How banks’ reluctance to make small-business loans is a major driver of sluggish recovery, and what to do about it.

My comment: Yesterday I got an email, one of many over the past several months, from someone who is a registered Democrat in Gilchrist county. His email, I’m sure, reflects his opinion that the Occupy Wall Street (OWS) crowd are grubby, lazy socialists whose parents did a terrible parenting job, encouraging them to suck on the proverbial socialist teat and do their best to destroy this wonderful country.

As someone who has made a living in the financial sector for almost 40 years, I have to tell you that I am entirely sympathetic to the message put forward by those involved in OWS. I’m clearly in the 99% and while I know a few people in the 1%, its really only a few who are pulling the strings. The result is a deck stacked against everyone else, forcing us to follow a path that leads nowhere, while at the same time allowing them to follow a path that we can only think about. The walls have come up to where we cannot see the other side, meaning that if too many people have no realistic expectation of reaching beyond the middle class, then the American Dream ceases to exist.

I no longer have the energy to stand on the battlements and fight, but anyone who believes there is not something fundamentally real about whatever it is the OWS folks are pushing against are sadly mistaken. The wall is there, and in time, no matter how hard you try and get beyond it, you won’t be able to. The effort results in the same distrust that led to the Arab Spring earlier last year. It may not be well defined, or properly articulated, but unless the folks at the top pay attention, it will eventually result in social chaos.

By Matthew Yglesias|Posted Monday, Jan. 9, 2012

Nobody will be surprised to learn that the past few years have been tough for small business. They’ve been tough for everyone, after all. But interesting research finalized in December from economists Burcu Duygan-Bump, Alexey Levkov, and Judit Montoriol-Garriga published by the Federal Reserve Bank of Boston indicates that the interplay of small business and the banking crisis may have played a special role in the recession. In particular, a tightening of credit standards during the high point of the fiscal crunch seems to have disproportionately impacted small firms and is continuing to hold them back during the recession.

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