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View Diary: The politics of Matt Taibbi's big con (105 comments)

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  •  you are evading the core point (1+ / 0-)
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    Taibbi's argument is that SBLF was a scam to allow banks to avoid even the limited obligations of TARP. He specifically ties it to the failure of the bailout to produce more lending. But SBLF is an apparently successful program that has nothing to do with Wall Street, but helps community banks and community lenders. The program has boosted lending by a majority of its recipients and has clearly funded some excellent projects. I think that even if some of the SBLF money was wasted, getting funding to organizations like the Appalachian group or the micro-lending firm or to small community banks that have boosted small business lending was not only a good thing, but evidence of the difference between the GOP and the Democratic responses to the financial crisis.  It's irrelevant whether some banks used the money to pay TARP loans back - 60% increased their small business lending. And  certainly nobody who knows of this program only from Taibbi will have that impression - instead they will think that its just another ripoff from a corrupt government.

    Many people who read Taibbi's article - as you can see in the discussion of the previous diary - got the impression that the repayments of TARP were from money provided by other government programs. And this SBLF is the lynchpin of Taibbi's argument for that point. He puts it out there and then writes:

    Using small-business funds to pay down their own debts, parking huge amounts of cash at the Fed in the midst of a stalled economy – it's all just evidence of what most Americans know instinctively: that the bailouts didn't result in much new business lending

    If anything, the bailouts actually hindered lending, as banks became more like house pets that grow fat and lazy on two guaranteed meals a day than wild animals that have to go out into the jungle and hunt for opportunities in order to eat.

    But actually, the SBLF HAS increased small business lending and it did not go to wall street at all.

    favorite band: twisted gloating

    by citizen k on Mon Jan 07, 2013 at 04:13:42 PM PST

    [ Parent ]

    •  It's even better (0+ / 0-)

      From the most recent SBLF Use of Funds Report (released today):

      • In total, SBLF participants have increased their small business lending by over $7.4 billion over a $36.5 billion baseline, and by $740 million over the prior quarter.
      • Increases in small business lending are widespread across SBLF participants, with 89 percent of participants having increased their small business lending over baseline levels.
      • Over three-quarters of SBLF participants (78 percent) have increased their small business lending by 10 percent or more.
      • SBLF banks that refinanced CPP funding have increased business lending by a median of 17.2 percent since their initial receipt of CPP funding from Treasury versus a 14.0 percent increase for the peer group and a 6.6 percent increase for the comparison group over the same period.
      •  Forgot to include this (0+ / 0-)
        • SBLF banks have increased business loans outstanding by a median of 32.2 percent over baseline levels, versus a 5.7 percent median increase for the representative peer group and a 2.1 percent median increase for the broader comparison group.
        Same source. The representative peer group and broader comparison group are defined in the document.

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