As I recall, we were told that much of the Bailout was based on the idea that the government would capitalize banks in exchange for primary equity positions and that, thus capitalized, the banks would again begin to loan money.
Great idea. Except, because of a lack of REQUIREMENTS to loan, banks are doing just the opposite: they're sitting on the cash.
So.... let me get this straight: We sent out checks like we have an unlimited number of trees to grind up into paper, and we placed zero requirements on the end user to do with it what they were supposed to do?
Shades of the Katrina Visa Cards.... $2000 handed out to "victims" for whatever they wanted to use it for.... no strings attached.
So.... where's the loans? Where's the cash flow?
And now, we're supposed to trust these same morons to get us out of this?
It seems to me that the issue is more one of getting out of this IN SPITE of them, instead of BECAUSE of them.
Westneat of the Times nails it here. After reading this, I felt, well, somewhat less "bailed out" than before.
Originally published Wednesday, January 14, 2009 at 12:00 AM
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Danny Westneat
Bailout trickles up, not down"You're good for it. " That's what most everyone has been telling Pam Pentz lately. You can slide this month, Pam. We know you're good for...
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Seattle Times staff columnist
"You're good for it."
That's what most everyone has been telling Pam Pentz lately. You can slide this month, Pam. We know you're good for it.
Everyone said that but her bank.
Pam's a horse trainer east of Woodinville. Last month the roof of her Olympic-sized horse-riding arena collapsed under the weight of the snow, all but shutting down her Derby Farms business.
The roof's insured so it will be fixed. But in the meantime she owes her hay man $1,300. The stall guy $2,000. The third-generation outfit that brings wood shavings for her 27 horses is due $1,800.
Don't worry, they all said. You're good for it.
It was nice to hear, but she fretted. How long can these others go without pay? So, to tide her over until her arena is back, Pam, 60, asked her longtime bank for a loan.
It was a pittance, really — a $15,000 line against a farm with at least a half-million dollars in equity. Where she's been in business for 30 years and has never missed a mortgage payment.
But the bank — Banner Bank, which likes to say that "you can take the bank out of the small town but you can't take the small town out of the bank" — said no.
You're not good for it, Pam.
The reason I'm telling you about a piddling $15,000 denied loan is that last fall Banner Bank got $124 million of your money as part of the bank bailout.
Yet Banner is not a troubled bank. It didn't need any rescue. The U.S. government gave the money on the theory Banner would turn around and lend it to people like Pam.
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