Saturday, October 25, 2008

Just a bit more in support of my economic theory is in the following article from the New York Times:
So When Will Banks Give Loans?
“Chase recently received $25 billion in federal funding. What effect will that have on the business side and will it change our strategic lending policy?”
The point of the article is that the banks won't make the kinds of loans that actually empower renewed productivity. They are only comfortable with using the money taken from the American taxpayer Wall St. Bailout to secure their positions of power by capitalizing the purchase of other banks.

So I will repeat the theory for your reading pleasure:
Investors will only invest in the economic sectors they think they understand and in which they place value.
This is what happens when hands-on learning has been removed from schools and broad swaths of American leadership have no connection with productive reality. So we will sit at the sidelines and watch the last of the great American manufacturers and many others go down as a result of under-capitalization. Bye bye, Ford, Chrysler and GM. Sorry, the American bankers just don't understand the concept of making things, because they've never made anything or fixed anything in their lives.

2 comments:

  1. You're a smart man, Mr Stowe.
    You hit the nail right on the head, so to speak.
    I've said since the very first bail-out talk began, that Wall Street would just use the money from the politicians, to buy more politicians.

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  2. And now, of course, they are finding that the money has been used irresponsibly. Not much surprise there.

    They don't want to bail out the auto industry without making the CEOs grovel. that was OK under the circumstances. But when would congress make the irresponsible bankers grovel?

    The banking bailout was proposed by the George W. Bush administration which also devalued our culture, our citizenship,our international standing as well as the economy.

    We have become lacking in common sense, because we are becoming further estranged from the simple things of stacking blocks and making things from wood.

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