Cliff Kinkaid at Accuracy in Media, today wrote about a Celent report that suggests the credit freeze claimed by government leaders never existed. The report summary says, “However, it appears that many of their assumptions regarding the nature of the crisis are not supported, or even flatly contradicted, by the available data. Many measures of lending have actually increased during the crisis and are even at record levels.”
Kincaid claims while Bernanke was claiming the sky was falling, the exact opposite was true, i.e. increased access to credit and lending activity. While some firms were in crisis, and rightly so, the same could not be said for the credit markets in aggregate.
“Paulson had claimed that, by mid-September, when he persuaded President Bush to go public with demands for Congress to approve a $700-billion bailout plan, the financial system had “seized up,” credit markets had ‘froze,’ and interbank lending had been ’substantially reduced.’”
But none of this was true. ‘The freezing of the credit markets that Secretary Paulson cites is not visible’ in the data, the Celent report shows.
The report concludes that the chief danger ahead is not depression but hyperinflation. The Bush Administration and Congress panicked and railroaded unprecedented socialist measures for the economy that were not justified by the evidence.
Meanwhile Congress has not received any indication from CEOs as to how bailout funds were allocated.