Tuesday, December 15, 2009

Obama and the "Fat Cats"

The majority of the big bankers, who Obama labeled "fat cats" this past Sunday, voted, funded and supported Barrack Obama for President (including famously Jamie Dimon and Lloyd Blankfein). Now they cheerfully meet with Obama, smile for the cameras, and gloat in the knowledge that there is really nothing he can do to get to them. Except for Wells Fargo, all the big banks have either paid off the TARP money or soon will. Even Wells Fargo has signaled its intention this week to repay TARP money. Thus, all Obama can do is make "fat cat" statements.

Obama knows and the bank CEOs know that there are no plans to expand small business lending -- not now, not next year. The regulators, for one, will not permit it. The OCC is forcing America's banks to reduce their commitment to small businesses. All the bombastic rhetoric by Obama aside, small business is in the deep freeze in the US and will not come out of the deep freeze until Obama and his Democratic majorities have gone down to defeat.

The truth, as Obama knows well, is that the American economy is going nowhere. If Obamacare passes, there is a real possibility of a double dip recession and unemployment levels will begin to increase from current levels. Obama seems in a fog about the economy. Larry Summers, his chief economic advisor, says the recession is over. It isn't (as Christine Romer, Obama's Council of Economic Advisors chieftan, pointed out after Summers' absurd comment).

Besides the possibility of the recession deepening, the other economic problem that Obama policies are aggravating is the national debt. The Obama Administration's own forecasts imply a tripling of the national debt within a decade. Clearly this is an underestimate. It is hard to see a way out of this, given the Obama program.

The "fat cats" aren't worried though. Their man Obama continued the Bush bailouts and have provided zero percent funding for the banking industry. Who needs to lend to small business even if the Obama regulators reversed themselves and permitted it. The banking industry doesn't need to lend to small business and they won't as long as Obama is around.

No comments: