Obama to Have Strong Message to Bankers: Start Lending
EmailIncoming White House senior adviser David Axelrod told me President-elect Barack Obama will have a strong message for bankers once he takes office: start lending again.
"I think he’s going to have a strong message for the bankers. We want to see credit flowing again. We don’t want them to sit on any money that they get from taxpayers. And the other things that we have to deal with is transparency. No one can really tell you exactly where the money went, how it was spent. It’s not easy to follow, even for people in government. We have to deal with that and we have to begin to address the housing issue in a way it hasn’t been addressed yet," Axelrod said.
"And we have to make sure that the money doesn’t go to excessive CEO pay and dividends when it should be going to lending," he said.
Axelrod slammed the way the Bush administration spent the first $350-billion of the TARP money.
"I think it’s clear that it has to be administered in a much different way," Axelrod said. "First of all, the point is to get credit flowing again, to businesses and to families across the country. That hasn’t happened with the expenditure of the first $350-billion."
–George Stephanopoulos
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Representatives of Ohio (R) John Boehner’s talking point was each job would cost $275,000. Senior Barack Obama adviser David Axelrod responded, correctly, that the $850 Billion recovery money was about investment in things (infrastructure etc that will exist and support on going recovery & prosperity) not just a job creation program. George Stephanopoulos immediately responded with the Republican tag line unaltered that the $850 Billion represents $275,000 for each job and isn’t that excessive? George Stephanopoulos fails the journalist test by repeating highly partisan retoric even after it was diplomatically but thoroughly refuted. George Stephanopoulos needs to move on – the age of journalist as antagonist is hopefully waning.
Posted by: Chris | January 18, 2009, 11:25 am 11:25 am
Don’t know where the money has gone? Maybe national security should invoked and some of those new investigative powers should be used before they are discontinued. Like Maybe against the banking and lending institutions on the suspicision that such large sums of money could only be used for something on a global scale… like terrorism. Perhaps that would help the lending institutions decide that transparency and cooperation would be a better route. Afterall, the American people, for all our stupidity, were willing to cooperate on bailing them out.
Its time for a bit, no, a whole lot, of quid pro co.
And close the country club prisons that executives usually get to go to.
Posted by: Patrick Herlihy | January 18, 2009, 11:27 am 11:27 am
Obama does not have a clue as to how to get us out of this financial mess we are in. He needs a lot of advisors because of his lack of experience, but again, they all come from the same ole, good ole boys club which has always been part of the problem and not part of the solution.
Posted by: Fran | January 18, 2009, 11:29 am 11:29 am
Hey George…time to come out of the closet and face the facts here my democrat comrade. Forcing institutions to lend to people of questionable character and reliability is what got us into this mess. But, I understand it goes against YOUR media company’s policy to report on the truth..it’s all good though..we still have the 2d Amendment.
Posted by: John | January 18, 2009, 11:45 am 11:45 am
Obama does not have a clue as to how to get us out of this financial mess we are in.
Posted by: Fran
********************************
Why not ask the person who hasn’t
a clue how he got us into this mess.
Good ole Bush.
Posted by: spacerook1 | January 18, 2009, 11:45 am 11:45 am
IMHO, the problem is that even now, no one knows how severe this crises is. I am willing to venture and say that probably our top financial institutions are actually insolvent and no one wants to admit to it because that will cause a “run-on-the-banks.” The initial money was probably used to clean up balance sheets and it only uncovered more of the mess. Although enacted with the purest of thought and heart, this current economic climate clearly demonstrates “why” deregulation may not be an optimal choice in all areas. The old adage; “If Wall Street doesn’t work, Main Street doesn’t work,” needs to additional line of; “If Main Street doesn’t work, neither will Wall Street.” Deregulation aside from opening up competition also opens the door for abuse and corruption.
The solution is just not in throwing good money after bad with the hopes that “something” works. Some of these institutions just need to fail and we start to support the creation of new entities. Also, enhanced regulation and oversight.
Posted by: FS | January 18, 2009, 11:48 am 11:48 am
I can not stand the talking heads on ABC.
Posted by: young conservative | January 18, 2009, 12:42 pm 12:42 pm
I haven’t had a chance to see yet….is George Will now up Obama’s a.s.s. now too?
Posted by: young conservative | January 18, 2009, 12:44 pm 12:44 pm
If Obama wants banks to lend money then he needs to give them a reason to do so. Why should banks loan money to businesses when Obama and Pelosi are talking about raising taxes? Why should banks loan to individuals when they have no job security? Why should banks make the same mistake that got us into this mess? Specifically, loaning money to people who do not qualify under normal banking rules. The Community Reinvestment Act was used to funnel money to minorities and low income individuals that would never have qualifed by these standards. Yet, when congress held hearings in 2002 and again in 2005 every Republican that warned against this looming crisis was called a racist and accused of being mean.
