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View Diary: The Single Fact that Explains Why this Recovery is Slow (100 comments)

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  •  Part of the problem.. (3+ / 0-)
    Recommended by:
    judyms9, Ginny in CO, OleHippieChick

    was TARP was not strict enough.  Part of the idea was to shore up banks' balance sheets, but to also encourage lending.

    Instead many of the banks just reinvested money borrowed from the Fed at next to nothing into securities rather than lending because the return was better.

    The same thing is going on in Europe with the ECB/Euro banks.  

    The trick is to improve consumer confidence as well so people that have jobs/money will by that new car.

    We did have nice recovery in 2011, but I'm afraid this is now faltering.

    "And there are those who give and know not pain in giving, nor do they seek joy, nor give with mindfulness of virtue; They give as in yonder valley the myrtle breathes its fragrance into space" Khalil Gibran

    by bcdelta on Wed Aug 29, 2012 at 10:02:24 AM PDT

    •  I'm going to disagree (0+ / 0-)

      the idea was that encouraging lending wasn't necessary, because as long as the banks are doing fine the rest of the economy will recover by magic.

      Voting changes things. That's why they don't allow it.

      by happymisanthropy on Wed Aug 29, 2012 at 04:54:40 PM PDT

      [ Parent ]

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