[Perfectlap]

^ more money in bank deposits does not encourage more loan making. This has been the unwelcome surprise of the Fed, Hank Paulson under Bush and now Geithner under Obama. If the banks have excess cash, as they do now with trillions in reserve, they will simply find other ways to use it like funding foreign investment projects or lending to Wall Street trading firms. The banks will take your deposits, pay you a Turkish Lira in interest and tell you to have a nice day.

The banks can be up their necks in cash but unless credit demand remains weak the cash pegged for consumer loans -- and busines loans frankly since they exist on consumer demand-- will sit idle. The banks are sticking to pre-bubble lending standards that do not correllate with post-bubble incomes and spending. Sure you bailed us out, took the haircutt and the bounce will only be "bonused" to our guys. This spells a very very weak recovery that although it is trending in the right direction sets up the economy like a big 757 jetliner that loses two of its engines mid-flight.
We can't produce the necessary lift to climb fast enough. All this had little to do with the govt and much to do with the role of the American worker in a new economy. We outsourced and consumed ourselves out of rising wages. What did you think was going to happen when China's GDP goes from under $1 trillion to over $6 trillion on American consumptio of cheap goods? The banks have no skin in the game because even with 10% unemployment the big ones at least are turning profits. When 8 of every 10 Americans owns $1 of every $10 dollars invested on Wall Street and are making no more than they were 10 years ago you have to start wondering what the game plan has been all these years.