Dateline Normal, Mn.: Fed urges banks to lend; Urges consumers to pay CASH; Lift up by bootstraps---FICTION

Well the headlines sure have been a bit bewildering. ( Click on the post for the recent story.)Banks being urged to lend...lend...lend.. when the excess lending to undocumented loan applicants was the problem in the first place---yet there are a few creditworthy loan applicants available now---and the fed is urging that the banks loan to those folks quickly---before they become uncreditworthy I suppose.



Still----the general public consumer is being urged to be prudent...to cut back...to pay cash. Somehow---the two messages conflict.



So--whenever I have questions such as this, I just pick up the phone and give my old friend Herman in Normal, Mn. a call----as folks will recall, Normal is that quiet fishing village just south of Garrison, and Herman is a down home real estate lawyer that also moolights as president of the local school board. Herman would know, I thought.



"Herman what is the deal. How can regular folks cut back and go to cash, while the banks resume lending---and lending to who?"



Herman let out a huge bellylaugh. "Wolfman (that's what he always called me), ya just need to decipher the lingo. When big corporations get in trouble, like GM for example, maybe even though they have been warned for 20 years or so since "The Reckoning" was written that small cars that were fuel efficient were the cars of the future, our government just assumes it was a hearing aid problem---and wishes to bail them out. The rule here is that when the rich need a bailout, it is "SAVING AMERICA"----

Then Herman took a deep breath.

"However---ya have to understand that if the regular tax paying folks need help---maybe they face foreclosure on a home that had an inflated valuation that busted----to help that person would be "SOCIALISM". "


Wow---that was sure a shocking comparison. After I got off the phone I just reflected. Yup. That seems to be the rule. Thank goodness we are back in good old Wisconsin.