Most people who are in the middle class are small business owners. Today they got a boost from President Obama. I managed to catch his speech about the help that his administration is extending toward small business owners. First we heard from Timothy Geithner, who gave a very brief summary of the plan. The room was full of small business owners.
What I liked was that the president was introduced first by a woman who, with her husband, owns a community bank. She told her story about why it was so hard to lend money at this time to the small businesses in her community, and how what the administration is doing will make a difference so they can lend again. Then the owner of a restaurant got up and told his story, and how not being able to use a line of credit was hurting business, and then he directly introduced the president.
President Obama first took the opportunity to give way to some of the anger he is feeling toward AIG and the bonuses they are giving to executives who are responsible for the losses that meant that taxpayers had to give billions of dollars for bailout. Obama doesn’t express anger very often, and he is restrained when he does, but his voice let all us listeners know that he was pretty angry. I imagine that he, Geithner and Congress are all angry and frustrated because the bonuses are something that are part of legal contracts. In other words, if the new CEO at AIG doesn’t pay the bonuses, AIG could be sued, and that would lead to another financial crisis. What a mess, and a clear example of greed gone wild. I looked up some articles on this after listening to the speech. You can read about it here.
Once he got past the AIG stuff he was free to talk about the help being extended toward small business. The audience of small business owners was really with him in all he said, interupting with applause. He emphasized getting the credit flowing again, and made a point to mention the small bank owner by name to illustrate how this would be done. He said they would be spending $15 billion to buy up “bundles” of loans that are now sitting in banks. In other words, using the community bank owner as an example: her bank is holding 11 million dollars in loans that no one will buy right now, so her bank can’t loan more money. Usually they are able to bundle and sell those loans to a bigger bank, then they have more money to loan, and so forth. In the plan presented today that 11 million dollars in loans would be purchased, enabling her bank to loan out more money. (Lots of applause here).
The government is also going to guarantee a higher level of SBA loans so more loans can be made. There was also talk about lowering capital gains taxes, and something about the IRS refunding taxes on losses. I wish I had taken notes! I didn’t find the whole speech on line yet, but I’m sure it will be up on the White House web site by the end of the day. Usually you can find the speech on line somewhere. It is well worth listening to, and I’ll be eager to read it. I am the kind of person who gleans information better by reading it, than from listening.
I had turned off CNN after I listened to the speech and just turned it on again to see what was being mentioned about this mornings event. The only thing the talking heads want to talk about is the AIG bonuses. Nothing about the good news for small business. Isn’t that interesting. They want to focus on what stirs up people’s anger, not on what stirs up optimism and hope. Very interesting choice on their part. It will be interesting to see what the news this evening does with today’s speech. Want to bet the focus stays on AIG?
There is some reporting on the news for small business on CNN here. It is not a very good summary of the speech, but it does give some information. There is a video here.
Tags: aig, bank, geithner, loans, obama, sba, small business
That is great news! I have not watched the speech but i will start looking for it. As for CNN not going over all the points Obama covered, i would have to say it is typical of the media to cover what brings more ad money. I would assume that cnn cannot find a good sponsor for a segment on small businesses.