Obama's Deaf Ear

The slogan in the Obama administration is "hundreds of billions for Wall Street banks and not one damn penny for Main Street!". Geithner has turned a deaf ear to the appeals to save CIT, the bank that finances roughly one million US small businesses. To the Obama admin, these aren't worth saving. Instead, the hundreds of billions went to the handful of big Wall Street banks that created the disaster. The innocent bystanders can wail and prostrate themselves before an indifferent administration. No money for the little guy. The federal tap is reserved for the high rollers. Let the little guy look after himself!

Here's a letter by signed by 32 small business associations pleading for help. Nope! Nada! Zip! The money's reserved the the guys with big cajones, the ones that bought and sold and created the financial collapse. The little guys, the meat-and-potatoes guys, are just going to have to suck it up (and pay the trillion dollar bill to feed the Wall Street fat cats!). Yep, life is rough...

The Honorable Timothy Geithner
Secretary
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220

Dear Secretary Geithner:

As the U.S. and world economies struggle to recover from the most devastating recession in recent memory, we are writing to impress upon you the very severe ramifications that a CIT bankruptcy would have on more than one million smalland medium-sized businesses, their partners in the U.S. retail industry and the manufacturers and service providers that supply that sector. Our organizations represent thousands of these small- and medium-sized enterprises and their suppliers as well as the most significant retail operations in this country. We urge the government to reconsider every possible option to address the current stresses confronting CIT and to prevent further tightening of the credit markets.

With personal consumption at 70 percent of GDP, the revival of consumer purchasing is critical to our nation’s economic recovery. Without CIT, thousands of retailers may be forced out of business because their suppliers will be put out of business. Such a ripple effect could set back the recovery of the manufacturing and retail sectors, and therefore the U.S. economy, by several years.

CIT is one of the leading factoring companies in the United States and is a vital source of financing for manufacturers as well as the small and medium-sized vendors who are the primary suppliers of merchandise sold in U.S. retail establishments. Because of CIT’s primacy in this field, they have essentially become the banker to “Main Street”, and as such, it is absolutely essential for the government to utilize every tool at its disposal to prevent a CIT bankruptcy.

Uncertainties over CIT have already provoked a credit squeeze that threatens payments and payrolls in thousands of businesses. As this uncertainty persists, and if CIT is forced to undertake a bankruptcy filing, the ripple effect will be felt in every city and state across this country as the further tightening of credit markets will make it incredibly difficult, if not impossible, for many of the companies who currently rely on CIT for financing to remain in business. The number of jobs that depend on the successful outcome of the CIT crisis is immeasurable.

We strongly urge you and your colleagues to thoroughly review the role that CIT plays in the financing of main street businesses and retail establishments and take appropriate action to ensure the ongoing viability of this company.