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The Politics of False Correlation – Regulations and Job Growth

This is an excellent example of garbage journalism. You have Greta Van Susteren arguing that small businesses are being strangled by overwhelming regulations. Okay. Where’s the data? Instead of arguing the data, Greta Van Susteren simply tells Paul Krugman to ask small businesses why they aren’t hiring. What’s wrong with that? What is wrong with simply asking a business owner about his business behaviors? Well, most of the time, business owners have not sat down and thought about why they do the things that they do. Secondly, many business owners do not delineate between federal, state and local regulations. They see this as all – government regulations. Finally, I should add that Americans are terrible at explaining why we embrace certain behaviors.

From the Economic Policy Institute:

The most common general studies are of environmental regulations, and these have consistently failed to find significant negative employment effects. Moreover, studies suggesting that regulations have broad negative effects on the economy offer little persuasive evidence.

Some well-executed studies have found that certain regulations led to job losses in particular areas, but most studies of various industries suggest that regulations had either a close to neutral or small positive effect on employment levels.

The problem with our economy is not some mysterious “regulations” that are holding our economy hostage. The problem with our economy is a lack of demand. Consumers are not spending. There’s overwhelming data to support this. Simply put, there’s a large number of consumers who don’t have a job. These consumers are not spending. There are large numbers of Americans who are living with economic uncertainty. They may only have part-time work. They may be working at a company at which they have seen their fellow coworkers get laid off. This atmosphere will cause most of us to be apprehensive about spending. We really and truly don’t need any mysterious “regulations” to explain our economic woes.

By |2013-04-09T19:48:15-04:00April 8th, 2013|Economy|Comments Off on The Politics of False Correlation – Regulations and Job Growth

BOA, Stop Ripping off Americans

The problem in this country is that making money isn’t enough. In the Wall Street environment that we have now, you always have to make more money than you did last quarter and more than you did last year. This is an impossible task to do forever, obviously, but Wall Street punishes those who don’t crank up the money machine. So, the fact that Bank of America is making money ain’t enough. They need to make more money. So instead of doing something like earning it, they thought that abusing their own customers was a good idea. They decided that they needed to charge their customers (who are nothing more than little piles of money) a monthly fee to use their stupid ATM cards.

BOA CEO was crying to reporters the other day:

“I, like you, get a little incensed when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well,” Moynihan said during the Oct. 18 gathering. To the bank’s critics, he said, “You ought to think a little about that before you start yelling at us.”

Really? That’s what he is bringing to the table. We spend a couple of million on charity so we should be able to rip you off for a couple billion in stupid fees? That’s his argument.

As I mentioned before, Americans are tired of being ripped off by American corporations. Maybe BOA didn’t read my blog. Maybe they don’t care about the fact that the American people are in a terrible bind. They don’t have any extra money.

From HuffPo:

Fact #1: Bank of America continues to smother job creation by refusing to lend to small-businesses:

Bank of America went from being one of the top SBA lenders in 2006, making $415 million in loans to small businesses, to extending just $46 million in loans in 2010, an 89 percent drop. No wonder that Bloomberg reported that Bank of America ranked lowest in a 24-bank survey of small business customer satisfaction.

Fact #2: Bank of America continues to prefer to kick homeowners out of their homes than do permanent, sustainable loan modifications:

After participating in the HAMP program for two-and-a-half years, Bank of America has made permanent loan modifications to just 136,195 families. Meanwhile, they’ve denied or canceled modification for 683,000 families. This means homeowners have a one out of six chance of getting a permanent HAMP modification with Bank of America. In August 2011, the bank granted HAMP trial modifications to just 1% of eligible borrowers, according to a monthly report from the U.S. Treasury.

Fact #3: Bank of America — and to be fair, the other big banks too — is actually increasing homeowner indebtedness, not reducing it:

A report by the Congressional Oversight Panel last December found that nearly 95 percent of active, permanent loan modifications resulted in homeowners actually having a higher unpaid principal balance than before the modification. Translation: even those lucky few who manage to get a mortgage modification from Bank of America still end up deeper in debt than when they started. Keep this in mind every time you hear Bank of America or any other big bank tout big numbers of homeowners they have helped — 95 percent of them are deeper in debt than when they started.

Fact #4: Bank of America continues to be a major threat to American taxpayers:

And the threat just grew by trillions of dollars. Last week, federal bank regulators allowed Bank of America to transfer the riskiest of its crumbling assets from an uninsured Merrill Lynch division to the deposit-insured and discount-window-eligible Bancorp division. As Simon Johnson from MIT wrote, “The move puts the Federal Deposit Insurance Corp. on the hook for any losses…because the agency can tap a U.S. Treasury line of credit if the fund runs dry, taxpayers could be at risk, too.” This is an unacceptable shift of Wall Street risk onto the American taxpayers, and some are saying the beginning of another backdoor bailout for Bank of America.

By |2011-10-28T17:33:20-04:00October 28th, 2011|Business, Economy|Comments Off on BOA, Stop Ripping off Americans

What does Small Business Need?

We’re sitting in the middle of a recession. Everyone knows this. By definition, a recession is when people stop spending. There’s too much supply and not enough demand. One of my commenters was 100% correct when he said that small business needs more customers. The question is, how we get Americans to start spending again. First, make sure they have safe, secure and well-paying jobs. Well, this is proving problematic for the Dems. So, now what? Allow small business to get loans fairly cheap so that they can modernize and hopefully produce their products more cheaply and efficiently so that they are better able to compete with bigger businesses for customers.

From TP:

The Senate invoked cloture today on a bill that provides tax credits to small businesses and creates a $30 billion lending fund for those same businesses to access loans. Considering that Republicans claim to be staunch defenders of small businesses (and their frequent use pf small businesses as cover to justify their desire to cut taxes for the richest two percent of Americans), this should have been a fairly non-controversial piece of legislation.

However, all but two Senate Republicans opposed it. In fact, today on C-Span, Sen. Mike Johanns (R-NE) said that small businesses “need another loan like they need a kick in the pants.”

By |2010-09-14T22:59:04-04:00September 14th, 2010|Business, Congress, Economy, Party Politics|Comments Off on What does Small Business Need?
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