If Obama wants banks to lend he will need to remove the people that got us into the mess – Barney Frank, Chris Dodd, Robert Rubin, and Larry Summers should all be in jail cells for their gross mismangement of the derivitive based mortgage mess that they forced on the American people.
Posted by: fran | January 18, 2009, 12:44 pm 12:44 pm
Obama does not have a clue as to how to get us out of this financial mess we are in.
Posted by: Fran
********************************
Why not ask the person who hasn’t
a clue how he got us into this mess.
Good ole Bush.
Posted by: spacerook1 | Jan 18, 2009 11:45:44 AM
Hey, two wrongs don’t make a right!
Posted by: Fran | January 18, 2009, 12:50 pm 12:50 pm
“We want to see credit flowing again……..???” That’s just what the HELL got us into the current mess…..credit flowing so fast and easy to folks who can’t pay it back and getting loans on inflated home values in a greed driven market.
Posted by: centurion666 | January 18, 2009, 1:15 pm 1:15 pm
spacerock1, Bush knows how we got into this mess. I believe he said that wall street got drunk, went wild and now we are left with the hangover. I’m tired of you dems bashing Bush. How about bashing Obama. He souts a lot of big words and lofty sentiment while saying nothing. He never gets specific about anything, including what he will do with the new package of $350 billion TARP funds he will receive on Jan 20. That is exactly the same as Bush did. Why didn’t the Congress demand that Obama show his detailed plan. I see no change from Bush here. And now, Obama is going to order the troops out of Iraq which he says will take 16 months. But Bush already had a pact with Iraq to have the troops out by 2011. That is almost the same time frame as Obama has said. So I see no change whatsoever and Obama isn’t even in office yet.
Posted by: Sandy | January 18, 2009, 1:27 pm 1:27 pm
Wall Street bankers were indeed drunk. But they had an alcoholic – George Bush himself – to lead the way. Bush was drunk with power, brought the Wall Street robber barons alog with him during his 8 year reign. JMO
Posted by: buzziea | January 18, 2009, 1:49 pm 1:49 pm
But how does Obama intend to back this up? Bush’s team played the same tone with banks, telling them to lend all of their TARP money, and look at what it got them. The banks still aren’t lending and are in as much trouble as they were last September.
http://www.political-buzz.com/
Posted by: matt | January 18, 2009, 2:26 pm 2:26 pm
Here’s a thought: Instead of giving more money to these financial institutions (who for some reason cannot account for the money already given to them), why not give every tax paying head of household 500K across the board? Overwhelmingly, the vast majority would pay-off or substantially pay-down their debt. If anything is left over more than likely they would spend it rather than hoard it. I’d say that would really stimulate the economy!
Posted by: FS | January 18, 2009, 3:23 pm 3:23 pm
Ms. Brazile
Please stop referring to President of the United States of America as an “African”.
Posted by: Voted for Mr. Obama | January 18, 2009, 4:08 pm 4:08 pm
today’s program was interesting with regard to the “hope” vs. “glass less than 1/2 full” theme. it is always striking when the gang make comments that reveal their perspective more directly than the “talking points”.
such a case occurred when g. stephanopolous asked g. will the question, “what do you fear?”
mr. will’s answer: “Failure.”
it was an odd moment. i would have appreciated some context: “who’s failure?” his? ours? “the ’cause’?
it just seems strange for someone in the public sphere, with such an influential voice to speak of his greatest fear as “failure”.
i wonder if this isn’t the unintentional disclosure of separation from “the masses”, about who mr. will intones: “if only they wouldn’t be so darned thrifty”.
he’s speaking, of course, about the “old way” to get out of our financial difficulties, namely: spend more money people, (darn it!)…
well, i’m no spring chicken or even wet behind the ears (my 60th birthday is tuesday, 1/20/2009), but my father and mother encouraged us all to go to college “to get a good paying job”. well, it didn’t turn out quite that way, but there was something else that was ingrained in us by parents who, even if they didn’t live in the dustbowl, knew intimately what the depression was like: self-sufficiency and, yes, “thriftiness”.
those in the bubble should not encourage us to make it bigger, and that goes double for clueless patricians who are worried about “failure”. …of what?
Posted by: blue_tarp_news | January 18, 2009, 7:57 pm 7:57 pm
It’s going to take more than a “strong message” to these lenders. See the “End of the USA in 2010,” video Please see it gets to the President
http://www.google.com/s2/sharing/stuff?user=107144048214030666073
Posted by: Richard Peter | January 18, 2009, 10:25 pm 10:25 pm
To spacerook1, buzziea & friends
For all you liberal pukes out there who still just want to blame Bush, perhaps you need to go back and look at the REAL history of all this.
The Community Reinvestment Act, Gramm-Leach-Bliley Act (Yes Gramm was a Republican) & Larry Summers, and the incredible mismanagement of Freddie/Fannie at the behest of Barney Frank!
There are people on both sides f the aisle who have a much larger piece of the blame pie than Bush.
Obama has some of these players of the past mistakes in his “group” of experts now. Larry Summers & Tim Geithner to name two.
