Main Street Businesses: What Credit Crunch?

While the fat cats squeal, free market business men and women are going about their own business of creating jobs, making profit and improving choice and the standard of living.  William Dunkelberg, chief economist for the National Federation of Independant Business, the largest small business lobbying group, says the bailout will do “probably nothing” to help small business.

This article in the Washington Business Journalsaid,

William Dunkelberg, chief economist for the National Federation of Independent Business, has a different view.

“Probably nothing” is his assessment of what the massive bailout would do for small businesses.

Dunkelberg, who also chairs Liberty Bell Bank in Cherry Hill, N.J., said the rescue plan wouldn’t affect his bank or most other community banks.

“I don’t have any toxic mortgages to sell,” he said. “We have money to lend.”

There is not even agreement on whether small businesses face a credit crunch.

A net 10 percent of NFIB members said loans were harder to get in August than three months earlier, but only 2 percent cited the cost and availability of credit as their No. 1 business problem — far below the 37 percent who cited credit as their biggest issue in 1982.

When the economy slows, businesses may have a harder time qualifying for loans because their sales and profits decline, Dunkelberg said. But uncertainty about the economy is decreasing small businesses’ demand for credit.

There is “no sign of the seizing up of credit markets,” Dunkelberg said.

Hello!!!!!  Maybe since we are in the middle of a bad debt induced financial crisis – perhaps IT SHOULD BE a little harder to get loans.  The point is ONLY THE FREE MARKET can produce the “correct” allocation of resources.   Can you possibly trust politicians to do it?  

Regarding the alleged seizing up of the credit markets (the government is the only thing doing any seizing) the article goes on to presents some difference of opinion, so it’s worth reading the whole thing, but here’s evidence of exactly why libertarian economists say we should keep government’s stcky fingers out of it.

George Mokrzan, chief economist for Huntington Bancshares Inc., said the small business sector is “quite healthy overall.”

“It would be foolish for banks not to lend to them,” he said.

Banks are concerned, however, that regulators will “start second-guessing” every loan decision, said Jim Chessen, chief economist for the American Bankers Association.

That is already happening in some cases, even at well-capitalized banks lending to “good prospects,” he said. “That is having a chilling effect on the willingness of banks to lend to even the best borrowers.”

The government guarantee on SBA loans is designed to encourage banks to lend to small businesses, but that program has shrunk dramatically.

In the wake of the USA-PATRIOT Act, the Iraq war, and countless other government swindles let’s remember the words of some true heroes – The Who – when they sang ” We won’t be fooled again”. 

So call your Congressmember and tell them to “just say no” to the bailout.  BTW I’ve heard rumor the bill will be called the USA PayFor It Act – “U Sucker Americans Pay For It”. 


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