Crisis? What Crisis?
Every day, at least since early September, we’ve heard a barrage of commentators, “experts”, talking heads and pundits expound on the “credit crisis”. Credit has dried up, we’re told. Companies cannot get financing. Banks refuse to lend to each other. The rhetoric has been used as justification for everything from the “bailout” packages (at a cost of $7,546 per taxpayer, and counting…) to the nationalization of insurance companies and, coming soon, automobile manufacturers.
But has credit actually dried up? What does the hard data tell us?
Well, according to data produced by the US Federal Reserve, lending activity does not appear to be slowing down. In fact, quite the contrary: commercial and industrial loans are up. So are consumer loans. We’re told banks are terrified of lending to one another for fear the borrower will collapse before the loan is repaid, however interbank lending shows no ill-effects of the so-called “crisis”.
Of course, such statistics aren’t cited by the vested interests currently in Washington, arms outstretched.