Tim Geithner is a tax cheat and had a key role in the AIG bailout. He should be getting grilled on where the money AIG got went to!
It is way past time to put the blame of this on one person. Exactly how do you liberals beleive you can solve this if your unwilling to admit the truth of how it occured.
I agree with others, simply telling the banks to lend is not the answer. That was the incredibly stupid kind of thinking that helped to create the problem in the first place.
The banks need to be encouraged to loan to qualified applicants. The problem is what others have stated, how many people are confident in things at the moment to take on additional bills? For a while, the only people who will be asking for loans, will be those who absolutely need them. People will not be going to get a new car if they really don’t need to. They will be putting off a refinance to take out equity for improvements, unless those improvements are absolutely needed.
People will need to regain confidence, and that takes time.
Posted by: Mike_C | January 19, 2009, 10:42 am 10:42 am
If “Axey” wants to whine about the first 350 billion, then he needs ot take Pelosi/Reid to task for releasing the money with NO OVERSIGHT in place!
Oversight is a Congressional Responsibilty. Interersting how whenever we hear about the lack of accountablilty on that 1st 350B, we never hear about Pelosi/Reid/Frank..etc.
In typical partisan form from that group, it is ALWAYS someone else’s fault.
Posted by: Mike_C | January 19, 2009, 10:45 am 10:45 am
This has been a 35 year bubble. It all boils down to reckless consumption spurred on by Federal Reserve policies. The crazy lending practices and dishonest greed manifested themselves in the free money atmosphere. Now the parties over, and it will be interesting to watch and see what happens. I wish Obama luck, but his idea of spending ourselves out of this will destroy this country. Bush has already done enough damage. It is time to listen to those that told us this was going to happen. Start listening to the likes of Ron Paul, Peter Schiff, and Jim Rogers. Watch IOUSA online to get some interesting facts.
Posted by: Huh | January 19, 2009, 2:12 pm 2:12 pm
The markets will work; Obama and the Feds messing with what the markets are trying to do, make housing affordable again, will only prolong the pain, the recession/depression. They are running the same plays that FDR called.
Arrogance and ignorance are a deadly combination; its why we are in Iraq.
It is time for a Second American Revolution; The bloated, intrusive federal government will run the United States into the ground.
Posted by: King Mike | January 20, 2009, 4:02 pm 4:02 pm
LOL, the markets were “convinced” today….Dow down over 300, its now under the 8,000 mark!
Hope Obamam enjoys the evening, tomorrow he actually has to start fulfilling those promises!
Posted by: Mike_C | January 20, 2009, 5:07 pm 5:07 pm
Everyone seems to totally miss the point. The bankers can’t lend. A loan officer that lends to a company that is substandard (ie: showing losses) is violating general lending policies and the regulators will come down on them. Doing such, in this environment, will lead to the loss of their jobs. All this capital being poured into the banks is just positioning them to absorb current and future losses as well as to meet their risk base capital requirements, but it is not really helping the small and mid size borrower who is the real foundation of this country. Capital (equity, not necessarily loan guarantees or loans) has to be made available to companies to counter the losses that they currently have in order to operate. The other option is to come in and provide capital for total debt restructuring (TDR’s) directly to companies and/or through equity firms. I have lived through many recessions since 1974 in the banking industry, and through the one in 87 handled the problem loans for a $46 billion bank. We need to learn from history. There are workable solutions out there.
Posted by: David B | January 20, 2009, 7:09 pm 7:09 pm
David,
Obviously we dont want ANYMORE lending to to unqualified people or companies.
The real question is how many qualified people are actually looking to get loans? Most people are are still in a state of save everything you can right now, because you can’t guarantee that you will have employment.
Those of us with college bills for our kids are not looking to go buy a new house or car right now.
AND ALL POLITICIANS (ON BOTH SIDES OF THE AISLE) SHOULD REALIZE THAT THE VAST MAJORTIY OF US ARE NOT GOING TO TAKE ANY “STIMULOUS CHECK” AND JUST GO SPEND IT. IT IS GOING TO GOING INTO A SAVINGS ACCOUNT AS RESERVE FOR A TIME DOWN THE ROAD IF INDEED OUR OWN JOBS GET THE AX!
Posted by: Mike_C | January 21, 2009, 9:11 am 9:11 am
Are you kidding David Axel? slammed the Bush admin for spending the 350B, what about the Democratic congress that approved this and how it should be spent????
Don’t forget Bush has been a lame duck for two years the Dems have controlled congress since the Midterms. Things have gotten much worse in those two years.
Posted by: Harry J | January 21, 2009, 9:46 am 9:46 am
American citizens did not approve of the bailout, not even half. Over 90% of Americans did not want the TARP fund. Who listens to us? Even President Obama instructed those funds to be released or he would use his Executive privilege once he was in office. We are manipulated and filled with such propaganda the democracy will no longer function as one.
Posted by: clancy49 | January 22, 2009, 9:54 am 9:54 am