Giving Credit Where No Credit is Due

In his news conference this day, President Obama reiterates what has been said by almost every economist for the past several months: that a stimulus package must be enacted that will provide banks with enough liquidity, i.e. enough of a cash cushion, that the banks will somehow no longer be afraid to loan companies money; and that the companies will, by borrowing the money from the banks, be able to buy raw materials for manufacturing, or to loan money to consumers to buy cars, etc., or to refrain from laying off further workers. The assumption is that, with this infusion of loaned money, American companies will, "again", become successful engines of commerce.
The assumption that most of us taxpayers have always made about businesses, at least about good successful businesses, is that a successful business did not have to borrow money daily or weekly in order to stay in business, any more than a financially successful person had to go daily or weekly to the loan shark and borrow money against his next paycheck. Many of us were not particularly financially savvy , but, learned to pay off credit card balances instead of using the cards as consumer loans. While we understood that a business might, for instance, need to borrow money to make a large capital purchase, as we might, to buy a house, we assumed that businesses were wiser than us taxpayers, and thus that surely a good business, SAVED, enough money to meet day-to-day operating expenses. Yet we are now presented with the spectacle of most businesses in our country operating hand- to-mouth, paycheck-to paycheck, and we are being told by the economic gurus, that we taxpayers should tacitly approve and support businesses operating in a way that we have been told goes against sound financial principles. President Obama and the gurus want the banks not to be afraid to loan businesses money. Yet it seems that the banks, and we, should properly be terrified.