Wesley G. Hughes, Staff Writer
Posted: 08/14/2011 04:46:33 PM PDT
The “experts” keep talking about a double-dip recession.
That’s all wrong. You can’t dip back into something you never got out of.
Sure the banks and other financial high-rollers are in hog heaven right now. They are rolling in cash. They paid back all the bailout money the federal government made available to them under TARP in October 2008, the Los Angeles Times reported last month. That’s when Congress enacted the Emergency Economic Stabilization Act.
That’s good for them but they have forgotten how the system is supposed to work. They’ve forgotten their role. It is really pretty simple: Banker sits on pile of cash in his money temple, businessman comes in with plan to expand, hire more workers and increase production. Part of his business plan is paying back the loan. That is made possible when the public sees his ads and marches in money in hand to buy his products. He pays his workers, pays his suppliers, pays his taxes, pays the bank and sets some aside for growth and some profit for himself. It’s a perfect circle. Life is good.
But no, the bankers don’t see it that way. Lending money is risky.
They want money coming instead of going. They do, however, feel the need to pay huge salaries and huge bonuses to their executives. What can we, the public, do about that? Not much, according to Treasury Secretary Timothy Geithner: “We do not have the capacity, and the program does not give us the ability, to force banks to lend.”
Government figures compiled by about.com say the Great Recession began in December 2007 and ended in June 2009. Did you feel it? The beginning was pretty noticeable as jobs in the hundreds of thousands disappeared and the unemployment lines, stretched into space, would probably reach the moon.
But those losses weren’t hitting everyone equally. As our friends and neighbors were losing their homes as they lost their jobs, in one week in September 2008 U.S. banks borrowed an average $188 billion a day from U.S coffers in the TARP bailout.
And have you noticed an end to the recession? Do you have a job? How long since you had a raise? If you are lucky enough to be employed, how is your IRA or 401k holding up?
The Congressional Budget Office said earlier this year in a report by the L.A. Times that losses from TARP were put at $25 million, not bad considering the total distributed was $410 billion. And remember those were toxic assets folks. That’s what you call a bailout.
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