Family Businesses Are Reeling in Recession

Jul 14, 2009 Full story: www.nytimes.com 79

Using only strips of canvas and a little rope, Scott Peterson walked up a 50-foot flagpole here to remove a star-spangled banner with reds faded pink.

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“Love of $ is the Root of Evil”

Since: Sep 08

Gotham City

#1 Jul 14, 2009
People have yet to realize the drastic effects on our economy the de-regulation that Bush initiated is having.

Specifically what I am talking about is the 2005 changes they made to the CRA (community reinvestment act). People are blaming this legislation for the economic collapse, but what they don't understand is the how and why the collapse occurred because of it.

http://en.wikipedia.org/wiki/Community_Reinve...

Look at: Regulatory changes 2005

"In early 2005, the Office of Thrift Supervision (OTS) implemented new rules that – among other changes – allowed thrifts with over $1 billion in assets to tweak the long standing 50-25-25 CRA ratings thresholds by continuing to meet 50 percent of their overall CRA rating through lending activity as always but the other 50 percent could be any combination of lending, investment, and services that the thrift wanted. The obligations to adhere to 25 percent for services and 25 percent for investments became optional and the means to securing a satisfactory CRA rating was left to the discretion of the qualifying thrifts instead."

In laymens terms, what that means, was that they changed the requirement for banks to re-invest in the communities that they were profiting from. They changed the 50-25-25 formula......... essentially allowing banks to profit from lending in certain parts of the country without re-investing back into those communities. Money coming out, no money coming in. All it takes is a few years of that before everything in small communities will dry up.

Did you know......... That in Spain, 15% of all bank profits must be spent on cultural activities?

This has had a huge effect on their arts and cultural industries. They have art museums and galleries sponsored by banks all over the place. It essentially gave people in the creative arts field a job and enough funding so that they don't have to be starving artist. That money then re-circulates into the local economy fueling small businesses, local art supply stores, and other small mom & pop operations that artist usually shop at.

Fixing the construction industry is a whole other topic of discussion though.

“Tell the Truth”

Since: Nov 07

Orlando, Florida

#2 Jul 14, 2009
What makes these people different from others who have lost a job? If you're not earning enough to pay your bills, you go out and find something else. Millions of people have had to change their lifestyles, seek different employment, become under-employed because nothing else is available. Small business owners are no different.

This recession is hurting everyone except the corporate executive, the bank president and the politician. The rest of us have been thrown to the wolves.
John

Powder Springs, GA

#3 Jul 14, 2009
Donna Atlanta GA wrote:
What makes these people different from others who have lost a job?
The difference and the reason people worry about it is that is where the recovery will happen. Small business is where the new jobs will come from.
Phuque Obama

United States

#4 Jul 14, 2009
Work harder! Millions on welfare want more! Socialsim is here. Worst president in history: Hussien Obama. All in only 6 months.
enlightened

New Brunswick, NJ

#5 Jul 14, 2009
I believe that now that Al Franken is in things will turn around. We just need more tax revenue going into the federal government to start creating new jobs. Bush's tax cuts really hurt our nation.
Chicago Guy

Winnetka, IL

#6 Jul 14, 2009
John wrote:
<quoted text>
The difference and the reason people worry about it is that is where the recovery will happen. Small business is where the new jobs will come from.
I didn't think that Walmart had left any small businesses in operation...
Mizz Bee Haven

United States

#7 Jul 14, 2009
Danny_Livewire wrote:
...
Did you know......... That in Spain, 15% of all bank profits must be spent on cultural activities?
This has had a huge effect on their arts and cultural industries. They have art museums and galleries sponsored by banks all over the place. It essentially gave people in the creative arts field a job and enough funding so that they don't have to be starving artist. That money then re-circulates into the local economy fueling small businesses, local art supply stores, and other small mom & pop operations that artist usually shop at.
Fixing the construction industry is a whole other topic of discussion though.
The financial and realestate recession in Spain is even worse than it is here in the United States. Also, the government does a poor job of deciding what to spend money on. I think every city needs a small arts district, but engineers, farmers, and teachers are what beefs up a nation's gross domestic product and infrastructure.
Oregon Is Disgusting

Portland, OR

#8 Jul 14, 2009
Donna Atlanta GA wrote:
What makes these people different from others who have lost a job? If you're not earning enough to pay your bills, you go out and find something else. Millions of people have had to change their lifestyles, seek different employment, become under-employed because nothing else is available. Small business owners are no different.
This recession is hurting everyone except the corporate executive, the bank president and the politician. The rest of us have been thrown to the wolves.
After scarfing up $185-$250 billion of welfare, AIG's out of control gambling unit is still paying out salaries AND bonuses. After having destroyed the company, only 2 (2!) people have left that unit.

