TGIF and clouds and silver linings and crunching credit

Posted on | September 26, 2008 | 2 Comments

New York Times quote of the day: “The situation is like that movie trailer where a guy with a deep, scary voice says, ‘In a world where credit markets are frozen, where banks refuse to lend to each other at any price, only one man, with one plan can save us,’ “ said Jared Bernstein, senior economist at the labor-oriented Economic Policy Institute in Washington.

Sort of conjures up improbable images of Vin Diesel as Treasury Secretary, doesn’t it?

But that’s not what I was planning on writing about today.

I’m still reading accounts of the deal, almost-deal, blown-deal, working-on-cobbling-back-together deal to bail out those Wall Street financial institutions — largely because that’s almost all there is to read about in the news lately.

Kudos to Congress for understanding that this is not the sort of thing they should be railroaded into — and for learning that lesson from the last time they let themselves get railroaded into — but it’s even more interesting that some are questioning whether we need to do this giant deal at all.

Brian Moran tweets: “How much could small businesses do with $85 BILLION that went to AIG. How much could we do with $700 BILLION? Aren’t WE the economic engine?” (Well, yuh!)

and

“My bailout plan-$450 billion for big finance co’s. $250 billion for small to midsize co’s. America should know where its bread is buttered”

There are a few other people who are starting to make noises about small businesses and, specifically, the difficulties being experienced by small businesses looking for financing. In fact, the noises I’ve been reading here and there are full of concern about the degree to which frozen credit markets could paralyze the economy because, evidently, Americans finance the purchase of everything.

All of which gave me the following, rather peculiar idea: so does that mean that the trusty microbusiness, which has so much trouble gaining access to capital that we have gotten used to operating without it, has a competitive advantage in a situation in which nobody seems to be able to get a loan?

Some kinds of business are so used to financing everything that they really can’t function without borrowing. Those sorts of firms are really going to be in trouble.

If you’re used to bootstrapping anyway, I’m not sure how much the current Credit Crunch from Hell is really going to effect you.

Now there’s a different sort of way to look at the current chaos, huh?

It’s Friday. This is a good thing. With any luck, next week, there will be something else in the news for us to read about, something involving fewer zeros.

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