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Notes to myself, possibly of interest to others.
-- Bill Northlich

Tuesday, July 13, 2010

Once again: It's -Demand-

The chairman of the Federal Reserve urged banks and regulators on Monday to help the nation’s small businesses get the loans they needed to create jobs.

Ben S. Bernanke held a forum Monday on small-business lending at the central bank's offices.  He also acknowledged that economists could not agree on why such lending has contracted substantially over the last two years.

Small businesses — those having fewer than 500 employees — employ half of all Americans and account for about 60 percent of gross job creation. Federal data indicate that lending to such companies fell to below $670 billion in the first quarter of this year from more than $710 billion in the second quarter of 2008.

The reasons are unclear. Many entrepreneurs say that bank loan officers are denying loans to creditworthy borrowers as part of an overreaction to the bad loans of the last economic expansion and heightened scrutiny by regulators.
William C. Dunkelberg, an economist in the School of Business and Management at Temple University, said surveys showed that capital spending was at a 35-year low and that companies were still cutting, not adding, inventory. “Credit’s not an issue,” he said. “Customers are the issue.”
---Sewell Chan, New York Times, 7/12

Credit would be nice, but... (my bold)

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