Today’s Episode of “The Onion or Reality?”

29 October 2008 at 1:56 pm 1 comment

| Peter Klein |

White House to banks: Start lending now
By Jennifer Loven, AP White House Correspondent

White House tells banks getting federal aid to quit hoarding money and start lending it

[ . . . ]

“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” White House press secretary Dana Perino said.

Those silly banks; first they made too many loans, causing the subprime crisis, now they’re making too few! (Via Manuel Lora.)

Let’s review: Some banks made bad loans, and some banks bought securities tied to these loans. When the bad loans went sour, some banks failed. Instead of letting those banks fail, freeing up scarce resources to flow to other banks and financial institutions, the government tried to prop up the entire banking system. Now, when the propped-up banks decide to hoard their taxpayer-provided cash, the government wants to make them lend — to whom, it doesn’t matter. Just lend, baby, lend! A loan, you see, is just like any other loan. All investments are the same. All banks are the same. No need to separate the good ones from the bad ones. We Are the World!

Entry filed under: - Klein -, Bailout / Financial Crisis.

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1 Comment Add your own

  • 1. Matt C.  |  29 October 2008 at 2:37 pm

    I believe this is the article on yesterday with the headline that read something to the effect, “Bush to Banks: Stop Hoarding Money”.

    All I could think about was how much that sounded like Hoover. Here we have a hugely interventionist pleading with banks to not hoard money, Hoover blamed “hoarders” for the problems of the early ’30s.

    We have a current Presidential candidates in Barak Obama and John McCain blaming the failure of the “free market” and “greed”, it all sounds too much like FDR.

    Could it be true that History is doomed to repeat itself?

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