Why are the “experts” so stupid?
”William C. Dunkelberg”, an economist in the School of Business and Management at Temple University, said surveys showed that capital spending was at a 35-year low and that companies were still cutting, not adding, inventory. “Credit’s not an issue,” he said. “Customers are the issue.”
When I see quotes like this I am reminded just how oblivious the so-called “experts” really are.
This article contains nothing more than assumptions and guess-work. Both current clients and prospective clients of Confidential Counselor will tell you that you that statements such as “Bank representatives maintained that meritorious borrowers were getting loans, and economists agreed that there was not much evidence of a broad refusal to lend” just don’t hold water.
Most lenders go out of their way to avoid a formal application for credit. Instead, they have an informal conversation that may include sharing some documents such as P&L statements, cash flow analysis, and credit information. By doing this so informally, lenders are able to avoid reporting true numbers of lending requests as most are denied.
Why do small businesses agree to this? First, they have a fear that a formal application will ding their credit report and leave them looking vulnerable to current lenders and investors. Second, they mistakenly trust the “friendly” banking officer who portrays himself or herself as a friend to small business which, they are NOT!
If Mr. Bernanke and President Obama really want to help small businesses in the USA, they need to add (and listen to) small business owners on their various economic panels. The make-up of the group should include representation of firms with less than 25 employees as well as those who have 50, 75, 100, 250 and 500 associates.
As many others and I have written about over the last 2-1/2 years, the key to rebuilding America is getting small businesses moving. Its time for the policy makers to talk to the boots on the ground who make it happen ever day and not ideologues, pontificators, bureaucrats, fat-cats and others who have NO experience starting and running an actual small business.
