Welch elaborated by saying that the TARP program is starting to "restore financial confidence." He went on to say that the decline in the economy may be ending.
But perhaps Welch's most insightful remarks were directed at our new President. He praised Obama's cabinet picks and encouraged him to foster an environment of teamwork with his staff.
But Welch took a scolding tone concerning Obama's current public stance on the economic situation. Welch advised, "He has to stop protecting himself by saying it will get worse before it gets better. This country needs a boost and every time he goes on television and talks about how bad it's going to get, people are looking for someone to take us out of this."
You know that I agree with Welch that TARP is working. Why do I agree? Because of the overwhelming evidence of mid-market bank strength in the Q4 results this earnings season. As we've seen, many of these regional and community banks are refusing TARP funding because their balance sheets are already strong.
I also agree with Welch that we need a confidence boost. As the Conference Board prepares its readout of leading economic indicators on Monday, one of the most helpful things that Obama can do is to focus on a message of "economic conditions improving." True to the Obama campaign message of "hope over fear," Obama needs to identify those hopeful indicators of improvement, clearly point to them, and then move forward with stimulus plans that specify the country's "unity of purpose."
Let's all decide to move this economy forward. As Welch says on his website, "First and foremost, we suggest you resolve to make 2009 a year during which you stay outward-facing and on the offensive."
TARP seems to be working, more positive economic indicators will be released on Monday, and our national resolve is clear. Let's get to work on some "shovel-ready" projects.
Posts
Thank you for seeking out encouraging news. There is enough bad news perpetuated by the press.
ReplyDeleteThanks William,
ReplyDeleteEncouraging words like yours from readers keeps me motivated...
Thanks again,
GNE
I appreciate the thrust of your website. Too many sites are dancing on graves and wallowing in the gloom. There are strong players out there, but probably not nearly enough in this economic cycle to enable a strong recovery any time soon. I feel strongly that just sitting back and waiting for a "normal" economic cycle recovery is not a wise approach given the uniqueness of this crisis. Too much irreversible damage is being done to too many individuals and businesses by the credit crisis. Sufficient recovery for many may take years.
ReplyDeleteSubprime loan problems started the housing crisis, but now it's the underwater home equity loans, and first lien mortgage loans, regardless of credit qualification, that have cornered many lenders and their homeowner borrowers. Government bailouts of big insolvent banks, or any other banks who want to be bailed out, won't deal at all with the problems of the approximately 25% (and climbing) of homeowners who now have zero or negative equity. Housing values will not sufficiently recover any time soon to alleviate the plight of that huge sector, even with a modest economic recovery. Unless homeowners can escape their positions no strong economic recovery is possible.
What's needed is a creative solution. Hardly anybody is proposing solutions other than throwing taxpayer money at big banks or nationalization, and the current traditional-type economic stimulus programs in Congress. Much has been attempted via TARP and other efforts, and I suppose it's working for the banks who are getting the billions. But those solutions do absolutely nothing to rescue the homeowners. It's a big mistake to think TARP or the stimulus plan in Congress is going to solve the most important problem, the housing and mortgage situation from the perspective of the borrowers who drive the economy.
We have proposed a new solution, The AllStreets Bailout Plan at http://www.themortgagenews.info, to provide fair access to low-interest, long-term government loans to all citizens, primarily designed to enable homeowners and their lenders to share loan to convert excess home equity to government loans, not secured by the properties. It will free up homeowners to enable them to refinance or sell without a short sale. But it also give fair access to citizens who do not own properties or have a mortgage to use the same government loans to pay off non-mortgage debt, finance a business, as a personal loan, or as second mortgage money (secured by the property purchases).
It will take about $2-3 trillion of government loans, not handouts, of which $350 billion can be from TARP funds. It will not increase the deficit, because it's not spending, and taxpayers will recover all the funds lent, plus interest.
Thank you for the good news.
ReplyDeleteDan,
ReplyDeleteThanks for the comment Dan.
I totally agree that we need to take the initiative and move plans like yours forward.
None of us can ever afford to just sit back and wait for things to happen around us.
Good luck with your plan... let me know if you want to write an article on your efforts and how best to get it in front of the right law-makers for consideration...
gne
Is Jack Welch working?
ReplyDeletepoor boomer,
ReplyDeleteyou might note that Welch is doing the educational circuit. I am sure he's not doing it for free.
He and his wife Suzy also are active on their website (reference in this article).
Again, the website does not operate as a non-profit.
gne