The Bush Administration now complains banks are not lending money. The plan was for struggling and undercapitalized banks to receive large amounts of Treasury money so that an unexpected and dangerous credit tightening would abate, and money would again start to circulate.
According to AP:
"White House tells banks getting federal aid to quit hoarding money and start lending it"
Ha! This is so funny. Because this was so predictable.
Apparently George Bush and his Administration did not consider the possibility that banks might decide to pursue their own special interests over those of the country.
"What we're trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money," White House press secretary Dana Perino said.
These complaints follow by the following eye-opener from Anthony Ryan who is Treasury acting undersecretary for domestic finance.
"As these banks and institutions are reinforced and supported with taxpayer funds, they must meet their responsibility to lend, and support the American people and the U.S. economy," Ryan told the annual meeting of the Securities Industry and Financial Markets Association.
And if the banks don't meet this "responsibility", what then, pray tell? Will the Treasury want its money back? Or will the Treasury be forced to supply more, good money, after bad? Will it be more regulations, or less? More controls, or less? More taxes, or less? Where will the solution ultimately lie: capitalism, socialism, cronyism, or something else entirely?
Here's the link to the AP/Yahoo news article: White House tells banks to stop hoarding money
Are the banks starting to become an embarrassment to Bush? Or is perhaps the reverse more the case?
UPDATE (ACTUALLY AN AFTERTHOUGHT): The bailout seems to have worked quite well, from the point of view of the banks which are still in business. Everyone else, however, seems to be stuck with the short end of the stick.