Friday, April 17, 2009

New York Fed Proves Lack of Lending Argument a Lie

From this week's New York Federal Reserve Board's "Empire State Manufacturing Survey":

Most respondents cited little or no difficulty obtaining financing for either long-term commitments (capital investment) or short-term needs (operating expenses). Moreover, fewer than 10 percent of those surveyed indicated that problems obtaining credit had adversely affected their production or sales.

A bigger surprise is that any manufacturing remains in New York State anymore!

In any case, the above but ignored statement by the New York Fed gives the lie to President Obama's argument that taxpayers need to subsidize Big Finance so that lending can resume. The truth is that the country overproduced beyond what it could afford in the last up-cycle. Let us be Green and use what we have rather than strain to satisfy the gods of output and employment, and just produce what we need and can afford, paying down debt and abjuring new debt along the way.

Copyright (C) Long Lake LLC 2009

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