Just Like Mattress-Stuffers, Banks Hoard Bailout Cash

Recovery a long way off
By Kevin Spak,  Newser Staff
Posted Oct 21, 2008 10:00 AM CDT
Bank of America Chairman and CEO Ken Lewis listens during a news conference in New York, Sept. 15, 2008. Lewis says the reason healthy banks like his got cash was to disguise the unhealthy ones.   (AP Photos/Bebeto Matthews)
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(Newser) – Wall Street may be cheering for the bailout, but Andrew Ross Sorkin knows what the banks are really doing with our $250 billion: “They have stuffed it under their mattresses like the rest of us,” he writes in the New York Times. Consumers will find it almost as hard to get a loan this week as last, and that won’t change until the economy actually recovers.

“It doesn’t matter how much Hank Paulson gives us,” said one senior official at a big bank. “No one is going to lend a nickel until the economy turns.” Besides, he added, “Who are we going to lend money to? Only people who don’t need it.” Paulson’s plan should help the economy, but with no strings attached to the money, it’s no silver bullet.