Even though bailout funds were intended to get banks to start lending again, the banks have drastically reduced their small business lending. When small businesses like Republic Windows and Doors in Chicago lose their financing, they often have to shutter their doors, leading to mass layoffs. In a National Small Business Association survey, the 56% of small businesses that have problems finding credit reported having to lay off employees as a result.63 Between October 2008 and April 2009, small business lending through the Small Business Administration's main program decreased 42% over the previous year.64 Meanwhile, the national unemployment rate skyrocketed, from 6.2% in September 2008 to 9.7% in August 2009.65
But at the same time that banks are cutting small business loans, they are continuing to lend to large corporations and private equity firms. For example, Bank of America, JPMorgan Chase, Citigroup, Goldman Sachs, and Morgan Stanley all helped finance the $68 billion Pfizer-Wyeth merger, which will likely result in thousands of layoffs.66 Bank of America, JPMorgan Chase, Citigroup, and Morgan Stanley are all among the banks providing $3.1 billion in financing to help private equity-owned Warner Chilcott buy Procter and Gamble's drug business.67
Standing in the Way of Reform: After crashing the economy and taking trillions of dollars in bailouts and backstops, the banks are now using our own money against us!
The fact is that they are spending millions of dollars of our money to lobby against reforms that would protect us from their abuses in the future. In the nine months following the bailout, companies in the financial, insurance, and real estate sector (which includes banks and other bailed-out companies like the insurance giant AIG), spent $321 million on lobbying.68 The top six banks alone spent $28.4 million lobbying during this time.69
Many banks lobbied against policies that would help protect Americans, both as taxpayers and consumers. They fought against:
- The formation of Brooksley Born's Consumer Financial Protection Agency to protect consumers' interests;70
- Limits on executive compensation and bonuses to ensure banks don't use taxpayer dollars to pay out bonuses;71
- The regulation of overdraft fees to protect American consumers from misleading and potentially predatory bank policies;72
- Credit card reform, including caps on interest rates and a ban on anytime-for-any-reason rate hikes;73
- Loan modification proposals to help keep millions of Americans in their homes;74
- A ban on payday lending.75
Bottom line: The big banks' predatory and abusive business practices cost us trillions of dollars in lost wealth and brought the economy to the brink of collapse. Now they are fighting an all out war to preserve the ability to do it all over again, and they are using our money as the ammunition!
A Real Economic Recovery
Now that the big banks are back to profitability, their promoters would have us believe that the worst is behind us. Wall Street celebrates � ��˜green shoots' in the economy and points to signs of an economic recovery. But Main Street is still hurting.
Next Page 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
