If "Stress Tests" Were Baseball, at Least Banks Would Be Hitting Over .300, Though in Obama's America There Is No Game of Failure
From Bloomberg News:
At least six of the 19 largest U.S. banks require additional capital, according to preliminary results of government stress tests, people briefed on the matter said. […]
Final results of the tests are due to be released next week. The banking agencies overseeing the reviews and the Treasury are still debating how much of the information to disclose.
Whole thing, including some moderately promising news, here; link via The Corner.
I am reminded of something Nick Gillespie and I mentioned in passing in this morning's 100-days column: When Obama said "it's not about helping banks–it's about helping people," it wasn't just that the contradictions were immediately apparent. If anything, the audible dissonance then was just a peep compared to the ongoing roar of reality. Which is to say, Obama' mindset is that Banks Must Not Fail, because they are inherently more important than the people from whom (with the help of the feds) they are currently siphoning money.
Consider Obama's mid-April economic address at Georgetown University, the speech that moved Joe Klein to such poeto-ecstatic heights. Here's what the president said then about the comparative importance of banks and people:
And although there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of to banks -- one of my most frequent questions in the letters that I get from constituents is, "Where's my bailout?" -- and I understand the sentiment. It makes sense intuitively, and morally it makes sense, but the truth is that a dollar of capital in a bank can actually result in $8 or $10 of loans to families and businesses. So that's a multiplier effect that can ultimately lead to a faster pace of economic growth. That's why we have to fix the banks.
Those with a firmer grasp on multiplier effects are welcome to share your knowledge in the comments. I'll just observe that if Obama believes that's actually true, the only upward limit on his appetite for propping up banks will be maybe Congress, perhaps eventually the courts, but most importantly the one entity he referenced in the passage above: public opinion.
