Letter to the editor 9/28/10
When I was a child my father fed me books instead of baseball cards and candy. I recall reading Aesop’s Fables and the stories of Hans Christian Andersen as a young boy. The story of the Emperor’s New Clothes seems quite prescient when reviewing our government’s latest attempt to help small business.
Yesterday, our chief executive office proudly announced the signing of a new “Small Business Jobs Bill.” I punched out an email to my banker expecting an optimistic response:” Yes Andy, this is going to be great for the bank and now we will be able to assist you with your business finances.” Imagine my dissapointment when I received his reply a few hours later: “Don’t believe everything you read in the newspapers. We are still under the same regulatory scrutiny as before, even more so now.” This is banker talk for: “we will loan you money provided you don’t really need it and there is absolutely zero risk to our institution. “ Keep in mind this is the same institution that happily took TARP funds last year to help fortify “their” balance sheet.
I called an old colleague at Morgan Stanley regarding the bill. The smart econ major that he is immediatley started the tired diatribe of how our economy has a demand problem not a supply problem. This means that there is plenty of money out their but no one wants or needs it. The majority of Republicans in our legislature and a few Democrats feared that this bill would be no different than the Wall St. bailout. They held it up for months.
President Obama can now claim success to the masses. Unfortunately the bill will probably have zero impact to small businessmen like me. Small businessmen like me, emphasize lower case “s”, who are deep down in the trenches of Main St. will be hung out to dry until it is politically prescient to assist them in the same manner as Goldman Sachs, Citibank and Chase. Millionaire small businessmen will benefit from capital improvement and healthcare write offs. I am sure that our local representatives will be chiming in next week about how much our congress has done for “the little guy.”
The fact is, unless the government places teeth in their laws, our banks will just sit tight and continue to repair their self abused balance sheets on our taxpayers’ dime and wait this one out. The only problem is that if you wait too long, the only customers they are going to have are the ones that really don’t need them.
So the tailor will continue to sell the emperor strange useless garments. God forbid the day when the emperor decides to try them on in public as they aren’t even there.