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THE MICHIGAN CHRONICLE March 3-9, 2010 Page C-7
The Moore Principal’s ‘Straight
Talk from Main Street’
By Charles L. Moore
26 weeks of their benefits.
CPA (Lansing)
This trend is likely to contin-
ue with the official unemploy-
ment rate around 10 percent
First of two parts
and could possibly increase
as public confidence erodes.
The recent vote in the Mas- • In January 2010, 36 states
sachusetts senate race was a showed an increase in unem-
cry for straight talk and real ployment. State, local and
action, not the political speech county governments will feel
that leaves the American the effects of rising unemploy-
people without jobs and small ment rates in the near future
businesses without access to because their primary income
credit — the lifeblood for both. sources of property, income,
Immediate interventions are and sales taxes, are on the de-
needed now before the second cline.
wave of the recession heads
our way like the flow of raging
Charles Moore
This is the result of the de-
water after a dam has broken.
must likewise show the same
crease in household income
faith in the small business
due to increasing unemploy-
The American people know
community as they did for
ment. The lack of access to
that the walls of the dam are on
mega-banks in order to jump
credit has devalued property
the verge of giving way, so let’s
start the economic engine.
throughout the country which
fix it before the waters begin to in turn has caused a contin-
flow. The so-called “experts”
There is an historical prec-
ued decline in property values,
contend that economic indi-
edent for this action. In 1933,
which equals a decline in rev-
cators persuade them to be-
the FDR administration start-
enue for most states.
lieve that we are in a recovery
ed “land banks” to lend to
period and job growth is a lag-
credit impaired farmers when
As disposable income de-
ging indicator of recovery.
banks would not during the
clines, there are fewer funds
Great Depression.
to purchase goods, thus, de-
Well, the people on Main clining sales taxes. This will
Street may not be able to
We have the vehicle to get
likely require additional funds
survive until the lagging job
these funds on Main Street
be given to state and local
indicator catches up with
within weeks.
governments to prevent mas-
the other economic indica-
This would require the fed-
sive layoffs and governmental
tors. Therefore, the American
eral government to invest $45
bankruptcies. This will cost
people want straight talk and
to $60 billion dollars into this
the federal government an es-
solutions to the lack of jobs
program. The FDIC, which
timated $100 to $150 billion.
and credit issues facing them.
has taken control of over 150
• With the economy in most
What we need is a good-old-
banks, can provide the infra-
states getting worse and the
fashioned dose of competition
structure for this “Job Cre-
number of qualified borrow-
in the form of a government-
ation Bank” concept facili-
ers in decline, the willingness
run bank that will lend to
tating the lending process to
to lend is also declining. The
credit-impaired businesses.
start within weeks instead of
government’s pressures that
months.
This is where the straight
have been placed on the Wall
talk and the solution will cross
The banks that the FDIC
Street mega-banks, which
paths. The clear problem is
has taken into receivership
hold over 50% of the nation’s
getting people back to work.
and have not been able to sell
deposits, have landed on deaf
Most politicians, economists,
provide the immediate vehicle
ears.
and academicians believe that
to get these funds to the people
Although the banks are
small businesses will account
most in need in an expedient
showing large profits, they
for upwards of 95% of the new
fashion. The government can
are not out of the woods yet.
job growth that is needed to
inject capital in these banks
They all have commercial
pull the country out of this re-
and lending can start immedi-
real estate portfolios that are
cession.
ately.
suffering from the economic
These experts assert that
Additionally, the govern-
downturn, which is preventing
small business lending will
ment can set the lending cri-
them from lending the funds
be the catalyst for this im-
teria, therefore, ensuring that
that are needed to jump start
provement, but they have not
the people who need the funds
the economy.
found an efficiently innova-
can have access, thereby in-
• Because the large banks
tive method to deliver those
creasing public confidence on
are not lending, services are
funds to the people who need
Main Street.
being left to small community
it most.
Why should the federal gov-
banks, which are now regulat-
The government has to lend
ernment institute the job cre-
ed with the same tough stan-
directly to businesses similar
ation bank concept?
dards as all banks due to the
to what was done in good faith
•
economic climate.
The government has put
for the mega-banks when the
$90 billion into extending the
world markets froze credit to
unemployment wages and ben-
them because of their instabil-
efits for the 5.5 million people
To be continued...
ity. The federal government
who have exhausted the first
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