If He’s A Decent Man, Steven Rattner Will Apologize To Judy Shelton

If He’s A Decent Man, Steven Rattner Will Apologize To Judy Shelton

On March 15th the Federal Reserve reduced the rate it sets to zero in an attempt to influence credit conditions. Important about the Fed's move was that the banks that the Fed strives to exert its well overstated influence through didn't comply.

On April 11th banking giant J.P. Morgan announced that it would raise borrowing standards. In late April Wells Fargo announced it would no longer accept applications for home equity lines of credit, and then throughout this time U.S. oil companies found that their crude inventory was less and less impressive to banks as collateral. A May survey indicated that amid "zero rates,“ 25% of credit card holders had their borrowing limits reduced or accounts closed altogether.

Some will respond with wonderment that the above happened despite the Fed returning to near zero, but it was really a statement of the obvious. Banks aren't in the business of issuing bad loans on the way to insolvency. Their loans must perform. So with the economy wrecked by the imposition of command-and-control decrees from politicians, banks naturally tightened to reflect a much more challenging economic reality.

That they did speaks to why Steven Rattner owes Federal Reserve Board nominee Judy Shelton a