'Too big to fail banks' leaving behind 'too small to help' customers and businesses
Filed under: Real Estate, Wealth, Recession, Mortgages
Another week and another round of the national guessing game: when exactly will the Great Recession's alleged end impact me? Or my children? Or my neighbors? The "too big to fail" banking crowd has gotten lots of help from D.C. But the jobless rate, despite a decline of late in layoffs, continues to go skyward, or, in the words of that most famous working-class stiff Ralph Kramer to his wife, Alice, "to the moon!"
"This will be a very slow recovery," says Jack Kyser, founder of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corporation. In a telephone interview with WalletPop, Kyser said that "small- and medium-sized businesses still can't get loans from banks." It is, says Kyser, "the perfect stalemate" -- unemployment continues to rise, businesses (especially smaller ones) suffer, and banks don't want to risk lending out their money.
Only, and here's the rub as Bill Shakespeare would have said, (I'm sure the bard's closest friends called him, Bill! Don't you think?)--as we all know, the banks are sitting on piles of greenbacks that came from U.S. taxpayers. And, even the banks that are paying or have paid back the loans, were only able to turn astronomical profits this past quarter because they benefited from the government. -- make that taxpayer -- bailout!
Right now, the national unemployment rate is at 10.2% in October, a 26-year high. Add in those who are no longer looking for work or can only find part-time gigs, and that rate skyrockets beyond 17%!
As Kyser tells WalletPop, "The unemployment rate in LA County (where the housing bubble burst louder than in most parts of the U.S.) is now 12.7% and the underemployed rate is more than 20%"
Time for those apparently " too small to save" to get some of that Barack Obama "hope" we heard so much about during the campaign!
Reader Comments (Page 1 of 1)
11-17-2009 @ 4:34PM
Kim Forbes-Gayton said...
Wonder what would happen if we 'too small to save', too small to help' suddenly have had it with the banks and took our money out, never to return? One way or the other, they're gouging us to no end, and still expect us to pay for their schemes, and then still be willing to do business with them? The last straw is not too far off for me. Anyone else?
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11-18-2009 @ 2:54PM
Mary said...
I wholeheartedly agree with you, Kim. I just wish that we were in a position where we could actually take our money and our business out of the 'monthly service fee' banks (esp. Bank of America) and away from the 'we regret to inform you that we must reduce your available credit limit' credit card companies (again, esp. Bank of America, not to mention American Express). Unfortunately though, because of the high costs of our health insurance ($1450 per month -- thanks CareFirst BCBS!) and the fact that one of us has been out of work for a year because of the practically non-existent jobs available, the banks and credit card companies have made it impossible for us (and everyone else) to "shop around" for companies that offer better rates and services -- because NO companies are lending now, despite our blemish-free, above-excellent credit! It really has come down to an inhumane case of the "haves" vs. the "have-nots" (or more appropriately... the "'haves' that have everyone else's now too" vs. the "'have-nots' that used-to-have at least their fair share").
Well, its back to the daily job search for me... Thanks for your absolutely spot-on idea! Let's hope we can figure out a way to turn your suggestion into a reality!
11-19-2009 @ 11:50AM
Tina said...
Kim
I'm way ahead of you. I took all of my money out of my bank, my in laws did the same and my elderly aunt has done the same as well. The bank was not very happy with my aunt for doing so and tried to talk her into keeping her money there. We did a bankrate.com search and a street.com search and found the bank received the lowest rating from each of these rating firms. The bank also did not tell us when we put her money in a money market that the money was not FDIC insured, we had to find that out online. We went back through the original papers and found the disclaimer buried in small print on one of the very back pages. We have put the word out to everyone we know and they are following suit. With 1000 banks predicted to fail in the coming year, I dont see how the FDIC can bail out ALL of them. We are keeping our money in a safe deposit box and out of the hands of the banks.
11-20-2009 @ 8:25AM
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12-17-2009 @ 10:21AM
bryant said...
Hum..I think you people got the right idea!!!
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