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March 11, 2013

While the Fed is Easing and the Government is Bailing Out...

For five years, the Federal Reserve and big government told us they were stabilizing everything through quantitative easing and big business bailouts.  Now, we're finding out where that is getting us.

On February 20th, Entrepreneur Magazine released an article detailing how small businesses can expect difficult lending conditions for the rest of 2013.  This followed a November article where they first noted the decline in credit availability for small businesses and the difficult road ahead.  Economist Mark Zandi, who thought that TARP saved the world, is quoted in both articles as offering light at the end of the tunnel.

In November, Zandi stated that small businesses weren't borrowing as much because they had plenty of cash on hand.  I'm not sure things were that swell considering the goose-egg we put up for GDP in the 4th quarter.  Additionally, Zandi said last month that things would get better within a year.  We've heard the same garbage from Keynesians for five years now.

One thing I'm trying to figure out is how bailing out the big companies, but not helping the engine that generates 2/3rds of new American jobs is going to help the labor market and more broadly, the economy.

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