Loan Ranger

This wouldn't be the first time
Things have gone astray
Now you've thrown it all away
--Bryan Adams

Banks receiving government bailout money had an implied requirement to lend. The data suggest that this isn't happening. Loan balances have been dropping for months.

So, does the government hold a gun to the heads of bankers and force them to lend? We could always just nationalize the banks as has happened elsewhere. Take the profit motive out of the picture to get credit flowing again.

The problem with that approach is that folks have a much lower appetite for risk now. They are less willing to borrow. As such, banks could offer credit for free and they'll have few takers (see Japan in the 90s).

Pushing on a string.