Everyone else is there on our dime doing pretty much what they have always done.

Goldman Sachs with fat profits is also dining out in style on our dime.

Since: Jun 09

Brooklyn NY

#9 Jul 14, 2009
All construction needs is the cash to keep things moving, some good long term infrastructure work would help turn things around. a new high speed cross country rail system, wider highways, new obamamobile only lanes, face it the commercial sector is built out at the moment and probably will not be back for years.
TASKMASTER

North Port, FL

#10 Jul 14, 2009
Sure they are,so they cut any labor they do not need...Obama today said Its getting worse..DUH!!..After he taxes the crap out of small business,the unemployment rate will skyrocket!!..over 15% in "Car Town'...jobs gone forever....CHANGE..HA! HA! HA!

Its The Jobs stupid!!!
GetRidofRitter

Denver, CO

#11 Jul 14, 2009
Danny_Livewire wrote:
People have yet to realize the drastic effects on our economy the de-regulation that Bush initiated is having.
Specifically what I am talking about is the 2005 changes they made to the CRA (community reinvestment act). People are blaming this legislation for the economic collapse, but what they don't understand is the how and why the collapse occurred because of it.
http://en.wikipedia.org/wiki/Community_Reinve...
Look at: Regulatory changes 2005
"In early 2005, the Office of Thrift Supervision (OTS) implemented new rules that – among other changes – allowed thrifts with over $1 billion in assets to tweak the long standing 50-25-25 CRA ratings thresholds by continuing to meet 50 percent of their overall CRA rating through lending activity as always but the other 50 percent could be any combination of lending, investment, and services that the thrift wanted. The obligations to adhere to 25 percent for services and 25 percent for investments became optional and the means to securing a satisfactory CRA rating was left to the discretion of the qualifying thrifts instead."
In laymens terms, what that means, was that they changed the requirement for banks to re-invest in the communities that they were profiting from. They changed the 50-25-25 formula......... essentially allowing banks to profit from lending in certain parts of the country without re-investing back into those communities. Money coming out, no money coming in. All it takes is a few years of that before everything in small communities will dry up.
Did you know......... That in Spain, 15% of all bank profits must be spent on cultural activities?
This has had a huge effect on their arts and cultural industries. They have art museums and galleries sponsored by banks all over the place. It essentially gave people in the creative arts field a job and enough funding so that they don't have to be starving artist. That money then re-circulates into the local economy fueling small businesses, local art supply stores, and other small mom & pop operations that artist usually shop at.
Fixing the construction industry is a whole other topic of discussion though.
Wikipedia?? Anyone can post anything on Wikipedia. A reliable source of information? You might as well get your "news" from Time or Newsweek. Hah!
donkeyman

Midland, OR

#12 Jul 14, 2009
thanks czar obama. you really screwed up the economy.
Yeppers

Kissimmee, FL

#13 Jul 14, 2009
Danny_Livewire wrote:
People have yet to realize the drastic effects on our economy the de-regulation that Bush initiated is having.
Specifically what I am talking about is the 2005 changes they made to the CRA (community reinvestment act). People are blaming this legislation for the economic collapse, but what they don't understand is the how and why the collapse occurred because of it.
http://en.wikipedia.org/wiki/Community_Reinve...
Look at: Regulatory changes 2005
"In early 2005, the Office of Thrift Supervision (OTS) implemented new rules that – among other changes – allowed thrifts with over $1 billion in assets to tweak the long standing 50-25-25 CRA ratings thresholds by continuing to meet 50 percent of their overall CRA rating through lending activity as always but the other 50 percent could be any combination of lending, investment, and services that the thrift wanted. The obligations to adhere to 25 percent for services and 25 percent for investments became optional and the means to securing a satisfactory CRA rating was left to the discretion of the qualifying thrifts instead."
In laymens terms, what that means, was that they changed the requirement for banks to re-invest in the communities that they were profiting from. They changed the 50-25-25 formula......... essentially allowing banks to profit from lending in certain parts of the country without re-investing back into those communities. Money coming out, no money coming in. All it takes is a few years of that before everything in small communities will dry up.
Did you know......... That in Spain, 15% of all bank profits must be spent on cultural activities?
This has had a huge effect on their arts and cultural industries. They have art museums and galleries sponsored by banks all over the place. It essentially gave people in the creative arts field a job and enough funding so that they don't have to be starving artist. That money then re-circulates into the local economy fueling small businesses, local art supply stores, and other small mom & pop operations that artist usually shop at.
Fixing the construction industry is a whole other topic of discussion though.
LOL...The CRA had absolutely nothing to do with the collapse...

