Here's what a handmaiden to the Fed, the U.S. Chamber of Commerce, had to say about the idea of a Consumer Financial Protection Agency (CFPA):
"Americans are losing sleep over this economy. Especially small business owners, worrying about payroll and mounting bills. Now Washington wants to make it worse, with the CFPA, a massive new federal agency that will create more layers of regulation and bureaucracy. The CFPA will make it harder for small businesses to access credit. Small businesses work too hard to suffer further. Urge congress to stop the CFPA. Go to www.StopTheCFPA.com."
There is a major problem for small businesses right now: They can't get money from the banks, who will not lend to them. And small businesses provide most of America's new employment. But they could not possibly be beleaguered because of a consumer protection finance agency! They are beleaguered because the banks took too many risks and are now withdrawing from the market and will not lend to them. So, what the Chamber of Commerce is saying is pure sophistry, cynical in the extreme. To tell the poor beleaguered small business owner that a consumer finance protection agency is going to add to their burden, is simply ridiculous. But at least it acknowledges a very real problem in this country, which is that small businesses far too often cannot get loans from the banks.
And why can't they?
Whenever you have a credit crisis, the banker who was, in the go-go good times so willing to lend to a person who didn't even have a pulse, so that they could buy a home (that "will surely appreciate in value"), will not now lend even to someone who has a very good business and simply needs money to make payments for inventory, for example.
In sunny economic weather the banker readily lends you an umbrella -- but then asks for it back when it rains. So now it's raining, and they're asking for the umbrella back. Yes, there are small business people who are in a terrible condition. And our heart should out to them and to all the people who depend on them for employment. America is very dependent on these small business owners to create jobs, and our government is dependent on them to provide tax receipts. But the business owners can't get the loans they need from JP Morgan, from Citibank, from all of these banks that made all these mistakes. What it boils down to is that the taxpayers can't get any of their money back -- after putting up so many billions to bail out the very banks that now give them the cold shoulder.
The frustration that a lot of people feel about this lack of real reform, and about the banks being in control to the point of lording it over Washington, comes from the realization that there's no effective outlet for their rage and anger. They don't have a lobbying organization to go to Congress for them and say, "What about these millions of people who have lost so much because of these bankster shenanigans? Look at these millions who have lost their jobs. Look at the millions who've lost their homes. Look at the millions who have credit card bills on which they're paying at a 28% interest rate." So people are voiceless and they feel powerless. And they're getting angrier by the day.
Senator Chris Dodd who chairs the key Senate Committee on Banking has taken so long to move any legislation toward reform that Jon Stewart's been having some fun with it:
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