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Car dealers across the country are feeling the pain because bankers still refuse to lend money to credit worthy borrowers to purchase new vehicles.

Laying it on the Line

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Dear Mr. Banker:
It has now been more than seven months since the Federal government injected more than $350-billion into your industry, which was followed by yet another round of hundreds of billions more, all in an effort to help you and your colleagues regroup and get back to providing Americans with the credit they need and deserve. We're now at the point in time where many experts predicted things were going to turn around. Yes, some positive signs have been seen of late—unemployment, while still high, is beginning to taper off and consumer confidence is beginning to point in the right direction. But you still haven't done your part to rebuild our economy.

When the government started the Trouble Asset Relief Program, it was meant to buy distressed assets from you so that you could get them off your books and start over. Instead, you convinced the government that the better track would be to take direct equity in your companies so that you could build your balance sheets and, thus, lend more money. Funny thing happened on that path: you decided to horde the money and instead use it to build up your reserves and buy other banks and businesses—not to mention the fact that you paid those who got you into this mess in the first place millions of dollars in bonuses so they wouldn't flee your crumbling organizations. It seems I went into the wrong industry.

Now the government is looking to hold you responsible for your actions—cutting your executive perks and pay to levels that would still make most Americans shake their heads in amazement. Not to mention the fact that more regulation is likely on tap to prevent you and your friends from repeating the mistakes that have made this one of the most painful recessions of the modern age. All of these necessary actions have caused you to, yet again, react in a puzzling way. Instead of doing what the market needs—lending money to responsible borrowers for such things as cars and homes—you are going to the markets to take some of that liquidity that is finally starting to appear in the capital markets and use it to get the government off your back. All of this is designed to do one thing that is most shocking of all: Get out from under the demands of your new lenders—the U.S. taxpayers—that your executives get paid more realistic salaries, instead of the hundreds of millions they have been paid in the past and that you increase your lending activity. Don't get me wrong, I still don't think you should lend money to those who can't pay it back, but to cut off the credit stream completely is equally illogical.

And you still haven't let up on your greedy impulses—you still demand businesses comply with unprecedented terms on loans that force them to make further cuts to the point that might prevent them from benefitting from the recovery when it happens—and the issue of a economic recovery is not a question of "if," but "when." Maybe it's time for Americans to go back to an old way of business that's pretty much gone by the wayside: co-operative lending. There are some institutions that still operate this way and they have been little impacted by the economic downturn—why? Because they didn't take part in the risky schemes of the hedge funds and credit default swaps—they lent to people who met a set criteria and worked with them when times got tough. It's time, Mr. Banker, for you to find some humanity for those who you do business with because without them, you wouldn't have a business. Maybe that's what needs to happen.

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