It must be big

Ready to bust some banks, Barack?

Financial strategist and author David Smick’s recent Washington Post editorial  “Memo to the Banks: Lend or Else” suggests that the President-elect must make bold moves in order to help recapture consumer (and institutional) confidence in the U.S. economy. One of the best ways he sees to accomplish this is via a showdown with the country’s afflicted banking system. Something like this would be much more important (and much less destructive) than cracking down on faxless payday loans that actually aid consumers.

At one time, banks were considered “too big to fail.” Clearly that is no longer the case, though, as massive bailouts from the Bush administration have shown.  Did you know, however, that current post-bailout cash reserves for America’s banks sit at over $800 billion? What are they doing with the money? They’re sitting on it! Smick blasts American banks, for they have shifted from reckless abandon to static safety. The result of this is that they are tightening their belts so much that credit has been unable to flow as it needs to.

The economy suffers

Banks have been doing something with the money. Unfortunately, it’s nothing good. The cockeyed leadership of these financial dumps have taken it upon themselves to send their executives on spa vacations and double their investment in Chinese banks. Common sense or a drive to tackle issues at home head on are nowhere to be seen.

The mortgage crisis is tightly wound up in this, too. Smick points out that giving loans to people who could scarcely repay them was one thing, but the banks made things even worse by burying their errors in off-the-books ventures. We may never know exactly how big a hole the banks dug for themselves, or whether they needed as much money as they received from an all-too-eager government in the first place!

Obama had better bring a shovel

If banks won’t lend, Smick suggests that Obama ride a hard line with these deeply diseased behemoths. He should insist that their Troubled Asset Relief Program (TARP) funds be used to buy Fannie Mae and Freddie Mac debt. Since it is now federally guaranteed, bank executives have no excuse. They cannot sit on their freshly manicured hands, they cannot pass Go and they cannot go on any more “team-building” retreats. It’s time to act like big boys and girls now, or else.

Some bankers are saying they’re confused by the government’s efforts, that some are telling them to demand more capital and lend less money, while others say they’re receiving the opposite message. Poppycock. You know that increased lending will improve liquidity and get this economy on the right track again. You want to make excuses, Mr. and Mrs. Bank.

Wow. Now.

America is in a financial crisis. This is not a test, but the real thing. As Smick sees it, Obama’s only move is to take banks to the carpet and make them heel. Busting banks for their misdeeds is what is needed, not punching payday loans in the mouth. Whether or not this will be possible remains to be seen, but what America wants to see is bold moves. They will appreciate the effort and (hopefully) savor the results.

No surprise here

In eight days, Barack Obama will take over the nation’s top job and move into the White House. As the transition nears, the news media are being flooded with reports summing up just exactly how bad the economy was during Bush’s tenure as president.

The recession has been going on for 13 months, but even before the economy began to shrink, it was not doing well. When Bush took over as president in 2001, the federal government actually had a small budget surplus. It didn’t take long for that to change. By 2004 the government had accrued a deficit of 4.9 percent of the GDP.

Slow going

After his re-election, Bush failed to amend Social Security and Medicare. His several attempts to repair the health-care industry were thwarted. As Obama prepares to take over the Oval Office, Henry Blodget from the Huffington Post warns that repairing the economy will take a long time.The payday loan industry will likely continue to see a lot of business for some time as Americans’ finances continue to be squeezed.

Blodget predicts that unemployment will remain at 7.3 percent, its current rate, for three years. Over Bush’s eight years in office, jobs grew by only 2 percent, the lowest growth in recorded history. Job growth has been  measured for seven decades. GDP growth, 2.1 percent, was the lowest it’s been since Truman was president.

Changing hands

Obama has asked that Bush request the other half of the federal bailout money, a sum of $350 billion.  A letter from Obama’s economic director outlines the President-elect’s plans for using the rest of the funds.

