Friday, May 7, 2010

Another major fiasco by the Obama Administration coming soon to a bank near you

The Obama administration now proposes a new bailout for small and medium sized banks. This new bank bailout is in the form of a $30bn support program aimed at helping small business.

First and foremost $30bn will barely cover lunch! And certainly it won’t cover the executive bonus pools.

However setting that aside if this were really a plan to help small business, the appropriate source to provide these funds to would be the SBA, Small Business Administration. Or, The Small Business Investment Companies, (SBIC’s).

By providing the funds to small and medium sized banks, with the idea that they will loan the money to businesses, is like betting against the odds in Las Vegas, “it ain’t gonna happen” and either President Obama is a slow learner, as we just tried this concept with the Wall Street Banks, (and they have been using the money to play the Market) or there is an intent here to bail out these small and medium sized banks and possibly to prevent the remainder of the 700 still primed and ready to fail, from actually failing.

In remarks to reporters at the White House, President Obama said that the program had been expanded to include a new state “small business credit” that would support efforts by state governments to provide loans to small businesses. But where that money will come from is anybody’s guess. The states are still struggling just to stay afloat. So far President Obama has designed one failed program after another, and we are left to pick up the pieces.

In any event with Washington Politics, things are never as they seem.