President Barack Obama’s economic advisers are talking tough about the banks ahead of his meeting with heads of financial institutions.
Larry Summers and Christina Romer say Obama will press bankers Monday to ease lending to help Americans get back to work.
As Summers put it, bankers need to recognize that “they’ve got obligations to the country after all that’s been done for them.”
Atrios is skeptical:
While I imagine there are some small businesses who are finding it difficult to obtain credit, the thing about a recession is… there’s reduced demand for stuff. I don’t think easing credit is the solution to all of our problems.
I don’t know if he’ll find this comforting or what, but the last person I heard make that critique of a focus on credit easing works in the government on economic policy issues. So at a minimum this perspective is around the table.
That said, yesterday I read this on my invaluable blog:
At the request of ANC 6C01 commissioner Keith Silver the development team for the Arts at 5th and I project delivered a status update at this month’s full commission meeting. Ty Simpson of Spectrum Management, Bob Holland of Holland Development and Jad Donohoe of Donohoe Development each took the floor to share details with the community.
Ty Simpson explained that the development team has met with the office of the Deputy Mayor of Economic Development office over 120 times (2 times per week) since the RFP was awared in September 2008. To date the development team has spent over $600K in planning the project. The development agreement/ground lease is slated to go before the City Council in the March/April timeframe.
According to Bob Holland the current economic conditions have dried up financing possibilities from Wall Street for the project.
So while credit easing isn’t the solution to “all our problems” I think there’s evidence that additional credit easing would lead more projects to be undertaken. More projects would mean fewer unemployed people. Fewer unemployed people would mean more people with money to buy things in stores. More people with money to buy things in stores would mean more jobs selling goods at stores, more jobs shipping goods to stores, and more jobs making goods. Those jobs would mean lower unemployment and more money to spend. Etc., etc., etc. Which is just to say that under conditions of elevated unemployment, every little measure that gets fewer people doing nothing helps a lot.