http://www.businessweek.com/investing/insight...
GetRidofRitter

Denver, CO

#15 Jul 14, 2009
donkeyman wrote:
thanks czar obama. you really screwed up the economy.
Maybe we can have a Czar Czar to investigate the Czars.
jim

Hollywood, FL

#16 Jul 14, 2009
Glasnos

Orlando, FL

#17 Jul 15, 2009
Yeppers wrote:
<quoted text>
LOL...The CRA had absolutely nothing to do with the collapse...
http://www.businessweek.com/investing/insight...
You are an ignoramous.

What was the purpous of the Community Reinvestment Act?

How was this to be accomplished?

What role did ACORN play?

What were the results and the consequences of the CRA?
http://www.theminorityreportblog.com/blog_ent...

The housing boom/bust would never have transpired without the CRA and government INTERVENTION.

Since: Jan 07

Location hidden

#18 Jul 15, 2009
there were too many unneeded useless little busninesses .. countless tanning salons, nail salons, pizza shops, gas stations, pet pooper scoopers, lawn care, auto detailing, cheese straighteners, etc.
Yeppers

Kissimmee, FL

#19 Jul 15, 2009
Glasnos wrote:
<quoted text>
You are an ignoramous.
What was the purpous of the Community Reinvestment Act?
How was this to be accomplished?
What role did ACORN play?
What were the results and the consequences of the CRA?
http://www.theminorityreportblog.com/blog_ent...
The housing boom/bust would never have transpired without the CRA and government INTERVENTION.
You know, normally I agree with most of your posts, but your off on this one junior...

"The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away:“In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

"Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt.(Barry Ritholtz had an excellent and more comprehensive survey of how Washington contributed to the crisis in this week’s Barron’s.)

In lay mans terms junior this means ONLY 20% of the lending institutions were even subject the CRA...What you're saying is this whole mess was created by only 20% of the lending institutions, eh...

No junior, it was the 50% of unsupervised subprime loan predators and the 30% of banks affiliates (thats 80% junior) that had free roam to do whatever they wanted that caused this mess...

Sources:

http://www.businessweek.com/investing/insight...

http://www.house.gov/financialservices/hearin...

http://www.traigerlaw.com/publications/traige...

http://online.barrons.com/article/SB122246742...

“Tell the Truth”

Since: Nov 07

Orlando, Florida

#20 Jul 15, 2009
Oregon Is Disgusting wrote:
<quoted text>
After scarfing up $185-$250 billion of welfare, AIG's out of control gambling unit is still paying out salaries AND bonuses. After having destroyed the company, only 2 (2!) people have left that unit.
Everyone else is there on our dime doing pretty much what they have always done.
Goldman Sachs with fat profits is also dining out in style on our dime.
I couldn't agree more. What are we doing about it? It's apparent the American people don't care or we'd be taking to the streets and demanding change. As long as we sit back and do nothing about it we've pretty much said "we don't care. Do what you want."

You want change? It's going to have to come from the people.

“Tell the Truth”

Since: Nov 07

Orlando, Florida

#21 Jul 15, 2009
John wrote:
<quoted text>
The difference and the reason people worry about it is that is where the recovery will happen. Small business is where the new jobs will come from.
Small businesses are usually low-paying, offer no benefits, and rest on shaky financial ground. These aren't the kinds of businesses we need right now.

I'm not putting them down. I think it's great if someone has the ability to own a small business, but what we desperately need back in this country are manufacturing and large-scale companies that hire hundreds, if not thousands, of people, pay them a living wage, offer them medical insurance, and some job security.

Our leaders (and I won't name names) allowed these businesses to walk away from America, to undermine the working middle class, to help destroy the economy of the nation for their own self-interest. This was wrong in every sense.

We can't depend on mom and pop businesses to put the country back on track. This is bigger than that. This requires companies with large employment needs; companies that should have never been allowed to leave here without serious penalty. Without these large companies, even the small businesses will suffer.

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