Guest Post: President Obama’s Plan to Improve Small Business Credit

By Robert Fairlie

Today, we’re fortunate to have Rob Fairlie, UC Santa Cruz Professor of Economics as a guest blogger. Some of his work was discussed in this earlier post.

On Monday, President Obama announced a plan to unfreeze capital for small businesses (see here). With the potential of creating new jobs and helping the country move out of the recession, the White House offered several actions to help small businesses obtain the capital that they need. The financial crisis has taken a devastating toll on entrepreneurs as capital has become increasingly scarce. This year’s projections for loans guaranteed by the Small Business Administration are down to $10 billion, which is half the amount of loans guaranteed last year.

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AIG outrage

New York Attorney General Andrew Cuomo (hat tip: LA Times) asserted that on Friday insurance company AIG, recipient so far of perhaps $170 billion in bailout assistance, distributed over $160 million in “retention payments to members of its Financial Products Subsidiary.” These payments apparently included “retention” payments of over $1 million each to eleven individuals who are no longer working at AIG.

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GDP Forecasts from the WSJ

With talk of a second stimulus package circulating, it’s of interest to see what the current forecasts are indicating about the depth of the recession, as well as the “bounceback”. Jim has presented some of his views here. In this post, I examine the implications of the consensus coming from the March WSJ survey article, which indicates continued deterioration in the outlook, but a recovery beginning in 2009Q3.

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