in concert with other unregulated banksters, had managed to write up around $60 TRILLION dollars worth of their special financial derivatives, phony securitized mortgage packages and other stinky little scams.  The unelected autocrat was borrowing money from every country stupid enough to loan it to him to pay for war time tax cuts for the richest Americans, a Part D pharmaceutical plan written by Big Pharma lobbyists and hundreds of billions of dollars in tax payer paid subsidies to every big oil company whose CEO could pick up a phone.

Meanwhile, the little draft dodgers in the Oval office were losing a war in Afghanistan and sub-contracting huge amounts of another war in Iraq.  After the Iraqi Hydrocarbon Treaty was signed by that unfortunate country, the autocrat lost interest in anything but contracted oil field service profits and the war profiteering saturating every opportunity Halliburton, the unelected Vice President's corporation, could find there.

The richest 400 Americans saw their net worth mushroom by $630 BILLION dollars during the W's eight year looting festival.

Unemployment had been exploding for seven straight months while the bankers running the Fed and the Treasury Department did nothing, spending their time  instead scheming on how to finally destroy their competition.  The Republicans in the House and Senate, after already scratching every dollar possible from their chicken coop, were turning to their "campaign contributing" friends to elect a war mongering old man to the Presidency.

Who, exactly, was happy in 2008?

Well, the middle class wasn't particularly happy.  Their wages had remained frozen for most of two or three decades since the Reagan Administration.  The cost of living had gone up.  So had middle class tax rates.

On the other hand, Big Pharma was having a wonderful time.  Part D was shoveling tax payer cash into their pockets like the Mississippi River in a spring flood.  There was to be no negotiating.  Just pay the price and shut up.

The health insurance companies were also having a great time.  They found that the monopolies they had set up under cover of the Republicans in Congress could arbitrarily raise premiums as much as they pleased.

As mentioned before, the banksters and their Wall Street cronies were having a good time, too.  They were creating cash out of thin air making phoney financial instruments, having their back room buddies rate them sky high then selling them to every Arab and Chinaman with any money in the bank.

The draft dodging autocrat was flooding more tax dollars into every Cold War weapon system that made it off the drawing boards -- for example, the infamously useless and expensive F-22 fighter bombers.  Total cost?   Initial program estimate $62 Billion.  Original number of aircraft: 750, production beginning in 1994; then, 648 beginning in 1996; then 442 beginning in 2003; then, 277; then 183.  Price per plane?  $361,000,000.

The same ridiculous largesse was going on with new destroyers, new air borne refueling tankers, IED armor for HumVees in Iraq -- you name it.  Halliburton subsidiaries were building showers which electrocuted soldiers and selling bottled water for $8 a pop to our troops in the desert, all the while "landing" one emergency no-bid contract after another, year after year.

The corrupt cronies of the autocracy were soon enjoying a $1.2 Trillion dollar tax cut.  The national debt -- under control at the end of the Clinton Presidency -- was mushrooming at $500,000,000,000 per year or more.  Yet another tax cut followed the first one!  The unelected government borrowed the cash necessary to make good its promises to its "friends" by selling Treasury bonds so fast the ink was still wet when they arrived in Bejing.  BTW, those "friends" were neither nice people nor good citizens.

The stock market tanked along with the rest of the economy.  Terrified bankers stop lending to anyone -- not even other bankers.  Businesses ground to a halt.  Housing prices plummeted into a rancid swill of wounded home-owners and waves of foreclosures.

This systematic looting went on for eight years.

Internationally, the unelected draft dodgers lied their way into the Iraq War, then they began almost daily threats of bombing Iran with nuclear weapons.  When the lies fell apart, they turned the problem over to professional liars like Rush Limbaugh and Sean Hannity.  The illiterate "hill billies and bigots" were swayed into supporting them almost immediately.  Any one who hesitated or criticized was castigated by 100,000,000 watts of neo-con broadcast power every day.

Here, MeanMesa will avoid the ulta-shaky 9/11 reports and the unchallenged fear mongering of an unelected President who shamelessly frightened the hell out of the country with tales of being H-bombed by Iraq.

This gut-wrenching tale has a point.

It is now about fifteen months after the Obama Presidency began.  The "hill billies and bigots" have been convinced that all this damage -- and more, the  entirety of the known list is far too long to be included here -- should have been rectified by now.  The Tea Baggers have been saturated with outright lies from the neo-con monkeys secretly pulling the strings on that tiny "puppet" outfit (i.e. Dick Armey of Freedom Works).  The intensely greedy and fickle Independent voters are, allegedly, drifting back to the Republican Party en masse.

Screaming breathlessly with a wounded 401K earnings report in one hand and a foreclosure notice in the other, the citizens still refuse to learn about what actually happened to them...  who actually has all their money...  who are still planning to -- once and for all -- take over the entire country...

Enter Obama

Unemployment has finally decreased for the first time since the plummet began.  The Dow Jones is up 3,000 points.  Housing prices have begun to stabilize.

Many of the 3 billion Muslims in the world no longer think that the US is "waging a war" on Islam.  Our troops are withdrawing from Iraq.  95% of tax payers have had a tax cut.  Goldmann Sachs and other crooks are beginning to be investigated and sued by a restored SEC.

It's beginning to look like Afghanistan won't be another Viet Nam after all.  European leaders are no longer afraid to appear in a photograph with the American President.  Our national GDP is actually showing growth.

The auto giants are paying back their TARP loans -- so are the banks.  Obama says that we should get back almost all the money that the W packed out the door in the last days of the autocracy.

Presidential briefings are conducted in understandable, literate English.

Is he a perfect President?  No.  Has he delivered all his campaign promises?  No. 

Has he interrupted the writing of the last chapter about the American Democracy?

Probably.

MeanMesa's compliments to the President.

As for all you visitors, join me in his defense!