That'll Be Another $30 Billion. Thanks, Taxpayers!

Posted: Sep 16, 2010 1:34 PM
Congress just passed the small business bill, which critics argue could create a permanent class of bailouts for banks and the businesses they serve. "Small" banks -- defined as banks that have less than $30 billion in assets -- can qualify for discounted lending rates (funded by taxpayers), depending on how aggressively they lend to other small businesses. The banks get even lower rates if those small businesses are minority or women owned, or in rural areas. In other words: there is a massive incentive to lend to unqualified borrowers. Stephen Spruiell comments at NRO:
The case against such measures isn’t based on racism or sexism. It’s based on the idea that banks should make lending decisions based on credit risk, period. We are far beyond the point where discrimination was a big enough problem to justify such measures.
This is the same mess that got us into the housing debacle. When it all goes bust, you can thank Republican Senators George Voinovich of Ohio and George LeMieux of Florida, who crossed party lines and enabled the bill's passage. Surprise, surprise: Voinovich is retiring, and LeMieux is a caretaker.