Dawidziak: Economy fizzles as banks fiddle

Michael Dawidziak is a political consultant and pollster.

Federal Reserve Chairman Ben Bernanke, as played by Paul Giamatti: "They will lend the money out won't they?" Treasury Secretary Henry Paulson (William Hurt): "They will."

So ends the final scene in the HBO movie "Too Big to Fail," which debuted last month. It's 2008, and along with Federal Reserve Bank of New York head Timothy Geithner (Billy Crudup), they've just come back from their historic meeting with bank CEOs, when they offered bailout money to save the banks' collective hides.

Leading up to this meeting, the script is filled with tension over whether the banks will accept the money. We're led to believe that these financial geniuses feared that the banks wouldn't take the money if the government attached too many strings. Their solution, essentially, is to offer banks a taxpayer-funded blank check.

The financial institutions, having gotten themselves in a deep financial hole, never hesitated. They desperately needed the money, and there was zero chance they would turn it down -- a fact that seems to have been totally lost on our lawmakers at the time.

As the movie ends and Paulson is assuring the others that the banks will lend the money, he gazes out a window with a mixture of doubt and subdued panic. And with good reason. He knows these people. He knows that greed and selfishness are what has gotten them and the country to this point in the first place.

And we know that the banks didn't lend the money out.

Bank executives paid themselves huge bonuses while foreclosing on and slashing the credit lines of the very taxpayers who had paid to bail them out.

Why rehash this now? Because our country's leaders are meeting in the nation's capital to discuss how to create jobs and stimulate the economy. Instead of listening to the barons of Wall Street, they should be listening to the small and midsize business owners of Main Street, like most of the companies here on Long Island.

Our local business owners would tell them that a major stumbling block to creating jobs is that banks have slashed their credit lines. Economists say that American companies are cautiously sitting on cash reserves and not investing it in the economy -- making it sound like this is true across the board. But small and midsized businesses don't have the luxury of large cash reserves.

Most small- and mid-size companies depend on borrowing to build, grow and employ. Businesses that want to build and create, need the financial capital to do so -- and they're not getting it. That's the banks' job, and by and large, they're not doing it.

That's not to say that there isn't any new building at all going on. Look around and you see new bank buildings going up all over Long Island. The banks appear to have had no problem lending the money we gave them to themselves. The comic tragedy here is that they weren't bailed out because they were deemed a good credit risk, but because they were "too big to fail." We tend to believe most major problems are unique to our generation. But it's rarely true. Thomas Jefferson said in 1802, "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency," -- the specific issue of his day -- "the banks and corporations that will grow up around the banks will deprive the people of all property -- until their children wake-up homeless on the continent their fathers conquered."

If jobs are really job one, our leaders in Washington should listen to Jefferson, and to Main Street.