Both conservatives and liberals are beginning to have doubts. For instance, Alan Reynolds of the Wall Street Journal and a senior fellow at the far right Cato Institute writes:
Let's dispel the Henny Penny idea that if we don't act in the next 10 minutes, the sky will fall. The argument for a government bailout goes something like this. If the finance sector crashes, the credit market could lock up and businesses won't be able to get the short-term credit they need to stay afloat. A large chunk of our businesses depend on short term loans and would fail in a matter of weeks or months after such a lockup. Its really not the financial industry per se, then that's the problem, its the many businesses which rely on short term loans that would dry up if the investment banks fail. There's one problem with this line of argument. The connection may not be there.
The financial storms over the past year have -- before last week -- been largely confined to securities markets and to interbank loans among commercial and investment banks. Bank loans to commercial and industrial business, real estate and consumers continued to expand nearly every month. Commercial and industrial loans exceeded $1.5 trillion this August, up from less than $1.2 trillion a year earlier. Real-estate loans exceeded $3.6 trillion, up from less than $3.4 trillion a year ago. Consumer loans were $845 billion, up from $737 billion. Credit standards are tougher, which is surely a good thing, but interest rates for creditworthy borrowers remain low.
The ongoing slow but steady availability of bank credit helps explain the much-remarked contrast between Wall Street and Main Street -- the shaky condition of exotic financial markets compared with relatively benign statistics for industrial production, retail sales, employment and the rest of the nonhousing economy. Most people go about their business without depending on investment banks or exotic varieties of commercial paper.
From the left, NYT Pulitzer Prize-winning journalist David Cay Johnston writes:
Ask this question -- are the credit markets really about to seize up?
If they are then lots of business owners should be eager to tell how their bank is calling their 90-day revolving loans, rejecting new loans and demanding more cash on deposit. I called businessmen I know yesterday and not one of them reported such problems. Indeed, Citibank offered yesterday to lend me tens of thousands of dollars on my signature at 2.99 percent, well below the nearly 5 percent inflation rate. That offer came after I said no last week to a 4.99 percent loan.
If the problem is toxic mortgages then how come they are still being offered all over the Internet? On the main page AOL generates for me there is an ad for a 1.9% loan (which means you pay that interest rate and the rest of the interest is added to your balance due.) Why oh why or why would taxpayers be bailing out banks that are continuing to sell these toxic loans?
Good question, Rocko! If we the taxpayers are supposed to cough up endless cash, putting our chance at affordable healthcare, clean energy, and a better life out of reach, then the fucking assholes we're bailing out had better fucking need it desperately, and they'd better stop the fuckery that got us into this mess to begin with.
If we find out after the fact that these ratfucking greedy sons of bitches never needed a bailout in the first fucking place, I think we'll be within our rights to demand they be thrown into Guantanamo Bay as enemy combatants and subjected to some of that "enhanced interrogation" John McCain cleared the way for.
I hope to fuck that Congress doesn't lose its spine today. I know a huge number of Republicons and nearly all the Dems are smelling a rat and digging in their heels. If they smell smoke, they'd better realize that the only fire they're dealing with is the rat Bush just set on fire to try to scare them into letting him and his cronies raid the Treasury on the way out the door.
(I've added links to the referenced articles. Read them both. Your energy costs will go down - you'll be steamed enough to boil water on your scalp, thus negating the need for a stove. Feel free to eviscerate Alan Reynolds' right-wing deregulation bullshit in the comments - the paragraphs quoted above are the only ones that remotely make sense, and the rest is just a lot of nonsensical bleating about how deregulation didn't get us into this mess. Funny, but none of the non-partisan economists seem to agree. Gee, I wonder why that is?)