Obama says he plans to broaden the goals tied to the use of the bailout money. He also plans to impose tough restrictions and oversight regarding how the money is used. The use of the first $350 billion given to the Treasury was not tracked, and it is unknown where much of that money went.

Runs in the family

Jobs only saw 2 percent growth during Bush’s tenure, a far cry from the almost 21 percent growth that took place during Clinton’s presidency. During Bush Senior’s four years in the White House, job growth was also dismal, only 2.4 percent.

It’s not a Republican thing. Jobs grew almost 18 percent during the Reagan administration. It seems to just be a Bush thing. Remember that, in case a familiar name pops up on the 2012 ballot.

Deeper in debt

Obama is charged with turning the economy around, and he certainly has his work cut out for him. Besides deciding where the other$350 billion in bailout money will go, he is putting together an $800 billion stimulus package that he hopes will create jobs and get the economy back on track. He wants the plan to be put to a vote this week.

Congress has the authority to block the spending of the rest of the bailout money, but it is widely expected that Congress will comply with Bush’s request and release the money to Obama.

Your payday loan source keeps you up to date on the nation’s finances.

Not your usual eBay auction

The bidding started high and fast after Muntadhar al-Zeidi was arrested in Iraq after he hurled his black size 10s at Bush in a defiant act of protest. Technical director of the Iraqi football team Adnan Hamad offered $100,000 for the shoes. But he wasn’t the only one willing to show his support for the man who openly insulted the U.S. President.

As word spread of the incident, one businessman said he’d pay any price for the pair of shoes. But the award for highest bidder currently rests with the Iraqi entrepreneur who offered $10 million for just one shoe. As of today, the location of the highly desired shoes is unknown.

Why all the fuss?

So, why would someone spend $10 million on a single shoe? The football team director who started this trend of offering large sums of money for the shoes said al-Zeidi’s act reflected the attitude of all Iraqis. It seems many people in the nation are coming together to support the symbolic gesture that swiftly summed up their feelings toward Bush.

Al-Zeidi says his actions were the result of years of filming suffering Iraqis. After covering the effects of the war in Iraq on the country’s citizens, Al-Zeidi couldn’t hold in his rage any longer.

The other shoe drops

Back home, citizens in the country Bush has led for eight years are showing support for the shoe thrower. In New York, copycat protesters have started hurling their shoes into trees to show solidarity and express their own frustration toward the president.

“We know a good symbolic act when we see one,” said a shoe thrower in New York City’s Union Square Park. It seems New Yorkers have been searching for a method to display their frustration about the war. Al-Zeidi’s method seems to be hitting home with the president’s critics.

Civil disobedience

Frustrated New Yorkers aren’t the only American citizens having a field day with the incident. Late-night comics including Jay Leno and David Letterman aren’t passing up the opportunity to spin comedic gold. The funny men wasted no time before cracking jokes about the President’s newfound ability to lean to the left.

Amateur YouTube artists got in on the action, making spoof videos and finding creative ways to re-enact what U.S. headlines have called “shoe-icide.” Shoe-icide? I’d think twice before taking out a cash advance to buy a copyright for that one.

Hailed as a hero

After Al-Zeidi was handed over to the Iraqi military and carted off to jail, cries for his release began immediately. Thousands of protesters demonstrated in the streets of Iraq, waving shoes and demanding the release of the man they now consider a national hero.

Iraqis, Americans and at least one ridiculously rich Saudi businessman aren’t the only ones engaging in hero worship. A Lybian charity group has given Al-Zeidi a bravery award. The group also has joined the throng clamoring for his release.

Where are they now?

So who will be the recipient of the millions that have been offered for the shoes? It is speculated that the shoes are either in the custody of Iraqi security service agents or an employee for the Bush administration. It’s reported that if Al-Zeidi is found not guilty he will have the right to claim his shoes.

One thing is for sure, whoever is deemed the rightful owner of the shoes heard ’round the world won’t need a cash advance to end up with some serious extra cash.

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