Matt Towery

OK, let's get this straight. The banks needed a bailout to keep liquidity from freezing up. I got it. I understood how their big drop in value during the crisis last fall could have left us with empty ATMs. I got it. Now what I don't get is how in the world anyone expects the economy to recover if the government puts too tight a set of restrictions on banks making loans, or if banks choose just to sit on their cash.

So now we come to the next round of bailout money, and both President Bush and President-elect Obama want the money paid out. And once again, Fed Chairman Bernard Bernanke says we need money to go to the banks. OK, again I get it. No, wait, I don't.

Right now it is virtually impossible to get a so-called "Jumbo Loan" on a house. (That's generally any amount over $500,000 in the United States.) That means a massive number of houses can't be purchased even if buyers have good credit and strong income.

Small businesses have to be making money hand over fist in a rough economy in order to qualify even for small loans -- be it for capital improvements or to provide modest lines of credit to help keep businesses running while clients and customers slowly pay what are, in reality, good and steady receivables.

Car loans. What a joke. No one is buying cars.

And as for getting a return on your investment in a bank -- you must be joking. With the Fed having cut interest rates to the core, most banks, particularly the big ones who say they need bailouts, would be better off giving you that free toaster they used to offer. It would be more valuable than the return their money market accounts can provide.

It's not just the banks' fault. The government has a noose around the banking industry's neck. After all, we wouldn't want any bad loans being made that could be risky, would we? So it is a vicious cycle. We give hard-earned dollars to mega-banks, and they can't or won't loan it to anyone except those who already have money and don't need it. The government then provides the excuse by placing strict lending requirements into effect. This is one guaranteed way to send us right into a prolonged recession, if not a depression.

We need capital freed up and into the hands of homeowners, entrepreneurs and businesses right now. Surely there is some means to avoid the sheer recklessness we witnessed in recent years, while at the same time putting real cash into struggling businesses that have been run well, have a track record of surviving and need help during this period of mass economic panic.

Matt Towery

Matt Towery is a pollster, attorney, businessman and former elected official. He served as campaign strategist for Congressional, Senate, and gubernatorial campaigns. His latest book is Newsvesting: Use News and Opinion to Grow Your Personal Wealth. Follow him on Twitter @MattTowery